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COA: Mandaue, Cebu City execs liable for P44-M lamppost deal

City officials fail to show there was an imminent danger to life or property due to man-made or natural calamities, which would have been the only justification for procurement negotiations for the lampposts

MANILA, Philippines – The Commission on Audit’s Commission Proper (COA-CP) reversed a June 16, 2010 ruling of COA-Region 7 reducing the disallowance against Mandaue and Cebu City officials in relation to acquiring decorative street lighting facilities for the 2007 ASEAN Summit.

COA Chairman Michael Aguinaldo and commissioners Jose Fabia and Isabel Agito said former local officials of Cebu City, along with the supplier Gampik Construction and Development Incorporated, have liabilities amounting to P23.97 million. COA-Region 7 only recommended P13.335 million in liabilities.

The COA-CP, meanwhile, affirmed disallowances of P19.98 million for Mandaue City officials and suppliers. The regional office previously set the amount at P11.234 million.

"This Commission holds that there was a clear violation of RA No. 9184 (the Government Procurement Reform Act) as the project did not undergo the required public bidding. It is apparent that negotiated procurement is not justified under the circumstances," COA said.

It explained that city officials failed to show there was an imminent danger to life or property due to man-made or natural calamities. This would have been the only justification for negotiation of procurement.

COA said: "The hosting of the ASEAN Summit is not a disaster. Since there is no calamity at the time the projects were implemented, there is no danger to speak of."

As the local government contracts for street lighting facilities in Cebu and Mandaue were "illegal" in this case, COA determined the auditors were correct in disallowing the payments made to Gampik.

While the audit leader and the COA regional cluster director issued notices of disallowance for the supposed "overpayments" made to Gampik, the Commission Proper said the correct amount should be based on the actual sum paid to the supplier as partial payment.

"Accordingly, the two contracts for the supply and installation of street lighting facilities in Cebu City under Contract ID No. 06HO0007… and in Mandaue City under Contract ID No. 06HO0008… are disallowed in audit. All the persons held liable are jointly and severally liable," said the COA-CP.

Criminal cases have already been filed at the Sandiganbayan over the lamppost procurement deals. The cases named former Cebu and Mandaue City executives, public works officials, and private contractors as defendants. – Rappler.com