At least P15 million worth of office supplies and construction materials for the municipality of Jamindan in Capiz were procured to a single supplier without public bidding, depriving the municipality of the most advantageous price, state auditors said.
In a 2016 report, the Commission on Audit (COA) said the procurement of office supplies and construction materials worth P15,119,209.76 in 2015 was done through shopping instead of competitive bidding.
This was contrary to public bidding rule under the Implementing Rules and Regulations of the Republic Act 9184 of the Government Procurement Reform Act, preventing the municipality from obtaining the most advantageous price, the auditors added.
The law states that as a general rule, all procurement should be done through competitive bidding, and that alternative modes of procurement should be resorted only in highly exceptional cases.
Shopping as an alternative mode of procurement should only be resorted to when there is an unforeseen contingency requiring immediate purchase, provided that the amount should not exceed the prescribed threshold; and when the procurement of ordinary or regular office supplies and equipment is not available in the Procurement Service.
Auditors said the procurement for the office supplies and construction materials was conducted through shopping without any evidence to support if an unforeseen contingency occurred and if the goods procured were not available in the Procurement Service.
The procurement was also divided by splitting the contracts, making each procurement at less than the threshold of P50,000 and P100,000 to avoid the conduct of public bidding.
The splitting of government contracts, or the act of breaking up government contracts into smaller quantities and amounts, is not allowed under the the Government Procurement Reform Act.
Splitting of contracts is done usually to avoid inspection of deliveries and to avoid public bidding, auditors said.
“Splitting of Government Contracts is not allowed, hence, requisitions should be consolidated especially if they were received on the same day,” the auditors said.
The goods were also procured from only one supplier, United B General Merchandising, casting doubt as to the legality and veracity of the transactions, the auditors said.
“This practice of procuring from only one supplier defeated the policy of the Government that procurement of infrastructure projects, goods and services shall be competitive and transparent,” the auditors said.
The COA urged the municipal mayor Ethel Jinon to procure office supplies and construction materials through public bidding, and ensure that all conditions are met before adopting other alternative modes of procurement.
The management vowed to start posting their bids in PhilGEPS, and conduct procurement through public bidding.