COA wants Ombudsman to probe FDA execs over security contract

MANILA, Philippines – The Commission on Audit (COA) wants the Office of the Ombudsman to investigate officials of the Food and Drug Administration (FDA) for an alleged illegal security agency contract extension back in 2012.

According to the COA’s Commission Proper, it said the P2.46 million paid to Maximum Security Services Corporation (MSSC) for a contract from January 1 to July 31, 2012, had no legal basis.

The COA said the extension exceeded the one-year limit placed on security service hirings and, as a result, should have secured prior approval from the Government Procurement Policy Board (GPPB) before extending the MSSC service contract.

No public bidding

Auditors noted the FDA failed to set up a public bidding for the security service contract.

COA pointed out from 2004 to 2009, the Department of Health had contracts with MSSC for its security services to its offices as well as its attached agencies. When the DOH switched to Alert Security and Investigation Services (ASIS) in 2010, the FDA (then the Bureau of Food and Drugs) was not included in the new DOH agreement.

The FDA director at the time, Nazarita Tacandong, in a letter dataed January 22, 2010, asked MSSC to continue its security services for the FDA till a public bidding could be held for a new contract, with the MSSC paid monthly for its services. Instead of a public bidding, however, the FDA just kept the arrangement it had with 

Curiously, the FDA failed to conduct the planned public bidding and instead continued the MSSC’s contract from January 2010 to July 2012. 

Noting the the procurement rules violation, auditors assigned to the FDA, as well as the supervising auditor for DOH, gave a suspension notice for the P2.46 million transaction – covering January to July 2012 – subject to a post-approval by the GPPB for an extension.

Contract renewals from January to December 2011 – worth P4.65 million – were disallowed in an earlier audit on September 17, 2012.

Who’s liable?

The COA Commission Proper added FDA acting director Suzette Lazo, accountant Ma. Victoria Calzado, chief administrative officer Gomel Gabuna, and administrative officer Adrianita Castillo, were liable for the occurrence.

Meanwhile, former Bids and Awards Committee chairpersons Ma. Lourdes Santiago (2010) and Rhoda Laine Manaloto (2009), both initially included in the list, were cleared in a COA review. Santiago’s successor, Former BAC chair Nemia Getes, was also excluded once auditors found she was setting up a technical working group and preparing bidding documents for a public bidding, though the FDA’s administrative division only did so on February 29, 2012.

“Considering that the security services of MSSC for the period of January 1, 2012 to July 31, 2012 is already beyond the period allowed for extension, payments for the same should be disallowed. To allow payment for the sole reason that the government had allegedly benefitted from the transaction would be tantamount to circumvention of the GPBB guidelines,” the COA said.

COA said those liable must refund the disallowed sum to the FDA. They may also face criminal investigation “in view of the violation of laws and regulations.” – Rappler.com