COA tells Makati City gov't to pay balance of Hilmarc's 2013 contract
MANILA, Philippines – The Commission on Audit (COA) ordered the Makati City government to pay private contractor Hilmarc's Construction Corporation (HCC) P53.2 million – an amount representing the balance of a 2013 contract to work on Makati City Hall 2's air conditioning system.
The ruling by COA chairman Michael G. Aguinaldo and Commissioners Jose A. Fabia and Roland C. Pondoc granted Hilmarc’s petition for a monetary claim, despite objections from Makati City.
The city government objected on the ground there was an 8-month delay in the project's completion, and some supporting documentation was not submitted.
HCC countered the delay claims by presenting a letter from the Makati City government approving an extension request. Meanwhile, COA pointed out the documents required –from the annual procurement plan, the project procurement management plan, the attendance sheet for the pre-procurement conference and bidding conference, and posted copies of the Notice of Award and Notice to Proceed – should have come from the city as they were connected to the bidding and procurement processes.
COA explained, "While the absence of documents may show violations in the procurement procedure, equity dictates that HCC, which had no control over the procurement process, should not be blamed for the deficiency. Thus, it should be compensated for what it had performed. Otherwise, it would result in undue enrichment on the part of the city."
HCC won the contract following a public building on January 31, 2013. It provided the lowest bid, at P145.23 million against a project of P155 million. While the contract was formally begun on February 21, 2013, revisions in the program of work brought the contract price down to P142.45 million.
The HCC project was competed and turned over to Makati City's government on July 19, 2014, and was validated by COA's Technical Service Unit for the National Captial Region, Local Government Sector. Both the contract awarding and turnover occurred under the administration of former Mayor Jejomar Erwin "Junjun" Binay, who stepped down June 30, 2015.
HCC said it only got P89.26 million in payments, however, leaving a P53.2 million balance which they sent formal demand letters for on February 23, 2016 and May 8 and July 18, 2017.
The city cited the above-mentioned delays and missing documentation as a basis for withholding the balance.
Records showed then-Mayor Romulo "Kid" Peña received the first demand letter as he served to finish his predecessor's term, which ended June 30, 2016. Mayor Mar-Len Abigail Binay-Campos received the subsequent demand letters.
HCC then filed its petition with COA to get the city government to pay the balance.
No compensatory interest
HCC's claim for payment of compensatory interest, alongside attorney's fees and other expenses was not affirmed by COA. These would have amounted to 10% of the claimed balance.
COA explained that, "To grant the same is tantamount to recognition of penalty or indemnity for damages which is not within the authority of this Commission to decide but by the regular courts."
COA added claims for damages can't be presumed. Rather, they "must be duly proved with reasonable certainty." – Rappler.com