COA tells Capitol to deduct excess in ‘overpriced’ Tuburan road project

CEBU CITY, Philippines — The Commission on Audit (COA) has asked the Cebu provincial government to deduct about P2.7 million from the remaining collectible of the contractor of a road concreting project in Tuburan town after it found that the contract price of the project was “excessive” by over 22 percent.

In its 2019 audit report for the province, COA said its Regional Technical Services unit rendered a report that the contract price of the concreting project of a portion of the Alegria-Kabangkalan Road Section in Tuburan which was pegged at P14,954,525.39 exceeded the agency’s computed cost which was only pegged at P12,177,474.33.

COA found an excess of over P2 million in the contract price in the concreting project of the Alegria-Kabangkalan Road in Tuburan town compared to the agency’s computed cost.

Under a circular that COA issued in 2012, the Commission defined “excessive expenditure” as those that are unreasonable or were incurred at an “immoderate quantity or exorbitant price” and exceeds the “usual or proper” cost.

According to COA, the program of works and estimates prepared by the Provincial Engineering Office was exceeded by 23.21 percent or byP2,825,526.66 compared to the COA computed cost, resulting in an overstated approved budget for the contract (ABC) of P14,999,999.99.

The ABC serves as the price ceiling for acceptable bid prices for interested contractors.

The winning bid for the project, which started in 2015, was pegged at P14,954.525.40.

The major differences in the COA computed cost, the approved budget for the contract (ABC) and the estimates in the contract cost:

Compared to COA’s cost computation for the project, the ABC is higher by over 23 percent or P2.8 million while the winning contract was higher by 22 percent or P2.7 million.

Aside from phases of the project having estimates that are higher than the state auditors computed cost, there are also portions of the project that were allocated with amounts that are significantly lower than what the PEO and the COA Technical Services unit pegged.

Among the parts of the projects that had a lower appropriation compared to the government’s estimates are the clearing and grubbing, roadway excavation, structure excavation, subgrade preparation, aggregate sub-base course, and the aggregate base course.

Following the audit observation, COA recommended for the Provincial Engineering Office to deduct P2,780,051.07 from the remaining receivable of the contractor to avoid disallowance in an audit.

As of January 2020, the project contractor has already received P12,099,418.60.

This means that instead of receiving the balance of P2,855,106.80 from the project, the contractor is now only entitled to receive the remaining balance of P75,055.73. /bmjo