Food caterer sues City Hall

CEBU, Philippines - A catering service company filed a case against the Cebu City government over unpaid meals worth millions of pesos two years ago.

The Cebu Red Carpet Catering Services Inc. claimed that the city government failed to settle the P5.2 million worth of packed meals served during the October 2010 barangay and Sangguniang Kabataan elections.

Named defendants in the case were Mayor Michael Rama and former city treasurer Ofelia Oliva.

“The request was supported with the October 12, 2010 letter of defendant OIC-City Treasurer Ofelia Oliva and Election Officer V-South District lawyer Edwin Cadungog,” the complaint reads.

 Rama said the City Legal Office will act accordingly on the case filed against him and Oliva.

“Let the right person answer that. We will face the case since it is already filed,” Rama said.

Josie Antonette Mirasol Uy, a representative of Cebu Red Carpet, said the defendants tapped their office to provide them with meals during 2010 barangay and SK elections.

The complainant said the purchase was made “under emergency” after a fast-food chain “made a last minute denial.”

The “denial” of the fast-food chain was due to the failure of the city to commit 50 percent down payment of the amount ordered for the meals.

The complainant said it accepted the request of the city and supplied it with packed meals through credit.

The meals were intended for the Board of Election Inspectors, (BEIs-1 Chairman, 1 Poll Clerk and a third member), City Hall and Commission on Elections (Comelec) employees, policemen and other support staff.

At least P5,208,600 worth of packed meals were delivered on October 23, 24 and 25, 2010.

In its complaint, Cebu Red Carpet said it sent a demand letter to the city for the unpaid obligations.

“The negotiation for payment was initiated after receipt of said demand letter but no offer for settlement was made by the defendants despite constant follow-up to the damage and prejudice of the herein plaintiff who failed to use the money for its business,” according to the complaint.

“That by reason of defendants’ adamant and unjustified refusal to pay its valid obligation to the plaintiff, the latter has been constrained to file this action in court,” complaint further reads.

Cebu Red Carpet, located along Road North 7 in Mabolo, Cebu City, asked the court to order the defendants to pay their obligation “jointly and severally.”

It also asked the court to order the defendants to pay the interest of 12 percent per annum from October 2010 until the amount is fully paid.

Moreover, the complainant asked the court to direct the defendants to pay ten percent of the “outstanding obligation” as attorney’s fees, aside from the litigation expenses and cost of suit.

Pending voucher

The payment, however, has not been released because the voucher is pending at the City Treasurer’s Office.

Diwa Cuevas, acting city accountant, said the vouchers for the payment of P5.2 million to Cebu Red Carpet has not reached her officer after they returned it to the CTO for lack of requirements.

“We issued suspensions so it was returned to the CTO for reply and compliance with the lacking requirements. So far, wala pa nabalik,” Cuevas said.

Cuevas said the accounting office only has the vouchers amounting to P800,000 representing the balance for the catering expenses incurred in the May 2010 elections.

Payment suspension

Earlier, the Commission on Audit suspended the payment to Cebu Red Carpet for the food it supplied during the May 2010 national elections amounting to over P3 million.

COA issued the notice of suspension after finding out the procurement did not undergo the regular process.

It said the purchase of packed meals violated Republic Act 9184, otherwise known as the Government Procurement Reform Act, because it did not undergo proper bidding.

COA claimed the conduct of the bidding was not competitive because only three bidders participated.

It said two of the bidders were even found to be small eateries competing with a major catering service.

But the city government explained that it was an emergency purchase because it had to feed the teachers and volunteers who served during the elections.

But state auditors said that “emergency” cannot be used as an excuse since the election is always held on May.

They also find the expenses incurred for food during the elections as extravagant, noting that the city spent a total of P8,627,950.00 for the purchase of meals during the elections.

The suspension remains because the city has not submitted the pertinent documents.

The city was able to pay Cebu Red Carpet after Rama ordered payment despite the “risk.”

The payments were approved by the accounting office and the treasurer’s office under protest to spare them from administrative sanctions should the payment is later disallowed by COA. — /LPM (FREEMAN)