COA finds undue haste, other red flags in Makati parking building

MANILA, Philippines - The Commission on Audit (COA) revealed to the Senate on Thursday that if found several red flags in the construction of the allegedly overpriced Makati City Hall II parking building.

During the resumption of the Senate Blue Ribbon sub-committee probe on the controversy, COA auditor Alexander Juliano presented the preliminary special audit report on the building which indicated red flags such as the undue haste in the implementation of the project's Phase 1.

"The first red flag is that the project was implemented with undue haste as there were no construction plans yet when it was bid out and awarded to Hilmarc's Construction Corp," Juliano said at the televised hearing.

Juliano said there was only a one-month gap between the city government's passage of the appropriation ordinance for the project on Nov. 8, 2007 and the publication of the invitation to bid on Dec. 6, 2007.

"While the swiftness of the action taken by the city government may be considered as efficiency, the same could also be considered as a red flag because this project with such a huge budget will surely require a careful conceptualization and planning," Juliano said.

He said the negotiated procurement adopted by the city government's bids and awards committee on the architectural and engineering services was also "improper" since none of the conditions under the Procurement Reform Act were present.

These conditions include failed biddings, emergency cases, takeover of contracts, adjacent or contiguous projects, agency-to agency, highly technical consultants and defines co-operation agreement.

According to the COA report, the Makati government had disbursed an aggregate amount of P2.36 billion as of Dec. 31, 2013 for the construction of the parking building, which had five phases. For preliminary services, the city spent P11.97 million.

The local government spent P386.99 million for Phase 1, P499.35 million for Phase 2, P599.99 million for Phase 3, P649.93 million for Phase 4 and P443.8 for Phase 5.

Other red flags

The COA report discovered five other red flags in the construction of the controversial building.

• the variances between the approved budget for the contract (ABC) and the bids tendered by Hillmarc's for the five phases were less than a fourth of 1 percent of the ABC.
• there was no valid ABC for Phase 3 when the city started the procurement process
• highly questionable why the city government allocated P793 million for Phases 4 and 5 when the parking building was already habitable and ready for use per COA inspection report dated July 7, 2011
• the ABC and contract cost show very significant variances above the COA estimated cost for Phases 3 and 4
• unnecessary expenditures for mobilization and demobilization