COA may stop P3.8B license plate contract


THE Commission on Audit (COA) is expected to issue a notice of disallowance on the contract entered into by the Land Transportation Office (LTO) involving the P3.85 billion motor vehicle license plates standardization program (MVLPSP) which is being investigated by the Senate.

On April 10, 2014, the state auditing body issued a notice of suspension against the LTO headed by Alfonso Tan after it found some deficiencies in the contract awarded to the joint venture Power Plates Development Concepts Inc. and Dutch firm J. Knierem BV-Goes (PPI-JKG) in 2013.

The notice of suspension covers the 15 percent payment for the supply and delivery of license plates amounting P477,901,329.

The COA issued the notice due to various deficiencies and the failure of the LTO to submit to the auditing body a number of documents related to the procurement process.

Leo Romero, counsel of bidder Marianing and Sons Development Corp., explained that the LTO has 90 days from the issuance of the notice of suspension to submit the needed documents demanded by COA.

Failure to comply with COA’s order within the given period will lead to the issuance of a notice of disallowance which will require the LTO to return the money.

A notice of disallowance is a written notice issued to the head of agency, in this case the LTO chief, and concerned officers when a transaction is disallowed for being illegal. The person liable should return the money through payment of the amount or any mode of extinguishment of obligations under the law.

The 90-day period given to the LTO will lapse on July 10.

Romero said he believes a notice of disallowance is in order because of the impossibility of validating and curing the legal infirmities and compliance to various legal requirements cited in the Audit Observation Memorandum (AOM) issued by the COA.

According to Romero, there are compelling reasons to invalidate the MVLPSP public bidding and the contract, including the certificate on the availability of funds dated February 18, 2014.

The project was bid out in 2013, but based on the 2013 General Appropriations Act (GAA) the allotment for the Motor Vehicle Plate Making Project was only P187,293,000, which is much lower than the project cost of P3.8 billion.

Romero said the LTO cannot use the appropriation under the 2014 GAA because the bidding was done in 2013.


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