• Defects found in 176 fire trucks delivered in 2015

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    Over 170 fire trucks procured by the Bureau of Fire Protection (BFP) and delivered in 2015 were found to be defective, according to the Commission on Audit (COA).

    The observation was made in COA’s audit report on the BFP for 2016.

    “The objective of achieving a set of reliable, fast and efficient fire trucks did not materialize viewed from the various defects noted in the 176 [or 37 percent]out of the 469 fire trucks delivered in 2015, preventing the end-users from the effective use thereof that eventually affect the delivery of public services,” COA said.

    Based on the audit report, the joint venture (JV) of Kolonwel Trading and Hubei Jiangnan Special Automobile Company Ltd. bagged the deal for the supply and delivery of the fire trucks that were deployed nationwide.

    “In a letter dated December 16, 2016 to the BFP Fire Chief, the supplier reported the repairs undertaken on the defects of the 176 fire trucks located in Regions 1 to 13, as of December 2016,” COA said.

    “The Audit Team Leaders [ATLs] of the BFP Regional Offices 1, 6 and 11 issued AOMs [Audit Observation Memorandums] on reported noted defects in the fire trucks and observed that the defects would affect the capability of the end-user regions to efficiently respond to emergency cases and effectively carry out BFP’s mission to prevent and suppress destructive fires,” it added.

    “The BFP Director for Operations emphasized that every defect of the fire trucks in the Regions are reported to NHQ [national headquarters]. As of May 9, 2017, 107 trucks are still to be repaired by the supplier,” COA said.

    Supposed lapses in the procurement process were also noted, according to COA.

    According to the audit report, the financial documents submitted by Kolonwel Trading showed that its net current assets amounted to P1.4 million for 2012 and P1.6 million for 2013.

    The company partnered with Hubei Jiangnan Special Automobile Company Ltd. to participate in the public bidding for the 469 fire trucks and under their agreement, the same audit report stated, Kolonwel shall put up P60 million or 60 percent of the JV’s P100-million initial funding requirement.

    Also, the post-qualification process for the procurement allegedly exceeded 30 days.

    According to the audit report, the post-qualification process began on October 21, 2014 when the joint venture of LDLA Marketing and Wuhan Automobile Refitting Factory was declared as the lowest calculated bidder.

    “Its bid was declared as Non-Responsive, thus post-disqualified by the BAC [bids and award committee]. The procedure for post-qualification was repeated for the JV of Kolonwel Trading and Hubei, being the second lowest calculated bidder,” COA said.

    The joint venture of Kolonwel and Hubei passed the post-qualification and was declared the lowest calculated responsive bidder on January 8, 2015.

    “It took the BFP Technical Working Group 79 days to complete the post-qualification process from October 21, 2014 to January 8, 2015, which period is not consistent with Section 34.8, Rule X of the Revised IRR of RA 9184 providing that in no case shall the aggregate period exceed 30 calendar days. Since the rule specifically provides for the timeline, the TWG should have completed the post-qualification process within 30 calendar days,” COA said, referring to the Revised Implementing Rules and Regulations (IRR) of the Government Procurement Reform Act or Republic Act 9184.

    “The extended period in the post-qualification had a domino effect in the procurement process with an extended period of 95 days, which is beyond the three-month period provided for under RA 9184, counted from the opening of bids on October 17, 2014 to the issuance of the Notice of Award on January 20, 2015,” COA said.

    Further, it said that “[t]he delivery of such defective fire trucks could have been prevented had there been judicious and meticulous planning in the procurement of the 469 fire trucks.”

    Unrealistic budget
    According to the audit report, the Approved Budget for the Contract (ABC) set in the amount of P6 million for the 1,000-gallon capacity fire trucks and P5 million for the 500-gallon capacity fire trucks “is too low to procure a fast and reliable and efficient fire trucks, compared with the market price of fire trucks of known quality and of international standard.”

    COA said that the setting of low ABC restricted competition.

    “As a consequence of restricted bidding, 176 [or 37 percent]of the 469 delivered fire trucks are defective, which greatly affect the delivery of public services,” it said.

    COA thus recommended that the BFP “direct all Regional Offices to report all noted defects in fire trucks in their custody in order to determine with certainty the total defective fire trucks delivered by the JV; thus, remedial measures can be undertaken at the most opportune time.”

    It also told the BFP to “judiciously and meticulously plan all procurement by setting a reliable ABC to allow wider range of competition in order to ensure the best quality of goods procured.”

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