THE P55-million contract for the 500 units of permanent shelter constructed after the devastation caused by Typhoon Sendong at Cagayan de Oro Relocation Socialized Housing Project was awarded and undertaken by an unfit contractor.
State auditors noted that when the row houses were constructed and given to SCV Construction, there were “infractions” that slipped through the negotiation for socialized housing project.
The Commission on Audit (COA) said that SCV has “no capacity” to absorb the additional obligations in connection with the contract and to finance its completion because the company net financial contracting capacity is only P19.24 million, which is P35.75 million lower than the required P55 million.
The private firm has also no branch business office near the construction site. COA identified that SCV has it main office in Valencia City.
“It has no known branch or business presence in Cagayan de Oro City. Situated within the vicinity means that the contractor must have an branch or business presence within the province where the emergency or calamity occurred,” the report read.
City officials opposed the observations of the audit team and asked for the legal opinion of COA regional director Donelo Secson and director Rosamarie Lerio.
Both COA officials affirmed the observations of the audit team.
In April 2012, city engineer Mario Batar in a change order reduced the number of housing units from 500 to 80 “allegedly because of non-availability of lots in the project site.”
Because of the change in plans, SCV already fit the housing project “legally, technically and financially.”
However, COA noted that the change order was only made only after the auditors told the project leaders about the observations of COA in February 2012.
A notice of suspension in November 2012 was issued on the payment of 15 percent mobilization on the housing project by virtue of the COA’s legal opinion.
“To date, no claims for projects accomplishment has been reported or made yet by the contractor, SCV Construction,” the Audit agency noted.
In a reply by Atinodoro Asequia, which Mayor Vicente Emano noted, city officials said that SCV has the lowest cost compared to other contractors.
“SCV is qualified to undertake the project considering that Region 10 is one of the regions declared under State of Calamity [after Typhoon Sendong],” city officials said.
They asked COA to lift the notice of suspension.
“The project was in response to the need to provide socialized housing project for the survivors of Typhoon Sendong . . . The intention was for the city government to construct as many houses as it can provide at the instance of making that decision,” the officials said.
The Commission said that the request for lifting of audit suspension was already forwarded to the audit team’s superior for “a more authoritative resolution.”
In the meantime, auditors said that the Cagayan de Oro officials should require the bids and awards committee to review its award of contracts and evaluate the selection of the winning bidder.