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Auditors call for action against erring contractors

Manila, Philippines: The National Mapping and Resource Information Authority (NAMRIA), Philippines, committed at least three grave errors in treating the PHP 79.9 million (PHP: Philippine Peso) Active Geodetic Stations (AGS) contract awarded to Philtek Instrumentations Inc., observed Philippine Commission on Audit (CoA) in its 2010 audit report. After finding these errors, the CoA proposed that contractors who fail to complete government projects on time should be penalised as stipulated in the provisions of their contracts.

The CoA revealed that the NAMRIA had paid the contractor full amount of the contract despite the over one-year delay in the completion of 16 AGS the agency sought to establish. The installation of the AGS is a component of the Philippine Active Geodetic Network (PageNET) project that would have provided real-time high precision geographic and related information to various stakeholders via the Internet utilising the global navigation satellite system (GNSS).

The audit report prepared by Norberta San Mateo, independent auditor of the Department of Environment and Natural Resources, indicated that Philtek was overpaid by PHP 7.9 million representing 10 percent of the total project cost.

State auditors pointed out that the amount should have been deducted from the total project cost as penalty for the failure of Philtek to complete the AGS within a 240-day period since the project’s implementation commenced.

Under the contract, Namria is entitled to deduct one-tenth of 1 percent from the total contract cost as penalty for every day of delay in the completion of the project. However, the penalty must not be over 10 percent of the total price.

Source: www.mb.com.ph