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Saturday, September 09, 2006
City's 11 Terranos questioned
By Roberto L. Bacasong
THE Bacolod City Government violated a national budget circular when it bought 11 second hand units of Nissan Terrano now being used as patrol cars for the Bacolod City Police Office.
The Commission on Audit (COA) reported that the patrol cars have no remaining economic service because its mileages exceeded 50,000 kilometers and the price also exceeded the Remaining Useful Values (RUV) based on the Standard Formula.
In a four-page report, it was also indicated might have paid more than the actual value of the vehicles and could have saved almost P1 million had it computed the purchase amount on the value of a reconditioned vehicle.
Worse, two of the units are no longer functioning and have been grounded at the garage of the City Engineering Office (CEO).
City Legal Officer Allan Zamora dismissed the COA report though saying the City has already submitted its answer to the auditing office.
He added that the purchase of the patrol vehicles was done in a legal manner and they are not affected with the observation of the COA.
But for the COA, the purchase of the vehicles itself violated the National Budget Circular No. 446-A and Republic Act (RA) 9184.
RA 9184 is an act providing for modernization, standardization and regulation of the procurement activities of the government while the National Budget Circular No. 446-A provides that the acquisition of brand new units by outright purchase (paid for a single, lump-sum basis) shall be adopted as a mode of motor vehicle acquisition.
The COA report also pointed out that the City should have only paid P3.2 million for the 11 units instead of paying P4.2 million had it considered that the units already exceeded its useful life or remaining economic service.
"If a careful comparative benefit-cost analysis have been made, the procurement of brand new vehicles either a Crosswind XL at P770,000 or a Mitsubishi Adventure/Toyota Revo at P625,000 or its equivalent quantity of six to seven units will decrease the opportunity cost or the cost incurred in maintaining the units plus a longer service or useful life," part of the report read.
The COA revealed that the mileage or total distance traveled on each of the acquired units exceeded the allowable mileage of 50,000 kilometers.
This led COA to conclude that the age of the newly procured second-hand Nissan Terrano patrol cars are already beyond its estimated economic life.
"Considering that the units will be used for anti-terrorism, anti-insurgency and peace and order campaign, this may not be able to serve its purpose. Barely months from the date of delivery, two units are no longer functioning and are already grounded at the garage of CEO compound," the report also read.
The COA also recommended that Mayor Evelio Leonardia require CBR Motor Center to immediately repair the two units which are no longer operational and correct the defects of the other units as noted during inspection.
Shiela Portal, Negros Occidental COA head, refused to comment further on the report.
She however said what has been stated in the report is the result of their observation on the acquisition of the 11 patrol cars.
"The bid tendered by CBR Motors did not state the brand of the vehicle it was offering to deliver. Moreover, the purchase order also did not state the brand of the vehicles procured," the COA observation read.
It also noted that there was no signature in the "Authorized Signature" portion of the official receipt No. 0182 dated December 5, 2005 issued by the CBR Motors for the payment of the 11 units Nissan Terrano.
The report showed that the bank guarantee given as Performance Security did not mention the specific transaction the guarantee was taken.
There was also no mention of the period of effectivity and was not executed in favor of the City of Bacolod.
"The Bids and Awards Committee failed to require the supplier CBR Motors the Warranty required under Section 62 of the implementing rules and regulations of RA 9184," the letter read.
The report also noted that the City could have saved at least P90,000 for each unit or a total of P990,000 for all 11 patrol cars.
The COA also recommended that the Bids and Awards Committee submit in writing its explanations and review the procedures and policies adopted in the bidding process in consonace with RA 9184 and other pertinent laws applicable.
Councilor Al Victor Espino, chairman of the committee on finance and appropriations, disclosed that he will recommend to conduct an inquiry regarding the matter on the next regular session.
(September 9, 2006 issue)
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