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Tuesday, August 03, 2021
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COA scores Capitol officials for cost of instant noodles

COA scores Capitol officials for cost of instant noodles. (File photo)

THE Commission on Audit (COA) has called the attention of the Cebu Provincial Government after its Bids and Awards Committee (BAC) accommodated an amendment to order 6,500 boxes of a certain brand of instant noodles that cost the Province a lot more than its original order.

The accommodation was made by the BAC without securing the approval of Governor Gwendolyn Garcia.

The instant noodles were for the Province’s “Tindahan sa Kapitolyo,” a program that aims to help the poor and marginalized constituents in the countryside by providing easy access to basic commodities and allowing them to buy goods on ration based on the mandated price ceilings of the Department of Trade and Industry (DTI).

In its 2020 annual audit report, the COA found that 6,500 boxes of instant noodles bought by the Province from Metro Retails Stores Group Inc. (MRSGI), the winning bidder, had an original cost of P2.8 million.

But the Province ended up paying P3.4 million for the purchase, which was P589,680 or 20.6 percent more than the original contract price.

MRSGI



A review by COA of the Province’s transactions on the procurement of goods through emergency purchase showed that on April 1, 2020, the Province awarded and signed a contract with MRSGI for the supply of food items worth P7.3 million.

On April 6, 2020, Provincial Social Welfare and Development Office (PSWDO) head Marivic Garces who served as BAC chairperson, requested for the cancellation of P2.8 million worth of QuickChow instant noodles that were included in the order because stocks were not available.

Due to the cancellation, the amount on the purchase request (PR), purchase order (PO), obligation request (OBR) and the disbursement voucher was then modified from the P7.3 million owed to MRSGI to P4.49 million.

On April 7, another PO, an amendment to the order, was executed and approved by Provincial Administrator Noli Valencia for the purchase of 6,300 boxes of Lucky Me noodles, another instant noodle brand, amounting to P3.4 million.

“Apparently, there was an accomodation made by the Provincial Bids and Awards Committee on Goods on the supplier’s failure to deliver what was originally specified in the purchase order,” COA said in its report.

“The BAC based their recommendation for award on the quotations submitted by the suppliers. Had MRSGI disclosed that there were no stocks available for Quickchow noodles, the BAC would have awarded the same to another supplier. Consequently, the amendment from Quickchow to Lucky Me noodles entailed additional cost to the Province of Cebu by P589,680 or 20.63 percent above the original contract cost,” the state auditors said.

This would have required approval from Garcia as head of the procuring entity.

State auditors also found that noodles bought by the Capitol were left to expire at the Provincial General Services Office (PGSO) warehouse.

Expired



Fifty-three boxes of Lucky Me that contained 72 packs each expired on October 6, 2020, while 18 boxes expired on December 6, 2020. The wasted noodles had cost taxpayers P38,851.

State auditors recommended that the BAC be required to submit a written explanation on the amendment to the order.

They also recommended to the Province that liquidated damages against MRSGI be imposed for breach of contract.

COA also directed the Province to ask MRSGI for a refund on the items that have expired or to replace them pursuant to the warranty clause implied in each contract.

Responding to COA’s observation, Capitol officials said the original order needed to be replaced because MRSGI could not secure QuickChow noodles from any of their branches at the time of negotiation, and reordering from their source would have taken time.

They said that although the price of Lucky Me was higher than Quickchow, it was still within the DTI’s suggested price ceiling.

It was the policy or practice of the Provincial Government to provide a retention fee of one percent of the total amount of the purchase value to serve as warranty for the purchase, the BAC said.

“Currently, they (MRSGI) have already delivered the replacement of the expired items and these were immediately picked up by the concerned local government units (LGUs). While those expired noodles noted by COA during the ocular inspection were the remaining items to be pulled out by the supplier after they delivered the replacement of the expired goods,” Capitol officials said, in their official reply to COA.

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