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Employees sue DAR Bids Committee chief for overpriced Luisita contract

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By Jonathan de Santos, VERA Files

EMPLOYEES of the Department of Agrarian Reform (DAR) have filed a graft case against an official of the DAR’s Bids and Awards Committee for awarding engineering firm F.F. Cruz and Co. a contract to survey Hacienda Luisita which they said was overpriced.

F.F. Cruz was to survey a portion of Hacienda Luisita, owned by the family of President Benigno Aquino III, in preparation for distribution to farmer-beneficiaries.

The DAR Employees’ Association (DAREA) filed a complaint before the Ombudsman today alleging that the contract was overpriced by some P7.5 million.

DAREA President Antonia Pascual and press relations officer Gloria Almazan told VERA Files the contract will cost the government P4,078 per hectare surveyed, when the planning cost parameters set at the time of the award in 2012 pegs the survey price at only P2,516.

The total contract cost is P19.9 million. It should have been only P12.4 million, the DAREA officers said.

In their complaint, Pascual and Almazaren said the DAR Bids and Awards Committee “knowingly, maliciously and with evident bad faith pursued the award notwithstanding the fact that the rate of survey per hectare by the FF Cruz Co. Inc., is over and above the rate per hectare as prescribed and conceived by the procuring entity on Planning Cost Parameters for year 2012 on sugar lands.”

They added the contract should have even been cheaper since F.F. Cruz “had conducted already an aerial survey of the property which is the subject of the contract during the SCTEX (Subic-Clark-Tarlac Expressway) construction.”

The DAR employees said the Geodetic Engineers of the Philippines, Inc., a professional organization of surveyors “per its standard rate of survey service” estimated the cost of the project at P2.4 million for the first 1,000 one-hectare-lots.

Surveying additional lots would cost P1,400 per hectare, they said. Surveying the land to be distributed would have cost around P7.8 million.

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Pascual and Almazan have accused DAR Assistant Secretary Felix Perry Villanueva of graft for entering into a contract “manifestly and grossly disadvantageous” to the government. Villanueva heads the Bids and Awards Committee for the project.

The alleged overprice is also in violation of the both the government procurement law and the code of conduct for public officials, they said.

“The deplorable act of Perry Villanueva, giving unwarranted or undue advantage to the Service Provider to the prejudice of the Government deserve punishment under the law,” they said.

In an email to Vera Files, Villanueva said DAR Field Operations had asked for end-to-end services for the land on Hacienda Luisita that would be distributed to farmer-beneficiaries.

He said this will include consolidating different land titles, identifying and excluding areas not covered by land distribution, and segregating lots, as well as an aerial and land survey.

“This resulted into a higher approved budget for the contract as opposed to the standard cost parameter for surveying services,” he said.

He added F.F. Cruz was chosen based on technical and financial qualifications, or a Quality and Cost Based Evaluation of Bids.

“The technical bid carries a bigger weight than the financial bid. In this particular case, the higher score of the lowest bidder in their financial bid cannot overturn the higher score of the winning bidder in their technical bid,” he said.

According to a copy of the service contract signed between DAR and F.F. Cruz on October 5, 2012, the firm “emerged as the Highest Rated Responsive Bidder” after a bidding held June 2012.

Under the Government Procurement Reform Act, government agencies are required to award contracts of consulting services to the highest rated responsive bidders. Contracts for goods and infrastructure projects are, on the other hand, supposed to be awarded to firms offering the lowest calculated bid.

The total cost of the contract is also below the Authorized Budget Cost for the project, which the complainants said was P21 million.

Despite that, Pascual and Almazan, are asking the Office of the Ombudsman to prosecute Villanueva and to put him on preventive suspension. They said this will preserve the department’s records and keep Villanueva from influencing the investigation.

In July 2011, the Supreme Court ordered Hacienda Luisita segregated and distributed to 6,296 farmer-worker-beneficiaries. DAR is in the process of screening claimants to the land.

Trouble at the Department of Agrarian Reform

Pascual and Almazan, as well as other members of DAREA, have been critical of the DAR leadership. In January, DAREA members joined a call by 27 agrarian reform advocate groups to have Secretary Virgilio delos Reyes removed from office.

They said delos Reyes was ineffective, and keeping him on as head of the agency could mean a failure of the Comprehensive Agrarian Reform Program. The extended agrarian reform program will end on June 30, 2014.

Pascual told Vera Files then that delos Reyes is a micro-manager, is “too legalistic,” and no longer has the support of DAR employees.

But delos Reyes said the gripes only come from DAREA members in the central office in Quezon City and that DAR employees in the field remain supportive.

President Aquino also continues to support delos Reyes. In a statement on Sunday, deputy presidential spokesperson Abigail Valte said the secretary “enjoys the full trust and confidence of the President.”

This despite a January 24, 2013 letter signed by 85 bishops urging Aquino to revamp the DAR leadership for its “dismal” performance in the past two-and-a-half years.

(VERA Files is put out by senior journalists taking a deeper look at current issues. VERA is Latin for true.)

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