COA questions delay of CCMC’s Phase 2 project

·4 min read

THE Commission on Audit (COA) has flagged the delay in the construction of the P299 million Phase 2 project of the Cebu City Medical Center (CCMC).

In its audit report, COA said design and detailed engineering issues, slow decision making, giving of unreasonable time extensions, and confusing computation of contract time have deprived the constituents of the much-needed facility, especially in this time of health crisis.

In 2019, the contract to build Phase 2 of CCMC was awarded to C.E. Padilla Construction Inc., which was given 180 calendar days to finish the project. Thus, the project should have been finished on Sept. 30, 2019.

However, COA’s report said that as of Dec. 31, 2021, or two years and eight months since the start date, the project was still only 75 percent accomplished.

“The project would have been very timely because a year after the project was started (in 2019), an unprecedented health crisis erupted and a reliable health facility has immediately become one of the major public concerns,” read a portion of the report.

The state auditors found that the city’s Department of Engineering and Public Works (DEPW) had issued several suspension orders and time extensions on the project.

Faulty engineering

Upon examination of records by COA, it was revealed that several conditions point to faulty detailed engineering in the construction of the hospital.

First, “the actual site condition of the location of the low voltage switchgear and generator set cannot accommodate the actual size of both items.” The report also said there was a problem with the spare allocation for medical equipment in the hospital’s radiology area.

According to the state auditors, these lapses have led to instances wherein the construction had to be suspended or extended.

COA said during the construction of the project’s Phase 1 in 2015, the project also took four years before its completion and this should have already taught the contractor a “good lesson.”

“But as the data shows, it seems that those were ignored, hence, the same troubles and disruptions are faced by the management which has grossly contributed to the delay of the project,” COA said in its report.

Too much

COA further said too much liberty in giving contract time extensions would give the contractor the impression that it can be easily obtained and it would not be pressured to accelerate completion of the remaining work.

The state auditors also observed that the issuance of suspension and the corresponding resumption orders were issued by the DEPW and not by the mayor.

Then-mayor Tomas Osmeña was identified by COA in its report as the head of the procuring entity and the one who signed the notice to proceed on March 28, 2019, but Osmeña lost to the late mayor Edgardo Labella in the May 2019 election.

“It sounds inappropriate if the order of the head of the office like in this case can just be reversed or put on hold by his subordinate,” said COA.

COA also pointed out that the contractor did not give full and detailed particulars of the P16,179,099 extra cost for the project.

Since this mandatory requirement of Republic Act 9184, or the Government Procurement Reform Act, was not complied with, state auditors said “the claim for any variation order is deemed waived by the contractor.”

Consequently, the portion of about P6 million of the variation order that was paid in 2021 has been deemed “irregular.”

COA asked the DEPW and the contractor to explain why the P6 million was not returned by the contractor to the government considering that it was deemed waived by the contractor by operation of law.

In an interview with SunStar Cebu on Sunday, July 24, 2022, Cebu City Mayor Michael Rama said he would check on the findings of the state auditors.

Rama promised to monitor CCMC every week and check on the construction’s progress.

In its audit report, COA recommended that the DEPW prepare and submit to its office a vivid presentation of the contract time both during the period of suspension orders and time extensions.

COA also directed the city accountant to thoroughly evaluate the DEPW’s computation of contract time and impose liquidated damages to the contractor.

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