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COA doubts if construction firm can legally supply DICT with laptops, tablets

/ 11:23 PM August 17, 2021

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MANILA, Philippines — The Commission on Audit (COA) doubts that a general construction company will be able to legally supply the Department of Information and Communications Technology (DICT) with laptops and other computer gadgets.

The company, Lex-Mar General Merchandise and Contractor, is the winning bidder in the procurement of various ICT gadgets totaling P170.2 million.

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The firm has no documents to show that it is engaged in the business of supplying information and communications technology gadgets, the COA pointed out in its Consolidated Management Letter addressed to DICT Secretary Gregorio Honasan II.

There is no information about this in Lex-Mar’s Certificate of Registration with the Bureau of Internal Revenue and its Permit to Operate, according to the COA letter.

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Citing Lex-Mar’s financial statements, the COA letter to Honasan said the “primary purpose of the company is to engage in the business of general construction.”

“Hence, it is doubtful whether the herein supplier has the legal capacity to engage in this kind of business,” it added.

On top of this, the letter also pointed out that Lex-Mar was a sole proprietorship with current assets of around P44.57 million — way below the P170.2 million contract it signed with DICT.

COA also raised a doubt as to whether the company had employees as it found no records of expenses for workers’ salaries.

“On the other hand, there are no reported Current Liabilities while the Other Liabilities for both year pertains to VAT and Income Tax Payable only,” COA said.

Because of all these, COA said the firm had “doubtful financial capacity to implement” the DICT projects.

COA specified three projects that will be handled by Lex-Mar.

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One is the procurement of P50.77 million worth of gadgets for students and teachers at the Pinaglabanan Elementary School in San Juan:

  • 1,000 laptops priced at P40,600 per unit
  • 1,500 tablets priced at P4,780 per unit
  • 1,001 pocket wifi units priced at P3,000 per unit

The two other projects — worth P118.49 million — are for the city governments of San Juan and Makati:

  • 6,250 tablets priced at P4,780 per unit — a total of P28.87 million
  • 18,750 tablets priced at P4,780 per unit — a total of P89.62 million

Ultimately, the DICT as a policy-making body has no authority to provide ICT products to beneficiaries, COA said.

“The DICT’s mandate of formulating and implementing policies and initiatives does not include the authority of providing ICT devices to the intended beneficiaries,” COA said.

“Hence, while we sympathize with the plight of Learners and Teachers in this time of distance learning or online classes, a donation of government property, such as in this case, may be considered as illegal expenditure,” it added.

As of this writing, COA said that it had not yet received a reply from the DICT.

/atm

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TAGS: COA, DICT procurement projects, illegal procurement, Lex-Mar General Merchandise and Contractor
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