Contractor cries foul over ‘defective firetruck’ claims: Warranty wasn’t even used
MANILA, Philippines — A contractor responsible for delivering 469 firetrucks in 2015 has cried foul on allegations that 40 percent of the units sold were defective, stressing that the cash bond they deposited as a warranty clause was not even used.
At the House Committee on public order hearing on Tuesday about House Resolution No. 724, which seeks a probe on the alleged overpriced firetruck procurement of the Bureau of Fire Protection (BFP), Kolonwel Trading’s Whelma Lanzuela said the non-usage of the P258-million cash bond as part of the warranty meant that no defects were encountered with their firetrucks.
Kolonwel Trading was responsible for the delivery of China-made Jiangte firetrucks, which cost around P5 million each — for a total contract cost of P2.575 billion — during the time of late former president Benigno Aquino III.
“We were able to collect proceeds worth P2.575 billion — that’s the total payment for the 469 firetrucks. What’s more, our performance bond that is in cash — only we provided a performance bond in cash — worth P258 million was returned to us. If there were defects, why return the whole amount?” Lanzuela asked in Filipino.
Lanzuela’s defense came after committee chair and Santa Rosa City Rep. Dan Fernandez asked if they could join biddings after their delivery in 2015. In response, Lanzuela said they were unsuccessful, while BFP head Director Louie Puracan noted that a Commission on Audit (COA) report pointed to defects in the firetrucks.
In June 2017, COA said that 176 firetrucks bought by the government under the Aquino administration were defective. Some of the supposed defects include:
- Defective engine relays
- Faulty starter and ignition switch
- Leaks in the water pump gasket
- Transmission and hand brake malfunction
- Unaligned wheels
- Damaged side mirrors
- Engine oil leaks
- Weak battery
- Low coolant level
“During 2014, the [BFP] acquired the 400 plus firetrucks, sir, and the COA performed an audit, performance audit in 2018, finding some recommendations on those procured firetrucks prior to 2018 […] so it was found out during that time that the BFP must exercise due diligence because of the findings of the Jiangte that majority of the firetrucks performing in the field have defects,” Puracan said.
“Sir, you signed this. If it is defective, why did you pay us? You accepted the performance report,” Lanzuela said, referring to BFP C/Supt. Jesus Fernandez. “Certificate of performance evaluation, very satisfactory, signed by General Fernandez, collaborated by […] and then we were able to collect the P2.5 (billion), and the P258 million was returned?”
Fernandez then asked BFP officials present in the hearing if they could confirm Lanzuela’s claims that the items were received in good condition and that the cash bond was indeed returned to Kolonwel.
In response, Puracan said they could not find an immediate answer, but they believe the money was returned to the contractor.
“Can you confirm this (BFP) chief, if the P258 million for the warranty given to BFP, did they provide this cash bond during the time of Mar Roxas with that 469 firetrucks? If they did, and if that is under warranty for two years, have we deducted anything for the supposed defect of the 40 percent of the 469 (trucks)?” Fernandez asked.
“Actually, sir, sorry I cannot answer that in full detail, sir, but we will try to find it out, sir. But according to our records, it appears to have been returned,” Puracan replied.
Fernandez then said that BFP should have used the money to repair the supposedly defective units, but Puracan noted that the audit was made by COA in 2017, or beyond the two-year warranty period.
Lanzuela meanwhile claimed that problems hit some of the trucks they delivered because BFP personnel do not know how to drive properly.
“In response to Congressman (Romeo) Acop, with the said defects, the BFP did not order replacement parts. To be fair to the current BFP administration because it did not happen during their time — but the drivers do not know how to change gears properly,” she said.
Before Lanzuela’s defense, she claimed that contractors like them are being set aside because they offer reliable items at a low price. She was, however, scolded by Acop, who told her to answer questions directly and refrain from advertising her side.
HR No. 724, filed by Makabayan bloc members ACT Teachers Rep. France Castro, Gabriela Rep. Arlene Brosas, and Kabataan Rep. Raoul Manuel, seeks an investigation into the alleged questionable procurement process by the BFP, particularly on the purchase of firetrucks.
According to the three lawmakers, it seems that BFP has given undue advantage to two joint venture entities since 2018. This was corroborated by Lanzuela, who claimed that the number of companies willing to engage in government procurement dwindled during former president Rodrigo Duterte’s term.
BFP has denied the accusations at the hearing, saying that their procurement procedures are not tailor-fitted to a few contractors.