176 firetrucks bought by gov’t 2 years ago defective—COA

A total of 176 of the 469 China-made firetrucks purchased by the Bureau of Fire Protection (BFP) for P2.57 billion two years ago were defective, according to the Commission on Audit (COA), which found several lapses in the procurement process.

In its annual audit report for BFP in 2016, COA released its observations on the government’s contract with the winning bidder, a joint venture between Kolonwel Trading and Hubei Jiangnan Special Automobile Co. Ltd., which was awarded the deal in January 2015.

Besides the faulty firetrucks, COA noted various procedural lapses, including questions over whether the winning bidder was actually 60-percent Filipino-owned, the lack of meticulous and judicious planning, and the post-qualification process exceeding 30 days, contrary to procurement rules.

COA also recommended that the BFP demand P52 million in damages from the contractor arising from delays in the delivery of the firetrucks, or “otherwise, hold responsible all persons who allowed the release of the full payment of the 469 fire trucks to the [joint venture].”

In its report, COA cited faulty parts in 176 firetrucks that were distributed to Regions 1 to 13, as of December 2016, including defective engine relay, starter and ignition switch, leaking water pump gasket, malfunctioning transmission and hand brake, among others.

Some of the firetrucks had wheels that were not aligned, damaged side mirrors, oil leakage, easily-drained battery, and low level coolant, the report showed.

COA’s audit team leaders from different regions “observed that the defects would affect the capability of the end-user Regions to efficiently respond to emergency cases and effectively carry out BFP’s mission to prevent and suppress destructive fires.”

As of May 9, some 107 trucks are still to be repaired by the supplier, COA said, citing a report from the BFP’s director for operations.

“The objective in procuring the fire trucks was to obtain a fast and reliable and efficient fire trucks.  However, it appears that the said objective was not attained considering the defects noted in the delivered fire trucks,” COA said.

COA also observed that the market price of the firetrucks did not appear to have been considered in determining the approved budget for the contract. Price had been set at P6 million for each of the 244 units of 1,000-gallon trucks and P5 million for each of the 225 units of the 500-gallon trucks.

It said the approved budget had been “too low to procure a fast and reliable and efficient fire trucks, compared with the market price of fire trucks of known quality and of international standard.”

COA also unfavorably compared the deal with the better quality firetrucks from Austria,

“For such [approved budget for the contract] set, we cannot help but to compare those with the 76 fire trucks bought from Austria under the loan facility costing P19,617,497.42 per unit, which to date no defects have been reported,” it said.

COA noted further that the financial documents submitted by Kolonwel Trading showed that its net current assets for 2012 and 2013 amounted to only P1.4 million and P1.6 million, respectively.

Thus, its financial capability to contribute P60 million to the joint venture under the contract terms “is highly questionable,” COA said. “This cast doubt on the 60-percent Filipino interest in the JV, affecting its eligibility to participate in the public bidding.”

COA said it took the BFP technical working group 79 days to complete the post-qualification process from Oct. 21, 2014 to Jan. 8, 2015, which was in violation of the implementing rules of the procurement law providing for only 30 calendar days to complete the deal.

Finally, COA questioned the decision of the BFP to condone the liquidated damages amounting to P51.979 million incurred by the contractor due to delays in the delivery of the firetrucks.

“The condonation of liquidated damages is not proper as there were obvious delays in the schedule of delivery in violation of Articles III and VI of the contract executed, necessitating the imposition of liquidated damages,” it said./rga