DBM aborts P727.5-M deal over delivery delays, links with blacklisted firm

MANILA, Philippines — The Department of Budget and Management (DBM) disclosed Monday that it had already canceled a contract with a company for the procurement of medical supplies, like personal protective equipment sets, over its delayed delivery and links to a blacklisted firm.

During the Senate hearing into DBM’s proposed 2021 budget, Undersecretary Lloyd Lao of the department’s procurement board told senators that they canceled the multi-million contract with Ferjan Healthlink Philippines, Inc. last Friday.

“The basis for our cancellation is delay of delivery and the changes in the prices that we entered with them previously which was significantly high compared to the price that is available in the market at present,” Lao said.

“Considering that there is a delay in their delivery, it would be wiser for the government to purchase again with a new supplier given the new market prices.”

“We have canceled it on that ground, based on the delay. The only advantage we have is we can buy it the same number of items at cheaper prices at present already,” he further said.

READ: 3 firms on DBM blacklist for P727M in PPE, other deals as gov’t purchase rules eased for pandemic

Lao disclosed the cancellation of the contract upon questioning by Senate Minority Leader Franklin Drilon, who noted that the procurement contract was worth P727.5 million.

Another reason for the cancellation of DBM’s contract with the company was its link to a firm earlier blacklisted by the department, according to Lao.

“The Ferjan Healthlink Philippines Inc., is the winning bidder. The blacklisted company is Ferjan Healthlink Enterprise. Initially, when we checked it they are different companies,” the DBM official said.

“However, when we checked with the SEC (Securities and Exchange Commission), we got some data…there is one stockholder who at the same time is the owner of Ferjan Healthlink Enterprise. Once we got the data, we contacted the [Government Procurement Policy Board] for this matter for guidance, and afterward, last Friday we canceled the contract,” he added.

Lao, meanwhile, assured senators that the government did not make any advance payment to the company.

“Since delivery is yet to be made, we have canceled the contract already after we got data from the SEC. We did not make any advance payments. No money has been spent by the government,” he said.

KGA