COA denies supplier’s claim for 601 undelivered vehicles to Batangas provincial gov’t

MANILA, Philippines – The Commission on Audit has denied the payment claim of a supplier for 601 rescue vehicles that were not delivered to the Batangas provincial government in 2021.

The COA en banc ruled on the petition of MCX International, Incorporated on March 5, which was released on Wednesday, April 28. The supplier had asked COA to compel the Batangas provincial government to release the full payment of P871.54 million for the vehicles that it had failed to deliver on time, citing force majeure due to the COVID-19 pandemic.

“This Commission is not persuaded. In petitioner’s case, the contract to deliver 1,000 units of MPRVs was entered into on February 19, 2021 or well into the aftermath of the pandemic. As such, the petitioner cannot claim that it was impossible to foresee the effects of the pandemic at that time,” COA said.

It reminded the supplier that at the time the contract was sealed, it committed to fulfill the required delivery for 1,000 multi-purpose rescue vehicles (MPRVs) “amidst the then prevailing global slowdown of businesses, concededly due to the pandemic.”

“Thus, the petitioner only has itself to blame. The province is correct in pointing out that the petitioner could have always walked away from the contract; but the petitioner chose to gamble, and then lost. This is not force majeure,” COA said.

It said that while MRX maintained that the undelivered vehicles were in its warehouse and ready for delivery since June 2022, Batangas “was prejudiced when it was deprived of the use of the 1,000 units of MPRVs that it urgently needed since August 17, 2021.”

“Thus, the claim for payment for these undelivered vehicles is denied,” COA said in its ruling.

Since the provincial government had already paid P187.51 million to MCX for the delivered vehicles, COA granted the supplier’s claim for additional payment but only in the amount of P225.29 million. The unpaid balance, based on COA’s computation, is P412.8 million.

This computation is based on the COA finding that the provincial government collected P230.05 million excessive liquidated damages from MCX for the 399 vehicles it was able to deliver worth P446.48 million.

COA said the correct computation for liquidated damages was P30.807 million, placing the amount due to the supplier at P412.8 million.

The contract was awarded to MCX on February 10, 2021, for the supply and delivery of 1,000 MPRVs funded under the provincial government’s Capability Building Program.

The provincial government issued the Notice to Proceed on February 18, 2021, setting the full delivery date on August 17, 2021.

MCX later requested a 90-day extension of its contract, or until November 15, 2021, citing unforeseen problems that led to manufacturing delays at the supplier’s sources. The province denied the extension. – Rappler.com