Makati should pay P387-M balance to city hospital contractor – COA

MANILA, Philippines – The Makati City government should pay the P387.77-million remaining balance in its Ospital ng Makati (OsMak) contract with builder Hilmarc’s Construction Corporation (HCC), the Commission on Audit (COA) ruled.

The COA en banc granted the petition of HCC for the release of the balance in its OsMak contract, saying that the claim had been sufficiently established through inspection and evaluation reports, and the certificate of completion and acceptance from Makati government officials.

COA noted that the Makati government had paid P1.3845 of the HCC contract, and that the contractor wanted full payment.

“The city cannot evade payment and unjustly enrich itself, especially that HCC has already completed the project, which is presently being used by the constituents of the city. Thus, this Commission gives due consideration to this petition for money claim,” it said.

COA also noted that the remaining balance of P387.77 million is P96.04 million less than the original claim, as the original contract cost had been reduced to P1.773 billion from P1.93 billion.

Case background

HCC won the bid for the construction of Phase 2 of the OsMak District 1 Emergency Hospital in August 2012, with an offer of P1.93 billion. This was reduced to P1.773 billion based on revisions made on the program of work during construction.

The Makati City Department of Engineering and Public Works issued an Inspection and Evaluation Report acknowledging project completion on  March 15, 2015.

In response to HCC’s demand letters for the release of the unpaid balance, the city government issued a certification that payment had not been made due to lack of supporting documents and clearances from the Office of the Ombudsman and the COA’s Fraud Audit Office, which had investigated alleged irregularities in the project.

The Makati government sought the dismissal of HCC’s payment claim before COA, citing insufficient  documentary support — the contractor did not even submit a copy of the Invitation to Bid, the resolution of the Bids and Awards Committee (BAC) that showed it won the contract, the Notice of Award, or the Notice to Proceed.

COA said in its ruling that the completion and existence of the project was no longer in question as the Technical Services Unit of the COA Local Government Sector-National Capital Region confirmed that the facility was built on the designated site, and 100% complete in accordance with specifications. – Rappler.com