Virac purchased 35 motorized bancas without DBM approval

PART OF THE 35 MOTORIZED BANCAS purchased by the Virac municipal government recently are now being painted with the LGU’s name at Plaza Rizal where they are temporarily stored prior to distribution to marginal fishermen affected by last year’s typhoons.

Another procurement of the Virac municipal government covering 35 units of motorized bancas last May 2021 has hit a snag after it was found out that no approval was sought from the Department of Budget and Management (DBM) prior to the bidding.

An informed source claimed that Mayor Sinforoso Sarmiento Jr. issued Purchase Order No. 2021-05-073 on May 12, 2021 to Nagas Fiberglass & Fabrication Shop of Oas, Albay , which acknowledged receipt of the PO eight days later.

The PO covered the supply and delivery of 35 units of 22-footer motorized fiberglass banca along with its accessories consisting of a 7.5hp marine diesel engine, stainless propeller, rudder shaft, cross joint, propeller shaft, and brass tube.

Each unit costs P71,000 each, with the contract having a total amount of P2,485,000.00.

The disbursement voucher covering the purchase was being processed for payment when the Municipal Accounting Office reportedly pointed out the procedural deficiency.

Pursuant to DBM Budget Circular No. 2019-02, the approval of the Budget Secretary is required in the requests of government offices, including LGUs, for the acquisition of motorized bancas/boats with funds sourced from the national budget.

The funding for the 35 motorized bancas reportedly came from the LGU’s Trust Funds, specifically those received as calamity assistance from the national government after super typhoon Rolly.

Mayor Sarmiento had publicly pronounced that the funds would be used to buy motorized bancas for distribution to marginal fishermen who lost their boats.

Research conducted by the Tribune, however, shows that the motorized fiberglass banca and accessories purchased by the Virac LGU may be grossly overpriced.

A post in its official website by the Tabaco City Government shows that on May 14, 2021, just two days after Virac LGU issued its PO to Nagas Fiberglass, Tabaco City Mayor Cielo Kristel Lagman-Luistro issued Purchase Order No. 21-05-0380 dated May 14, 2021 to the same supplier, Nagas Fiberglass.

The Tabaco PO listed the cost of each 20-foot motorized fiberglass banca at P29,900, less than half of the price quoted by Nagas for its Virac bid.

There are two significant differences in the specifications for both procurements.

The Tabaco bancas are six meters (6) long and powered by 6.5hp gasoline engine, while the Virac units are seven (7) meters long and uses 7.5hp marine diesel engines.

A source claimed there should not be not much of a disparity in the price.

Many marginal fishermen prefer to use motorized banca hulls made from wood and marine plywood, instead of the fiberglass ones.

A banca fabricator based in Bato town told the Tribune that the fiberglass boats sink immediately after being holed while the plywood-hulled ones stay afloat much longer.

A standard marine plywood-lumber hull, however, costs somewhere between P45,000 to P60,000 each if bought from backyard manufacturers in coastal villages of Camarines Sur.

The new kink in the Virac LGU’s procurement procedures comes two months after Mayor Sarmiento had to “annul” a contract for the supply of heavy equipment for the very same lack of authority from the DBM.

Last May 28, 2021, the first-termer chief executive communicated his decision to the Bids and Awards Committee (BAC) regarding the April 26 bidding for the supply and delivery of a wheel-type backhoe and 6-wheeler dump truck supposedly for use in solid waste management and awarded to Powertrac Incorporated of Valenzuela City.

What happened to the heavy equipment procurement is highly unusual in that there is no provision in the Revised Implementing Rules and Regulations (IRR) of Republic Act 9184, or the Government Procurement Reform Act, that allows the Head of Procuring Entity, in this case the mayor, to “annul” an awarded contract on the ground that the LGU failed to secure an authority covering the procurement.

Section 41 of the procurement law only allows the LCE to “reject any and all bids, declare a failure of bidding, or not award the contract” on the basis of prima facie collusion in the bidding, failure of the BAC to follow procedures, or if the project is no longer feasible or necessary or the funds have been withheld or reduced through no fault of the LGU.

An insider told the Tribune that MENRO/SWM in-charge Andy Po II made the request for the heavy equipment with subsequent approval from Mayor Sarmiento on March 22.

In the document, both the wheel-type backhoe costing P2.8 million and the 6-wheel 4xw dump truck costing P2.2 million had detailed specifications. It also indicated that the funding will be charged to the allocation of the Municipal Disaster Risk Reduction and Management Office (MDRRMO).

Why it was the MENRO-SWM in-charge who made the Purchase Request, not the MDRRMO head, has yet to be determined.

A source also told the Tribune that the funding actually came from the national government as assistance following last year’s series of typhoons.

Pursuant to revised guidelines issued by the Department of the Interior and Local Government (DILG) on motor vehicle acquisition, all LGUs “must seek prior approval of the Secretary of Budget and Management, or the Secretary of Interior and Local Government, on specific motor vehicles as may be authorized, and that no post-purchase authority will be issued.”

The same guidelines state that the Local Government Risk Reduction and Management Fund could be used for the purchase of vehicles, provided that it shall be utilized in the acquisition of motor vehicles and heavy equipment to be “exclusively used for response and rescue/relief activities.”

Under the procedure, the local chief executive, or the mayor in the case of a city of municipality, is supposed to submit a letter-request stating the number and specific type of vehicle to be purchased, Certification of Availability of Funds, and a Sanggunian resolution on the fund utilization in the case of trust funds such as unexpended DRRM fund balances or funds transferred to the LGU from higher-level LGUs or government corporations.

Following the “annulment” of the contract, the delivered Jinggong JG708S backhoe and Sinotrac Powertrac H3 mini-dump truck was removed from its parking spot at the plaza and transferred to the evacuation center at San Isidro Village.

A scan of Powertrac posts on the heavy equipment showed that a Jinggong JGS708S wheel excavator with 0.30 cubic meter bucket capacity costs about P1.7 million in Powertrac branches while a Sinotrak H3 4×2 mini dump truck with 4.5 cubic meter capacity is priced between P1.15 million to P1.5 million.

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