Audit Report on cowd 3

HERE'S the third part of the Commission on Audit's findings and report on the Cagayan de Oro Water District (COWD). Read on:

The team observed that there was no valid reason cited by the contractor to transfer the take-off point. In as much as the COWD personnel conducted comprehensive technical studies in locating the take-off point most beneficial to the concessionaires of the district, it would be disadvantageous and unfair to the COWD which made adjustments just to accommodate the proposal of the contractor for no valid reason, which in the first place, accepted and signed the original contract specifying the take-off point at the Lumbia airport.

The transfer of the take-off point apparently resulted in the widening of the (beginning of Page 11) prospective service area of the contractor. The areas where RVWCI water pipes passes through would become their probable service areas since it owns the pipes. The coming up of subdivisions and villages in the area can happen in the near future. In the event of termination of the contract between COWD and RVWCI, the latter has already laid its pipes strategically for its advantage. In analyzing the situation, RVWCI preferred to invest larger pipes in anticipation of future benefits, the widening of its prospective service areas.

A very glaring example that the FAIO Team noted was the existence of a water purifying station during inspection near the area of the RVWCI. It can be safely inferred that the water came from Rio Verde and not from COWD considering that said water station cannot purify water without undergoing treatment, and it is only the RVWCI which treats water in the area.

In G.R. No. L-5439 dated December 29, 1954, Caltex (Philippines), Inc. vs. Delgado Brothers, Inc., the court ruled that the due execution of a contract after public bidding is a limitation upon the right of the contracting parties to alter or amend it without another public bidding, for otherwise what would a public bidding be good for if after the execution of a contract after bidding, the contracting parties may alter or amend the contract, or even cancel it, at their will?

Public biddings are held for the protection of the public, and to give the public the best possible advantage by means of open competition between bidders. He who bids or offers the best term is awarded the contract subject of the bid, and it is obvious that such protection and best possible advantage to the public will disappear if the parties to a contract executed after the public bidding may alter or amend it without another previous public bidding. The court took into consideration not only the evidence adduced but also the detrimental effect upon the consuming public.

Ben Contreras

In Agan, Jr. vs. PIATCO (Philippine International Air Terminals, Co. G.R. No.155001 dated January 21, 2004, the court again bright-lined the principle that in public bidding, bids are submitted in accord with the prescribed terms, conditions and parameters laid down by government and pursuant to the requirements of the project bidded upon.

In light of these parameters, bidders formulate competing proposals which are evaluated to determine the bid most favorable to the government. Once the contract based on the bid most favorable to the government is awarded all that is left to be done by the parties is to execute the necessary agreements and implement them. There can be no substantial or material change to the parameters of the project, including the essential terms and conditions of the contract bidded upon, after the contract award. If there were changes and the contracts end up unfavorable to government, the public bidding becomes a mockery and the modified contract must be struck down. The contracts which made a mockery of the bidding process cannot be upheld and must be annulled in their entirety for violating law and public policy.

As can be noted, the contracts were substantially amended after their award to the non-responsive bidder on terms more beneficial to the contractor, RVWCI, and prejudicial to public interest. If this flawed process would be allowed, public bidding will cease to be competitive and worse, government would not be favored with the best bid. Bidders will no longer bid on the basis of the prescribed terms and conditions in the bid documents but will formulate their bid in anticipation of the execution of a future contract containing new and better terms and conditions that were not previously available at the time of the bidding. Such a public bidding will not inure to the public good. The resulting contract cannot be given half a life but must be struck down as totally lawless.

Audit Report on cowd

Ben Contreras

ENGR. Reonil Joseph J. Linaac is the secretary general of First Labor Organization of the Cagayan de Oro Water District (Flow). He thought the public deserves to know the truth. Hence, I am printing the 22-page COA report he e-mailed to me and in fairness to all concern.

The document, written in 2009, was addressed to the then COWD manager Gaspar Gonzales by Leonor Boada, a director of the Commission on Audit. Read on:

"We are pleased to transmit the partial Fraud Audit and Investigation Office-Audit Observation Memorandum (FAIO-AOM) No. 2009-001 dated November 9, 2009 on the conduct of audit/investigation on the alleged graft and corrupt practices of the Board of Directors of Cagayan de Oro city Water District, Cagayan de Oro city; the contractor, Rio Verde Water Consortium, Inc. and the then LWUA Administrator, pursuant to COA Office Order No. 2009-393 dated June 15, 2009.

"The findings/observations of the FAIO Team are discussed in detail in the said AOM. In connection herewith, we request that the management comments be submitted to this office within ten (10) days from receipt hereof for evaluation and incorporation in the final report."

We acknowledge the assistance and cooperation of the officials and staff of COWD in this undertaking. Thank you.

"Very truly yours,
"Leonor D. Boada
Director IV"

"Audit Observation
"There were seven (7) bidders who participated in the bidding as follows:
"1. AAA/First Global (AAA/FG)
"2. FF Cruz & Co. Inc. (FFCCI)
"3. Honor Merit Ohils. Corp. (HMPC)
"4. Manila Water Company Inc. (MWCI)
"5. Rio Verde Water Corp. (RVWC)
"6. Solerex Water Tech., Inc. (SWTI)
"7. Visland Water Corp. (VWCI)

"However, only two (2) among the above mentioned suppliers submitted their bid documents for Eligibility Proposal, Technical Proposal and Financial Proposal. They were HMPC snf RVCI. HMPC was declared a non-eligible bidder by the BAC thru Engr. Bienvenido V. Batar, Jr., vice Chairman of the BAC for failure to submit some of the eligibility requirements. The BAC applied the non-discretionary pass or fail criteria based on Republic Act 9184.

"RVWCI, on the other hand, was declared an eligible bidder by the BAC thru the Vice Chairman in view of the compliance and submission of all the proposals namely, eligibility, technical and financial proposals, as provided in RA 9184. Initially, RVWCI was considered by the BAC the lone eligible bidder with the lowest calculated bid.

"On November 25, 2004, the result of post evaluation/detailed examination/post qualification of the three (3) envelops submitted by RVWCI were turned-over to the BAC Secretariat by the Eligibility Subcommittees (TWIGs). It was the time when the BAC declared RVWCI as a Non-Responsive Bidder and therefore, disqualified. In ruling the disqualification, BAC issued Resolution No.003, S-04 dated December 1, 2004.

"However, to the surprise of the BAC, the Board of Directors of COWD issued Resolution No.222, S-04 dated December 9, 2004 awarding the contract of Bulk Water Supply Project (BWSP) to RVWCI per recommendation of the COWD-BWSP Committee. Records show that under the December 9, 2004 Minutes of the Board Meeting on the Award of COWD-BWSP, it was Vice Chairman Gapuz who said that the results of the post qualification process on the bid documents submitted by RVWCI were evaluated by the COWD-BWSP Committee and were found to be in order. Per their committee recommendation, the Board resolved to award the contract for BWSP to RVWCI. It was also resolved to furnish LWUA Administrator Jamora of the copy of the contract for his review."

(To be continued)

Cowd Perks

Jay Valleser

I WOULD like to give way today's space to an employee of the Cagayan de Oro City Water District who wants to emphasize that the conflict now affecting that office is not that they do not like each other (employees vs. board of directors). They are not against Mr. Joel Baldelovar and Co.. They are against the policies that make the COWD the milking cow for unreasonable benefits.

"For the employees, allowances, fringe benefits or ‘perks' as they would want to call it, were not the issues at hand inside the Cagayan de Oro City Water District (COWD).

"Likewise, the newspaper is not the venue for all these grievances but has to be addressed accordingly to the office of the Department of Budget (DBM) and the Commission on Audit (COA). In many occasions, Mr. Joel A. Baldelovar, with repetitions, kept on maligning the integrity of the employees' crusade through print and media. I guess it would be fair enough to air our side if not give him the dose of his own medicine.

"Allow me to introduce Director Baldelovar, with a bachelor's degree in AB-Mass Communications and rose from the ranks of Bombo Radyo, appointed by the city mayor in January 2005 as director and currently the chairman of the COWD Board of Directors. He is the same individual who claimed that they took the lead in 2009 to exempt themselves from receiving all those ‘perks'. Ironically, he is the same official among some other directors who approved and enjoyed all those bonuses by virtue of their board resolutions. Resolutions passed were not only unlimited but self-serving from car loans, appointments of their own children, P4,500 per diem for every day of travel, etc. Of course, be it known that various issues involve different set of directors and may not apply to all its members at all times and in all issues. COWD Board of Directors may come and go but has continued receiving the very questionable ‘Gratuity Pay' which Mr. Baldelovar failed to enumerate. The last time a COWD director had received such pay was in December 2008.

"Contrary to his self-acquired recognition, if not ‘pogi' points of exempting to said ‘perks' is the truth of the matter - Resolution No. 2004-006 issued by the Commission on Audit on September 14, 2004. It states, ‘This commission has consistently disallowed these benefits on the ground that water district directors are prohibited from receiving compensation other than the per diems mandated under Section 13 of P.D. 198... and, "The Supreme Court in G.R. No. 147248-49 entitled Baybay Water District vs. COA dated January 23, 2002 had affirmed the disallowances holding that the law clearly indicates that directors of water districts are authorized to receive only the per diem authorized by the law and no other compensation or allowance in whatever form.

"On same resolution, it is very important to note that it does not totally disallow said benefits to the employees of a district but subject to the established policy on "non-diminution in pay" and to the conditions set forth by DBM dated April 27, 2001 on the continued grant of such. Retaliation or not, the COWD Board has stripped off all the benefits due for the employees while pretending to be the advocates of such change and get the credit from the public after lavishly enjoying the same. If indeed they would want to set themselves as examples, then why only implement those steps in 2009, surprisingly at the height of the very sensitive issues of the Bulk Water Supply Agreement tainted with alleged irregularities and anomalies, if not fraud. With propriety, we will inquire officially on these disallowances from proper agencies and certainly not on the streets.

"Again, to set the record straight, the employees are not protesting on the streets on lost benefits and allowances but are consistent of questioning the propriety, if not irregularities, of policies passed by the board of directors specifically on the controversial Bulk Water Supply Contract, the questionable Lwua intervention and the pending selection of a General Manager.

"Ricochet or so, the public deserves to know the truth of the COWD case."
Reonil Joseph J. Linaac

E-mail: tabletalkgsd@yahoo.com

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FLOW @ COWD Shop Grounds

May 19, 2010 : FLOW members and employees held their first day of peaceful mass demonstration simultaneous at the Admin. Building in Corrales' 66th day of picketing across the street. The members were updated anew on the group's intention and objective by way of appealing for the following, to list ;

• LIFTING OF THE LWUA INTERVENTION





• APPOINT THE NEXT GM FROM WITHIN COWD





• GENUINE SOLUTION TO THE BWSP CONTRACT MESS

1. 
   

   VOTE WISELY…
   SURIIN MABUTI ANG INYONG BOBOTOHANG KANDIDATO… YONG KANDIDATONG MAKAKATULONG SA PAG UNLAD NG ATING NAGHIHINGALONG EKONOMIYA.

   HUWAG PADADALA SA MGA MATATAMIS NA SALITA AT PERA NA BINIBITAWAN NG MGA GALANTENG POLITIKO… PAGNAGKATAON YAN AY BABAWIIN DIN NILA SA KABAN NG BAYAN..PARA BUMALIK SA KANILANG BULSA.

   IPA IRAL ANG IYONG KONSENSYA…. VOTE WISELY AND SELECT THE BEST CANDIDATE, OTHERWISE… VOTE NOBODY !!!!!!

   MAU NA NI ATONG PANAHON PARA MAUSAB ANG DAGAN SA PANAHON…..

   DAGHAN SALAMAT – MAAYONG BUNTAG!!!!

May 1 - Prayer Rally

May 1, 2010 : FLOW at its 53rd day of peaceful mass demonstration on COWD issues related to the Bulk Water Supply Contract discrepancies and the controversial LWUA intervention, conducted a prayer rally @ KIOSKO Kagawasan in Divisoria to commemorate the Labor Day celebration. The group is calling Vice-Mayor Emano on his commitment to convince if not persuade the board of directors , who were appointed during his term, to consider lifting the LWUA intervention by relieving Engr. Proceso Pag-ong, Jr. who failed to resolve the conflict between the board, the management and the employees on very sensitive issues, major of which is the questionable BWSP Contract. The group offered prayers and lit candles to show reconciliation and hopeful of peaceful means to finally resolve the COWD mess.

DAY 52 : FLOW President celebrates bday

FLOW President Engr. Antonio B. Young celebrated his birthday in the streets on its 52nd day of protest against irregularities inside the water district firm. The group continued with its monitoring and follow-up with the commitment of Vice-mayor Emano and his appointed board of directors to consider lifting the LWUA Intervention and finally put concrete solutions on how to handle the Bulk Water Supply Project Agreement discrepancies. FLOW will stay vigilant for this promising development to finally put rest of the whole COWD controversy.