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By Francis Allan L. Angelo

THE Commission on Audit (CoA) Iloilo office has issued a Notice of Finality of Decision (NFD) relative to the disallowed purchase of a laptop computer by the Iloilo provincial government in 2007.

The NFD, which was issued early this week, is a follow up to the Notice of Disallowance No. 2008-003-300 (08) dated December 2, 2008 which nixed the acquisition of an Acer laptop computer for the Provincial Health Office (PHO).

State Auditor 4 Haydee Pasuelo of CoA provincial office, said they did not accept the justification of the provincial Bids and Awards Committee (BAC) on why the laptop computer delivered by the lone supplier was different from the item described in Purchase Order No. B-1273.

The laptop transaction was included in the 2008 Annual Audit Report on the provincial government which outlined why the deal was attended with irregularities.

According to the CoA report, the PHO requested an Acer Aspire laptop computer (model 5920G-302G16N) costing P99,000.

But the lone bidder, Seven Seven Trading, delivered another brand of lesser specification, an Acer Travelmate 6292-101616MI which only costs P59,900.

But the BAC’s inspection team accepted the delivered laptop even if it deviated from what was originally ordered.

CoA also found out that Seven Seven Trading carries only supplies such as computer ink, not a computer distributor.

The supplier is actually a middleman for a computer supplier, the audit agency found out.

The audit body said the transaction “is considered an irregular expenditure since it is in violation of a government policy to acquire the same directly from reputable manufacturers or their duly licensed distributors.

CoA also rapped the BAC for its “failure to exert efforts to attract competitive bidders, especially the duly registered computer stores in the city, to avail of price advantageous to the government.”

The provincial government, through the General Services Office (GSO), justified the deal saying that the delivered unit was upgraded from 1526 MB DDR2RAM to 2 GB DDR2RAM.

“The upgraded unit has higher specifications compared to the one that was bidded out which Acer Aspire 5290 G-302 G16N.  As to its durability, Acer Aspire model is usually used indoor while Acer Travelmate is used for outdoors and could withstand traveling thus considered more durable than the former,” the GSO said.

But the CoA provincial office did not accept the GSO’s justification and recommended the return of the delivered unit and the conduct of a new bidding on the item.

The Iloilo provincial government can still appeal the Notice of Finality of Decision with the CoA regional office.

CoA held Gov. Niel Tupas Sr., the BAC and other officials who released the funds for the laptop computer liable for the controversial deal.

By Francis Allan L. Angelo

THE head of the Bids and Awards Committee (BAC) of the Iloilo provincial capitol denied any irregularity in the purchase of two hematology analyzers worth P2.9 million each for two district hospitals.

Atty. Salvador Cabaluna III, provincial legal officer and BAC chair, said the two analyzers supplied by Crestline Scientific Corp. conformed with the specifications in the request of the two hospitals.

The heads of Federico Roman Tirador Sr. Memorial District Hospital (FRTMDH) and Ramon Tabiana Memorial District Hospital (RTMDH) refused to accept the two hematology analyzers as it did not follow the purchase orders aside from being defective. 

Drs. Noel Roy Gigare, FRTMDH head, and Levi Osea, RTMDH chief, said the machines lack vital components and produced unreliable and erroneous results.

Cabaluna said the BAC’s technical working group found out that Crestline’s machines followed what the two hospitals requested.

“The concerns of the two hospital chiefs were addressed during a meeting with the technical working group. The advantages of the machines were also discussed with them,” Cabaluna said.

Cabaluna said they will also submit their findings and justifications to the Commission on Audit (COA) which has been inquiring into the transaction.

Cabaluna said he will provide a copy of the letter once it is finalized and submitted to COA.

The purchase of the two hematology analyzers is part of the 2008 Health Facilities Enhancement Program (HFEP) which has a total funding of P33 million.

Cabaluna said the machines have no defects “and these were explained to the two hospital chiefs.”

Cabaluna said they cannot exclude Crestline from the transaction because it passed the BAC evaluation aside from offering the lowest bid.

“We cannot skirt around the procurement laws, especially if the supplier is qualified and offered the lowest bid. If the lowest bidder failed to satisfy the requirements, then we can consider the next lowest bidder,” he added.

By Francis Allan L. Angelo

HERE’S why deals in the Iloilo provincial government should be closely scrutinized.

The Commission on Audit (CoA) 2008 annual audit report recommended to the Bids and Awards Committee (BAC) to ensure that Capitol suppliers are “well-scrutinized, eligible, competitive and capable to deliver.”

The audit body based its recommendation on the circumstances surrounding the purchase of a laptop computer requested by the Provincial Health Office (PHO) in December 2007.

The PHO requested an Acer Aspire 5920G laptop computer with a memory size of 2,048 megabytes (MB) and processor type Intel Core 2 Duo T7300.

An Acer Aspire unit costs P99,000, according to the purchase order. But the laptop unit delivered by lone bidder Seven Seven Trading was an Acer TravelMate 6292. This unit has a memory size of 1,556MB while its processor is Intel Core 2 Duo T7100.

The Acer TravelMate laptop only costs P59,900, the audit agency said.

Despite the disparity between the purchase order and the unit delivered by Seven Seven Trading last February 2008, the Capitol inspection team accepted the laptop.

The audit body also found out that Acer TravelMate was already phased out from the market.

It was also found out that Seven Seven Trading, which is located on JM Basa Street, Iloilo City, is actually a middleman of another computer supplier Electroworld, Inc.

The CoA report said a certification issued by Electroworld to Ramie Salcedo, BAC chair and General Services Office head, proved that Seven Seven Trading does not sell Acer Aspire laptops.

“The certification issued by Electroworld Inc. to Mr. Ramie Salcedo proved that the item in the PO does not exist in the shelves of the Seven Seven Trading and dependent only in the stocks of Electroworld, Inc., the source of the said laptop unit,” the CoA audit report said.

CoA also questioned the eligibility of Seven Seven Trading saying no computers were displayed in the store but only sells school supplies and compute inks.

Salcedo defended the deal saying the two laptops have the same function.

The Acer TravelMate became cheaper compared to Acer Aspire because of technological advancements, Salcedo said.

Currently the media is taking a vigilant look on the bidding process for the purchase of P33-million worth of equipment for various district hospitals in the province of Iloilo.

Reports say the process is being influenced by people at the governor’s office who are asking huge commissions from “favored” suppliers.

By Francis Allan L. Angelo


GOVERNOR Niel Tupas Sr. will reorganize the provincial bids and awards committee (BAC) following his approval of the recommendations made by a special body that investigated the controversial autoclave sterilizer deal.


Tupas said he is looking for the replacement of General Services Office chief Ramie Salcedo as BAC chairman.


The governor said he is eyeing provincial budget officer Elena Lim to head the BAC but the latter has yet to give her nod.


Tupas mulled the BAC revamp after the former approved the findings of the committee headed by Atty. Jonel Alipao of the Provincial Legal Office relative to the P1.1-million autoclave sterilizer.


The committee exonerated the BAC of any liability in the deal and instead recommended that supplier Pacific Trade House (PTH) refund the provincial government’s money.


The Alipao committee also recommended the blacklisting of PTH and its sister companies from capitol transactions.


The Commission on Audit (COA) had earlier disallowed the purchase of the autoclave sterilizer for the Don Valerio Palmares Sr. Memorial District Hospital in Passi City.


In a notice of disallowance issued November 11, 2008, state auditor 4 Haydee P. Pasuelo said they found discrepancies in the deal.


“Ocular inspection conducted by the COA-Technical Services Office on August 21, 2008 disclosed that the unit is not in accordance with the duly approved Purchase Order, has no nameplate indicating the name of the manufacturer, origin of the unit, brand name/model and power consumption, and brochure submitted does not indicate the product patent number. It was also found out to be defective; thus the actual test was not performed at the time of the inspection,” the notice said.


The audit body also found “existence of fraud” in the procurement process based on the disbursement voucher and other supporting papers.


“The bidding participated in by Pacific Trade House and CDC Pharmacy showed that there was collusion between the two bidders. The disbursement voucher revealed that the person who received the check for payment in favor of Pacific Trade House was the authorized representative of CDC Pharmacy in the name of Ma. Cherry D. Alaban. It was also noted that the delivery receipt, signed by the Nurse-in-Charge supposedly issued by Pacific Trade House, bears the Taxpayer’s Identification Number (TIN) of a Dione Trading. Further investigation revealed that this Dione Trading (which delivered the autoclave sterilizer) and CDC Pharmacy are owned by only one person,” COA said.


Unlike the Alipao-led committee, the COA held the entire BAC liable for the alleged anomalous transaction.


Held liable were Salcedo as BAC chairman, Lim as vice chairman, provincial engineer Gracianito Lucero, former provincial treasurer Melba Sullivan, provincial administrator Manuel Mejorada, and executive assistant Levy Buenavista. Also held liable were Governor Niel Tupas Sr. for approving the transaction and Mercedes Sibug as supplier..

City Hall bought phony rifles – manufacturer


By Francis Allan L. Angelo


A US-based manufacturer said the five rifles bought by the Iloilo City government for the Special Weapons and Tactics (SWAT) team might be fakes, according to a city councilor.


Councilor Perla Zulueta said she received transcripts of email exchanges between her undisclosed source and a certain George W. Holloway who is in-charge of Law Enforcement and Government Sales of gun manufacturer Olympic Arms, Inc.


Zulueta said the emails indicate that the supposed K23B “Stubby” rifles acquired to beef up the SWAT have different specifications from what Olympic Arms manufacture and sell.


Holloway said a factory K23B would have a 1×7 twist barrel. The rifles the City Government bought from R. Espineli Trading had 1×9 twist barrel.


“If they are in fact 1×9 (twist barrel) they are fake,” Holloway said in his email message dated December 6, 2008.


A barrel twist of 1×7, which is also similar to “1 in 7”, means a projectile traveling down the barrel rotates one complete turn around its own axis in 7 inches. The twist barrel stabilizes the bullet when fired from a gun.


Holloway’s statement backs the contention of Zulueta that the SWAT rifles did not follow Olympic Arms specifications.


“The discrepancies lie on the different twist barrel which is 1×7 in the original firearm while the rifles bought by the City Government had 1×9. The rifles must be full automatic while the fakes are semi-automatic, Zulueta said.


As regards the purchase and export of firearms from Olympic Arms to the Philippines, Holloway said orders must be made through an export company like ETSS or World Wide Sports.


“They are able to handle the export/import of these weapons and are on file with us as dealers. We are not able to directly send product to the PI (Philippine Islands) because of the policies of the US State Department,” Holloway said.


The Olympic Arms executive said all firearms exported from the US are full automatic unlike the ones purchased by City Hall which are semi-automatic.


The serial numbers of genuine Olympic Arms items, Holloway said, have a “DE # # # # serial number range.”


“There may possibly some that have a ‘E # # # # number range’, but anything more than four numbers is for sure a fake,” Holloway added in another email dated December 10.


Zulueta said the serial number is another indication that the rifles purchased by City Hall are fake because their serial number starts with the letters BPNP instead of the DE or E number range.


The City Government through the Bids and Awards Committee (BAC) headed by Atty. Edgardo Gil, city legal officer, bought the five rifles from Espineli for P675,000.


The Bacolod City-based Espineli, which was represented by a certain Roberto Herbolario, claims to be an accredited distributor of Olympic Arms in the country.


Herbolario reportedly returned the City Government’s money after the controversy was exposed in the media.


The firearms have also been returned to the supplier but Zulueta said the City Council will still investigate the issue in an executive session with the key BAC members.


By Francis Allan L. Angelo


MEMBERS of the Iloilo City Bids and Awards Committee (BAC) can still be held liable for the alleged substandard rifles purchased for the Special Weapons and Tactics (SWAT) team even if the supplier has refunded the City government.


Department of Budget and Management (DBM) assistant regional director Alfonso Bedonia said the fact that R. Espineli Trading decided to return more than P600,000 to the City Hall does not exonerate BAC members from any legal responsibility relative to the rifles deal.


City treasurer Katherine Tingson confirmed that Roberto Herbolario of R. Espineli has refunded the city P638,839.32 as indicated in Official Receipt No. 3132947 after the media exposed the five defective rifles the firm sold to City Hall.


Tingson said the rifles are still in their vault as only the General Services Office (GSO) headed by Agustin Sangrador can return the items to R. Espineli.


Bedonia said the BAC should have conducted a post qualification audit by test firing a sample of the rifles before the committee awarded the contract to R. Espineli.


The post qualification audit is done after the BAC has determined the lowest bidder and before the contract is awarded to the winner.


Bedonia said the post qualification audit is the most important phase of the bidding process as this will ascertain if the bidder followed the specifications set by the BAC as regards the items to be purchased.


The DBM official said a gun expert representing the BAC should be present in the test firing.


A representative from the end user, in this case the SWAT, should also be present in all BAC meetings to guide the committee on the details of the rifles, Bedonia added.


Bedonia said the GSO can also be held liable for accepting the alleged substandard rifles without any test firing.


The Sangguniang Panlungsod the other day passed a resolution requesting Sangrador and his two supply officers, City Administrator Melchor Tan, and the City Treasurer’s Office’s (CTO) in-charge of cash division where the rifles were kept in the vault for a closed door executive session at the vice-mayor conference room 9am of Dec. 16.


Councilor Erwin Plagata, who authored the resolution, said they will be forced to relay the rifles issue to the Ombudsman if said officials don’t attend the meeting.


The City Council will conduct an investigation to know whether there were irregularities on the bidding process of the substandard rifles.


The alleged substandard rifles were exposed in the media after SWAT members complained before the City Council appropriations committee that the firearms’ target sight cannot be zeroed-in while the paint flaked when scratched.


SWAT rifles deal fishy


By Francis Allan L. Angelo


THE transaction surrounding the purchase of the supposed substandard automatic rifles for the Iloilo City Special Weapons and Tactics team is riddled with questions.


In an interview with The Daily Guardian on Air over Aksyon Radyo-Iloilo, Councilor Perla Zulueta said it appears in the bidding abstract that only one contractor, R. Espineli, joined the bidding for the five AR-15 rifles last March 2008.


A certain Bert Herbolario from Bacolod City represented Espineli in the bidding conducted by the Iloilo City Bids and Awards Committee headed by Atty. Edgardo Gil.


The other members of the BAC are city administrator Melchor Tan, executive assistant to the city mayor Francis Te, Ninda Atinado and General Services Office chief Agustin Sangrador.


The bidding papers also showed the five rifles cost P135,000 each, not P139,000 as claimed by a SWAT member who appeared before the City Council’s budget hearing last November 21.


The request for purchase of the five rifles was made last February by then SWAT head Chief Insp. Kim Legada while the bidding was held last March.


Espinelli won the contract and delivered the rifles October 16. The City Government then paid the contractor P675,000 March 29.




What surprised Zulueta is the performance bond and warranty of the rifles underwritten by Sterling Insurance Co. managed by Dama de Noche Gordoncillo.


Instead of the usual firearms bond, the insurance only covered construction contracts of public works. Worse, the bond was signed October 10, 2008 but it already expired February 2008 or 10 months ago.


“This is fraudulent. This was deliberate. How can they fix this when the City government signed an expired insurance policy which only covers public works contracts?” Zulueta said.


Zulueta also pointed out the bond’s insured amount is not enough to cover the contract price of the SWAT rifles.


“This transaction is under-insured because the contract price is P675,000 but the insurance is only P202,500,” she said.


The insufficient bond and insurance will somehow affect the Iloilo City government’s plan to have the supplier replace the alleged defective rifles, Zulueta said.


The alleged substandard AR-15 rifles surfaced after SWAT members complained that it was impossible to zero-in the target sights of the firearms.


Councilor Erwin Plagata said aside from the defective sights, he also noticed that the body paint of the rifles flaked when scratched.


Zulueta said gun experts who saw the controversial rifles noticed that the lower receiver of the firearms, which includes the grip, magazine feed, trigger, serial number and other details of the gun “look fake.”


When asked if who is to be blamed for the SWAT rifles transaction, the lady councilor said the BAC should answer for the supposed irregularities because it is the agency which examined the bid documents of Espineli.


Zulueta said she would rather that the contractor returns the money paid by the City Government for the rifles although she “cannot second guess the attitude of Espineliand Herbolario.”

July 2020

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