to Proceed was issued and duly received by the Supplier on December 4, 2023.
On December 27, 2023, the Supplier delivered drugs and medicines worth
₱5,964,085.88 or 83.88 per cent of the contract amount. The delivery was paid
on October 9, 2024 even without the certification from the HOPE that the goods
delivered were in accordance with the terms of the contract.
7.5 The medicines that were not fully or not delivered at all amounting to
₱1,146,495.12 are listed in Appendix I.
7.6 The payment made to the supplier amounting to ₱5,964,085.88 was not in
accordance with the rules and regulations governing partial payment for supplies
and materials, particularly under government procurement policies and
applicable auditing guidelines.
7.7 The contract between the City and the Supplier stipulates that the supplier shall
execute the project “Purchase of Drugs and Medicines (CHU I)” in accordance
with its total bid price of ₱7,110,581.00, with full delivery expected as a condition
for complete payment.
7.8 However, audit verification revealed that the payment was processed despite the
absence of full delivery of the required items under the contract. Furthermore,
there was no clear provision or approved contract variation authorizing partial
delivery or partial payment. Supporting documents such as Delivery Receipts
(DRs) and Inspection and Acceptance Reports (IARs), pertain only to 83.88 per
cent of the contract.
7.9 Upon inquiry with the City Accountant, it was disclosed that the supplier was
unable to deliver the remaining goods within the allowable delivery period due
to insufficient stock availability and cold chain logistics constraints in the market.
As a result, the agency opted not to compel the supplier to deliver or bill the
remaining items, considering that such delivery would already fall beyond the
budget validity period of the procurement.
7.10 Furthermore, the agency did not impose liquidated damages, citing that the partial
delivery was completed within the prescribed delivery schedule stated in the
contract.
7.11 However, as confirmed by the Bids and Awards Committee (BAC) Secretariat,
the BAC issued a Resolution suspending the supplier for a period of one year
from participating in any public bidding activities of the City Government, due
to its inability to fully deliver the goods as required under the contract.
7.12 It is worth mentioning that Section 19 of the GCC provides that the Procuring
Entity deduct liquidated damages from the contract price if the supplier fails to
satisfactorily deliver any or all of the goods within the period specified in the
contract inclusive of duly granted time extensions if any. Thus, liquidated
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