DepEd suspends ‘delinquent’ supplier

A supplier that bagged billions of pesos worth of contracts with the Department of Education (DepEd) was suspended from participating in the procurement process of the agency for one year after it failed to deliver on a P113.4-million contract last year.

The STAR yesterday obtained a copy of the suspension order against PHILAB Industries Inc., which has won several contracts with DepEd for the delivery of thousands of science and mathematics equipment to public elementary and high schools.

In a letter dated Nov. 7, Education Secretary Leonor Briones informed PHILAB chairman and chief executive officer Hector Thomas Navasero of the decision to impose a one-year suspension from participating in the procurement process of the DepEd and its attached agencies.

“PHILAB has for countless times been given the opportunity to live up to its obligation, as per extensions of the contract period given by the department as well as the chance to present its reasons for the delay,” read the letter, received by the supplier on Nov. 15.

PHILAB has yet to issue a statement on the suspension.

The one-year suspension was in relation to the termination of a P113.4-million contract for the delivery of science and mathematics equipment to 544 public high schools last year.

In its position paper submitted to DepEd over the matter, PHILAB vice president Sylvia Navasero claimed that the equipment has already been delivered and accepted by the end users, although she admitted the delays and that the liquidated damages has reached 10 percent of the total contract price.

Despite the explanation, DepEd still partially terminated the contract last Dec. 23, 2015 “on the ground of default of the supplier.”

The termination was affirmed in a decision denying the motion for reconsideration filed by PHILAB, signed by former Education Secretary Armin Luistro on Feb. 4, 2016.

In her letter to PHILAB, Briones said it is in the best interest of the department that the equipment be delivered on time or ahead of schedule.

She said the Government Procurement Reform Act gives procuring entities the power to issue a suspension order as penalty to contractors whose contracts have been terminated.

The uniform guidelines for the blacklisting of government contractors allow the head of the procuring entity to blacklist erring contractors from participating in the bidding of government projects.

No blacklisting order was issued against PHILAB.

Other contracts

Prior to the issuance of the suspension order, PHILAB had bagged three other contracts with DepEd, worth over P2 billion.

In a complaint-letter to DepEd, losing bidder Multifocus Corp. claimed that PHILAB was already delayed in two of the contracts worth P286.1 million and P1.412 billion, which were respectively awarded in October and November 2015.

“To put matters into perspective, the due dates on these projects were last July and August 2016, and there has been no actual delivery as of this date,” read the letter-complaint, signed by Diana Go Dy of Multifocus.

Multifocus claimed that PHILAB had secured advanced payments last June 9 amounting to over P250 million for the two contracts “even with its nonperformance.”

In both projects, PHILAB was supposed to deliver 60 percent of the contract while the remaining 40 percent would be delivered by its partner China Educational Instrument and Equipment Corp. (CEIEC).

In addition to these, PHILAB and CEIEC also bagged in April 2016 a P744.4-million rebid contract for the delivery of another 33,070 mathematics and science equipment for Grades 4 to 6.

The company showed intent to participate in the bidding process for the delivery of additional science and mathematics equipment to public elementary schools amounting to P391.4 million, as shown in a bid bulletin issued last September.

However, with the suspension order, the company will not be able to participate in the said procurement process.

In response to the complaint of Multifocus, DepEd undersecretary and bids and awards committee chairman Jesus Mateo said they “will undertake the necessary steps to evaluate the track record on the performance of suppliers and enforce the guidelines on the suspension and blacklisting of erring suppliers as the law warrants.”

The STAR repeatedly tried to get the reaction of PHILAB in relation to the complaint, but a representative said the official statement has yet to be approved by company officials.

Another representative at the head office who received a phone call declined to comment on the matter, saying they are not aware of any complaint filed against the company.