midnight contracts

DPWH cancels 19 ‘midnight deals’ worth over P934M

DPWH cancels 19 ‘midnight deals’ worth over P934M

By Jerry E. Esplanada
Philippine Daily Inquirer

MANILA, Philippines—Citing the Aquino administration’s policy of transparency and accountability, Public Works Secretary Rogelio Singson has ordered the cancellation of 19 “midnight deals” entered into by the Department of Public Works and Highways (DPWH).

The contracts, worth over P934 million, for the rehabilitation of provinces affected by Storms “Ondoy” (international codename: Ketsana) and “Pepeng” (Parma) are supposed to be funded by the Japan International Cooperation Agency (JICA).

He said proper procedures were clearly violated as the projects did not undergo “open and competitive” public bidding.

“Aside from being negotiated, the contracts were signed even before their SARO (special allotment release orders) were released by the Department of Budget and Management. That’s quite irregular,” he said.

“They were signed just a few days before July 1 (Day 1 of the Aquino administration),” Singson told the Inquirer.

JICA earlier agreed to finance 86 projects worth over P3 billion in areas in Regions 1 to 5 severely damaged by the two storms.

A check with DPWH files showed the contracts were signed on June 18 while their SAROs were released on June 25.

“Why should you sign contracts when you’re not authorized?” Singson asked.

Probe of DPWH officials

He has formed a team tasked with conducting a thorough investigation of the canceled contracts and the DPWH officials behind them.

The “contract packages,” which are part of the DPWH’s Post-Ondoy and Pepeng Short-Term Infrastructure Rehabilitation Project, included the following (with their respective project costs, locations and contractors):

• No. 10: P53.06 million; La Trinidad, Bokod, Itogon and Buguias, Benguet; Sabangan, Mountain Province and Tabuk, Kalinga; Ferdstar Builders Contractors.

• No. 13: P35.1 million; Ilocos Norte; A. de GuiaConstruction.

• No. 24: P91.5 million; Sitio Departe, Barangay Bantog, Asingan, Pangasinan; Tokwing Construction.

• No. 25: P228.7 million; Sitio Bato, Barangay San Vicente, San Manuel, Pangasinan; Northern Builders.

• No. 27: P25.8 million; Camalaniogan and Sta. Praxedes, Cagayan; M. M. Construction.

• No. 28: P68.6 million; Paitan Section Bay and Bambang, Nueva Vizcaya; Royal Crown Monarch Construction and Supply.

• No. 30: P27.4 million; Sta. Fe, Kayapa and Dupax del Sur, Nueva Vizcaya; Christian Ian Construction Corp.

• No. 36: P9.14 million; Paombong and San Jose del Monte City, Bulacan; P.O.N. Construction.

• No. 37: P41.1 million; Bulacan province; Northern Builders.

• No. 39: P42.5 million; San Felipe and Iba, Zambales; Tokwing Construction.

• No. 40: P19.2 million; San Marcelino, Zambales; Arrowhead Construction.

• No. 41: P77.3 million; Arayat, Pampanga; L.R. Tiqui Builders, Inc.

• No. 44: P78.7 million; Candaba, Pampanga; Northern Builders.

• No. 45: P27.4 million; Barangay Bodega, Floridablanca, Pampanga; Northern Builders.

• No. 46: P16.4 million; Guagua and Lubao, Pampanga; L.R. Tiqui Builders, Inc.

• Nos. 47-A and 47-B: P32.01 million; Moncada and Bamban, Tarlac; R.A. Pahati Gravel and Sand and LSD Construction and Supplies.

• No. 48: P18.3 million; Aliaga, Nueva Ecija; L.R. Tiqui Builders Inc.

• No. 49: P19.1 million; Bongabon and San Leonardo, Nueva Ecija; Royal Crown Monarch Construction and Supply.

• No. 51: P22.4 million; Balayan and Lemery, Batangas; A.D. Construction.

Need for transparency

Singson repeatedly stressed the need to be “very transparent and objective in project selection, bidding and awarding of projects.”

“I will seek and even plead for the cooperation of members of Congress, politicians and local government units to help us in ensuring the integrity and transparency of all public works projects,” he said.

He vowed to lead by example.

“This is what I told President Aquino when I accepted this position … I realize that we also have to change how contractors, suppliers and elected officials deal with DPWH,” Singson said.

He warned DPWH personnel against acting as “middlemen and collectors for contractors, politicians and other questionable personalities.”

2 unauthorized transactions stopped at Pagcor, DPWH

2 unauthorized transactions stopped at Pagcor, DPWH
By Aurea Calica and Jess Diaz
The Philippine Star

MANILA, Philippines – Two unauthorized million-peso transactions were stopped at the Philippine Amusement and Gaming Corp. (PAGCOR) and the Department of Public Works and Highways (DPWH).

At PAGCOR, Chairman Cristino Naguiat managed to stop a P21.1-million disbursement by a resigned employee.

Jay Santiago, Naguiat’s lawyer, identified the former employee as Pedrito Adao, who was trying to encash a P21.1-million check at a bank. “The encashment was stopped because the bank, taking cognizance of the PAGCOR letter, confirmed with us,” he said.

Naguiat said he had sent a letter to banks informing them that he was the new signatory for all checks of PAGCOR.

The check, issued before he assumed office, was not given clearance, he added.

At the DPWH, Secretary Rogelio Singson stopped an P18-million “midnight contract” for the rehabilitation of a portion of the national highway in Guiuan, Eastern Samar after Rep. Ben Evardone informed him that the 11th-hour deal could result in the dissipation of funds allotted for the road project.

In his letter, Evardone said former public works secretary Victor Domingo inexplicably transferred the P18 million to the town of Guiuan on June 25, or five days before he was to end his stewardship of the DPWH.

The town hired a contractor because it has no engineering equipment and personnel, he added.

Domingo should not have transferred the funds to a local government that has no capability to undertake a road or construction project, he added.

Evardone said at the time Domingo transferred the funds, DPWH field personnel in Eastern Visayas had already started the bidding process for the project.

“They have advertized the project twice and have attracted at least eight bidders, who have already purchased bidding documents. Amid his field personnel’s preparations, out of the blue, Domingo gave away the funds to the town of Guiuan under a memorandum of agreement,” he said.

“He did not consult his district engineer, he did not consult his regional director for Eastern Visayas, not even his undersecretary for the Visayas,” he said.

“He alone made the decision, which is highly suspicious and questionable. “We don’t want any more taxpayers’ money wasted on projects poorly done and on things that my provincemates do not need.

“For instance, we have so many road signs and railings along roads that are rutted and need repairs. The money should have instead been used for rehabilitating these thoroughfares.” Evardone said the road signs and railings were the projects of his predecessor, defeated Rep. Teodulo Coquilla.

“I do not know why tens of millions of public funds had to be spent on these materials when the money would have been put to better use had they repairs the rutted roads instead.”

Naguiat: Banks had to clear checks with us

Naguiat, who serves as president of Eastern Pangasinan Chamber of Commerce and Industry Inc., said he informed various banks to verify with the new PAGCOR management first before clearing checks.

Based on reports, Naguiat, a classmate of President Aquino at the Ateneo de Manila University, resigned from PAGCOR in 2001 due to differences with his predecessor, Efraim Genuino.

Naguiat had served for 15 years as chief financial officer of Pagcor, managing head of its treasury department and managing head of its audit department, all under the leadership of Alice Reyes who led the gambling agency from 1986 to 2001.

Naguiat said aside from these kinds of cases, Mr. Aquino also asked him to look into possible midnight deals entered into by his predecessor.

There were reportedly a lot of casino and poker licenses granted by Genuino’s board involving multi-million peso contracts. Earlier, Mr. Aquino’s spokesman Edwin Lacierda said the amount involved was P26 million.

However, Naguiat clarified it was P21 million.

Aquino warns: I’ll void ‘midnight’ appointments, deals

Aquino warns: I’ll void ‘midnight’ appointments, deals
By Philip Tubeza
Philippine Daily Inquirer

MANILA, Philippines—Liberal Party standard-bearer Benigno “Noynoy” Aquino III Thursday warned foreign governments and suppliers against entering into “midnight contracts” with the outgoing Arroyo administration.

Without giving specifics, the LP senator alleged that graft-ridden, “supplier-driven” deals involving the Armed Forces modernization program were “being rushed even as we speak.”

He also denounced the “midnight appointments” of administration favorites in the defense establishment.

In a wide-ranging speech at the Mandarin Oriental in Makati, Aquino said any “midnight deal” with the administration would be scrapped if proven to be disadvantageous to the government.

“We call upon suppliers and representatives of foreign governments to refrain from entering into 11th-hour contracts with this outgoing administration,” Aquino said.

“If such midnight deals are concluded just the same, they must all be subjected to the strictest scrutiny and immediately rescinded whenever warranted.”

Soldiers’ lives are the price

Aquino lambasted the administration for failing to come up with a comprehensive national security program and failing to curb “endemic corruption” in the security services.

“Every peso stolen from the budget of our security organizations represents a drop of blood of our soldiers, airmen, sailors and police officers who risk their lives in the service of our nation,” he said.

Aquino said procurement reforms that promote transparency must be fully implemented and include the participation of reputable watchdogs. “Anyone caught profiting from procurement contracts will be prosecuted to the fullest extent of the law.”

Personal loyalties

Aquino accused the administration of undermining the defense establishment through the “midnight appointments” of favorites and through “politically driven policies and actions.”

“The most recent of these actions include midnight appointments in key leadership positions based on personal loyalties instead of merit,” he said.

Other politically driven actions were the “coddling and arming” of warlords and private armies that have acted with impunity, as shown in the Maguindanao massacre, reversal of policies to insulate the military and police from partisan politics, and the “repeated abuse” of powers by the Commander in Chief to promote a political agenda “in the guise of addressing emergencies.”

“It is unfortunate how the present administration has quickly forgotten that as a result of similar acts in the past, some of our men and women in uniform have taken to the extreme and rose in mutiny,” Aquino said.

Why warlords are protected

He said the administration was protecting warlords because they were useful during elections.

“It chose to coddle warlords willing to deliver command votes come election time rather than arrest them,” he said.

Aquino cited the Ampatuan clan as a prime example of the Arroyo administration’s failure to rein in warlords and resolve conflict in the Autonomous Region in Muslim Mindanao (ARMM).

“The infamous Ampatuans have become the symbol of everything that has gone wrong in Maguindanao, ARMM and other conflict-ridden areas. While political warlords like the Ampatuans live like kings, their own constituencies live in abject poverty and hopelessness,” Aquino said.

Ominous sign

Aquino said the recent Department of Justice decision to release suspended ARMM Gov. Zaldy Ampatuan and Maguindanao Vice Gov. Akmad Ampatuan—both massacre suspects—boded ill for the elections in Maguindanao.

“Nineteen days from today, our people will go to thousands of precincts all over the archipelago to exercise their right to vote,” Aquino said.

“The release of (the two Ampatuans) comes at a suspicious time—a few weeks before the elections. The consent of our fellow brothers and sisters in Maguindanao, we can predict, will not be given freely and honestly,” he added.

He said that from a broader perspective, the Maguindanao massacre and the Ampatuans “are the symptoms of a deeper systemic problem: The failure of the Arroyo administration to implement a comprehensive national security policy that focuses on the root causes of war and conflict.”

“Unless we correct this problem immediately, the democratic way of life will never be secure in our country and progress will remain an elusive dream,” Aquino said.

Under one flag

He said the national government, in partnership with international donor organizations, must assist the new ARMM government in building a capable bureaucracy with transparent procedures to speed up development projects.

Aquino vowed to make the peace process “transparent and participative” so that Filipinos would have a secure future “under one sovereign flag.”

“With the consent of our people, I am confident that the next six years will be a watershed period in the history of our young nation that is at peace with itself and proudly marching toward an even brighter future,” he said.

DND chief buys arms in ‘last 2 minutes’

DND chief buys arms in ‘last 2 minutes’
By Jocelyn R. Uy
Philippine Daily Inquirer

MANILA, Philippines—A day after opposition presidential candidate Benigno Aquino III warned foreign governments against forging “midnight deals” with the Arroyo administration, Defense Secretary Norberto Gonzales confirmed he was engaged in a last-minute groundwork to acquire new weapons for the Armed Forces of the Philippines.

“We are rushing what we can still do under the AFP modernization program in our very limited time left,” Gonzales said in a statement. “Aren’t we, Filipinos, known to be good in the last two minutes?”

To expedite the upgrading of the AFP, Gonzales on Friday said he had set up a new mode of procurement which would allow the Philippines to enter into deals with “reputable” governments, instead of dealing with private suppliers.

He said this would avoid controversial biddings that had tainted previous equipment acquisitions by the military organization.

The AFP Modernization Act of 1995 was enacted to allow the military to modernize in 15 years with a total outlay of P331 billion. But only P28.9 billion out of the total fund has been allotted under the law, which expires this year, Gonzales said.

He cited “legal constraints” and the country’s financial condition as the reasons why his predecessors failed to aggressively pursue the modernization program.

“Notwithstanding the fund provision of the law, the defense department can only spend up to P5 billion per year from this fund,” he pointed out.

Aquino warning

Speaking before diplomats on Thursday, Aquino warned foreign governments and suppliers against entering into “midnight contracts” with the outgoing Arroyo administration.

Foreign offers

The Liberal Party standard-bearer said graft-ridden, “supplier-driven” deals to modernize the AFP were “being rushed even as we speak.” He said any such midnight deals would be scrapped if they turned out to be disadvantageous to the government.

Gonzales disclosed that the defense department and AFP officials had started considering various offers coming from certain countries. He did not elaborate.

Among the hardware the AFP was keen on acquiring were an armor system for the Army; multi-role vessels for the Navy; and attack helicopters, long-range patrol and medium-lift aircraft for the Air Force.

Gonzales said acquiring the equipment might take at least two to three years but the government was already doing the groundwork for the acquisitions before his term ends, as President Gloria Macapagal-Arroyo winds down her administration.

Open to scrutiny

To allay fears of irregularities, Gonzales stressed that any deal resulting from these preparations “would be according to law and open to public scrutiny.”

Gonzales underscored the importance of pushing for the AFP modernization, saying a strong defense system was vital in building a “wealthy and progressive country.”

“It is not only about building our defense capability. It is also about restoring our people’s pride in their Armed Forces and triggering their pride for our country,” he said.