October 23, 2017, 3:59 pm
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BSP execs to face probe over fire suppression system

THE Commission on Audit has sought an investigation by the Office of the Ombudsman for possible criminal and administrative charges against officials of the Bangko Sentral ng Pilipinas (BSP) over alleged irregularities in the procurement of a P17.15 million fire suppression system in 2002.

In a 24-page decision dated August 18, 2017, COA Chair Michael G. Aguinaldo and Commissioners Jose A. Fabia and Isabel D. Agito affirmed the notice of disallowance issued against the transaction on November 28, 2008 and ordered the Prosecution and Litigation Office to forward the records of its own inquiry to the Ombudsman.

Held liable in the notice of disallowance were former BSP deputy governor Armando L. Suratos; Disbursement Control Committee and Bids and Awards Committee (DCC/BAC) members Evelyna C. Avila, Wilfredo B. Domong, and Eduardo L. Magahis; Rolando A. Pinangat, acting deputy director Edgardo A. Reyes, and OIC Michael G. Gesmundo; Bank Officer II Isamael G. Bacarse; and contractor Builders International First Defense Inc. (BIFDI).

“The DCC/BAC cannot feign ignorance nor claim that they acted in good faith in relying on the recommendation of their subordinates,” the COA said.

Records showed that in 2000, the BSP invited bidders for the installation of FM-200 Fire Suppression System for its Electronic Data Processing Center. Allocations for the project totaled P16.936 million.

In the first bidding held on February 20, 2000 the lowest bid submitted exceeded the agency estimate by P3.29 million, resulting in a rejection of all bids.

A second bidding was conducted in January 2002 wherein two parties were pre-qualified. Global Protective Systems Inc.’s (GPSI) offer was P17.95 million while BIFDI tendered a P17.5 million offer.

The contract was awarded to BIFDI on February 5, 2002 and a job order was issued on March 20, 2002.

The Fire Suppression System was declared completed on October 18, 2002 after Gesmundo signed the certificate of final acceptance and completion on the recommendation of Reyes.

Official turnover of the project was made in February 2003.

Four months later, news reports surfaced that the fire suppression system was sub-standard because the cylinder tanks for the fire extinguishers used in the system were fabricated in a local machine shop but were misrepresented as imported from the United States.

Inquiries by the National Bureau of Investigation, the Presidential Anti-Graft Commission, and by the BSP’s Security Investigation and Transport Department revealed that BIFDI submitted falsified documents during the pre-qualification process.

Likewise discovered were the installation of 31 locally-fabricated cylinders passed off as genuine Kiddie cylinders, use of HCFC 123 gas in the fire extinguishers instead of FM-200 as specified in the contract, and failure by the BSP to conduct a post qualification process. --  Peter J. G. Tabingo
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