COA flags Pagcor's P95-million catering contracts without public bidding

Adrian Ayalin, ABS-CBN News

Posted at Jul 26 2019 05:53 PM

MANILA - The Commission on Audit (COA) has flagged the Philippine Amusement and Gaming Corporation (Pagcor) for P95.021 million in catering contracts which were not bidded out, contrary to provisions of the Government Procurement Reform Act.

State auditors said Pagcor entered into 10 service contracts via direct contracting, failing to meet requirements for foregoing public bidding such as the need to purchase specific goods from an exclusive dealer or manufacturer.

Pagcor for its part told auditors that the reasons for resorting to direct contracting were justified, such as the suppliers' track record and proximity. 

“The food and beverages were exclusively provided by the contractor who does not have [a] sub-dealer selling at lower prices and not [a] suitable substitute that can be obtained at [a] more advantageous price,” Pagcor told state auditors.

COA still recommended to Pagcor management to ensure that it would only resort to direct contracting if requirements of the law are satisfied.

State auditors also noted that monthly rentals for office spaces amounting to P6.361 million or P76.330 million per year should be eliminated as soon as its own office complex is completed. 

The Manila International Airport Complex has a total approved budget of P875.038 million.

“Pagcor has been incurring monthly rentals of P6.361 million or P76.330 million a year for its corporate offices, which could be minimized if not totally eliminated once the site development and construction of Pagcor building will be completed,” the COA report said.

The second phase of the consulting contract has yet to resume pending written approval from the Office of the President.

Pagcor for its part agreed to the recommendation of the audit team to urgently secure the approval of the OP to avoid unnecessary expenses for consultancy services if the project will be stalled.

The audit report also said that Pagcor should consider the imposition of sanctions against local government units (LGUs) that do not follow guidelines for the proper utilization of their income share as host cities and provinces of Pagcor gaming facilities.

Among those that committed “improper” use of funds was Angeles City, which used P2.667 million to cover tuition of students enrolled in private schools, as well as P577,000 for a basketball tournament, COA said. 

Pagcor management told auditors they would see to it that funding requests by LGUs are supported by an annual plan which would be the basis of the amount released to them. 

Pagcor CEO Andrea Domingo received a copy of the report on July 16, 2019. 

The full audit report on Pagcor can be downloaded from the COA website.

In his State of the Nation Address on Monday, President Rodrigo Duterte praised Pagcor, citing how it has generated P16 billion in revenues for government.