Supply of P250M equipment: Capitol deal overpriced?

CEBU, Philippines - The P250-million equipment deal that the Cebu provincial government insisted on awarding to the highest bidder may have been overpriced by almost 100 percent.

This was learned after the same supplier quoted a much lower price to a local company for the same dump truck model that the Capitol wants it to supply.

 Conequip Philippines, Inc., which the Capitol Bids and Awards Committee declared as the lowest responsive bidder for the supply of various brand new construction light and heavy equipment, submitted a bid price of P5.123 million for one unit of 4x2 dump truck model ZZ3167M3811 from China.

A document obtained by The FREEMAN showing price quotation for the same truck model revealed that another company, which appeared to be related to Conequip, has offered it at P2.6 million.

The price quotation was issued by Seth Oliver Tio, managing director of Mighty Brothers Heavy Equipment, to a company in Mandaue City. An Internet search would show that Tio is connected with Conequip.

Based on the quotation, the Capitol would be paying P2.52 million more for every unit of nine dump trucks that Conequip will supply or a total of at least P22.7 million.

This does not include the other equipments that the provincial government is procuring for road construction and maintenance.

The Capitol bid out in September the procurement of at least 27 units of various brand new construction light and heavy equipment with a budget allocation of P252.68 million. It would be funded out of the continuing allocations of the province under the calamity funds and a loan from the Land Bank of the Philippines.

The equipment to be procured include the following:  two brand new boom truck; one water tanker; nine dump trucks; one crawler tractor; two 10-wheeler self-loader trucks; three hydraulic excavators; two payloaders; two motor graders; two vibratory rollers; one forklift; and one new man lift.

At least four companies joined in the bidding—Conequip Philippines, Inc., RDAK Transport Equipment, Inc., Civic Merchandising, Inc., and TKC Heavy Industries Corporation.

During the opening of the bids on September 7, 2015 only RDAK Transport Equipment and Civic Merchandising were pre-qualified.

Conequip and TKC were disqualified on different grounds. Conequip failed to sign its omnibus statement while TKC did not have not the end-users’ acceptance. Both Conequip and TKC filed a separate motion for reconsideration after their disqualification.

The BAC, headed by Provincial Administrator Mark Tolentino, denied TKC’s motion for reconsideration but granted Conequip’s and proceeded with the opening of its financial documents on September 30.

Of the three qualified bidders, RDAK had the lowest bid with P235 million, followed by Civic Merchandising at P237.17 million, and Conequip had the highest bid of P250.6 million.  RDAK has the lowest price with P235.050 million while Civic was at P237.168 million.

But even when Conequip had the highest bid, the BAC declared it the winning bidder for allegedly having the lowest calculated and responsive bids. In its Resolution no. 0217 series of 2015, all BAC members recommended to award the contract to Conequip. Although a notice of award has been signed by Governor Hilario Davide III already, the contract is yet to be awarded since it still requires Provincial Board approval.

BAC has disqualified RDAK and Civic allegedly because some of the units they quoted do not comply with the specifications set by the province. The Capitol required that the equipment to be supplied must conform with “G7 standard”.

 The Group of 7 is an international organization officially established in 1985 to facilitate economic cooperation among the world’s largest industrial nations. The members are Canada, France, Germany, Great Britain, Italy, Japan, and the United States. It does not include China where Conequip’s dump trucks are made from.

The model ZZ3167M381 dump truck to be supplied by Conequip to the Capitol, which they called “Big Yellow” is actually a Howo truck made in China. On the contrary, the two disqualified bidders were offering known brands from Japan. — /RHM (FREEMAN)