NIA bidding crafted to preclude sellers

The admin has still to account for the P728-million fertilizer fund and P1.1-billion swine dispersal scams leading up to the 2004 balloting. Yet here again is a potential pre-election sham: P1.4 billion in excavator supply, also at the agriculture department. Will this go the way of unresolved fraud like NBN-ZTE, Diwalwal-ZTE, Northrail, Southrail, Comelec-MegaPacific, and World Bank bid collusion? If so, let it be billed this early as “backhoe scam.”

 Everything points to bid rigging, Sen. Mar Roxas says. To begin with, the National Irrigation Administration set it in the midst of Yuletide tizzy. The bids committee ran a notice of bidding on Dec. 16, 2008. Last day for prospectors to buy bid documents was Dec. 23. Bid submission was Jan. 16, 2009. The NIA claims today that it was only going by timetables set by the Procurement Reform Act. But scheduling the four-week bidding process during the holidays invites suspicion. More so since last Christmas was being reported in the media as particularly long, 11 days from Dec. 25 to Jan. 4. NIA officials’ own calendars were shot. They had to move the Dec. 23 pre-bidding conference to Jan. 6, necessitating postponement of actual bidding to Jan. 19.

The NIA cannot classify its purchase as emergency, to justify rushing it within a month with 11 days of official no work. It was for long-planned restoration of irrigation ditches, consisting of:

• Package I — 139 excavators of .8-cubic meter capacity, officially budgeted at P903,500,000;

• Package II — 69 excavators of .5-cu. m. capacity, P400,200,000; and

• Package III — 15 dump trucks of 25-ton capacity, P120,000,000.

When the purchase was posted on the Government E-Procurement website on Dec. 17, it was billed as “agricultural equipment.” This in itself was dubious, according to Roxas, because the term refers to hand tractors, harvesters or threshers. At the agriculture office, backhoes and trucks come under “heavy machineries.” The confusion, likely intentional, went on for a month. It misled the biggest heavy equipment supplier Monark, distributor of Caterpillar, from joining on time.

NIA did worse things, Roxas adds. The bids committee imposed that bidders should have been in the trade for 25 years. This extra rule defies the procurement act, which nixed officials’ discretion to fudge procedures. The law requires only that bidders must be at least three years in existence. At any rate, the 25-year minimum seemed aimed against second top supplier Maxima, carrier of Komatsu (or Monark if it were able to join despite the contrived chaos). Maxima is 21 years old; Monark, 22. Both were formed right after the fall of Marcos, when century-old Komatsu and Caterpillar needed new local partners in a system rid of cronies. The NIA cannot say why it picked the number 25, instead of 15 or 20 or 30.

 With Maxima and Monark (combined market dominance, 72%) out of the way, the NIA opened the bids. Civic Merchandising reportedly won Package I; Transport Equipment Corp. (TEC), Package II. Records gathered by Roxas’s office show an anomaly. Civic and TEC may be 35 and 33 years old, but they began selling Volvo and Hitachi brands, respectively, only 10 and 15 years ago. NIA broke its own extra rule. Industry records show the following capitalization:

This debunks NIA’s claim that its 25-year rule is “sound business decision.” It falsely assumed that only a firm that old will stay in the business for a long time, and so can maintain and repair its purchased backhoes.

Industry records further show that Monark has machinery and parts inventory worth P1.3 billion; Maxima, P963 million; Civic, barely P168 million; and TEC, P74 million. In 2007 the four posted the following figures:

The table shows that “benefits” from NIA’s 25-year rule are imaginary. The NIA was in fact unsure of itself. In the bidding rules, it stated that it may itself opt to open a letter of credit for the heavy machinery import, instead of obligating the bid winners to do so.

The Pastelero Law Office, which in 2003 got the MegaPacific deal scraped for fraud, saw another anomaly. In a letter to the NIA, the firm pointed to an item in the procurement act that qualifies parties to bid for huge supply projects. Bidders must have had supplied in one contract in the past ten years at least half of the amount now up for bidding. Both Civic and TEC had submitted bids for Packages I and II. This means they should have already sold in one blow P450 million worth of large backhoes and P200 million worth of medium ones. But records show that Civic, which clinched the P903-million Package I, never had a whole year’s sale of more than P228.5 million in 1998-2007. TEC, winner of the P400-million Package II, never notched more than P154.2 million in any year in the same period.

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