The Office of the Ombudsman has been asked to hold criminally liable Bureau of Fisheries and Aquatic Resources (BFAR Director Eduardo B. Gongona and two other officials in connection with the alleged anomalous awarding of a contract to a British company to supply Vessel Monitoring System (VMS) transceivers for local vessels.
The VMS is said to be a component needed to implement BFAR’s more than P2-billion Integrated Marine Environment Monitoring System Project II, aimed at improving the agency’s mandate of safeguarding and monitoring the country’s maritime resources.
In a complaint filed on Tuesday with the Ombudsman, lawyer James Mier Victoriano accused Gongona, along with Demosthenes R. Escoto and Hansel O. Didulo, who served as chairpersons of the Bids and Awards Committee of BFAR during the bidding of the controversial IMEMS project, of conspiring with private respondents for the irregular award of the project to SRT Marine Systems Solutions Ltd (SRT), in violation of the pertinent provisions of Republic Act 3019 or the Anti-Graft and Corrupt Practices Act, RA 9184 or Government Procurement Reform Act and its revised implementing rules and regulation.
Also named respondents to the graft complaint were Simon Tucker and Richard Hurd, both British nationals, chief executive officer and chief financial officer, respectively of SRT Marine Systems Solutions Ltd, the winning bidder, to supply 5,000 units of VMS transceivers or two-way transmitters in the amount of P2,096,989,000, a little lower than the P2,097,819,000 project cost.
The complainant alleged that Gongona, Escoto, and Didulo committed graft and corruption when they violated provisions of RA 8550 or the Philippine Fisheries Code of 1998 and the anti-graft law for causing undue injury to the government and giving unwarranted benefits, advantage and preference to SRT in awarding the project, and entering into a transactions that is manifestly and grossly disadvantageous to the government despite knowing that SRT is ineligible to participate in the bidding of the IMEMS project.
“The foregoing illegal acts of the respondents in knowingly (1) awarding the Project to an ineligible bidder, in violation of the terms of the terms and conditions of DA-BFAR’s own Invitation to Bid, which resulted in the loss of foreign assistance loan and consequently the increase in the needed costs for local funding of the Project; (2) modifying the terms of the procurement of VMS Transceivers for the Project, in contravention with the relevant provisions under R.A. No. 8550, as amended, which result in an excessive purchase requirement; and (3) the apparent unsustainability and excessiveness of the awarded procurement, are bases enough to hold the Public and Private Respondents criminally liable for violation of Section 3, subparagraphs (e), (g), and (f) of R.A. No. 3019; Sections 30, 34,
65(c), and 65(d) of R.A. No. 9184; and Section 23.6 of the Revised Implementing Rules and Regulations (“Revised IRR”) of R.A. No. 9184,” the complainant stressed.
Besides penal and civil liabilities, the complainant pleaded the anti-graft body to hold the erring public officers and private individuals administratively liable for violating RA No. 9184 and its IRR.
The complainant also sought for the preventive suspension of Didulo and Escoto, chairpersons of BFAR’s BAC during the procurement process, should be preventively suspended pending the investigation by this Honorable Office of the subject procurement in this case,” the complainant stressed.
The controversy stemmed from the BFAR’s awarding of the contract to SRT for the procurement of 5,000 units of VMS to implement the agency’s IMEMS Project Phase II, which aims to enhance the government’s capability to safeguard and monitor the country’s marine resources and combat illegal, unreported, and unregulated fishing activities. It seeks to improve the existing Monitoring Control and Surveillance (“MCS”) programs of BFAR, whose mandate is to protect, conserve, and properly manage the Philippine marine resources.
In particular, the IMEMS project aims to institutionalize VMS for commercial fishing vessels — catcher, carrier, and support vessels – which are thirty (30) gross ton and above operating within and beyond the Philippine Exclusive Economic Zone (“EEZ”) by providing and installing five thousand (5,000) VMS transmitters.
Initially, the approved budget for the project was ₱1,675,889,000 for the procurement of 2,500 VMS transmitters for catcher fishing vessels and 1,000 one-way satellite transmitter for fishing vessels above 30 gross tons.
Since the funding of the IMEMS project would be provided through loan from the French Republic, participating bidders were required to have joint venture agreement with any French companies registered and operating under the pertinent laws of France dealing with such service; the origin of goods and services must be from France. On December 18, 2015, the Philippines and France signed a loan agreement amounting to 28,520,000 Euros or P1,700,077,200.
The disapproval by French government of SRT as the winning bidder prompted the BFAR to seek for the approval of NEDA to cancel the loan agreement with French Republic and proceed with the procurement for the project using local funding.
BFAR then conducted the last bidding on October 30, 2018, but this time with an approved budget for the contract (ABC) of ₱2,097,819,000. The supplier is required to deliver the goods within four years from the date of receipt of notice to proceed, and in accordance with the project implementation schedule provided in the bidding documents.
One of the components of the project is the supply of VMS transceivers, which will transmit the identity, location and current activity status of each vessel and enable them to be continuously tracked and monitored in real time. Transmission shall be encrypted and able to be received by satellite, PCMS, and suitably equipped patrol vessels and aircraft.
SRT won the bid with ₱2,096,989,000.00 on November 26, 2018. Thereafter, BFAR issued the Notice to Proceed on December 4, 2018 which term is set to expire on December 4, 2022. Under the terms of payment of the project upon inspection and acceptance of the BFAR, the supplier will be paid P50,000,000 for first year; P672,639,000 for second year; P1,113,924,000 for third year, and P261,256,000 for the 4th year.
However, based on Commission on Audit’s Observation and Recommendations on BFAR’s 2019 Audit, the payments for SRT was among the three Notices of Suspension (“NS”) pertaining to disbursements under Fisheries and Regulatory Enforcement Program (“FRLEP”) which were not supported by complete documents. The total payments already paid to SRT amounted to ₱738,124,000.00 as of 31 December 2019.
The complainant lamented that the Bids and Award Committee then chaired by respondent Didulo and subsequently chaired by respondent Escoto found SRT eligible to bid when it was not eligible to participate on account of the French-related provisions as evidenced by the disapproval of the French Republic and eventual rescission of the Loan Agreement.
Besides, BFAR required 5,000 units of VMS transponders for catcher vessels above 30GT when the required number should only be around 1,800 units or an excess of 3,200 units.
The VMS transponders are only required to be installed in catcher vessels in compliance with Section 119 of R.A. No. 8550, as amended. The project terms is for the installation of VMS transponders on catcher vessels beyond 30 gross tons. Currently, the total number of catcher vessels classified as beyond 30 gross tons is only about 1,800 vessels. However, te DA-BFAR required 5,000 VMS transponders or an excess of 3,200 units.
The complainant noted that excess units of 2,500 units at the minimum and 3,200 units at the maximum represents an excessive purchase requirement and would increase the ABC for the project. The incremental cost of the excess VMS transponders would range between ₱250,000,000. to ₱320,000,000.
“The DA-BFAR caused undue injury to the Government and gave SRT unwarranted benefits, advantage, and/or preference, through manifest partiality, evident bad faith, and/or gross inexcusable negligence, when it unduly awarded the subject procurement to SRT,” the complainant said, adding that the public and private respondents conspired with the commission of the offense.
“However, due to the Respondents’ intentional illegal acts, the said financing did not push through when they knowingly and intentionally violated the terms of the Loan Agreement and DA-BFAR’s own Invitation to Bid for the Project. Consequently, the Project had to be funded locally and solely by the Government, requiring it to allot bigger budget for the Project,” the complainant lamented.
“The loss of foreign financial assistance and the excessive purchase requirement, which resulted from the illegal acts of both Public and Private Respondents, undeniably caused undue injury to the Government,” it added.
The complainant also alleged that the DA-BFAR was and continues to be grossly negligent in ensuring the sustainability of the project, noting that the matter on the annual cost to operate, upgrade and maintain the project is left for the taxpayers, which may burden public in the amount of P580 million in favor of SRT, excluding the cost of annual cost of satellite services.
“Worse, in the event that the cost to sustain the Project is passed on to the fishing operators, who are left with no choice but to continue with SRT’s system, the cost would have a direct impact on the cost of fishing operations, and eventually increase the price of the poor man’s fish, i.e. galunggong and tamban,” the complainant lamented.
“These are all in clear contravention to the government’s policy of ensuring food security and the DA and BFAR’s mandate of protecting, conserving, and properly managing the country’s marine resources. These undeniably show DA-BFAR’s gross negligence in the performance of their duties,” the lawyer said.
“Considering all the foregoing, it is clear that Public and Private Respondents should be held liable under Section 3(e) of R.A. No. 3019 for causing undue injury to the Government and for giving unwarranted benefits, advantage, and/or preference to SRT at the expense of the people’s taxes,” the complainant stressed. “DA-BFAR entered, on behalf of the Government, into a transaction with SRT that is manifestly and grossly disadvantageous to the government.
It added that SRT should be administratively sanctioned with suspension from participating in public bidding process due to its unlawful acts of submitting its bid for the project and later on accepting the award of the project when in fact it is not eligible in the first place.