COA asks LTO to blacklist license plate supplier

By: Cynthia D. Balana, January 23rd, 2013 12:54 AM

MANILA, Philippines—The Commission on Audit wants a private contractor disqualified from future biddings of the Land Transportation Office for failure to comply with its contract obligation resulting in the delay in the delivery of motor vehicle license plates last year.

The supplier, GJB Enterprises Inc., was awarded a P21.3 million-contract to deliver 82,862 aluminum sheeting materials for motor vehicles and 39,922 sheets for motorcycle plates on Dec. 18, 2010, the Commission on Audit said in its 2011 audit report on the agency.

The supplier was supposed to deliver 25 percent of required aluminum plates within 30 days from the issuance of the Notice to Proceed on Jan. 3, 2011, but failed to complete the delivery within five months after the initial delivery.

In its report, COA discovered that the supplier still had a shortfall of 49,762 motor vehicle plates and 21,887 motorcycle plates as of end of last year.

The LTO said it had agreed to several extensions to enable the supplier to complete the delivery but as of June 30, 2012, or a year beyond the original deadline, 20,262 motor vehicle plates and 11,887 motorcycle plates were still undelivered.

Because of the short deliveries, LTO’s three-month buffer supply of sheeting materials were used up and caused massive shortage in the production of license plates last year.

In its reply to the LTO Property Officer on March 14, 2011, the supplier admitted that the delay in the delivery of aluminum sheeting materials was caused by “an unexpected disruption of production” suffered by their counterpart abroad resulting in temporary shutdown of the plant.

The LTO granted a 90-day extension on July 12, 2011, but did not specify the reckoning date.

As a result, the LTO management decided to forfeit the performance bond of the supplier of aluminum sheeting materials, rescinded the contract and required the supplier to pay liquidated damages.

It also collected a total penalty of P4,328,619.03 on the undelivered aluminum sheeting materials from the supplier.

The COA said the penalties were not enough and recommended the disqualification of the supplier from future biddings in the LTO until such time that the delivery under the previous contracts is completed.

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