COA flags PHP 7.24M Concepcion farm aid procurement

By Rjay Zuriaga Castor

ILOILO CITY — State auditors have questioned a PHP 7.244 million procurement of farm machinery and organic fertilizers for agrarian reform beneficiaries in Concepcion, Iloilo, citing out-of-sequence approvals, shortened bidding timelines, and unmet legal prerequisites.

The Commission on Audit (COA), in its 2025 annual audit report on the municipality, said the deficiencies rendered “the propriety and regularity of the procurement process questionable.”

The Concepcion municipal government used funds transferred by the Department of Agrarian Reform Region 6 (DAR-6) to buy PHP 4,923,500 worth of farm machinery and equipment and PHP 2,320,472.70 worth of organic fertilizers.

The goods were intended for the Tirol Estate Farmers Association and the Belen Irrigators’ Services Association.

Both purchases were paid on June 27, 2025, the audit report showed.

Instead of conducting the bidding itself, the northern Iloilo town engaged the City Government of Passi as its procurement agent.

COA said the engagement was carried out with procedural deficiencies, contrary to the 2016 revised implementing rules and regulations (IRR) of Republic Act (RA) 9184, or the Government Procurement Reform Act, and Government Procurement Policy Board (GPPB) Resolution No. 07-2022.

Auditors relayed the findings to the municipal government through an audit observation memorandum dated March 19, 2026.

Approvals out of sequence

Among the issues auditors flagged were authorizations and procurement steps that were recorded out of their proper order.

An office order designating the town’s officer-in-charge municipal assessor as Concepcion’s Technical Working Group (TWG) representative to Passi City’s Bids and Awards Committee (BAC) was dated Feb. 5, 2025.

The BAC resolution that recommended the issuance of that order, Resolution No. 2025-02-053, was dated Feb. 12, 2025, or seven days later.

The pre-procurement conference for the organic fertilizers was held on March 7, 2025, two days after Passi City’s Special BAC (SBAC) had recommended the award of the contract on March 5, 2025.

The IRR requires the conference to be held before the invitation to bid is advertised.

Concepcion’s TWG representative was also unable to attend the pre-bid conferences held on Feb. 25, 2025, for the fertilizers and on March 17, 2025, for the machinery.

Auditors said the rules require the procuring entity’s representative to take part in all procurement activities to safeguard its interests.

The SBAC resolutions for the fertilizers and the machinery were approved on March 6 and March 25, 2025, respectively, by the mayor of Passi City as head of the procurement agent.

COA said the approval should have come from the mayor of Concepcion, who remains the head of the procuring entity and keeps the responsibility to approve or disapprove award recommendations.

Passi City’s role was limited to conducting the bidding, evaluating bids, and recommending the award, auditors said.

Bidding timelines cut short

Both biddings were completed faster than the 26 calendar days that the IRR sets as the earliest possible period for procuring goods through public bidding, COA said.

The organic fertilizer procurement was completed in 21 calendar days, from the advertisement on Feb. 19, 2025, to the issuance of the notice to proceed on March 12, 2025.

The farm machinery procurement took 17 calendar days, from the advertisement on March 11, 2025, to the issuance of the notice to proceed on March 28, 2025.

The pre-bid conferences also fell outside the prescribed window.

The IRR states that a pre-bid conference must be held no earlier than seven calendar days after the invitation to bid is posted and at least 12 calendar days before the deadline for bids.

For the fertilizers, the conference was held on Feb. 25, 2025, six days after the advertisement and seven days before bids were submitted on March 4, 2025.

For the machinery, the conference was held on March 17, 2025, six days after the advertisement and seven days before bids were submitted on March 24, 2025.

Bid evaluation and post-qualification for the machinery were recorded on March 24, 2025, the same day the bids were submitted, the audit report showed.

The municipality told auditors that the acceleration was meant to address the urgent agricultural needs of the beneficiaries.

COA noted, however, that the fertilizers were delivered in April 2025 but distributed only in June 2025, which it said “tends to negate the asserted urgency” behind the accelerated timeline.

Grounds for hiring an agent

Under the IRR and the GPPB resolution, a procuring entity may engage a procurement agent only when it lacks enough qualified personnel to form its own BAC or when its BAC lacks the proficiency and expertise for a specific project.

Concepcion’s BAC resolution cited only the need to engage an entity with expertise in procuring farm machinery, equipment, and organic fertilizers, COA said.

The resolution did not state or establish that the municipality lacked the proficiency and expertise to conduct the procurement.

Auditors said the guidelines do not allow a procurement agent to be engaged solely for expediency, efficiency, or timeline considerations when the procuring entity is capable of conducting the procurement itself.

The absence of that determination left the legal basis for the engagement unsupported, COA said.

COA added that the BAC’s statement that Passi City met the required track record was “based solely on an inquiry.”

Auditors said the claim should have been backed by copies of at least three similar contracts, each costing at least 50% of the approved budget for the contract (ABC) and completed within the relevant period.

Documentary, contractual lapses

The copy of the BAC resolution first submitted for contract review was unnumbered and printed on DAR letterhead.

It was later replaced with the numbered resolution bearing the municipality’s letterhead.

The first performance bond for the fertilizer contract was issued in favor of Passi City instead of Concepcion.

An amended bond naming Concepcion was submitted on July 18, 2025, but it was dated March 10, 2025, while the official receipt for its payment was dated July 3, 2025.

The omnibus sworn statements submitted by the suppliers did not include the required disclosure of their relationship with the procurement agent.

The municipality’s annual procurement plan, approved on Jan. 31, 2025, did not indicate the engagement of a procurement agent, as the guidelines require.

Auditors also found mismatched dates on the purchase orders and contracts.

The fertilizer purchase order was dated March 12, 2025, two days after the contract dated March 10, 2025.

The machinery purchase order was dated March 24, 2025, four days before the contract dated March 28, 2025, and the supplier signed the purchase order only on March 31, 2025.

The fertilizer contract did not explicitly name the Municipality of Concepcion as a party, although the municipal mayor signed it.

During the exit conference, the audit team also raised that the specifications in the purchase request appeared restrictive and “could be met only by a single supplier.”

What COA recommended

COA recommended that the BAC submit documents on three similar contracts to establish Passi City’s track record as procurement agent.

It also recommended that the BAC follow the proper procedure for engaging a procurement agent.

Auditors further recommended consistent compliance with the IRR of RA 9184 or with RA 12009, the New Government Procurement Act, whichever applies, in all future transactions.

The municipal mayor agreed to the recommendations, the report said.

As of August 2026, COA documents showed that the municipality had yet to submit Passi City’s track record documents.

The municipality said it sent a formal request to Passi City’s SBAC on April 16, 2026, but the records remain under the jurisdiction of that committee.

In its replies to auditors, the municipal government said the deviations were made in good faith and did not result in favoritism or loss to the government, and it committed to follow the rules in future procurement.

RA 12009, which President Ferdinand Marcos Jr. signed on July 20, 2024, revised RA 9184, the law that had governed government purchases since 2003.

Its IRR was approved on Feb. 4, 2025, according to the Department of Budget and Management.