PhilGEPS: 11 Davao City deals with Sara-linked firm skipped bidding

The Davao City government under Mayor Sebastian Duterte awarded at least 11 contracts worth around PHP 8 million to a company linked to Vice President Sara Duterte without public bidding, a Philippine Government Electronic Procurement System (PhilGEPS) official told the Senate impeachment court on Monday, Sept. 28.

Rendell Sopeña, chief of the PhilGEPS Electronic Government Procurement Operations Division, made the confirmation while answering questions from Senator-Judge Risa Hontiveros on procurement transactions involving GenCorp Industries Inc.

The vice president declared GenCorp as a business interest in her Statements of Assets, Liabilities, and Net Worth (SALN) for 2024 and 2025.

Hontiveros asked how many of the Davao City contracts awarded to GenCorp did not undergo public bidding.

“Sa mga kontrata ng Davao City LGU na in-award sa GenCorp, ilan po ang hindi dumaan sa public bidding?” Hontiveros asked.

“If I remember it right, 15 po, minus 11 po ang hindi dumaan sa public bidding. 11,” Sopeña testified.

Sopeña said four of the 15 contracts went through public bidding, while the remaining 11 were awarded through negotiated small value procurement, an alternative mode that allows agencies to deal directly with suppliers for purchases below a set ceiling.

“Ang total po ni Davao is P34,216,000. And out of this po, yung apat po is yung public bidding […] And yung 11 po is through negotiated small value procurement po,” he explained.

Reading from his records, Sopeña cited several of the smaller contracts awarded through negotiated procurement, with amounts of PHP 501,600; PHP 414,000; PHP 249,000; PHP 49,800; PHP 498,000; PHP 805,500; PHP 381,500; PHP 508,000; PHP 254,000; and PHP 554,000.

“Roughly mga nasa P8 million or P7 million siguro po ito,” Sopeña estimated.

Sopeña earlier told the impeachment court that GenCorp secured around 49 government contracts worth a combined PHP 35.9 million from various government offices, including the Davao City government, the Philippine Health Insurance Corp. (PhilHealth) Region XI, and the Overseas Workers Welfare Administration (OWWA) Region XI, during Sara Duterte’s term as vice president.

PhilGEPS records showed that Davao City awarded 15 contracts worth PHP 34.216 million, PhilHealth Region XI awarded 33 contracts worth PHP 1.331 million, and OWWA Region XI awarded one contract worth PHP 330,000, BusinessMirror reported.

House prosecutors are presenting the records under Article II of the Articles of Impeachment, which covers the vice president’s alleged unexplained wealth, including the alleged non-divestment of her business and financial interests. 

Conflict of interest raised

In an interjection, Senator-Judge Joel Villanueva asked whether Davao City under Mayor Duterte split contracts to skirt public bidding rules, noting that the transactions involved similar supplies.

Sopeña confirmed that the contracts covered identical goods, including “food and catering services,” but that the “publish and award date[s]” differed.

Government procurement rules prohibit splitting contracts into smaller amounts to avoid the thresholds that require public bidding.

The disclosures prompted other senator-judges to raise questions on potential conflict of interest in the transactions, as the vice president and the Davao City mayor are siblings.

“Allowed ba ang GenCorp na mag-participate sa public bidding sa Davao knowing na si VP Sara ay may-ari, isa sa may-ari ng GenCorp, and then yung Davao is baluwarte niya, and so wala bang conflict of interest doon?” Senator-Judge Raffy Tulfo asked. “Hindi ba na-flag down yun agad ng GenCorp na, ‘Teka muna, may conflict of interest ata rito?’”

Mayor Duterte has denied knowing of his sister’s links to GenCorp and has maintained that the city’s contracts with the company were legitimate, Rappler reported.

In a separate statement, the mayor put the city’s transactions with GenCorp at over PHP 33.2 million across 19 contracts, according to GMA News.

Lead House prosecutor Rep. Gerville Luistro argued that the transactions breached constitutional ethics standards if the vice president maintained an ownership stake in GenCorp.

“GenCorp should not be participating in the bidding of City of Davao, which is headed by no less than the brother of the respondent Vice President,” Luistro said. “It is my humble submission that this is the conflict of interest contemplated under Article VII, Section 13 of the Constitution.”

Article VII, Section 13 of the 1987 Constitution bars the president, vice president, and members of the Cabinet from participating in any business or having a financial interest in any government contract during their tenure, and requires them to strictly avoid conflict of interest in the conduct of their office.

As the court dismissed Sopeña from the witness stand, Luistro made a manifestation citing mandatory disclosure requirements under procurement laws, arguing that the vice president faces three distinct ethical breaches.

“Owning business, operating business, and conflict of interest, Your Honor. In fact, ito po sa larong tong-its. Three hits po ito,” Luistro said.

Tong-its is a popular three-player Filipino card game.

The impeachment court has subpoenaed Mayor Duterte to testify in the trial from Sept. 28 to 30.