Factors in determining whether or not the price is excessive

Pursuant to its constitutional mandate to “promulgate accounting and auditing rules, and regulations including those for the prevention and disallowance of irregular, unnecessary, excessive, extravagant or unconscionable expenditures, or uses of government funds and properties,”[25] the COA promulgated the amended Rules under COA Circular No. 85-55-A[26] dated September 8, 1985.  With respect to excessive expenditures, these shall be determined by place and origin of goods, volume or quantity of purchase, service warranties, quality, special features of units purchased and the like.[27]

          Price is considered “excessive” if it is more than the 10% allowable price variance between the price paid for the item bought and the price of the same item per canvass of the auditor.  In determining whether or not the price is excessive, the following factors may be considered[28]:

A –    Supply and demand forces in the market.

Ex. –  Where there is  a supply shortage of a particular product, such as cement or GI sheets, prices of these products may vary within a day.

B –    Government Price Quotations

C –    Warranty of Products or Special Features

The price is not necessarily excessive when the service/item is offered with warranty or special features which are relevant to the needs of the agency and are reflected in the offer or award.

D –    Brand of Products

Products of recognized brand coming from countries known for producing such quality products are relatively expensive.

Ex. -Solingenscissors and the like which are made inGermanyare more expensive than scissors which do not carry such brand and are not made in Germany.

The issue to be resolved is whether the computer units bought by CDA from Tetra were overpriced.

….

Petitioner believes that there is no basis to hold him personally liable on account of the fact that the purchased computers were not inferior in quality.  In support thereof, he submitted a certification dated September 12, 2003 issued by incumbent CDA Executive Director, Atty. Niel A. Santillan, that 68% of the Tetra computers, or 30 out of 44 units, are still operational even after twelve (12) years of continuous use.  Only fourteen (14) units have become unserviceable, which means that the Tetra computers have proven their worth and thus vindicated petitioner, the CDA, CDA-PBAC and the DAP-TEC.[36]

          We are not persuaded.

          The continued serviceability of the purchased computers is not a factor in the determination of whether the price paid by the government was unreasonable or excessive.  The damage or injury caused to the government refers primarily to the amount exceeding the allowable variance in the price paid for the item purchased under a transaction which is not the most advantageous to the government.  In this case, it was clearly shown that CDA could have purchased the same quality computers with similar technical specifications at much lower cost and the result of technical evaluation was manipulated to favor one bidder, for which the COA found the petitioner to be directly responsible.

http://sc.judiciary.gov.ph/jurisprudence/2011/march2011/157838.htm

Advertisements

About Erineus

Born on December 28, 1965, Surallah, South Cotabato, Southern Mindanao, Philippines.
This entry was posted in COA and tagged . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s