Non-imposition of liquidated damages
Department of Public Works and Highways · 2023
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What Happened?
Category: Financial ManagementIssue: Non-complianceContractors who finished projects or delivered goods late were not penalized as required by law. When penalties were collected, they were often calculated incorrectly, resulting in millions of pesos in under-collections for the government.
Why It Matters
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Original Audit Finding Excerpt
"Liquidated damages were not imposed, collected or deducted from the payments made to the contractors and suppliers who incurred delays ranging from 1 to 912 days corresponding to days elapsed between the target schedule and actual dates of completion of projects and delivery of goods, with total contract cost of P8,555,210,686.28."