Liquidated damages for delayed projects and deliveries were not collected or under-collected
Department of Public Works and Highways · 2024
This summary was generated automatically from the source document and may contain errors. It is not an official interpretation and should not be relied upon as legal guidance. Review the original excerpt and source document to verify before citing or acting on it.
What Happened?
Category: Financial ManagementIssue: Non-complianceThe government did not charge contractors and suppliers the required penalties when projects were completed late or goods were delivered late. In the cases where penalties were collected, they were too low. This means the government did not recover compensation it was entitled to for delays.
Why It Matters
Recommended Actions
No recommendations are available for this finding yet.
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 1,075 days corresponding to days elapsed between the target schedule and actual dates of completion of projects and delivery of goods, with a total contract cost of P5,109,276,235.99. Moreover, liquidated damages collected totaling P474,743.76 in 13 projects of two DPWH Offices were found to be lower by P1,817,754.45 than the COA validated or evaluated amount of P2,292,498.21."