Liquidated Damages Not Imposed or Under-Collected for Delayed Projects and Goods
Department of Public Works and Highways · 2024
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What Happened?
Category: Financial ManagementIssue: Non-complianceContractors and suppliers who finished projects or delivered goods late were not charged the penalty required by law. Some penalties were collected but were less than they should have been, costing the government money it was entitled to receive.
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 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 c ontract 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."