Inconsistent Calculation of Liquidated Damages
National Housing Authority · 2023
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 agency charged contractors less penalty than what was required by law, resulting in a shortfall of over P208 million.
Why It Matters
Recommended Actions
- Strictly adhere to Paragraph 9, Annex "E" of the RIRR of RA No. 9184 by: Imposing the corresponding liquidated damages on the contractors for every day of delay by collecting/deducting the same from the progress billings/claims or retention money
- Initiating termination/rescission of contracts on infrastructure projects when liquidated damages reaches 10 per cent and forfeit the contractor's performance security
- Impose sanctions on erring NHA personnel who may be remiss in their obligations
- Pursue legal actions against the contractors to address the breaches of contract
- And Consider the creation of a committee responsible for monitoring the contractor's performance/surety bonds and collecting the money value of the forfeited performance/surety bonds.
Original Audit Finding Excerpt
"Furthermore, it was observed that the LD imposed by the Management totaled P80.347 million for five YPHP in Region VIII were less than the COA-evaluated amount of P288.925 million, resulting in an under-imposition of P208.578 million. The specifics are outlined as follows: Table 14.2 – Breakdown of Discrepancies in LD imposed by NHA vs. Audit Results"