Expired or Non-Renewed Performance Bonds for Calamity Projects
National Housing Authority · 2023
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What Happened?
Category: Procurement and Contract ManagementIssue: Non-complianceThe government requires contractors to post performance bonds to ensure they complete projects. For several projects, these bonds have lapsed or are not being renewed, meaning the government has no financial protection if the contractors fail to deliver.
Why It Matters
Recommended Actions
- Closely monitor the expiration and the required adjustments of the performance security, ensuring that appropriate measures are taken against the contractors or developers who deviate from the prescribed guidelines
- And
Original Audit Finding Excerpt
"Performance bonds of several ongoing construction projects or with extended construction timelines, funded through calamity funds, are either inactive, not renewed or their renewal status cannot be assessed, posing a significant risk to the Authority, and contravening the provisions outlined in the Revised Implementing Rules and Regulations (RIRR) of RA No. 9184."