Contractor’s P398M claim vs DPWH denied

PRIVATE contractor Foundation Specialists Inc. (FSI) has failed in its bid to collect P398.08 million plus interest from the Department of Public Works and Highways (DPWH) for mobilizing manpower and equipment for a road project that was subsequently terminated.

In an en banc ruling, the Commission on Audit denied the petition filed by FSI, declaring it bereft of merit.

The claimant said that in 2012, it was contracted by the DPWH for the construction of the C-2 (Gov. Forbes Street)/R-7 (España Boulevard) Interchange project with P825.16 million in total funding.

A notice to proceed was received by FSI from the DPWH on March 5, 2012 informing the contractor that the work was expected to begin within a week with a duration of 450 days.

However, on March 28, 2012 the DPWH issued a suspension order, stopping further work on the project on the ground that no approval was obtained from the Department of the Environment and Natural Resources (DENR) for the removal and earth-balling of the trees on the work site.

While a DPWH resume order was issued on July 17, 2012, the contractor said it was limited to work only on the drainage section, which resulted in lengthy standby time for its equipment and personnel.

Later, the DPWH notified FSI that the plan has been revised so that instead of a flyover, an underpass would be constructed instead along España Boulevard which reduced the contract price to P214.53 million and the contract time to 330 days.

FSI objected, saying it necessitated the intercession of the Office of the Solicitor General and later on, the Department of Justice.

On February 23, 2015, the DENR finally issued a permit to cut down and earth-balling trees in the area traversed by road works.

However, on October 5, 2015, the DPWH issued a Final Notice of Contract Termination.

Unhappy with the delays, the FSI filed its petition with the COA for payment of P398.08 million consisting of equipment standby time (P307.18 million), manpower standby time (P21.45 million), and unrealized overhead, contingency, and miscellaneous components.

The DPWH opposed the petition, saying the equipment deployed on site should have only cost P578,256 based on the DPWH Summary of