DA investigators find irregularities in P30M NIA organic fertilizer project

MALAYBALAY CITY (MindaNews/26 August) – A fact finding team created by Agriculture Secretary Proceso Alcala in July 2010 found irregularities in the National Irrigation Administration’s P30-million bio-organic fertilizer subsidy program implemented in Region 10 in 2009, among them that there was only one bidder and that the organic fertilizer delivered did not comply with the specifications of the procuring entity, “hence should have not been accepted and paid for.”

Alcala set up the team in response to the resolution of the Provincial Board of Bukidnon. The legislative body initiated inquiries in June 2010, questioning the procurement process, the quality, the supplier, and the price of the fertilizers distributed to at least a thousand irrigators in Northern Mindanao, mostly in Bukidnon, using funds from the DA’s Ginintuang Masaganang Ani (GMA) – Rice Program.

The investigation was conducted when the P9.55-million second phase of the three-phase project was already distributed.

Former Board member Glenn Peduche, now Valencia City Councilor, received a copy of the report only on August 2, 2011. The fact-finding team set up on July 20, 2010 by the DA national legal office, submitted its report to Alcala in September 2010.

The team reported that the procurement went through a bidding process, completed on January 26, 2010. But there were lapses in the post-qualification stage, the fact finding team cited in its 18-page report, 14 of which are attachments.

The report said only one firm submitted a bid, MLB Enterprises, which was later awarded the P9.55-million contract as the “single lowest calculated and responsive bid.” But the team reported the BAC did not conduct actual site inspection on the bidder or its suppliers during the post-qualification stage of the procurement process.

“The post-qualification was only limited to the legal, technical, and financial documents submitted by MLB Enterprises,” the report added.

The team also reported that NIA, the procuring entity, did not conduct testing and inspection as to the quality of the ordered fertilizers upon delivery.

“The goods were inspected and received based only on quantity and not on quality,” said the three-member fact-finding team led by Roxana Hojas, DA-10 regional technical director for operations.

The contract provides that the firm will deliver 11,000 bags of organic fertilizer and 14,625 liters of “foliar liquid fertilizer cum pesticide” within 20 calendar days to the NIA’s Bukidnon Irrigation Management Office in Bagonta-as, Valencia City.

On July 23, 2010, investigators took samples from a portion of the third-phase supply of the project in the NIA warehouse in Valencia City. The fact-finding team found out that the samples tested did not comply with the required NPK (Nitrogen, Potassium, and Phosphorus) specifications as printed on the labels in the bags.

The results, they said in the report, would show that the subject fertilizers failed to comply with the specifications of the procuring entity, “hence should have not been accepted and paid for,” they stressed.

The team also added in its observations that NIA inspectors “failed to notice the very glaring fact that the packaging of the organic fertilizer did not indicate the FPA registration number, which is the standard.

NIA officials also did not inspect that the NPK content printed in the label of foliar fertilizer cum pesticide failed to comply with their specifications in the bidding, the fact-finding team added.

The resolution awarding the contract to MLB Enterprises also did not have a number, which a BAC official from the provincial government of Bukidnon who asked not to be named is irregular because it is used to monitor the process.

The fact-finding team also noted that the NIA BAC should have allowed the other bidder who bought bid documents, People’s Agri Service and Supply, to participate in the bidding so as not to defeat the purpose of Republic Act 9184 or the Government Procurement Reform Act, which pushes as much as possible for competitive bidding, especially when there were only two bidders. The other bidder’s tender was not accepted because it came 10 minutes late beyond the deadline.

The team reported, however, that in their dialogue with the irrigation association leaders who were recipients of the project, “all of them had positive feedback on the results of their harvest when they started using and applying the fertilizers” distributed by NIA.

“In fact, they are highly disappointed when NIA stopped the distribution,” they added in the report.

The team also found out that MLB Enterprises actually do not sell Grow Organic Fertilizers – the one they supplied to NIA – in their store in Valencia City.

“They informed us that those items were not available in their store and was only bought specifically for their contract with NIA-10,” said the report.

The team recommended to Alcala the withdrawal and replacement of all the organic and foliar fertilizers.

Last year, the Fertilizers and Pesticides Authority in Region 10 issued a stop use-stop sale order against the products delivered for the NIA project. About 2,700 bags of “grow organic” fertilizers and 3,741 bottles of Green Organic liquid fertilizers worth P2.3 million, believed to be a portion of the last of the three tranches of the P30-million fertilizer subsidy project, were held at the NIA warehouse in Valencia City.

But the team’s report was silent on the possible liabilities of those involved in the project.

Despite the discovery of lapses and substandard quality, the team only recommended to Alcala the “reorientation of all BAC members of NIA-10 “ to “keep them updated and abreast with the latest updates of the Government Procurement Reform Act (RA 9184).”

This drew the ire of Councilor Peduche and the farmers who complained against how the project turned out.

“The DA should conduct a more in-depth investigation how this happened. If proven to have violated the law, perpetrators must face the consequences,” he added.

Francisco Matulac, president of the Bayanihan Lateral G-7 Irrigators Association (BLGIA), one of the 42 irrigators’ associations under the Pulangi River Irrigation System (PRIS), said the perpetrators should not go scot-free.

But the fact-finding team’s report was silent on the allegations of overpricing and also on the problem of propriety they raised against 3K and C Enterprises, producer of fertilizers for MLB Enterprises.

The Bayugan-based organic fertilizer producer, 3k and C Enterprises, is owned by Carlos Salazar, who at the time of the procurement project was the administrator of the National Irrigation Administration.

Peduche said the price of P390 per bag of the organic fertilizer is also “too high.” The same product sells at P250 to P300 in Valencia City, he said back in June 2010.

Back then, Peduche alleged a scam but NIA regional director Julius Macquiling told the provincial board in June 2010 that nothing was irregular and they were open for investigation.

Peduche, however, pushed for Alcala to act fast on the recommendation of the DA fact-finding team for possible replacement of fertilizers “so the farmers can benefit from it, after all.”

Engr. Jimmy Apostol, NIA-Bukidnon irrigation, said in a telephone interview Thursday that the replacement is still subject to Alcala’s approval. (Walter I. Balane / MindaNews)