Senate Accounts Committee Chair Alan Peter Cayetano wants the Senate to consider if it will allow the Department of Public Works and Highways and contractor Hillamarc's Construction Corporation to continue building the remaining phase of the new Senate Building construction in Bonifacio Global City, Taguig as he red flagged the various causes of delay in the project.

Cayetano also clarified that work on earlier phases of the project continues, as it is only the final phase of the project that is on hold.

Cayetano released to the media his letter to Senate President Francis Escudero where he detailed the results of his initial review of the project. Cayetano had three major recommendations---chief of which is to advise the Senate President to conduct an inquiry on the implementation of the contracts of the New Senate Building. 

"This is to identify problems, immediate or otherwise, in the project and  will compel the DPWH to question, evaluate, and rectify the problems  that may still be corrected at this point. At the same time, DPWH’s actions will be the decisive factor on whether  DPWH and the contractor (HillMarc’s Construction Corporation) will implement the remaining portion of the project which has an approved budget of Php 10.33 Billion but is yet to be awarded," Cayetano said in his letter.

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He also recommended to compel DPWH to create a high level liaison team for this project to be composed of the DPWH’s Unified Project Management Office (UPMO) as the project manager, and the Bureau of Design for proper coordination and to engage a third party construction management team to help with the process of clarifying and validating the project to date, both technically and financially as well as aid in a value engineering exercise intended to reduce the cost of the building. 

"This is highly recommended considering the high projected cost of the project, the subsequent delays, and the desire to turn over a building that conforms to the original design intent," the senator explained.

Cayetano identified four causes of delay in the multibillion peso project and explained each of the 4 in his letter.

Cause #1: Deviation/ Variation in the Projects

Cayetano said that the project, as observed by the Senate Coordinating Team, were riddled with deviations with the Terms of Reference (TOR) and variation orders.  Cayetano said one sample among those deviations and variations are the lack of waterproofing  in the tiles as well as the failure to observe the proper ceiling heights. 

Cayetano said this means that in implementing the project, the constructor failed to follow technical specifications and the implementing agency, the DPWH, as the project manager failed to question and call the attention of the contractor. 

"The presence of numerous deviations within the project implies that DPWH as the project manager failed to ensure, as specified in the Terms of Reference, specifically that “The DAED shall be undertaken with a degree of accuracy that will allow estimates to be made within approximately plus or minus five percent (+/- 5%) of the final quantities”1  Cayetano added.

Cayetano also said that Inspections of the Senate Coordination Team (SCT) also calls into question workmanship quality as well as the adherence to the original Terms of Reference. 

Cayetano explained that the Core and Shell (Phase I) has an approved budget of P8.9 Billion while the amount awarded between DPWH and HCC is P8.067 Billion. Cayetano explained that the difference between the two amounts was already used for variation  orders which is around 10% of variation.

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"Accordingly, while a 10% variation order is allowable, it was observed by the SCT that such the number of variation is still alarming," Cayetano explained as he stressed that it is perceived that the mistakes made by the contractor, with the inaction or lack of complaint of the project manager (DPWH), is at the financial cost of the Senate as these mistakes are rectified through variation orders which are paid by the Senate. 

"These variations (at the Core and Shell only) have totaled to P833 million which is just under 10% of the original contract price. We will have to clarify with all parties concerned the reasons and justifications for these variation orders that incidentally have caused extension of time claims by the contractor. Understanding that this is a design & build project, it is unclear at this point why there are so much variations allowed by DPWH, the project management team. " Cayetano said.

Cause #2: Procurement 

Cayetano said that in connection with the deviations and variations, it was observed that DPWH had procured items not yet for implementation or in the inverse there were items not yet procured but already needed for implementation. 

Cayetano added that SCT has observed several times that materials shown by the DPWH for approval to the Senators for procurement were way beyond the indicated budget for such materials. "As such, the materials were always rejected," Cayetano added.

Cause #3: DPWH’s Bureaucracy 

Cayetano said that since there are deviations/variations in the project covered by a Design and Build project, a new design for that portion with variation is necessary. However, as part of the DPWH’s processes, a new design will have to be approved by the Bureau of Design of the DPWH.  Cayetano explained that after that bureau has approved the new design based on the variation order, DPWH’s Unified Project Management Offices (UPMO) will implement and procure the items in the new design. 

Cayetano said that according to the SCT, there is a lack of coordination between the said Bureau and the UPMO as documents required or the approvals needed would sleep in the DPWH. Hence, slowing down the entire process. 

Cause #4: Slow Down Order 

Cayetano then said that since there are deviations that are needed to be rectified, the SCT would not approve payment for the variation orders issued by the DPWH as a means to compel HCC and DPWH to rectify those deviations. 

He explained that a Slow Down Order was issued by DPWH since payments were not made.

"This has placed the Senate in a difficult position where it has to choose between paying for the contractor’s/DPWH’s mistake in order to gain time or withhold payment in order to compel the rectification but at the cost of timeliness," the senator said.

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Cayetano said that the Fit-Out (Phase II) has an approved budget of Php 2.5 Billion. The amount awarded between DPWH and HCC is P2.375 billion by means of a negotiated procurement while the Works to Finish/Complete (Phase III) has an approved budget of P10.33 billion. However, he stressed that Nothing in this phase is awarded and is up for bidding. 

Cayetano also pointed out that the sum of the total approved budget for the first 2 phases is Php 11.4 Billion but  according to the SCT, only Php 6 Billion out of the Php 11.4 Billion has been paid out and the remainder of the payments are withheld as a means to compel the contractor/DPWH to rectify the issues in the project.

In a subsequent live appearance on his Facebook account, Cayetano maintained that they were shocked by the cost of the project.

"Maganda naman po ang start pero medyo lahat po ng nakakita nung cost medyo nagulat. But I ask people let's not muna speculate , let's not jump to conclusion," Cayetano said. "Let's not muna speculate , let's not make accusations, let's make sure na factual, let's make sure kumpleto yung ating information."

Cayetano also clarified that the construction for phases 1 and 2 of the project continues, and it is the phase 3 of the project that is on hold.

"So let me clarify this part noh kasi napanood ko rin yung news kagabi na may taga DPWH  na nagsasabi nga na wala pang order na itigil. Ah yung sinasabi po sa news na phase 1 and phase 2 , eto po'y nabid at eto po'y ongoing. Pwede naman po tuloy yung construction dyan na nirereview namin, wala pong conflict yun. So we're just looking at the documentation, we're looking at yung mga why and what. Pero tuluy-tuloy po yan para walang delay," he explained.

"Pero meron po kasing additional na 10 billion sa aming briefing na hindi pa daw yan napo-procure noh hindi pa nabibid or meron kasing isang part ninegotiate na billion din so eh eto whether, let me just use the word procure although mas alam ng ating kababayan yung bid but there are different ways to procure. So eto po yung hinold and I agree and support the decision of the senate president and this will not cause delays because nga we have to find out kung tama yung amount at tama yung bibilhin at tama din 'yung pagcoconstruct."

"So it's not the order of the Senate President nor the doing of the committee on accounts that will cause any delay at this point because at this point we are reviewing phase 1 and phase 2 while it is ongoing and it is the additional 10 billion that we are reviewing now," Cayetano said. 

"Ang nagreview po nito for your info po ay nasa secretariat ng senate nasa staff ko nasa staff ng com on accounts at sila po namamahala , yung iba po sa kanila very very capable po , may abogado , may engineer na from the start po nandyan sila sa project. So hindi po to bulong bulong or haka haka lahat po to ay official mga reports mga documents noh. But voluminous po napakarami kaya we're getting through ah we're sorting through it."

On Monday, Senate President Francis Escudero told Senate employees on Monday that the cost of building the Senate's new headquarters in BGC, Taguig has gone up up to P23 billion from the original P8.9 billion as he stopped the construction and payments pending review of the project.

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