COA Orders DOH to Pay P9.5 Million to NIFCSI
The Commission on Audit (COA) has mandated the Department of Health (DOH) to disburse P9.5 million to Nonpareil International Freight and Cargo Services, Inc. (NIFCSI) for brokerage services rendered during the peak of the Covid-19 pandemic in 2020. This decision underscores the importance of timely payments for services that were essential in managing health logistics during a global crisis.
Contractual Background
NIFCSI was awarded the brokerage services contract by the DOH on February 6, 2020, with a total contract price of P18,603,200. By August 11, 2020, nearly 92% of this amount had been utilized, totaling P17,041,586.55. The urgency of the situation warranted an extension of the contract due to an influx of international aid and donations aimed at bolstering the country’s response to the pandemic.
Extensions Amid Crisis
Recognizing the high volume of shipments necessary for Covid-19 response, the DOH extended its contract with NIFCSI on September 30, 2020, for an additional P10 million, allowing services to continue for another three months until a new provider could be found.
This arrangement was further complicated by the DOH’s procurement efforts under the Philippine Covid-19 Emergency Response Project (PCERP), funded by the World Bank (WB). As the WB sought to enhance the capabilities of hospitals and laboratories, it became necessary for the DOH to rely on existing brokerage services due to the lack of a contracted third-party logistics firm for critical shipments, including portable X-ray machines.
Challenges in Payment
The contract with NIFCSI saw multiple extensions, ultimately totaling P15 million for a two-month period and another P11 million for services extending from January 1, 2021, to February 28, 2021. However, complications arose when the World Bank notified the DOH that brokerage services could not be funded through WB resources. In light of the budget overruns and exhaustions, NIFCSI filed a final demand letter for payment of P9,557,567.12 for the unpaid shipments. Despite the DOH’s admission of its inability to pay due to depleted funds, NIFCSI pursued the claim through COA.
COA’s Findings
Upon review, COA found NIFCSI’s claims to be valid and well-supported by documentation. The audit team confirmed that the brokerage services provided were essential and directly benefited both the DOH and PCERP initiatives during this unprecedented health crisis. The COA’s decision emphasized the necessity for the DOH to honor its contractual obligations and settle the outstanding payment, thus allowing NIFCSI to recover the reasonable value of the services rendered.
Conclusion
This decision reflects the critical importance of addressing financial claims related to emergency services during the pandemic. The ruling highlights that, even when funds are limited, contracts should be honored to ensure a reliable supply chain and logistics support for health services. The timely payment of such claims not only sustains the companies involved but also reinforces the integrity of public service agreements during emergencies.
