EN BANC
G.R. No. 228595, September 22, 2020
FORMER MUNICIPAL MAYOR HELEN C. DE CASTRO, TOBY C. GONZALES, JR., DENNIS H. DINO, CARMENCITA S. MORATA AND LIZA L. HOLLON, PETITIONERS, V. COMMISSION ON AUDIT, RESPONDENT.
D E C I S I O N
GAERLAN, J.:
This petition for certiorari1 under Rule 65, in relation to Rule 64 of the Rules of Court, seeks to annul and set aside the Commission on Audit (COA) Decision2 dated September 11, 2014, in the "Automatic [R]eview of the [COA] Regional Office No. V Decision No. 2012-L-007 dated June 4, 2012 partially granting the appeal of Mayor Helen C. de Castro, Municipal Government of Bulan, Province of Sorsogon, et al., from Notice of Disallowance Nos. 2008-06-27-001-101 (2009) to 2008-06-27-005-101 (2009) all dated August 18, 2009 and Supplemental Notice of Disallowance No. 2008-06-27-006-101(2009) dated October 9, 2009." The present petition likewise seeks to annul and set aside COA Resolution3 dated November 9, 2016, re: "Motion for reconsideration of Mayor Helen De Castro, Municipal Government of Bulan, Sorsogon, et al., of [COA] Decision No. 2014-209 dated September 11, 2014, which affirmed with modification [COA] Regional Office No. V Decision No. 2012-L-007 dated June 4, 2012, on the lifting and amendment of various Notices of Disallowance relative to the construction of Bulan Integrated Bus Terminal and Slaughterhouse Projects."
After the two projects were paid, the then COA Regional Cluster Director of the Local Government Sector, Cluster II, Province of Sorsogon, issued Office Order No. 2008-06-07 dated June 23, 2008, directing the Audit Team Leader (ATL) to conduct a special audit on the BIBT and Slaughterhouse construction projects of the MGB.6 The special audit resulted in the issuance of Notices of Disallowance (ND) Nos. 2008-06-27-005-101(2009) to 2008-06-27-005-101(2009)7 all dated August 18, 2009, and Supplemental ND No. 2008-06-27-006-101(2009)8 dated October 9, 2009, with the following details: ChanRoblesVirtualawlibrary
Project Contractor Contract PriceDesign and Construction of the BIBT S.R. Baldon Construction & Supply P32,984,7000.005Labor and Materials for the Construction of Bulan Slaughterhouse Steven Construction & Supply P4,991,800.00
The NDs were based on the following findings:
Item
No.References
Amount
DisallowedPersons
LiableDesignation
Reason for Disallowance
1 NDNo. 2008-06-27- 001-101 (2009)9 P196,526.13Shirley R. Baldon (Baldon)
Proprietor, S.R. Baldon Construction
Unaccomplished deficiency of 0.58% or Php 196,526.13, the equivalent amount in terms of pesos.Toby C. Gonzales, Jr. (Gonzales)
Municipal Engineer
Dennis H. Dino (Dino)
BAC Chairman
Helen C. De Castro (De Castro)
Municipal Mayor
2 NDNo. 2008-06-27- 002-101 (2009) 10 P4,368,046.5811 BaldonProprietor, S.R. Baldon Construction
Representing 16.79% as overprice net of 10% tolerable allowance from the 26.79% overpricing of COA Estimated Cost per COA Res No. 91-52 dated September 17, 1991. GonzalesMunicipal Engineer
DinoBAC Chairman
De CastroMunicipal Mayor
3 NDNo. 2008-06-27- 003-101 (2009) 12 P2,638,776.00 BaldonProprietor, S.R. Baldon Construction
Representing liquidated damages for 80 days in excess of contract time. GonzalesMunicipal Engineer
DinoBAC Chairman
Castro
Municipal Mayor 4 NDNo. 2008-06-27- 004-101 (2009)13 P169.721.20 Jocelyn D. Destura (Desturia) Owner, Steven Construction and Supply Representing liquidated damages for 34 days in excess of contract time. Gonzales Municipal Engineer Dino BAC Chairman Castro Municipal Mayor 5 NDNo. 2008-06-27- 005-101 (2009)14 P32,984,700.00 Rodosendo Razo, Jr. (Razo) Municipal Accountant Violation of Section 8-Implmenting Rules and Regulation (IRR)-A of Republic Act (RA) No. 9184. Procuring entities without internet access may avail of the Philippine Government Procurement System (PhilGEPS) Public Access Terminals which shall be installed at DBM-designated locations in the provinces and in Metro Manila. Failure to post a procurement opportunity will render the resulting contract null and void. Sonia G. Revilla (Revilla) Municipal Treasurer Dino BAC Chairman De Castro Municipal Mayor 6 NDNo. 2008-06-27- 006-101 (2009)15 Razo Municipal Accountant Violation of Section 8-1RR-A of Republic Act (RA)No. 9184. Procuring entities without internet access may avail of the Philippine Government Procurement System (PhilGEPS) Public Access Terminals which shall be installed at DBM-designated locations in the provinces and in Metro Manila. Failure to post a procurement opportunity will render the resulting contract null and void Revilla Municipal treasurer Dino BAC Chairman De Castro Municipal Mayor
Ocular inspection conducted by the undersigned together with the above named MEO personnel showed that, as per documents submitted, the [above-named] project is only 99.42% completed. The deficiency in the accomplishment was due to the fact that the Bus Terminal is still tapped to temporary source pending approval with Soreco of a permanent line leading to the building. The transformer being used is a 25 kva instead of a 50 kva, as programmed. Also included in the deduction, being accessory to the transformer!,] is the cut-out/lighting arrester and the corresponding KWH meter.17cralawlawlibraryNDNo. 2008-06-27-002-101 (2009)
CONCLUSION:NDNo. 2008-06-27-003-101 (2009)
The approved budget for the contract amounting to P32,730,452.37 and contract cost of P32,984,700.00 were found to be 25.81% and 26.79% above the COA estimated cost[,] respectively, hence considered excessive per COA Resolution No. 91-52 dated September 17, 1991 re: TSO Policy Guidelines governing auditorial review and evaluation of bidded infrastructure. The difference was due to the [overestimated] quantity of some construction materials, cost of equipment rental and cost of labor. Some construction materials were [overpriced].
NOTE: Unit prices were based on the previously reviewed contracts and the unit prices used in the project, Construction of Slaughterhouse^] located at Brgy. J.P. Laurel, Bulan, Sorsogon. The equipment rental rates were based on the DPWH rental rates of heavy equipments [sic].21cralawlawlibrary
NDNo. 2008-06-27-004-101 (2009)
CONSTRUCTION OF [BIBT]Contract Duration 180 Calendar DaysNotice to Proceed December 13, 2006Actual Date of Construction Started December 23, 2007Actual Date Completed September 29, 2007No. of days from Signing of NTP to Completion 260 Calendar Days
That the contractor shall commence work on the Site within 30 calendar days after the date of receipt of NTP on December 13, 2006
January
13-31,2007 19February 01-28,2007 28March 01-31,2007 31April 01-30,2007 30May 01-31,2007 31June 01-30,2007 30July 01-31,2007 31August 01-31,2007 31September 01-29,2007 29 ===Total 260Less (Contract Time) 180 ===Excess of Contract Time 80 x P32,984.70 = P 2.638.776.00 (Liquidated Damages)
That suspension order22issued by the Hon. Mayor [De Castro], for work stoppage starting July 02, 2007 to September 10, 2007, due to refinancing agreement between the lending bank and the LGU ha/sj no legal basis, x x x23cralawlawlibrary
ND No. 2008-06-27-005-101 (2009)
CONSTRUCTION OF BULAN SLAUGHTERHOUSEContract Duration 180 Calendar DaysNotice to Proceed December 13, 2006Actual Date of Construction Started December 23, 2006Certificate Issued to LBP Irosin Branch, Sorsogon that the project is still on-going July 24, 200724
Accomplishment report25 submitted to Hon. Mayor Helen C. De Castro of LGU Bulan, Sorsogon by Engr. [Gonzales], Municipal Engineer dated April 29, 2007, was 100% completed, while on the contrary a certification was likewise issued dated May 29, 2007,26 with 100% work accomplishment x x x.
December 23-31,2006- 9January 01-31,2007- 31February 01-28,2007- 28March 01-31, 2007 - 31April 01-30,2007- 30May 01-31,2007- 31June 01-30,2007- 30July 01-24,2007- 24Total 214Less (Contract Time) 180 ==Excess of Contract Time 34xP4,991.80 = P169,721.20 [LD]27
1. Whether the disallowance of P196,526.13, representing cost of unaccomplished work7deficiency in the Construction of the BIBT, could now be lifted in view of the subsequent accomplishment done by Contractor-(S.R. Baldon);On June 4, 2012, the RD rendered COA Regional Office No. V. Decision No. 2012-L-007, disposing as follows: ChanRoblesVirtualawlibrary
2. Whether Baldon, et. al. could be held liable for the Final Cost Variance (FCV) of P4,368,046.58 in the Construction of BIBT, which amount represents the excess of Contract Price of P32,984,700.00 over COA estimated cost of P26,015,762.82, after considering the 10% allowable variance of P2,600,890.60;
3. Whether there is legal basis to bill or charge S.R. Baldon Construction and Supply x x x for LD amounting to P2,638,776.00, in the light of the idle time allowed and the suspension order issued by Hon. Mayor x x x De Castro;
4. Whether Steven Construction and Supply, represented by its proprietor xxx Destura, should be held liable for LD amounting to PI69,721.20 despite allegation by management that the Construction of Bulan Slaughterhouse was finished within the contract duration of 180 days;
5. Whether there is basis to nullify the entire contracts for the Construction of the BIBT and Slaughterhouse, and disallow the related costs, for reasons that the Municipality failed to post the procurement opportunities in the PhilGEPS."28cralawlawlibrary
The Decision of the COA-RD of Region V was elevated to respondent COA Proper for automatic review pursuant to Section 7, Rule V of the 2009 Revised Rules of Procedure of the COA (RRPC) as the RD modified the ruling of the ATL.
(1) ND No. 2008-06-27-001-101 (2009) amounting to PI96,526.13 was partly affirmed holding the contractor liable for liquidated damages amounting to P145,770.60 only, assessed by reason of the delay in the delivery or installation of additional 25 kva transformer and its accessories in the main terminal building;(2) ND No. 2008-06-27-002-101 (2009) amounting to P4,368,046.58 was partly lifted in so far as the portion that relates to overpricing is concerned, but not the portion that relates to overestimation in quantity amounting to P2,838,3 84.00;(3) ND No. 2008-06-27-003-101 (2009) amounting to P2,638,776.00 was lifted for lack of legal basis without prejudice to the administrative liability of the Honorable Mayor (and other officials, if any), for issuing a patently erroneous and baseless suspension of work order that ran counter to Item 9, (1) of Annex "E" to IRR-A of RA 9184;(4) ND No. 2008-06-27-004-101 (2009) amounting to PI69,721.00 was lifted due to insufficiency of evidence, but with a stern warning to the Municipal Engineer to stop giving inconsistent and misleading information (i.e. dates of project completion, work accomplishment, etc) to users of his reports; and(5) ND No. 2008-06-27-005-101 (2009) and 2008-06-27-006-101 (2009) totaling P37,976,500.00 are lifted for want of legal basis, without prejudice to the administrative liability of the BAC Secretariat for dereliction of duties and conduct grossly prejudicial to the best interest of service and/or other criminal or civil liabilities that may be imposed under appropriate laws and regulations.29
WHEREFORE, in view of the foregoing, this Commission AFFIRMS with MODIFICATION COA Regional Office No. V Decision No. 2012-L-007 dated June 4, 2012, as follows:Aggrieved, S. R. Baldon, Orencio C. Luzuriaga, petitioners De Castro, Dino, Gonzales, Liza L. Hollon (Hollon), and Carmencita S. Morata (Morata) moved for reconsideration, which respondent COA denied in its assailed Resolution31 dated November 9, 2016, the dispositive portion of which reads: ChanRoblesVirtualawlibrary
The modified ND No. 2008-06-27-001-101 (2009), holding x x x Baldon, Proprietor, S.R. Baldon Construction and Supply, liable for the liquidated damages amounting to P145,770.60 only based on the Inspection/Evaluation Report dated March 18, 2011 of COA TAS is affirmed;
The partial lifting of ND No. 2008-06-27-002-101 (2009) is sustained but the correct amount of the ND should be P4,367,360.90 instead of P4,368,046.58. Consequently, the amount of P2,509,485.57 pertaining to the overpricing is lifted but the remaining P1,857,875.33 for the overestimation in quantity is sustained;
The lifting of ND No. 2008-06-27-003-101 (2009) in the amount of P2,638,776.00 is hereby set aside. Mayor x x x De Castro shall be held liable for the amount of disallowance for her issuance of a work suspension order not in accordance with the provision of Item 9 (1) Annex E to IRR-A of R.A. 9184;
The lifting of ND No. 2008-06-27-004-101 (2009) amounting to P169,721.00 is hereby set aside. Engr. x x x Gonzales, x x x Municipal Engineer, MGB, Province of Sorsogon, shall be held liable for the amount of disallowance for misfeasance in giving inconsistent and misleading information regarding the date the project was completed; and
The lifting of ND No. 2008-06-27-005-101 (2009); and ND No. 2008-06-27-006-101 (2009) totaling P37,976,500.00 is affirmed for want of legal basis without prejudice to the administrative liability of Mayor x x x De Castro, Head of Procuring Entity and the BAC members for their violation of the provisions of R.A. 9184 and its IRR regarding the full use ofthePhilGEPS.
The Audit Team Leader, Municipal Government of Bulan, province of Sorsogon, is hereby directed to prepare a Notice of Settlement of Suspensions/Disallowances/Charges to reflect the disallowance lifted, and issue an amended Notice of Disallowance to reflect the reduced amount in accordance with the attached Schedule I, forming an integral part of this Decision.
WHEREFORE, premises considered, this Commission hereby DENIES the motion for reconsideration. Accordingly, [COA] Decision No. 2014-209 dated September 11, 2014, which affirmed with modification COA Regional Office No. V. Decision No. 2012-L-007 dated June 4, 2012, on the lifting and amendment of various [NDs] relative to the construction of [BIBT] and Slaughterhouse Projects in the Municipality of Bulan, Sorsogon, is AFFIRMED with FINALITY.Hence, the present petition.
The Prosecution and Litigation Office, Legal Services Sector, this Commission, is hereby directed to forward the case to the Office of the Ombudsman for investigation and filing of the appropriate charges, if warranted, against the persons liable for the transaction.32cralawlawlibrary
A
The above-stated reasons, with reference to pertinent documents, were adequate enough to inform the parties concerned that the corresponding bases for the disallowance are contractual in character, thereby affording the parties the opportunity not only to respond, but more importantly, to properly formulate their defenses in their Appeal Memorandum before the COA-RD of Region V.
References Facts and/or Reasons for Disallowance ND No. 2008-06-27-001-101 (2009) Unaccomplished deficiency of 0.58% or PI96,526.13[,] the equivalent amount i terms of pesos. Per inspection repor attached on Special Audit Report (Annexes "M- 1-5") ND No. 2008-06-27-003-101 (2009) Representing liquidated damages for 80 days in excess of contract time attached in the Special Audit Report as Annex "Z- 15-A" NDNo. 2008-06-27-004-101 (2009) Representing LD for 34 days in excess of contract time attached in the Special Audit Report as Annexes "Z- 16-A" & "18-a-d"
1. Letter/Report issued by the Office of the Municipal Engineer, dated October 20, 2009, stating that per inspection of the BIBT project conducted on even date, the 50kva transformer and its accessories, in accordance with the Program of Work (POW), had been installed;52As stated above, the COA-RD of Region V modified the disallowance under ND No. 2008-06-27-001-101 (2009), assessing the private contractor's liability at P145,770.60 only, as liquidated damages by reason of the delay in the delivery or installation of additional 25kva transformer and its accessories in the main terminal building. Upon automatic review of the COA Proper, the respondent affirmed the modification made by the COA-RD of Region V.
2. Letter of the contractor Baldon, dated October 3, 2009, informing the Municipal Mayor of the installation of the 50kva transformer, as well as all electrical equipment and accessories, had been properly installed;53
3. Certification issued by Sorsogon I Electric Cooperative, Inc. (SORECO) on September 30, 2009, stating that a secondary line (consisting of units steel poles; one unit 50kva transformer; and one unit kwh meter class 200) has been installed at the BIBT.54cralawlawlibrary
Petitioners assert that there was denial of administrative due process when, after the private contractor Baldon had established that her construction firm had rectified the deficiency cited by the ATL in the original ND No. 2008-06-27-001-101 (2009), the COA-RD and respondent COA Proper still partly sustained the said disallowance based on a new ground. Considering that the basis for the liability under the modified ND was different from that originally cited, petitioners claim that a new ND should have been issued covering the same. Petitioners, thus, argue that respondent COA committed grave abuse of discretion when it affirmed ND No. 2008-06-27-001-101 (2009) as modified by the COA-RD of Region V.
NDNo. 2008-06-27-001-101 (2009) ORIGINAL MODIFIEDAMOUNT P196.526.13 P145.770.60REASON
FOR
DISALLOWANCEUnaccomplished deficiency of 0.58% upon per inspection Liquidated Damages by reason of the delay in the delivery and installation of additional 25 kva transformer and its accessories in the main terminal building
The disallowed NCV under the original ND No. 2008-06-27-002-101 (2009) consisted of two parts, namely, overestimated quantities and overpricing:59
Contract Cost
32,984,700.00
Less COA Estimated Cost
26,015,762.82
Difference: (Gross Variance)
6,968,937.18
Gross Variance / Allowable Variance x 100 = 26.79%
Less: 10% of COA Estimate (Allowable Variance) 57
2,601,576.28
Net Cost Variance (NCV) Disallowed in Audit
P4,367,360.90 58
On appeal to the COA-RD of Region V, the amount of disallowance was reduced to P1,857,875.33, after the RD lifted the disallowance of Php2,509,485.57 representing the NCV of the alleged overpriced construction materials. The reason for the partial lifting of the disallowance was the failure of the COA-TAS to support the finding of overpricing with actual canvass sheets and/or price quotations from identified suppliers, as required under COA Memorandum No. 97-012.61
Details
Overestimated
QuantitiesOverpricing
Total
Amount (P)
%
Amount (P)
%
Amount (P)
%
Portion of CV for construction materials, rental cost of equipment and cost of labor
2,838,384.00
42.54
3,834,453.30
57.46
6,672,837.30
100
CV for mobilization, overhead cost and contractors profit and tax 125,960.89 42.54 170,138.99 57.46 296,099.88 100Total Cost Variance/ Gross Variance Equivalent to 26.79%
2,946,344.89 42.54 4,004,592.29 57.46 6,968,937.18 100Less COA Allowable Variance: 10% of Total Estimate: (26,015,762.82) 1,106,710.55 42.54 1,494,865.73 57.46 2,601,576.28 100Net Cost Variance (NCV) Disallowed P1,857,875.33 42.54 P2,509,485.57 57.46 P4,367,360.90 10060
Point 1:While this Court finds points 1 to 4 raised by petitioners to be ostensibly sound in theory, it is unfortunate that petitioners failed to present before Us the LGUs Program of Work (POW), in order to enable Us to confirm whether the items or expenses referred to in petitioners' arguments indeed form part of the agency approved budget, and whether they constitute the remaining gross variance of P2,964,344.89. Considering that the said document is clearly relevant to the material allegations in this petition, petitioners should have presented the same.It must be noted that in the Detailed Estimates under Masonry Works, page 2, for 10,475 hollow blocks used, Engr. Gomez estimated only 611 bags of cement needed or to be used.Point 2: ChanRoblesVirtualawlibrary
However on page 5, for another Masonry Works, for 13,800 pieces of hollow blocks[,] Gomez estimated that only 120 bags of cement are needed.
x x x xRelative to the Perimeter Fencing, on page 1 of both the LGU Program of Work and the COA Detailed Estimates, the COA inspector (Engr. Gomez) did not include in his Detailed Cost Estimates the use of scaffoldings for the construction of the perimeter fence, x x xPoint 3: ChanRoblesVirtualawlibraryIn the COA. Detailed Estimates prepared by the COA inspector, the employment of a Civil Engineer, or an Electrical Engineer, or a Project Engineer who must supervise, check and oversee the whole project as big as the Bus Terminal was not included. The BIBT was a big civil works project awarded to a contractor who must hire a professional civil engineer, or any other engineer, depending on the line of work or project being done. The labor cost for such engineer was obviously disregarded or omitted by the COA inspector[,] which could partly account for or explain or reduce the alleged overestimated cost of the project.Point 4: ChanRoblesVirtualawlibraryCOA Inspector (Engr. Gomez) raised the issue that for the acquisition of common borrow which will be used as filling material, why adopt the farther source in the LGU estimate and pay a higher cost of P220.00 per cubic meter instead of the nearer source with lower cost of P130 per cubic meter? He claimed that] in this material alone, the government could have saved P90.00 per cubic meter of P1,944,000.00 for 21,600 cubic meters.63Point 5: ChanRoblesVirtualawlibrary
It must be pointed out that the site of the [BIBT] is very much different from that of the Municipal Slaughterhouse. The BIBT project is located in a rice field needing more selected type of filling materials than the usual filling materials for the construction site of an ordinary project like a slaughterhouse. The BIBT serves as a facility that can carry heavier loads like, not only the building but several buses equivalent to 50 units at some point of time, and thus, the foundation materials had included selected filling materials like boulders and rocks. The area at the site of the BIBT project sits on a ground softer than at the slaughterhouse site. Thus, there was a need for a selected borrow since safety like security is a main concern for the Bus Terminal Management.
Accordingly, [the] alleged savings of P90.00 per cubic meter for 21,600 cubic meters or a total amount of P1,944,000.00 is totally baseless and therefore there was no overestimation in the quantity and price of the borrow used as filling materials for the BIBT project.The COA inspector (Engr. Gomez) had questioned the rental of Road Grader estimated by the LGU of Bulan at P12,048.00 per eight-hour operation based on Municipal Ordinance No. 002, Series of 200564 [xxx] which is the prevailing rate at the construction site. Engr. Gomez used the DPWH Regional Equipment Rental rates based on the DPWH Order No. 57, Series of 2002, dated February 13, 2002 which is legally non-existent for not having been published or filed with the Office of the National Administrative Register (ONAR) as already discussed above. And if Engr. Gomez used any other rates prevailing in a locality outside of the LGU [of] Bulan or in a place far from the construction site like Legaspi City, then Engr. Gomez failed to consider the factors that affect costing or pricing or rental, like distance, time and the added cost of hauling the heavy equipment to and from the project site at Bulan Sorsogon.65cralawlawlibrary
9.1. The procuring entity shall have the authority to suspend the work wholly or partly by written order for such period as may be deemed necessary, due to force majeure or any fortuitous events or for failure on the part of the contractor to correct bad conditions which are unsafe for workers or for the general public, to carry out valid orders given by the procuring entity or to perform any provisions of the contract, or due to adjustment of plans to suit field conditions as found necessary during construction. The contractor shall immediately comply with such order to suspend the work wholly or partly.COA further ruled that neither does the said circumstance fall under Item 9(2) of Annex E to IRR-A of R.A. No. 9184, which enumerates the following grounds for a contractor to request for work suspension: ChanRoblesVirtualawlibrary
9.2. The contractor or its duly authorized representative shall have the right to suspend work operation on any or all projects/activities along the critical path of activities after fifteen (15) calendar days from date of receipt of written notice from the contractor to the district engineer/regional director/consultant or equivalent official, as the case may be, due to the following:Taking exception therefrom, petitioners argue that the respondent committed grave abuse of discretion in relying solely upon the grounds for work suspension mentioned in Items 9(1) and (2) of Annex E to IRR-A of R.A. No. 9184 to invalidate the subject Work Suspension Order. They assert that De Castro's order may likewise be justified under the General Welfare Clause of the Local Government Code. Expounding on this assertion, they explain that in order to fund the construction and development of the several priority projects, such as the BIBT, SB Ordinance No. 004, series of 2003,74 was enacted authorizing the municipal mayor to float Bulan bonds in the amount of P50,000,000.00. In the same ordinance, the municipal mayor was also authorized to undertake alternative arrangements should such be necessary due to cost considerations. Thereafter, when the implementation of the Bulan bonds turned out to be difficult, SB Resolution No. 033 series of 200775 was issued on July 16, 2007, authorizing the municipal mayor to apply, negotiate and enter into a contract of loan or any credit accommodation or facility to finance the early redemption or bail-out of the outstanding Bulan Bonds. Considering the amount of time, it would take to process the refinancing agreement, petitioner De Castro issued the questioned Work Suspension Order in order to protect the interest of the municipality from being sued by the private contractor for any resulting delay in the payment of progress and final billings.
a. There exist right-of-way problems which prohibit the contractor from performing work in accordance with the approved construction schedule.
b. Requisite construction plans which must be owner-furnished are not issued to the contractor precluding any work called for by such plans.
c. Peace and order conditions make it extremely dangerous, if not possible, to work. However, this condition must be certified in writing by the Philippine National Police (PNP) station which has responsibility over the affected area and confirmed by the Department of Interior and Local Government (DILG) Regional Director.
d. There is failure on the part of the procuring entity to deliver government-furnished materials and equipment as stipulated in the contract.
e. Delay in the payment of contractor's claim for progress billing beyond forty- five (45) calendar days from the time the contractor's claim has been certified to by the procuring entity's authorized representative that the documents are complete unless there are justifiable reasons thereof which shall be communicated in writing to the contractor.
8.1. Where the contractor refuses or fails to satisfactorily complete the work within the specified contract time, plus any time extension duly granted and is hereby in default under the contract, the contractor shall pay the procuring entity for liquidated damages, and not by way of penalty, an amount, as provided in the conditions of contract, equal to at least one tenth (1/10) of one (1) percent of the cost of the unperformed portion of the works for every day of delay.Petitioner's last argument was echoed by the OSG in its Partial Manifestation.
a. Accomplishment Report issued by Municipal Engineer Gonzales, dated April 29, 2007, stating that the Bulan Slaughterhouse was actually completed on April 29, 2007;92To Our minds, petitioners' documentary evidence preponderantly establish that the project was completed prior to the expiration of the 180-day contract time, ending on June 20, 2007. In their chronological sequence, these documents credibly tell the following narrative: that on April 29, 2007 (128 days from the commencement date), the construction of Bulan Slaughterhouse project was completed; thereafter, on May 28, 2007, the private contractor requested the municipal government to conduct an inspection on the project as a necessary precursor for the final payment; on May 29, 2007 (still well-within the 180-day contract time), the project was inspected and the work thereon was certified as 100% accomplished "as of the inspection date; accordingly, the final payment was made to the private contractor on 4 June 2007. Under the foregoing established facts, the purported delay in the project completion—the basis for the issuance of the original ND No. 2008-06-27-004-101 (2009)—is belied.
b. Request for Inspection and Final Payment, dated May 28, 2007, from Steven Construction and Supply, addressed to then Mayor De Castro;93
c. Certification issued by the Project-in-Charge Mr. Benito Marquez, and noted by Municipal Engineer Gonzales, dated May 29, 2007, stating that the project was 100% work accomplished as of May 29, 2007;94
d. Official Receipt issued by Steven Construction dated June 4, 2007, acknowledging that final payment has been made by the LGU of Bulan for a project already completed.95cralawlawlibrary
It is clear from the provision of Section 8.2.1 and 8.3.1 of IRR-Aof R.A. No. 9184 that the Procuring Entity is mandated to fully use the PhilGEPS. The Head of the Procuring Entity (HOPE) and BAC in this case, deliberately violated the said provisions through its failure to post the invitation to bid of the said project procurement, results of bidding and related information in the PhilGEPS website.Petitioners now assail the portion of the COA Proper Decision finding them administratively liable for the non-posting of the invitation to bid for the BIBT and the Bulan Slaughterhouse projects in the PhilGEPS website. According to petitioners, respondent had illegally assumed administrative disciplinary jurisdiction when it proclaimed petitioners be administratively liable under ND Nos. 2008-06-27-005-101 (2009) and ND No. 2008-06-27-006-101 (2009), notwithstanding its own finding that the said disallowances had no legal basis.
However, since the project was already completed and delivered, and the public has benefited therefrom, equitable considerations allow for payment to the Contractor based on quantum meruit.98cralawlawlibrary
Very truly yours, (SGD.) EDGAR O. ARICHETA Clerk of Court |
Endnotes:
* On official leave.
** On leave.
1 Rollo, pp. 3-119.
2 Id. at 145-158; numbered as COA Decision No. 2014-209.
3 Id. at 135-144; numbered as COA Decision No. 2016-330.
4 Id. at 374-377.
5 Id. at 277-278.
6 Id. at 145
7 Id. at 296-300.
8 Id. at 301.
9 Id. at 296.
10 Id. at 297.
11 Id. at 150; according to the assailed COA Decision dated September 11, 2014, the amount of disallowance should be P4,367,360.90, which was inadvertently indicated as P4,368,046.58.
12 Id. at 298.
13 Id. at 299.
14 Id. at 300.
15 Id. at 301.
16 Id. at 383-384.
17 Id. at 384.
18 Paragraph 7, COA Resolution No. 91-52 states:
The total contract price should be equal to or less than the total COA estimate plus 10% in order to sustain a finding of reasonableness, otherwise, the contract price will be deemed excessive.
19Rollo, pp. 240-260.
20 Id. at 261-262.
21 Id. at 262.
22 Id. at 264.
23 Id. at 341-342.
24 Id. at 355.
25 Id. at 356.
26 Id. at 357.
27 Id. at 350-351.
28 Id. at 147-148.
29 Id. at 148-149
30 10 Id. at 145-158.
31 Id. at 135-144.
32 Id. at 141-142.
33 Id. at 12-15.
34 Sec. 3. Time to file petition - The petition shall be filed within thirty (30) days from notice of the judgment or final order or resolution sought to be reviewed. The filing of a motion for new trial or reconsideration of said judgment or final order or resolution, if allowed under the procedural rules of the Commission concerned, shall interrupt the period herein fixed. If the motion is denied, the aggrieved party may file the petition within the remaining period, but which shall not be less than five (5) days in any event, reckoned from notice of denial.
35Rollo, pp. 411-414.
36 506 Phil. 613 (2005).
37Fortune Life Insurance Company, Inc. v. COA Proper et al, 752 Phil. 97, 106 (2015).
38Subic Bay Metropolitan Authority v. COA, G.R. No. 230566, January 22, 2019.
39 750 Phil. 258(2015).
40 Id. at 274-275, citing Sanchez v. Court of Appeals, 452 Phil. 665, 674 (2003).
41Rollo, pp. 432-435.
42 Sec. 9. Period to Decide Case - The Director shall render his decision on the case within fifteen (15) days after submission of complete documents necessary for evaluation and Decision.
43 Sec. 4. Period for Rendering Decision - Any case brought to the Commission Proper shall be decided within sixty (60) days from the date it is submitted for decision or resolution, in accordance with Section 4, Rule III hereof.
44Revuelta v. People of the Philippines, G.R. No. 237039, June 10, 2019.
45 Id.
46Navarro v. COA, G.R. No. 238676, November 19, 2019.
47 Id.
48Vivo v. Phil. Amusement and Gaming Corporation, 721 Phil. 34, 39 (2013).
49 Id. at 43, citing Casimiro v. Tandog, 498 Phil. 660, 667 (2005).
50Security and Exchange Commission v. Universal Rtghtfield Property Holdings, Inc., 764 Phil. 267, 283 (2015).
51Insular Bank of Asia & America v. IAC, 249 Phil. 417. 427 (1988).
52Rollo p. 306.
53 Id. at 307.
54 Id. at 308.
55Maritime Industry Authority v. COA, 750 Phil. 288, 334 (2015).
56Rollo, p. 150.
57 Paragraph 7, COA Resolution No. 91-52 states: The total contract price should be equal to or less than the total COA estimate plus ten percent (10%) in order to sustain a finding of reasonableness, otherwise, the contract price will be deemed excessive.
58 According to the assailed COA Decision dated September 11, 2014, the amount of disallowance should be P4,367,360.90, which was inadvertently indicated as P4,368,046.58.
59Rollo, p. 151.
60 Id. at 151-152.
61 COA Memorandum Order No. 97-012 dated March 31, 1997 states: ChanRoblesVirtualawlibraryx x x x62Rollo, pp. 240-260.
3.2 To firm up the findings to a reliable degree of certainty, initial findings of overpricing based on market price indicators mentioned in pa. 2.1 above have to be supported with canvass sheet and/or price quotations indicating: a) the identities of the suppliers or sellers; b) the availability of stock sufficient in quantity to meet the requirements of the procuring agency; c the specifications of the items which should match those involved in the finding of overpricing; d) the purchase/contract terms and conditions which should be the same as those of the questioned transaction.
63 Id. at 388.
64 Id. at 385-386.
65 Id. at 94-97.
66Morales, Jr. v. Ombudsman Carpio-Morales, 791 Phil. 539, 556 (2016).
67 Id.
68 Item A.3.1 of DPWH D.O. No. 57, series of 2002, states: ChanRoblesVirtualawlibraryA.3 Equipment Expenses.69Rep. of the Phils, v. Pilipinas Shell Petroleum Corporation, 574 Phil. 134, 144 (2008), NASECORE v. Energy Regulatory Board, 517 Phil. 23, 54 (2006).
A.3.1 Rental equipment which shall be based on the prevailing "Associated Construction Equipment Lessors, Inc." (ACEL) rental rates approved for the use by the DPWH. Rental Rates o*" Equipment not indicated in the ACEL booklet shall be taken from the rental rates prepared by the Bureau of Equipment, x x x
70Dr. Salvu v. Chairman Carague, 540 Phil. 279, 286 (2006).
71Arias v. Sandiganbayan, 259 Phil. 794 (1989).
72 The principle of unjust enrichment under Article 22 of the Civil Code ordains that "every person, who through an act of performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same to him."
73Shinryo (Philippines) Company, Inc. v. RRN Incorporated, 648 Phil. 342, 351 (2010).
74Rollo, 374-377.
75 Id. at 378.
76 Part 1 provides: If a Notice of Disallowance is set aside by the Court, no return shall be required from any of the persons held liable therein.
77 G.R. No. 244128, September 8, 2020.
78 Approving and certifying officers who acted in good faith, in regular performance of official functions, and with the diligence of a good father of the family are not civilly liable to return consistent with Section 38 of the Administrative Code of 1987.
79Rollo, p. 355.
80 Id. at 356
81 Id. at 357.
82 COA Circular 85-55a, September 8, 1985.
83 " Irregular expenditure signifies an expenditure incurred without adhering to established rules, regulations, procedural guidelines, policies, principles or practices that have gained recognition in law.
84Unnecessary expenditure pertains to expenditures which could not pass the test of prudence or the diligence of a good father of a family, thereby denoting non-responsiveness to the exigencies of the service.
85Excessive expenditure signifies unreasonable expense or expenses incurred at an immoderate quantity and exorbitant price. It also includes expenses which exceed what is usual or proper as well as expenses which are unreasonably high, and beyond just measure or amount. They also include expenses in excess of reasonable limits.
86Extravagant expenditure signifies those incurred without restraints, judiciousness and economy. Extravagant expenditures exceed the bounds of propriety. These expenditures are immoderate, prodigal, lavish, luxurious, waste grossly excessive, and injudicious.
87 Section 33 ofP.D. No. 1445.
88Illegal expenditures are expenditures which are contrary to law.
89Unconscionable expenses are expenditures which are unreasonable and immoderate, and which no man in his right sense would make, nor a fair or honest man would accept as reasonable, and those incurred in violation of ethical and moral standards.
90 Item 8.3 of Annex "E" of the IRR-Aof R.A. Nc. 9148.
91Rollo, p. 355.
92 Id. at 356.
93 Id. at 358.
94 Id. at 357.
95 Id. at 358.
96 Section 4.17 of the 2009 COA Rules and Regulations on the Settlement of Accounts: ChanRoblesVirtualawlibrary4.17. Liability - a personal obligation arising from an audit disallowance or charge which may be satisfied through payment or restitution as determined by competent authority or by other modes of extinguishment of obligation as provided by law.97 Section 31 of Volume 1: Government Auditing Rules and Regulations of the Government Accounting and Auditing Manual provides:
Section 31. Initiation of criminal, civil, or administrative action. — Pursuant to its constitutional power to examine, audit and settle all accounts of the government, the Commission may initiate, in the proper forum, an appropriate criminal, civil or administrative action against any government officer or employee, or even private persons, whenever upon examination, audit, or settlement of an account or claim, a violation of law or regulation is discovered or disclosed.
98Rollo, p. 155.
99 Sec. 31 of Volume 1 of Government Auditing Rules and Regulations of the Government Accounting and Auditing ManualchanRoblesvirtualLawlibrary