Atienza, Lorraine G.

Name: Culaway, Stanley G. Date: May 01, 2022

David, Sophia Marie D.
Section: TCIE 3-2 Group: #11 – Year 2017-2020

CE LAWS, CONTRACTS AND ETHICS

FINALS – EXERCISE 1

CASE 1
_________________________________________________________________________________________________

GOVERNMENT AGENCY NAME:

Department of Science and Technology (DOST)

PROJECTS:

Construction of the Philippine Science High School (PSHS)-Mindanao Campus Building Complex.

CASE:

This is a Petition for Certiorari (Petition) under Rule 64 in relation to Rule 65 of the Rules of Court
(Rules) seeking to set aside the following issuances of the Commission on Audit (COA): (i) COA Decision No.
2008-048 dated May 6, 2008 (2008 COA Decision) rendered by the COA Commission Proper (COA-CP), and
(ii) the Letter dated July 16, 2010 (questioned Letter) issued by the COA Director of Legal Services Sector
Adjudication and Legal Services (LSS-ALS).

The instant dispute was precipitated by Notices of Disallowance Nos. 98-012-101-(89), 98-015-101-
(90), and 98-013-101-(91) (Notices of Disallowance), which uniformly found petitioner Emerita A. Collado
(Collado) severally and solidarity liable with several others for erroneously computing liquidated damages
arising from the construction of the Philippine Science High School (PSHS)-Mindanao Campus Building
Complex. The Notices of Disallowance were eventually upheld by the COACP in COA Decision No. 2002-282
dated December 17, 2002 (2002 COA Decision) and later affirmed in the 2008 COA Decision.

Meanwhile, the questioned Letter affirmed with finality the LSS ALS' finding that Collado's Letter
dated June 10, 2008 was a prohibited pleading for being a second motion for reconsideration pursuant to
Section 13, Rule IX of the 1997 Revised Rules of Procedure of the COA (1997 COA Rules).

On December 27, 1988, a contract was entered into by and between the PSHS, Diliman Campus,
Quezon City and N.C. Roxas, Inc., for the construction of the PSHS-Mindanao Campus Building Complex at
Mintal, Davao City in the amount of P9,064,799.76 which was to be completed within 240 calendar days. Due
to certain circumstances beyond its control, the contractor requested an extension of the contract time, which
the Department of Science and Technology (DOST)-Wide Infrastructure Committee granted for 50 days from
September 12, 1989, the original completion date, to November 1, 1989 but with a notification and reminder
to the contractor that even considering the grant of extension, the completion date of the project had elapsed
and the same was already subject to liquidated damages.

The then PSHS Auditor, in her letter dated July 23, 1990, informed the Director, Technical Services
Office, [the COA], that even with the granting of the extension of the contract time, the contractor had already
incurred a negative slippage of 63.58% as of February 15, 1990. However, the DOST-Wide Infrastructure
Committee decided to continue with the project as it would entail a longer time to finish the project if they
rescind[ed] the contract and conducted another bidding.

On July 31, 1990, a Supplemental Contract was entered into by and between the PSHS and N.C.
Roxas, Inc. for the completion of the Academic Building (Phase 1), and concreting of the [d]riveway[,] etc., to
be completed within 45 days, with a contract price of P2,333,313.61 under the same terms and conditions as
the original contract dated December 27, 1988.

On January 25, 1991, the PSHS Board of Trustees in its Resolution No. 1 terminated the two
Contracts (Original and Supplemental) for failure of the contractor to finish the projects.

Upon post-audit, the Auditor discovered that the liquidated damages imposed by PSHS Management
on the contractor was only P252,114.79 instead of P2,400,134.65 or a difference of P2,148,019.86.

Notice of termination dated January 30, 1991, was furnished the Manager, Suretyship Department,
Government Service Insurance System (GSIS) Makati, in a letter dated February 5, 1991, of the Director,
PSHS, with the request for payment of the amount of P906,480.00, under Performance Bond G(13) GIF Bond
No. 041917 for the Contract dated December 27, 1988 with contract price of P9,064,799.76 and the amount
of P233,331.36 under GSIS Performance Bond of No. 049783 for the Supplemental Contract dated July 31,
1990, with a contract price of P2,333,313.61. It appeared, however, in the letter of the General Manager, N.C.
Roxas, Inc., dated March 27, 1991 and in the letter of the Director, PSHS, dated June 3, 1991, that the
amounts under the afforested GSIS Performance Bonds were already released to N.C. Roxas, Inc.

Consequently, the COA State Auditor IV (COA Auditor)11 issued the Notices of Disallowance
covering the deficiency in the amounted of liquidated damages deducted from the payments made to N.C.
Roxas, Inc., for being contrary to the formula provided in the Implementing Rules and Regulations (IRR) of
Presidential Decree No. (P.D.) 1594. Based on the records, N.C. Roxas, Inc. incurred delay starting from the
4th progress billing for a total of 409 days (from November 2, 1989 to December 15, 1990).

Thus, due to the insufficient deduction in liquidated damages (i.e., P252,114.79 instead of P2,400,134.65),
there was an overpayment in the progress billings made to N.C. Roxas, Inc. in the amount of
P2,148,019.86.15 In effect, because the formula used was different from that mandated in the IRR of P.D.
1594, it would appear that PSHS incurred a total expenditure of P8,641,470.47, instead of only
P6,793,450.41.

For such overpaid amount, the COA Auditor found the following persons solidarily liable: N.C. Roxas,
Inc., as payee, Evelyn B. Rabaca (Rabaca), Accountant III, Rufina E. Vasquez (Vasquez), Administrative
Officer V, for her act of "certifying the expense as necessary, lawful and incurred under [her] direct
supervision," and Collado for her act of "computing the erroneous liquidated damages to be imposed."

DECISION:

Premises considered; the Petition is GRANTED IN PART. The Commission on Audit-Commission

Proper Decision No. 2008-048 is AFFIRMED WITH MODIFICATION. Petitioner Emerita A. Collado is
excused from solidary liability to return the total amount of the under-deducted liquidated damages. The
Commission on Audit is hereby DIRECTED to institute the necessary claims against N.C. Roxas, Inc.

YEAR:

2020
CASE 2
_________________________________________________________________________________________________

GOVERNMENT AGENCY NAME:

Department of Agriculture (The Bureau of Soils and Water Management)

PROJECTS:

Small Water Impounding Project (SWIP)

CASE:

The Bureau of Soils and Water Management of Department of Agriculture implement the Small Water
Impounding Project (SWIP) which is funded the constructions and rehabilitation of water structures in the
certain provinces. Municipality of Romblon was one of the guarantees and P9,000,000.00 were allotted for the
rehabilitation of canals and dams.

On September 24, 2007, the Bids and Awards Committee (BAC) of Looc Province - which comprised
of Solomon Gregorio as Chairman, Renato Saludaga (Saludaga) as Vice-Chairman, and Rolando Gregorio,
Virginia Morales, Pastor and Jomadiao as provisional members - and then Mayor Juliet Ngo-Fiel (Fiel), as
head of the procuring entity, convened in a regular meeting.

After the public bidding, the required documents need to facilitate on time particularly the Program of
Works and the contracts with full amount of funding that will be released to the LGU before the end of
December 2007. The projects will enhance, increase production of our farmers in countryside. The body
hereby agreed that these projects should undergo a public bidding, and recommend to the Head of the
Procuring Entity, the Municipal Mayor. The meeting adjourned at 2:30pm.

Thereafter, an invitation to Apply for Eligibility and to Bid (IAEB) was published twice in Romblon Sun,
a local newspaper, on September 25 to October 1, 2007, and on October 2 to 8, 2007. Another IAEB was
posted on Looc’s Municipal Bulletin Board from October 15, 2007 to November 20, 2007.

The openings of bids were conducted November 12, 2007 and R.G. Florentino Construction Trading
was the lone bidder with the bid amount of Eight Million Nine Hundred Ninety-Nine Thousand Five Hundred
Pesos (P8,999,500.00). The BAC accepted and recommended R.G. Florentino’s bid after determining that it
was compliant with the eligibility, technical and financial requirements.

November 20, 2007 – Notice of Award was published in favor of R.G. Florentino

November 29, 2007 – Issuance of SWIP contract

December 4, 2007 – Notice to Proceed

September 2, 2008 – A certificate of Acceptance and Tum Over was issue by the Municipality of Looc
in favor of R.G Florentino, the certificate indicates therein that the SWIP was completed in accordance with
the guidelines and specifications under the contract agreement.

May 4, 2009 – Regional Office No. IV of the Commission on Audit (COA) forwarded an Annual Audit
Report on the Municipality of Looc for the Year Ended December 31, 2008 to Fiel.

The COA observed that pertinent provisions of RA 9184 and its implementing Rules and Regulations
– A (IRR-A) were violated when BAC awarded the SWIP to R.G. Florentino, to the detriment of Looc.

August 26, 2009, Manuel Arboela (Respondent) filed a complaint before the office of the Ombudsman
against Fiel and the BAC members of the following irregularities:
 a) Non-submission of pre-procurement conference, making it appear that the Bids and Awards
Committee (BAC) did not convene to determine the readiness of the procuring entity in terms of
legal, technical, and financial requirements, to ensure the availability of funds for the contract, and
to review all relevant documents in relation to their adherence to the law, considering that the
amount involved is more than P5 Million. This is a clear violation of Section 20 of RA 9184,
Section 20.1 of its IRR-A.
b) Violation of Sections 21.2.1 (a),21.2.1(b), 21.2.1(c), 21.1.3, 21.1.5, 41, 13.1 of RA 9184 relative to
the publication of the Invitation to Apply for Eligibility to Bid. Likewise, it is noteworthy that per the
certification issued by the Local Newspaper, Romblon Sun, hereto appended as ANNEX "B",
paragraph two (2) clearly says that: "That the said publication was paid by Engineer Romeo
Florentino of RG Florentino Construction".
c) The BAC appears to have shown negligence or bias in favor of the lone prospective bidder, R.G.
Florentino and Trading, when it failed to determine that the said bidder was "ineligible", contrary
to Sections 23.2, 23.6 and 23.11.2 of RA 9184 IRR-A, thus it was allowed to participate in the
bidding.
d) The Bidding conducted on 12 November 2007 was prior to the receipt of funds on 13 and 27
December 2007.
e) The BAC was not able to rate the bid as "failed" due to the incompleteness and insufficiency of
the bid security, contrary to Section 30.1 of RA 9184 IRR-A.
f) Excess advance payment of Pl26,525.00 was given to the contractor, contrary to Item 4.1 of the
Contract Implementation Guidelines for the Procurement of Infrastructure Projects of RA 9184
IRR-A. The law only allows the payment of 15% advance payment.

DECISION:

November 14, 2014 – The Office of Ombudsman rendered a Decision charging the BAC members
and Fiel with grave misconduct on findings that the conspired in awarding the SWIP project to R.G. Florentino
and imposed penalty of dismissal as published under Section 46, Rule 10 of the Revised Rule on
Administrative Cases in the Civil Service (RRACCS).

WHEREFORE, respondents JULIET NGO-FIEL, Municipal Mayor, SOLOMON R. GREGORIO

Municipal Planning and Development Coordinator (MPDC), RENATO S. SALUDAGA, Municipal Engineer,
JESSIE L. JOMADIAO, Municipal Agricultural Officer, VIRGINIA C. MORALES, Budget Officer, WILMA F.
PASTOR, Municipal Civil Registrar, and ROLANDO C. GREGORIO, Municipal Assessor, all of the Municipal
Local Government of Looc, Province of Romblon, are hereby found GUILTY of Grave Misconduct and are
meted with the penalty of DISMISSAL from the service with the cancellation of eligibility, forfeiture of
retirement benefits, and perpetual disqualification from holding public office, as well as in government-owned
and -controlled corporations, pursuant to the Revised Rule on Administrative Cases in the Civil Service.

In the event that the penalty of Dismissal can no longer be enforced, the penalty shall be converted
into a FINE in an amount equivalent to respondents' respective salary for one (1) year, payable to the Office
of the Ombudsman, and may be deductible from their respective retirement benefits, accrued leave credits, or
any receivable from their respective office.

The Ombudsman found untoward bias towards R.G. Florentino when:

1. the BAC allowed Romeo Florentino of R.G. Florentino to pay for the publication of the IAEB in
Romblon Sun
2. the BAC declared R.G. Florentino’s bid as “eligible” even if the bid was not present at the opening of
bids
3. the SWIP was not posted on the Philippine Government Electronic Procurement System (PhilGeps)
website.
 Wherein petitioners, Jomadiao and Pastor filed a Motion of Reconsideration, by themselves and
submitted therein that they never underwent any training and were never informed of the procedures, duties
and responsibilities of the BAC.

July 21, 2016 the CA rendered the assailed Decision affirming the findings of the Ombudsman, and
disposed

WHEREFORE, the petition is DENIED. The assailed dispositions are AFFIRMED. No costs.

The CA noted that the BAC must duly ensure faithful compliance to the provisions of R.A. 9184 and
its IRR-A during the bidding process. Allowing R.G. Florentino to pay for the IAEB was, therefore, a blatant
disregard of R.A. 9184, particularly Section 21 thereof.

Petitioners are charged for the less grave offense of simple neglect of duty, which is the failure to give
attention to a task, or the disregard of a duty due to carelessness or indifference.35 They are hereby
penalized for six (6) months suspension,36 considering that this is their first offense after several years in
public service.

WHEREFORE, the petition is PARTLY GRANTED. The Decision dated July 21, 2016 and the
Resolution dated March 1, 2017 of the Court of Appeals in CA-G.R. SP No. 142029 are hereby  SET ASIDE.
A new one is ENTERED finding petitioners Jessie L. Jomadiao and Wilma F. Pastor GUILTY of SIMPLE
NEGLECT OF DUTY and the penalty of six (6) months suspension is hereby imposed unto them.

YEAR:

2020
CASE 3
_______________________________________________________________________________________________

GOVERNMENT AGENCY NAME:

Department of Public Works and Highway (DPWH)

PROJECTS:

Mandurriao-San Miguel Road, Barangay Hibao-an Section in Iloilo City; and

Mandurriao-San Miguel Road, Guzman-Jesena Section in Iloilo City

CASE:

Respondent Maria Elena L. Malaga owns B.E. Construction, a private contractor and the lowest
bidder for two concreting projects of the Department of Public Works and Highways (DPWH).

The bidding for the above projects was held on November 6, 2001, and was based upon an August
2001 published invitation to bid.

However, it appears that after the publication of the invitation to bid but prior to the scheduled
November 6, 2001 bidding, the road condition of the Mandurriao-San Miguel Road in Barangay Hibao-an
severely deteriorated to an almost impassable state on account of the prevailing typhoon and monsoon
season, prompting calls for immediate repairs and other appropriate action from local government units
(LGUs), a Member of the House of Representatives, and concerned private citizens and interest groups.6
Petitioner Vicente M. Tingson, Jr. (Tingson), DPWH Iloilo City District Engineer, thus requested his immediate
superior, herein petitioner and DPWH Region VI Director Wilfredo B. Agustino (Agustino), that the
Mandurriao-San Miguel Road, Barangay Hibao-an Section and Mandurriao-San Miguel Road, Guzman-
Jesena Section projects be implemented by administration, that is, that these projects be undertaken directly
and immediately by the government, on account of urgency, and thus taken out of the list of projects bid out to
private contractors. In turn, Agustino sent an August 23, 2001 1st Indorsement to then DPWH Secretary
Simeon A. Datumanong (Datumanong), reiterating Tingson's request that the said projects be implemented
by administration.

On August 23 and 24, 2001, DPWH Undersecretary and herein petitioner Manuel M. Bonoan
(Bonoan) personally inspected the area covered by the proposed projects, and in an August 29, 2001
Memorandum to Datumanong, he recommended that the subject projects be undertaken by administration.

Agustino sent an October 23, 2001 letter to Datumanong reiterating his earlier request contained in
the August 23, 2001 1st Indorsement.9

Since no response was forthcoming from Datumanong, the DPWH Regional Office VI proceeded with
the dropping and opening of bids as scheduled. Thus, respondent won as the lowest bidder for the above-
mentioned projects.

On November 7, 2001, Datumanong issued a Memorandum10 of even date approving the DPWH
Regional Office VI request, but only with respect to the Mandurriao-San Miguel Road, Barangay Hibao-an
Section considering the exigent circumstances prevailing. The DPWH Regional Office VI received a copy of
this Memorandum on November 12, 2001.

Pursuant to Datumanong's November 7, 2001 Memorandum, herein petitioners Ruby P. Lagoc

(Lagoc), Mavi V. Jerecia (Jerecia) and Elizabeth Gardose (Gardose), Bids and Awards Committee members,
conducted the postevaluation/ qualification of respondent's firm, but only for the Mandurriao-San Miguel
Road, Guzman-Jesena Section project. Respondent was declared postqualified for the project, and the same
was awarded to her.

On November 15, 2001, Lagoc informed respondent that the MandurriaoSan Miguel Road, Barangay
Hibao-an Section project may not be awarded to her, in view ofDatumanong's November 7, 2001
Memorandum. Respondent replied with formal written demands that the project be awarded to her in spite of
Datumanong' s directive, under pain of civil action and claim for damages. Lagoc wrote back disavowing any
liability and claiming that Datumanong's directive was a supervening event that prevented the award of the
subject project to respondent, and until it is nullified or set aside, the Mandurriao-San Miguel Road, Barangay
Hibao-an Section project shall be undertaken by administration as directed.

On February 14, 2002, respondent filed Civil Case No. 27059 with the RTC. In her Complaint 13 for
damages against the herein individual petitioners, respondent claimed that the individual petitioners, "acting
together, in cooperation and collusion with each other, have manipulated things and circumstances in a
manner deliberately intended to deprive and deny her the project even if she was the lowest and complying
bidder thereof;"14 that individual petitioners' "clear intention has been indisputably to implement the project
'by contract' if the bidding is won by any other bidder, and to implement it 'by administration’” if respondent
won.

Individual petitioners prayed for the dismissal of the case, arguing that respondent has no valid cause
of action; that the decision to undertake the subject project by administration was legal and justified, and was
not arrived at in bad faith and with malice; that respondent had no right to the project since under the
Implementing Rules and Regulations (IRR) of Presidential Decree No. 1594, a contractor is not automatically
entitled to an award of a project subject to bidding by the mere fact that he is the lowest bidder as he must still
undergo a mandatory post-qualification procedure regarding his legal, technical and financial capability and
other qualifications as outlined under said IB 10.5 of the IRR; that under the published Invitation to Bid for the
subject project, it is particularly stated that government reserved the right to reject any or all bids, waive any
minor defect therein, and accept the offer most advantageous to it; that respondent had a mere inchoate right
but which does not give her a valid cause of action; that respondent was awarded the other project she bid
for, which indicates lack of bad faith and malice on their part; and that the case is clearly an unauthorized suit
against the State, as no prior consent to be sued was shown in the complaint.

DECISION:

The Regional Trial Court (RTC) issued an Order dismissing Civil Case No. 27059 on the conclusion
that it was an unauthorized suit against the State.

WHEREFORE, the defendants' affirmative defenses is granted and this case is hereby DISMISSED.

YEAR:

2017
Reference:
https://lawphil.net/judjuris/juri2020/feb2020/gr_230322_2020.html

https://lawphil.net/judjuris/juri2020/dec2020/gr_193143_2020.html

https://lawphil.net/judjuris/juri2017/jun2017/gr_204906_2017.html