EN
BANC
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CANDELARIO L. VERZOSA, JR. (in his former capacity as Executive Director
of the Cooperative Development
Authority), Petitioner, -
versus GUILLERMO N.
CARAGUE (in his official capacity as Chairman of the |
G.R. No. 157838 Present: CARPIO, VELASCO, JR., LEONARDO-DE
CASTRO, BRION, PERALTA, BERSAMIN, ABAD, VILLARAMA, JR., PEREZ, SERENO, REYES, and PERLAS-BERNABE, JJ. |
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COMMISSION ON AUDIT), RAUL C. FLORES, CELSO D.
GANGAN, SOFRONIO B. URSAL and
COMMISSION ON AUDIT, Respondents. |
Promulgated: February 7, 2012 |
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RESOLUTION
VILLARAMA,
JR., J.:
This resolves the motion
for reconsideration of our Decision[1]
dated P881,819.00
under Notice of Disallowance No. 93-0016-101.
In compliance with our Resolution
dated
The motion for reconsideration filed
by petitioners counsel, son of petitioner, is anchored on the following
grounds:
1) There is no finding of fact in this Courts
decision which supports the serious finding that petitioner acted in bad faith
when he prevailed upon the DAP-TEC to modify the initial result of the
technical evaluation of the computers by imposing an irrelevant grading system
intended to favor one of the bidders;
2) Assuming without admitting there was an
attempt to alter the results of the bidding, petitioner was not directly
responsible for it since it was a certain Rey Evangelista whose act in itself
did not constitute bad faith as to be interpreted as deliberately favoring
TETRA;
3) The mere fact that petitioner was the
signatory in the vouchers and other documents for the processing of the
purchase after the winning bidder had been chosen does not by itself constitute
bad faith, malice or negligence. His participation
as final recommending/approving authority in the said purchase was merely
ministerial;
4) Records of this case show that the COA
decisions did not hold petitioner solely liable for the disallowed amount of
P881,819.00; there were others adjudged solidarily liable with petitioner for the
reimbursement of said amount;
5) The decision in Arriola v. Commission on Audit[2] should have been applied in this
case. The TSO canvass coupled with
confirmatory telephone canvass should be re-examined given the admission made
by the COA Auditor in her 1st Indorsement dated
6) The Court should consider the bases of
comparison which is made against a clone generic brand (and its reference price
values), in light of compliance with intellectual property laws on software
piracy and hardware imitations.[3]
On September 15, 2011, the Office of
the Solicitor General (OSG) filed its Comment reiterating its position that
petitioner should not have been made liable for the disallowed amount since
there was no substantial evidence of his direct responsibility. It contends that
the decision should not have ordered petitioner to reimburse the disallowed
amount on account of overpricing of purchased equipment because he did not
have any participation in the bidding that was conducted by the PBAC, nor did
he have any participation in influencing Mr. A. Quintos, Jr., the DAP-TEC
evaluator, to change the evaluation results.
As to the acts cited by the COA in holding petitioner liable for the
disallowed amount, these cannot be the clear showing of bad faith, malice or
gross negligence required by law to hold public officers liable for acts done
in the performance of his official duties.
There was no contrary evidence presented by the COA to overcome the
presumption of regularity in the performance of official duty. The OSG also cites the discussion in the
dissenting opinion of Justice Sereno that the standards set in Arriola should have been observed by the
COA, i.e., it should have compared
the same brand of equipment (with the same features and specifications) with
the items CDA purchased to determine if there was indeed overpricing.
Respondents filed their Comment
asserting that the arguments raised by the petitioner in his motion for
reconsideration do not warrant reversal of the decision rendered by this
Court. They point out that the bad faith
of petitioner was satisfactorily established when he prevailed upon DAP-TEC to
modify the initial result of the technical evaluation of the bidders computer
units. As to the contention that
petitioners act of signing the documents for the processing of the purchase
was merely a ministerial function, respondents noted that the Certification in
the Disbursement Voucher for the payment of the computer states that Expenses
necessary, lawful and incurred under my direct supervision. Such certification definitely involves the
exercise of discretion and is not a ministerial act. Petitioner recommended to the Chairman of the
Board of Administrators of CDA the award of the contract to TETRA upon
evaluation by the PBAC which he reconstituted. He cannot therefore escape
liability for the disallowed amount together with the other liable parties,
namely: Mr. Edwin Canonizado, PBAC Chairman, Ms. Ma. Luz Aggabao, PBAC
Vice-Chairman, and PBAC Members Ms. Sylvia Posadas, Ma. Erlinda Dailisan, Mr.
Leonilo Cedicol, Ms. Amelia Torrente (IT Consultant) and CDA Board Chairman Ms.
Edna E. Aberilla. As to the argument
that the COA-TSO canvass was not accurate as it compared generic computers with
the computers offered by TETRA, respondent pointed out that aside from having
already been passed upon in the decision sought to be reconsidered, the report
submitted by said office disclosed that certain specifications of the reference
computers were either similar or better than those of the Trigem brand offered
by TETRA at a much lower price. COA Auditor Rubico had allowed a 15% mark up on
the prices of the items canvassed by COA-TSO, but still the actual purchase
prices were way above the maximum allowable COA reference prices, hence, the
disallowance was proper.
We find that the arguments raised in
the motion have been adequately discussed and passed upon in our Decision
dated
There was no violation of COA rules
In
Arriola v. COA,[4] this Court ruled that the disallowance
made by the COA was not sufficiently supported by evidence, as it was based on
undocumented claims. The documents that
were used as basis of the COA Decision were not shown to petitioners therein
despite their repeated demands to see them; they were denied access to the
actual canvass sheets or price quotations from accredited suppliers. Absent due process and evidence to support
COAs disallowance, COAs ruling on petitioners liability has no basis.
Reiterating the above declaration, National Center for Mental Health Management
v. COA,[5] likewise ruled that price findings
reflected in a report are not, in the absence of the actual canvass sheets
and/or price quotations from identified suppliers, valid bases for outright
disallowance of agency disbursements for government projects.
The aforesaid jurisprudence became the
basis of COA Memorandum No. 97-012 dated
The memorandum laid down the following
specific guidelines:
3.1 When the price/prices of a transaction under
audit is found beyond the allowable ten percent (10%) above the prices indicated
in reference price lists referred to in pa[r]. 2.1 as market price indicators,
the auditor shall secure additional evidence to firm-up the initial audit
finding to a reliable degree of certainty.
3.2 To firm-up the findings to a reliable degree
of certainty, initial findings of over-pricing based on market price indicators
mentioned in pa[r]. 2.1 above have to be
supported with canvass sheets and/or price quotations indicating:
a) the identities/names
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 over-pricing; and
d) the purchase/contract terms and conditions
which should be the same as those of the questioned transaction.
x x x
x (Italics supplied.)
Contrary to the thrust of Justice
Serenos dissent, the lack of compliance with the above guidelines did not invalidate
the audit report for violation of the CDAs right to due process. We categorically ruled in Nava v. Palattao[6]
that neither Arriola nor the COA
Memorandum No. 97-012 can be given any retroactive effect. Thus, although Arriola was already promulgated at the time, it is not correct to
say that the COA in this case violated the afore-quoted guidelines which have
not yet been issued at the time the audit
was conducted in 1993.
As to COA Resolution No. 90-43 dated
September 10, 1990, while indeed it authorized the disclosure or identification
of the sources of data gathered by the Price Evaluation Division-TSO in the
conduct of its data gathering and price monitoring activities, perusal of this
resolution failed to indicate that the disclosure of the names and identities
of suppliers who provided the data during price monitoring activities of the
TSO formed part of the evidentiary process in audit findings of overpricing and not merely to guide the agencies
on where to procure their supplies. COA
Resolution No. 90-43 reads as follows:
WHEREAS, it
inheres in its constitutional mandate for this Commission to assist in the
development efforts of government by providing audit services with a view to
avoiding loss and wastage of public funds and property;
WHEREAS, in
pursuance of such mandate, the determination of the reasonableness of price is
an essential aspect of the audit of procurement in goods and services;
WHEREAS, towards
that end, the Price Evaluation Division (PED) of the Technical Services Office
(TSO), this commission, provides the Auditors with reference values which are
obtained thru a valid canvass in the open market;
WHEREAS, the
price findings of the TSO that result from such audit determination of price
reasonableness at times adversely affect auditees who would request TSO to disclose or identify the sources of these
price quotations set by PED so that they can procure their supply needs from
said sources;
WHEREAS, this
Commission is cognizant of the national policy of transparency in government
operations;
WHEREAS, this
Commission perceives no legal impediment to the disclosure or identification of
the sources of price data which will ensure economy, efficiency and
effectiveness in government procurement;
NOW, THEREFORE,
in keeping with the national policy of transparency, the commission Proper has
resolved, as it does hereby resolve, to authorize the disclosure or
identification of the sources of data gathered by the Price Evaluation
Division, TSO in the conduct of its
data gathering and monitoring activities;
Be it further
resolved that in order to carry out such policy of disclosure, the Price Monitor Bulletin, a COA
publication, contain not only specific items and prices of goods and services
but also the names and identities of responsive suppliers who provided the data
during the canvass conducted by the PED, TSO. (Emphasis and
underscoring supplied.)
Accordingly, COA Memorandum No. 97-012
was issued on March 31,
Further, it must be noted that
petitioner in requesting reconsideration of the audit disallowance, did not make
a demand for the production of actual canvass sheets. Neither did he question
the correctness of the reference values used by the TSO. Petitioner only pointed out that the date of
canvass conducted by the TSO does not coincide with the date of purchase. To this the COA-TSO countered that there was
no showing that the foreign exchange rate changed during the latter part of
1992 that would have significantly increased the prices of computers. Petitioner nonetheless assailed the price
comparison of the branded computers
purchased by the CDA with non-branded computers, which the dissent now deems as
a right of preference or an exercise of discretion on the part of CDA.
COA
Upheld the Auditors
Position that Brand is
Irrelevant on the Basis
of
Findings of its
Technical
Personnel
The COA, under the Constitution, is empowered to
examine and audit the use of funds by an agency of the national government on a
post-audit basis.[7] For
this purpose, the Constitution has provided that the COA shall have exclusive
authority, subject to the limitations in this Article, to define the scope of
its audit and examination, establish the techniques and methods required therefor,
and promulgate accounting and auditing rules and regulations, including those
for the prevention and disallowance of irregular, unnecessary, excessive,
extravagant, or unconscionable expenditures, or uses of government funds and
properties.[8] As such, CDAs decisions regarding
procurement of equipment for its own use, including computers and its
accessories, is subject to the COAs auditing rules and regulations for the
prevention and disallowance of irregular, unnecessary, excessive and
extravagant expenditures. Necessarily,
CDAs preferences regarding brand of its equipment have to conform to the
criteria set by the COA rules on what is reasonable price for the items
purchased.
The dissent points out that COA Circular No. 85-55-A
itself provides that in determining whether the price is excessive, the brand
of products may be considered, thus:
D Brand of
Products
Products of
recognized brands coming from countries known for producing such quality
products are relatively expensive.
Ex. -
In
this case, however, brand information
was found by the COAs TSO Director, and also the Information Technology Center
(ITC) Director
Marieta SF. Acorda as irrelevant to the determination of the reasonableness of
the price of the computers purchased by CDA from Tetra.
Director
Jorge H.L. Perez of the TSO in his Memorandum dated
x x x x
1. On the allegation that Trigem
and Genesis computers are not comparable since it is like comparing apples with
oranges As a general rule/procedure, verification by TSO of the price of an
item requires comparison with the same/similar classification/group of items.
The items would then have the same specifications unless stated otherwise in
the price findings of the Office. In
this case, the reference values are in accordance with the specifications but exclusive
of the branded information, since this was not stated in the
P.O./Invoice, which was used as basis of canvass. Since Trigem and Genesis are both computers
of the same general characteristics/attributes, the branded and non-branded
labels propounded by the supplier is of scant consideration.
As regards the UPS, the enumerated advantages of the delivered items are
the same advantages that can be generated from a UPS of the same specifications
and standard features. In this case, the
reference value pertains to a UPS with the same capacity, input, output,
battery packed and back-up time, except for the brand.
x x x x[9] (Underscoring
supplied.)
On her part, COA Auditor Luzviminda V. Rubico
maintained that what is important is that the specifications and functions of
Genesis and Trigem computers are similar.
She pointed out that if the comparison of the prices for the
disallowances issued was erroneous because what was compared was Genesis brand [versus]
Trigem, then the bidding conducted by CDA would not be acceptable since in the
Abstract of Bids, prices were not based on similar brands.
Director
Acorda of the COA ITC likewise expressed a similar view when asked for comment
regarding the penalty points imposed by the CDA after the result of the DAP
technical evaluation initially showed that Tetra was ranked lowest. Thus, she
explained in her
1. On the first issue - we
observed that no additional computer features were introduced in CDAs grading
system, rather the bidders were penalized for non-compliance with technical
specifications fixed by CDA.
On CDAs representation with the
1.1 Columbia Computer Center (
AMD and Intel are both microprocessor brands. It rarely malfunctions. Hence, the difference in brands, as in this
case, will not affect the efficiency of the computers performance. However, Intel microprocessors
are more expensive and are manufactured by Intel Corporation which pioneered
the production of microprocessors for personal computers.
1.2
This will not affect the efficiency of the computers performance. What is important is that these ROM BIOSes
are legal or licensed.
1.3
Casings do not affect the efficiency
of the computers performance but may affect office furniture
requirements such as the design of the computer tables.
1.4 Tetra Corporation (Tetra) was penalized because the RAM of the
Notebook it delivered for evaluation was only 640K instead of 2M (expandable).
We agree that RAM capacity will affect the efficiency of the computers
performance.
2. On the second issue - the
Benchmark testing conducted by the DAP Committee in which Tetra got the lowest
score in terms of Technical Evaluation is not a sufficient basis for us to
determine whether or not Trigem computers are inferior to the computer brands
offered by the other bidders.
In Benchmark Testing, weights are allocated to the different technical
features of a computer. The computers
are then evaluated/appraised using diagnostic software and ranked in accordance
with the results of such evaluation/appraisal.
The resulting ranking merely suggests which computer best the
appraisals. (Underscoring supplied.)
In
the light of the foregoing consistent stand of its own technical personnel
having expertise in computer technology, the COA upheld the auditors finding
that brand was irrelevant to determining the reasonableness of the price at
which CDA purchased the subject computers.
It is not for this Court, as the dissent attempts, to make assertions to
the contrary, i.e., that the brand preferred by CDA was superior to another
brand or generic computer having similar specifications/functions and to which
the price of the branded computer was compared by respondents. Whether a particular brand of computer or microprocessor
is of superior quality is not subject to judicial notice. Judicial notice is the cognizance of certain facts
which judges may properly take and act on without proof because they already
know them.[10]
The dissent also asserted
that it is unfair to compare Tetras proposed Trigem computers to a computer
clone that was not even qualified to be bidded on or was not subjected to the
same hardware benchmark testing. But as
COA ITC Director Acorda had explained in her December 9, 1996 memorandum, such
Benchmark Testing conducted by the DAP-TEC
is not a sufficient basis for them to determine whether or not Trigem computers
are inferior to the computer brands offered by the other bidders.
COAs observation that
CDA should have been
entitled to volume discount
was valid
Under COA Circular No. 85-55-A, the price is deemed
excessive if the discounts allowed in bulk purchases is not reflected in the
price offered or in the award or in the purchase/payment documents. This implies that bulk purchases are expected
to be accompanied by discounts that should have resulted in lowering the price
of items, which is contrary to the dissents stance that the supplier TETRA was
not legally obligated to give such discount to CDA. COA noted that CDA should have been entitled
to volume discount from the supplying dealer considering the number of units it
procured from them. Instead of
explaining why there was no volume discount at all reflected in the bid or
purchase/payment documents, petitioner claimed that other buyers even bought
the same computers at higher prices from Tetra.
However, when the sales invoices issued to other companies were examined
by the COA, it was found that only one unit was procured by each. Hence, it was not pure conjecture on the part
of COA to take into consideration the absence of volume discount. Whether or not the other bidders actually
committed to give volume discount is beside the point, as the subject of
post-audit was the reasonableness of the price already paid to Tetra by CDA.
No grave abuse of discretion
committed by COA in holding
petitioner personally and
solidarily liable for the
overpricing of the
computers procured by CDA
Pursuant to Section 103 of P.D. No. 1445 and
Section 19 of the Manual on the Certificates of Settlement of Balances,
petitioner was found liable for the audit disallowances totaling P881,819.00
representing the overprice of the computers purchased by CDA. Petitioners participation in the
transaction was not limited to his signature/approval of the purchase as recommended
by the PBAC.
As pointed out in our Decision, records showed it
was petitioner who ordered the reconstitution of the PBAC which nullified the
previous bidding conducted in December 1991.
He further secured the services of the DAP-TEC for technical evaluation
and signed the agreement for the said technical assistance when it is already
the duty of the PBAC Chairman.
Notwithstanding petitioners claim that it was part of his duties as
Executive Director to [sign] outgoing communications/letters except letters
addressed to Heads of [Office], Congressmen, Senators and to the Office of the
President,[11] the fact remains
that the services of DAP-TEC for P15,000.00
fee were availed of at his instance. As
it turned out, the DAP-TEC came out with two different technical evaluation
reports, the second having been antedated but also signed by DAP-TEC Director
Minerva Mecina who admitted it was her signature in both documents but claimed
she was unaware that she had signed two different documents. The discrepancies in the two reports (in the
first impartial result, Tetra got the lowest ranking but in the second result
made after CDA ordered certain changes in the grading system, Tetra eventually
won) was found by Auditor Rubico to be irregular and indicative of bad faith.
The dissent assails such alleged instances of
manipulation mentioned by Auditor Rubico as belatedly raised and contends that
the
It is to be noted that petitioner never denied
there were two different results of DAP-TEC technical evaluation. To refute the imputation of irregularity,
petitioner submitted a certification
from the incumbent CDA Executive Director that as per inventory, only fourteen
out of the subject forty-four Trigem computers have become unserviceable, which
he said vindicated their choice of branded computers. Thus, the supposedly fraudulent imposition
of penalties in the DAP-TEC second report during the physical testing of the computer
hardware, construed as manipulative endeavor by the COA Auditor, is now moot
and academic. But as already explained
in our Decision, the continued serviceability of the purchased items did not
justify the overpricing nor render moot the disallowances based on post-audit
examination of the pertinent bid and purchase documents.
Finally, we find no merit in the
assertion that in ordering the petitioner to reimburse the disallowed amount,
this Court misapplied the solidary nature of the liability determined by the
COA for petitioner and the other members of the PBAC. We have categorically stated that the Court
upholds the COAs ruling that petitioner is personally and solidarily liable
for the overpricing in the computers purchased by CDA. The directive for the
payment of the amount of disallowance finally determined by the COA did not
change the nature of the obligation as solidary because the demand thus made upon
petitioner did not foreclose his right as solidary debtor to proceed against his
co-debtors/obligors, in this case the members of the PBAC charged under Notice
of Disallowance No. 93-0016-101, for their share in the total amount of
disallowance.[12]
Petitioner is therefore liable to
restitute the P881,819.00 to the Government without prejudice, however,
to his right to recover it from persons who were solidarily liable with him.[13]
We
stress anew that
it is the general policy of the Court to sustain the decisions of
administrative authorities, especially one which is constitutionally-created,
not only on the basis of the doctrine of separation of powers but also for
their presumed expertise in the laws they are entrusted to enforce.[14] Findings of quasi-judicial agencies, such
as the COA, which have acquired expertise because their jurisdiction is
confined to specific matters are generally accorded not only respect but at
times even finality if such findings are supported by substantial evidence,[15] and the decision and order are not tainted
with unfairness or arbitrariness that would amount to grave abuse of
discretion.[16]
There
being no grave abuse of discretion in the findings and conclusions of the COA
in this case, the Court finds no cogent reason to deviate from these
long-settled rules.
WHEREFORE,
the motion for reconsideration is DENIED
WITH FINALITY.
No further pleadings shall be
entertained.
Let entry of judgment be made in due
course.
SO ORDERED.
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MARTIN S. VILLARAMA, JR. Associate
Justice |
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WE CONCUR: (No
Part) RENATO
C. CORONA Chief Justice |
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ANTONIO
T. CARPIO Associate
Justice |
PRESBITERO J. VELASCO, JR. Associate
Justice |
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TERESITA J. LEONARDO-DE CASTRO Associate
Justice |
ARTURO
D. BRION Associate
Justice |
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DIOSDADO
M. PERALTA Associate
Justice |
LUCAS
P. BERSAMIN Associate
Justice |
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(On leave) MARIANO
C. Associate Justice |
ROBERTO
A. ABAD Associate
Justice |
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JOSE
Associate
Justice |
JOSE
CATRAL Associate
Justice |
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MARIA
Associate
Justice |
BIENVENIDO
L. REYES Associate
Justice |
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ESTELA M. PERLAS-BERNABE Associate
Justice |
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C E R
T I F I C A T I O N
Pursuant
to Section 13, Article VIII of the 1987 Constitution, I certify that the
conclusions in the above Resolution had been reached in consultation before the
case was assigned to the writer of the opinion of the Court.
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RENATO C. CORONA Chief Justice |
* No part.
** On
leave.
[1] G.R. No. 157838,
[2] G.R. No. 90364,
[3] Rollo, pp. 375-382.
[4]
[5] G.R. No. 114864,
[6] G.R. No. 160211,
[7] Section 2(1), Article IX(D), 1987
Constitution.
[8] Section 2(2), id.
[9] COA records.
[10] People
v. Tundag, G.R. Nos. 135695-96,
[11] Rollo,
pp. 277, 306.
[12] See
Civil Code, Art. 1217. The
article provides:
ART. 1217. Payment made by one of the
solidary debtors extinguishes the obligation. If two or more solidary debtors
offer to pay, the creditor may choose which offer to accept.
He who made the payment may
claim from his co-debtors only the share which corresponds to each, with the
interest for the payment already made. If the payment is made before
the debt is due, no interest for the intervening period may be demanded.
When one of the solidary debtors
cannot, because of his insolvency, reimburse his share to the debtor paying the
obligation, such share shall be borne by all his co-debtors, in proportion to
the debt of each. (Emphasis supplied.)
[13] Frias,
Sr. v. People, G.R. No. 171437,
[14] Sanchez
v. Commission on Audit, G.R. No. 127545,
[15] Laysa
v. Commission on Audit, G.R. No. 128134,
[16] Sanchez
v. Commission on Audit, supra note 14.