CASE DIGEST
Estrella v. Commission
on Audit
G.R. No. 252079, [September 14, 2021]
EN BANC, LOPEZ, M.V
Powers of COA;Commission on Audit Disallowances; Grave abuse of discretion; Net Disallowed Amount
When there are irregularities in the
procurement process and non-compliance with statutory procurement requirements,
the liability of approving or certifying officers, such as those involved in
the Bids and Awards Committee (BAC), is up the “net disallowed amount” only. It
means that the officers' liability for the disallowed amount may be reduced by
the amounts due to the contractors if they have fully or substantially
accomplished their obligations under the contract. This liability is grounded
upon the principles of solutio indebiti and unjust enrichment. This doctrine
recognizes that the government should not unjustly enrich itself at the expense
of contractors who have fulfilled their obligations, even if there were
irregularities in the procurement process.
The DPWH-NCR initiated an infrastructure project for the Restoration of the Damaged Revetment/Dredging of Flood Control of Meycauayan River (Valenzuela Side). The project was initially funded under Special Allotment Release Order (SARO) No. A-09-09064 dated December 21, 2009, with P40,000,000.00 released under Sub-Allotment No. SR2009-12-007232 dated December 22, 2009. On the same day, DPWH-NCR Regional Director Edilberto D. Tayao requested the modification of the project into eight phases, each to be separately bid out for P5,000,000.00. The request was approved by DPWH Assistant Secretary Dimas S. Soguilon and Undersecretary Manuel M. Bonoan on December 28, 2009. The DPWH-NCR Bids and Awards Committee (BAC) allegedly conducted a public bidding on the same day, with only one contractor bidding for each phase. The project was awarded and implemented by the lone bidders for each phase. Subsequently, a Notice of Disallowance (ND) was issued, disallowing payments made to the contractors amounting to P36,084,006.06 due to the alleged splitting of the SARO and contract. Assistant Regional Director Armando G. Estrella and BAC Member Lydia G. Chua were charged to settle the disallowance, along with other DPWH officers and BAC Members.
Whether or not the Commission on Audit
(COA) Proper committed grave abuse of discretion in sustaining ND No. 10-03
disallowing payments related to the infrastructure project.
NO. The COA National Government Section
(NGS) – Cluster D ruled that there was no illegal splitting of the contract,
absolving Bonoan, Soguilon, and Tayao. However, it upheld the liability of
Estrella and the BAC Members due to irregularities in the procurement process,
lack of compliance with pre-procurement requirements, absence of a proper
public bidding, and deficiencies in the post-qualification evaluation.
The court acknowledged the importance
of adhering to procurement requirements for transparency and fairness but found
that DPWH-NCR did not comply with RA No. 9184 and its Revised IRR. The court
held that Estrella, as BAC Chairman, was liable for the disallowance due to the
absence of a public bidding and deficiencies in post-qualification evaluation.
However, considering the completion of the project and rectification of
defects, the court deemed it improper and unjust to hold petitioners liable for
the entire disallowed amount. The liability of Estrella and Chua was reduced to
the "net disallowed amount," subject to further post-audit to
determine the value of the completed works. The court emphasized that this
decision is without prejudice to administrative or criminal actions against
responsible officers as warranted by existing laws and jurisprudence on illegal
procurements.
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