ARMANDO E. ENAJE, SR., PAULITO V. LINIS, CARLOS H. DELA CRUZ, LUTGARDA S. BAUTISTA, MARICHU D. SIEJA, BENJAMIN M. CHUA, KARL S. SANMILLAN, RHEA PAULA G. GAMIT AND BRENIA F. FRAY…

Enaje versus Oquendo

The Case

This is Enaje versus Oquendo, a petition for review brought by the Barangay Captain of Barangay 598, Zone 59, District VI, Manila, together with his Barangay Kagawad, the Sangguniang Kabataan Chairman, the Barangay Secretary, and the Barangay Treasurer, against the Office of the Ombudsman and the private complainant, a fellow Barangay Kagawad. The petitioners ask the Supreme Court to reverse the Ombudsman's finding that they are administratively liable for grave misconduct, conduct prejudicial to the best interest of the service, and, in the case of the Barangay Captain, serious dishonesty, arising from the purchase of one hundred twenty sacks of rice out of calamity funds after typhoon Pedring without the required competitive public bidding. The case matters because it is the Court's clean statement that a declaration of a state of calamity authorizes the use of calamity funds but does not, by itself, authorize the barangay to abandon competitive bidding.

Procedural History

The private respondent filed a criminal and administrative complaint against the petitioners before the Office of the Ombudsman in March 2012. On July 29, 2013, the Office of the Ombudsman rendered its Decision, finding the petitioners guilty of grave misconduct and conduct prejudicial to the best interest of the service, and further finding the Barangay Captain guilty of serious dishonesty. The petitioners were meted the penalty of dismissal from the service, with the accessory penalties of forfeiture of retirement benefits, cancellation of Civil Service Commission eligibility, and perpetual disqualification to render government service. The petitioners moved for reconsideration, and the Ombudsman denied the motion in an Order promulgated on April 30, 2014.

The petitioners then elevated the matter to the Supreme Court by a Petition for Review under Rule 43 of the 1997 Rules of Civil Procedure, assigning as errors that there was faithful and substantial compliance with the procurement law, that there was no evidence of conspiracy, and that the theory of forgery and falsification had no basis in fact and in law.

Facts

On September 26 and 27, 2011, typhoon Pedring brought havoc to Luzon, particularly Metro Manila. To address the needs of the constituents, the City Council of Manila adopted a Resolution declaring a state of calamity and allowing all barangays in the City of Manila to release and disburse their five percent calamity funds. On October 12, 2011, the Sangguniang Barangay of Barangay 598 passed a Resolution approving the release of the calamity fund to purchase assorted goods for distribution to their constituents.

The Committee on Canvass then canvassed for the lowest net government price of one hundred twenty sacks of rice. Three firms submitted bids. Danrenz Trading quoted 2,694.12 pesos per unit for a total of 323,294.40 pesos; Boylet Enterprise and General Contractor quoted 2,822.41 pesos per unit for a total of 338,689.20 pesos; and HRPH Trading and General Contractor Company quoted 2,565.83 pesos per unit for a total of 307,899.00 pesos. Considering that HRPH gave the cheapest price, the petitioners contracted with that firm and made the corresponding particulars of payment.

The private respondent, a Barangay Kagawad, alleged that there was no public bidding and no invitation to bid, no publication, and no proof that notice of bidding was posted in the barangay, in clear violation of the Government Procurement Reform Act. He further alleged that only fifty of the one hundred twenty sacks of rice were actually delivered; that at least eighteen persons came forward claiming their signatures on the list of recipients were falsified and that they received nothing; and that the list included at least three names of persons who were already deceased even before typhoon Pedring struck Manila. The procurement was made on October 13, 2011, more than two weeks after the typhoon, and the Barangay Captain informed the barangay accounting department that the rice would be distributed simultaneously with the distribution of gifts in December 2011.

Issues

• Whether or not the petitioners faithfully complied with the requirement of competitive public bidding under the Government Procurement Reform Act, or could validly resort to negotiated procurement as an alternative method.
• Whether or not the petitioners are liable for grave misconduct and conduct prejudicial to the best interest of the service.
• Whether or not the Barangay Captain is liable for serious dishonesty on account of the falsified and forged signatures in the lists of recipients.

Applicable Provisions

Section 10 of the Government Procurement Reform Act provides:

Section 10. Competitive Bidding. All procurement shall be done through Competitive Bidding, except as provided for in Article XVI of this Act.

This is the general rule the petitioners are charged with violating, since competitive bidding is mandatory unless an alternative method is expressly authorized.

Section 48 of the same Act, on alternative methods of procurement, provides in its relevant portion:

Section 48. Alternative Methods. Subject to the prior approval of the Head of the Procuring Entity or his duly authorized representative, and whenever justified by the conditions provided in this Act, the Procuring Entity may, in order to promote economy and efficiency, resort to any of the following alternative methods of Procurement: x x x e. Negotiated Procurement, a method of Procurement that may be resorted under the extraordinary circumstances provided for in Section 53 of this Act and other instances that shall be specified in the IRR, whereby the Procuring Entity directly negotiates a contract with a technically, legally and financially capable supplier, contractor or consultant. In all instances, the Procuring Entity shall ensure that the most advantageous price for the government is obtained.

This is the provision the petitioners invoke, and it bears on the case because negotiated procurement is available only under the extraordinary circumstances defined by law, and always subject to securing the most advantageous price for the government.

Section 3 of Civil Service Commission Resolution Number 06-0538, on serious dishonesty, provides:

Section 3. Serious Dishonesty. The presence of any one of the following attendant circumstances in the commission of the dishonest act would constitute the offense of Serious Dishonesty: The dishonest act causes serious damage and grave prejudice to the government. The respondent gravely abused his authority in order to commit the dishonest act. Where the respondent is an accountable officer, the dishonest act directly involves property, accountable forms or money for which he is directly accountable and the respondent shows an intent to commit material gain, graft and corruption. The dishonest act exhibits moral depravity on the part of the respondent. The respondent employed fraud and/or falsification of official documents in the commission of the dishonest act related to his/her employment. The dishonest act was committed several times or in various occasions. The dishonest act involves a Civil Service examination, irregularity or fake Civil Service eligibility such as, but not limited to, impersonation, cheating and use of crib sheets. Other analogous circumstances.

This provision supplies the gradation and the penalty for the Barangay Captain's act of attesting to falsified lists of recipients.

Ruling

On the first issue, the Court held that the petition is not meritorious. The law requires public bidding in all procurement of infrastructure, goods, and services, and competitive bidding is a method open to participation by any interested party, consisting of advertisement, pre-bid conference, eligibility screening of prospective bidders, receipt and opening of bids, evaluation of bids, post-qualification, and award of contract. The rationale is to ensure that the people get maximum benefits and quality services, and strict compliance echoes the call for transparency and accountability of public officers. The petitioners failed to comply. The winning bid amounted to 2,565.83 pesos per unit, or 51.32 pesos per kilo of rice, considerably higher than the prevailing market rate in 2011; there was no detailed description or brand of rice to be quoted or bidded out; and neither the purchase request nor the acceptance and inspection report provided such description. The transaction was therefore not favorable to the government.

On the claim of negotiated procurement, the Court held that although the reasoning was laudable, there was no convincing evidence to substantiate it. There was no emergency to speak of in order to prevent damage or loss to life or property, since the procurement was made on October 13, 2011, more than two weeks after the typhoon, and the delivery and distribution were not done immediately but were deferred to December 2011. The Court laid down the governing rule:

In sum, competitive public bidding may not be dispensed with nor circumvented, and alternative modes of procurement for public service contracts and for supplies, materials, and equipment may only be resorted to in the instances provided for by law. The declaration of state of calamity only authorizes the barangay to use its calamity fund but no express provision of law has granted the barangay the right to forego competitive bidding in negotiating the procurement of goods.

On the second issue, the Court held that the acts of the petitioners in processing, recommending, approving, and awarding the procurement of rice, as well as disbursing funds, without the required competitive bidding, constitute grave misconduct and conduct prejudicial to the best interest of the service.

On the third issue, the Court held that the Barangay Captain is also liable for serious dishonesty. He attested in every page of the lists of recipients that all the persons named therein received rice, when in truth some did not. Several listed beneficiaries neither signed nor received anything because their signatures were forged, while other names were of persons already deceased before the typhoon. Since he was in possession of the lists containing falsified and forged signatures and made use of the same for liquidation purposes, it can reasonably be concluded that he is the author of the falsification or forgery. The Court added that findings of fact of quasi-judicial bodies like the Office of the Ombudsman are accorded respect, even finality, if supported by substantial evidence, which means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds equally reasonable might conceivably opine otherwise.

Doctrine

Competitive public bidding is the general rule for all government procurement and may not be dispensed with or circumvented; alternative modes of procurement may be resorted to only in the instances provided for by law. A declaration of a state of calamity authorizes the barangay to use its calamity fund, but no express provision of law grants it the right to forego competitive bidding in negotiating the procurement of goods. Negotiated procurement requires proof of the extraordinary circumstances defined by law, and in all instances the procuring entity must ensure that the most advantageous price for the government is obtained. Findings of fact of quasi-judicial bodies like the Office of the Ombudsman are respected, even final, if supported by substantial evidence, and a reviewing court does not weigh conflicting evidence or substitute its judgment on the sufficiency of evidence.

Disposition

The Supreme Court dismissed the petition for review for lack of merit, thereby affirming the finding of administrative liability and the penalties imposed by the Office of the Ombudsman.

Remember This

Memorize this line: a declaration of state of calamity authorizes the use of the calamity fund but does not authorize the barangay to forego competitive bidding. Examiners like to use this case in administrative law and procurement questions, testing whether a calamity justifies negotiated procurement, and in questions on serious dishonesty and the substantial evidence standard for Ombudsman findings.