EMMANUEL CEDRO ANDAYA, ATTY. SYLVIA CRISOSTOMO BANDA, JOSEFINA SAN PEDRO SAMSON, ENGR. ANTONIO VILLAROMAN SILLONA, BERNADETTE TECSON LAGUMEN, AND MARIA GRACIA DE LEON ENRIQUEZ, …

Andaya versus Office of the Ombudsman

The Case

This is a petition for review on certiorari brought by Emmanuel Cedro Andaya, Atty. Sylvia Crisostomo Banda, Josefina San Pedro Samson, Engr. Antonio Villaroman Sillona, Bernadette Tecson Lagumen, and Maria Gracia De Leon Enriquez against the Office of the Ombudsman and the Court of Appeals. The petitioners are the Acting Director of the National Printing Office and the Chairman, Vice Chairman, and Members of its Bids and Awards Committee. They were administratively charged by the Field Investigation Office of the Ombudsman for Serious Dishonesty, Gross Neglect of Duty, Grave Misconduct, and Conduct Prejudicial to the Interest of the Service, arising from their decision to repair an elevator through negotiated procurement instead of competitive public bidding. The case matters because it is a clean teaching vehicle on the primacy of public bidding under the Government Procurement Reform Act, on the narrow and highly exceptional character of negotiated procurement, and on the elements that elevate simple misconduct and simple neglect into their grave forms.

Procedural History

The Field Investigation Office of the Ombudsman filed the administrative complaint against the petitioners. In a Decision dated June 27, 2016, the Office of the Ombudsman found them guilty of Gross Neglect of Duty and Grave Misconduct and imposed the penalty of dismissal from the service with accessory penalties. The petitioners moved for reconsideration, which was denied in an Order dated October 10, 2016. They then appealed to the Court of Appeals by petition for review under Rule 43 of the Rules of Court. In a Decision dated August 31, 2017, the Court of Appeals affirmed the ruling of the Ombudsman in all respects. Their motion for reconsideration was denied in a Resolution dated February 23, 2018. Hence, they elevated the matter to the Supreme Court by petition for review on certiorari.

Facts

At the time material to the case, Andaya was Acting Director of the National Printing Office, while Atty. Banda was Chairman, Samson was Vice Chairman, and Sillona, Lagumen, and Enriquez were Members of the Bids and Awards Committee. On September 2, 2010, after obtaining a certification of availability of funds, the National Printing Office Technical Working Group made a purchase request to the Committee for the checkup, repair, and supply of parts of Elevator II, with an estimated cost of 680,000 pesos. Three suppliers submitted quotations, namely Eastland Printink, Incorporated, C.A. Enterprises, and Giraqui Trading.

On December 13, 2010, the Committee passed a Resolution stating that it would resort to negotiated procurement for two reasons: the delay in the elevator's repair would hamper the operations of the National Printing Office and result in considerable losses to the government, and the allocated budget had to be disbursed before the end of the fiscal year so that it would not revert to the general fund. Andaya approved the Resolution, and a Notice of Award was issued to Eastland Printink, Incorporated, which had the lowest quotation at 665,000 pesos.

The Field Investigation Office then filed the complaint, alleging that the Committee failed to justify recourse to negotiated procurement under the emergency clause of the procurement law, since an unserviceable elevator posed no imminent danger to life or property and no immediate action was necessary to restore vital public services. It added that the award went to a printing company, not an elevator repair contractor, and that Andaya was grossly negligent in allowing the Committee to adopt negotiated procurement without complying with the formalities of the law. The petitioners defended on good faith, claiming the elevator carried heavy rolls and pallets of paper and printed forms, that they believed the repair was urgent, and that Eastland Printink's secondary purpose included general construction.

Issues

• Whether or not the Court of Appeals erred in upholding the finding of administrative liability of the petitioners for Grave Misconduct and Gross Neglect of Duty.
• Whether or not the petitioners' resort to negotiated procurement was justified under the exceptional circumstances allowed by the procurement law.
• Whether or not the penalty of dismissal from the service was properly imposed.

Applicable Provisions

Section 10 of Republic Act Number 9184 provides:

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

This fixes competitive bidding as the default and primary mode of government procurement, so that any departure must be justified under the exceptions.

Section 53 of Republic Act Number 9184 provides:

Section 53. Negotiated Procurement. - Negotiated Procurement shall be allowed only in the following instances: (a) In case of two (2) failed biddings as provided in Section 35 hereof; (b) In case of imminent danger to life or property during a state of calamity, or when time is of the essence arising from natural or man-made calamities or other causes where immediate action is necessary to prevent damage to or loss of life or property, or to restore vital public services, infrastructure facilities and other public utilities; (c) Take-over of contracts, which have been rescinded or terminated for causes provided for in the contract and existing laws, where immediate action is necessary to prevent damage to or loss of life or property, or to restore vital public services, infrastructure facilities and other public utilities; (d) Where the subject contract is adjacent or contiguous to an on-going infrastructure project, as defined in the IRR: Provided, however, That the original contract is the result of a Competitive Bidding; the subject contract to be negotiated has similar or related scopes of work; it is within the contracting capacity of the contractor; the contractor uses the same prices or lower unit prices as in the original contract less mobilization cost; the amount involved does not exceed the amount of the ongoing project; and, the contractor has no negative slippage: Provided, further, That negotiations for the procurement are commenced before the expiry of the original contract. Whenever applicable, this principle shall also govern consultancy contracts, where the consultants have unique experience and expertise to deliver the required service; or, (e) Subject to the guidelines specified in the IRR, purchases of Goods from another agency of the government, such as the Procurement Service of the DBM, which is tasked with a centralized procurement of commonly used Goods for the government in accordance with Letter of Instruction No. 755 and Executive Order No. 359, series of 1989.

This is the exception the petitioners invoked, particularly its emergency clause, and the Court measures their conduct against its strict terms.

Ruling

On the first issue, the Court held that the petition is bereft of merit and that substantial evidence exists to hold the petitioners guilty of Grave Misconduct and Gross Neglect of Duty. Misconduct is a transgression of some established and definite rule of action, more particularly unlawful behavior or gross neglect of duty by a public officer. It becomes grave when it involves corruption or the willful intent to violate the law or to disregard established rules, proven by substantial evidence. Gross Neglect of Duty is negligence characterized by want of even slight care, or by acting or omitting to act in a situation where there is a duty to act, not inadvertently but willfully and intentionally, with a conscious indifference to the consequences.

On the second issue, the Court held that the resort to negotiated procurement was not proper and justified. Public bidding is the primary process to procure goods and services for the government, and alternative methods are allowed only in highly exceptional cases and under the conditions set forth in the law. The petitioners' reasons satisfied none of the instances in Section 53, particularly paragraph (b). First, the alleged urgency was belied by the fact that the purchase request was made only in September 2010, whereas the elevator supposedly became non-operational in July 2010; the delay was inconsistent with the immediate nature of the service required and negated the existence of an emergency. Second, the elevator, used merely for carrying loads of paper and other printed materials, was not indispensable to the mandate of the National Printing Office, which could continue its day-to-day operations without it, albeit with some inconvenience, and such inconvenience did not warrant a complete disregard of public bidding. Third, adopting negotiated procurement to use the funds before the end of the fiscal year lest they revert to the general fund was devoid of legal justification.

On the third issue, the Court held that the gross disregard of the law was so blatant and palpable that it amounted to a willful intent to subvert the clear policy of the law for transparency and accountability in government contracts, warranting dismissal from the service with accessory penalties. Since Grave Misconduct and Gross Neglect of Duty are of similar gravity and both are punished by dismissal, that ultimate penalty was properly imposed.

Doctrine

All government procurement shall be done through competitive bidding, and alternative modes such as negotiated procurement are allowed only in highly exceptional cases and strictly under the conditions set forth in the procurement law. A Bids and Awards Committee that dispenses with competitive public bidding and fails to justify the resort to an alternative mode commits grave misconduct, and where its infractions are blatant and palpable, also gross neglect of duty. Misconduct is grave when corruption, clear intent to violate the law, or flagrant disregard of an established rule is evident; absent those elements, it is only simple. Neglect of duty is gross when it is characterized by want of even slight care, or by willful and intentional omission with conscious indifference to consequences; otherwise, it is simple. The inconvenience of operating without a facility, or the desire to avoid the reversion of budgeted funds to the general fund, does not constitute the imminent danger or urgency that justifies negotiated procurement.

Disposition

The petition was denied, and the Decision and Resolution of the Court of Appeals were affirmed, so the petitioners stand dismissed from the service with accessory penalties.

Remember This

Memorize this line: public bidding is the rule, and negotiated procurement is the narrow exception that must be justified by the procuring entity under the strict terms of the procurement law. Examiners use this case to test the distinction between simple and grave misconduct and between simple and gross neglect of duty, and to test whether a candidate can apply the emergency clause of negotiated procurement to facts involving mere inconvenience or budget pressure.