G.R. No. 157838 - Candelario L. Versoza, Jr. (in his former capacity as Executive Director of the Cooperative Development Authority), petitioner v. Guillermo N. Carague (in his official capacity as Chairperson of the Commission on Audit), Raul C. Flores, Celso D. Gangan, Sofronio B. Ursal, and the Commission on Audit, respondents.
Promulgated:
February 7, 2012
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DISSENTING OPINION
SERENO, J.:
The Office of Solicitor General (OSG) is sworn to protect the interests of government as its principal law officer and legal defender. In a very rare occasion as in this case, the OSG has taken the side of private petitioner and against public respondents. When the OSG adopts a position contrary to that of a government agency, this Court should seriously pause and look at the facts and the law more closely. In Gonzales v. Chavez,[1] we said:
Moreover, endowed with a broad perspective that spans the legal interests of virtually the entire government officialdom, the OSG may be expected to transcend the parochial concerns of a particular client agency and instead, promote and protect the public weal. Given such objectivity, it can discern, metaphorically speaking, the panoply that is the forest and not just the individual trees. Not merely will it strive for a legal victory circumscribed by the narrow interests of the client office or official, but as well, the vast concerns of the sovereign which it is committed to serve. (Emphasis supplied.)
Petitioner is before us, seeking a reconsideration of this Court’s Decision promulgated on 8 March 2011. He maintains that public respondents failed to present any evidence supporting the allegation that the bidding for the computer equipment was rigged, or that he had any part in such manipulation if indeed there was any. He also claims that the dispositive portion of the Decision wrongly made him solely liable for the disallowed amount when it stated as follows:
WHEREFORE, the petition is DENIED. The COA Decision Nos. 98-424 and 2003-061 dated October 21, 1998 and March 18, 2003,
respectively, are AFFIRMED and UPHELD. Petitioner Candelario L. Versoza, Jr. is hereby ordered to REIMBURSE the amount of P881,819.00 subject of Notice of Disallowance No. 93-0016-101 dated November 17, 1993 and the corresponding CSB No. 94-101 dated January 10, 1994.
respectively, are AFFIRMED and UPHELD. Petitioner Candelario L. Versoza, Jr. is hereby ordered to REIMBURSE the amount of P881,819.00 subject of Notice of Disallowance No. 93-0016-101 dated November 17, 1993 and the corresponding CSB No. 94-101 dated January 10, 1994.
We subsequently required the OSG and respondents to comment on the Motion for Reconsideration. The OSG noted that “there is no finding of fact in the Decision dated March 8, 2011 which supports this serious finding or determination that the late Petitioner acted in bad faith so as to make him personally liable for the said amount disallowed.” The OSG’s Comment further states:
Assuming without admitting that there was an alleged intent to alter the results of the bidding, the late Petitioner was NOT DIRECTLY RESPONSIBLE FOR THIS (and there is also no factual finding even of any indirect responsibility on the part of the late Petitioner) since it was a certain Rey Evangelista who was directly responsible. Even by itself, the actions by Mr. Rey Evangelista do not per se constitute such serious bad faith as to be interpreted as deliberately favouring Tetra computer bid...
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To be certain, the CDA being a government agency/corporation, there is no single allegation or imputation much less any evidence of any act constituting bad faith, malice or negligence on the part of the petitioner (during his services as Executive Director of the CDA) in any of the issuances by the COA, whether it be COA Decision No. 98-424 dated October 21, 1998 (Annex “A”) or COA Decision No. 2003-061 dated March 18, 2003 (Annex “C”) or even the Notice of Disallowance 93-0016-101 dated November 17, 1993 (Annex “F”), let alone any supporting document thereof. (Emphasis supplied.)
Reviewing the case at hand, this Court’s dependence on unsupported allegations is alarming. Even more alarming is the fact that its findings are contrary to what the evidence actually proves.
I reiterate the five reasons I enumerated in my Dissent to the Decision dated 8 March 2011 why this Court must grant the Petition.
First, the Commission on Audit (COA) cannot violate the same rules it imposes on all public offices regarding the manner of conducting canvasses. Second, the COA auditor cannot substitute her own discretion for that of the Cooperative Development Authority (CDA) by denying its right to prefer certain specifications for the computers it intended to purchase for
its own use. Third, the amount of disallowance has no basis in fact, is grossly disproportionate to the total purchase price, and is in the nature of punitive damages. Fourth, there is no clear and convincing evidence that there were instances of manipulation during the bidding process. Moreover, this allegation of manipulation was belatedly raised by public respondents, having been raised for the first time only in COA’s Comment before this Court, thus violating petitioner’s right to due process. Finally, respondent miserably failed to show that petitioner was personally liable for the return of the disallowance.
its own use. Third, the amount of disallowance has no basis in fact, is grossly disproportionate to the total purchase price, and is in the nature of punitive damages. Fourth, there is no clear and convincing evidence that there were instances of manipulation during the bidding process. Moreover, this allegation of manipulation was belatedly raised by public respondents, having been raised for the first time only in COA’s Comment before this Court, thus violating petitioner’s right to due process. Finally, respondent miserably failed to show that petitioner was personally liable for the return of the disallowance.
In the Decision, the ponencia focuses on COA resident auditor Luzviminda V. Rubico’s allegation of manipulation of the bidding process. A judicious review of the records and pleadings reveals, however, that the conspiracy theory of the so-called manipulation was a mere figment of the imagination of an overeager auditor.
It must be emphasized that there are two very serious flaws in the findings of fact in the Decision, which must thus be reconsidered.
First, respondents failed to refute the presumption of regularity in the exercise of official functions. Aside from the reports and bare allegations submitted by the resident auditor, there is nothing in the records that would speak of any hint of manipulation or illegality in any part of the bidding process.
Second, respondents also failed to show that petitioner was involved in the so-called manipulation of the bidding process, if ever there was one. To prove the alleged manipulation, they presented only three documents, two of which were letters from auditor Rubico herself, dated 17 November 1995 and 23 November 1995, addressed to COA Legal Counsel Director Raquel Habitan. The third document is the letter, also dated 23 November 1995, written by Antonio Quintos, Jr. of the Development Academy of the Philippines (DAP) upon the request of COA representative Abraham Rodriguez.
The first evidence that the majority relied on was the 17 November 1995 letter of auditor Rubico. Here she alleged that she “discovered” an irregularity in the bidding process. She also alleged that the results were manipulated to make it appear that Tetra Corporation bested the other bidders. In her narration of her so-called “discovery,” she never mentioned the name of petitioner.
The second evidence that the majority considered was Rubico’s 23 November 1995 letter, wherein she mentioned petitioner’s name twice, but not in any manner as to indicate any suspicious behavior on petitioner’s part. The first instance was in paragraph 1, where she mentioned that petitioner had reconstituted the Public Bidding and Awards Committee (PBAC). The second instance was in paragraph 5, where she merely confirmed that he had signed a Memorandum of Agreement between the CDA and the DAP. These two acts were neither illegal nor prohibited per se, and Rubico has not claimed so in any of her letters. Moreover, as the majority itself pointed out in its Decision promulgated on 8 March 2011, only paragraphs 6 to 12 of the 23 November 1995 letter were relevant to the discussion of the alleged manipulation. In these paragraphs, again, auditor Rubico made no mention at all of petitioner and his supposed participation in the alleged manipulation.
The third and final piece of evidence on which the majority based its findings on was Quintos’ letter also dated 23 November 1995. Likewise, his letter neither mentioned petitioner nor proved manipulation in the technical evaluation of the computer equipment.
Looking very closely at these pieces of evidence, it is clear that the majority’s Decision was unwarranted and was bereft of any basis.
More importantly, an indication that the COA officials themselves found the alleged manipulation to be improbable or, at the very least, unsupported by evidence was the inaction thereon by COA’s legal counsel and its Commissioners Celso D. Gangan, Raul C. Flores and Sofronio B. Ursal in COA Decision No. 98-424; and again by Commissioners Guillermo N. Carague, Emmanuel Dalman and Raul C. Flores in COA Decision No. 2003-061.
To recall, CDA purchased the computer equipment in December 1992. Respondent COA issued the Notice of Disallowance on 17 November 1993. Auditor Rubico issued her reports in November 1995, and these were duly received on 16 February 1996 by respondent’s legal office through the assistant commissioner of the National Government Audit Office I. Attached to the reports were additional pieces of evidence showing that petitioner and the PBAC were liable for the disallowed amount. However, respondent’s legal counsel did not act on the alleged manipulation or institute any administrative action against petitioner and the PBAC members. Furthermore, despite being additional evidence for the disallowance, respondent’s Decision No. 98-424 dated 21 October 1998 and Decision No. 2003-061 dated 18 March 2003 were deafeningly silent on Rubico’s reports.
The only conclusion to be reached is that the higher officials of COA did not find any merit in the auditor’s allegations after conducting a “judicious evaluation of the facts and circumstances.”[2] Hence, it would be unwarranted for this Court to hold otherwise. To reiterate, it was only in respondents’ Comment dated 12 March 2004 filed before this Court that the allegation of illegal manipulation was first made. Prior to this Comment, there was no indication that petitioner was ever informed of the possible accusation of illicit behaviour, or that such allegations were duly considered by the Commissioners who issued the assailed rulings.
In contrast, despite being caught off guard by the belated allegation of manipulation in the bidding process, petitioner was able to present substantial evidence to show that his participation was only ministerial. He duly submitted additional documents[3] and attached them to his Reply,[4] thus showing that the acts referred to by the auditor were regular and within the lawful ambit of his authority as executive director.
Moreover, this Court blatantly ignores and disregards prevailing laws, administrative rules and established doctrines on issues of excessive expenditure. It fails to consider the prevailing doctrine first laid down in Arriola v. COA[5] on issues of overpricing. The majority fails to squarely explain why Arriola should not be applied to this case, when both cases clearly proscribe a finding of overpricing when due process has been violated.
To reiterate, the canvass sheets were not presented to the petitioner in Arriola. In the present case, aside from the non-presentation of the canvass sheets, no actual field canvass was made but, instead, a mere telephone canvass was conducted. The COA in Arriola likewise secured price quotations from three suppliers. In the present case, comparisons of only one or two suppliers were made. The Court in Arriola struck down the comparison made by the COA between the equipment purchased and an item of the same brand, but not the same model. Here, different pieces of equipment of different brands were compared. Finally, in both cases, the specifications of the items compared were not provided.
As emphasized, this Court’s ruling contradicts what the evidence has actually proved. It bears emphasis that the ponencia has reproduced the findings of the Technical Services Office (TSO). These TSO findings were the only ones relied upon by the auditor in holding petitioner liable for an overpricing of P811,819. The same document clearly shows that no comparison was actually made. It notes the following express disclosures:
Other items were verified/evaluated but had no valid data for comparison.
*The only available valid price information.
**Lower price out of only two valid price information for want of a third valid price information as required. (Emphasis supplied.)
Despite the TSO’s findings, this Court still unreasonably upholds the auditor’s findings on the overpricing and petitioner’s personal liability.
It must also be equally emphasized that, contrary to what the ponente posits, the opinion of COA’s information technology (IT) personnel could not be the basis of overturning the discretion of the CDA in determining the specifications for the computer equipment. Nowhere in the Constitution or any law is the IT department of COA allowed to override the preference for equipment brands or specifications of an agency. To reiterate, what was at issue was not the necessity of these specifications or the equipment themselves, but only that it should not be overpriced. We are setting a very dangerous precedent if we are to insist that the COA’s preference – or even that of its IT personnel – is far superior to and prevails over that of the agency that it is auditing.
Thus, the majority fails to satisfactorily address the following truths:
1. The doctrine established in Arriola was already controlling at the time the issues arose in this case, and yet it was not applied to this case.
2. No actual field canvass was made, and no canvass sheets were presented.
3. Comparisons were made among different specifications and brands of equipment, or that the equipment was compared to those having no specifications at all.
4. Comparisons of pieces of the same equipment coming from at least three (3) suppliers were not made.
5. There was a contradiction in respondent’s statement that, on the one hand, the winning bid should have been the lowest bidder, but that on the other hand, the amount of overprice was based on the price of the generic clone equipment.
6. The generic equipment referred to for comparison was not even included or qualified in the bid process.
7. Respondent COA itself did not act on Rubico’s allegations of manipulation, and, in fact, did not raise them during the proceedings at the administrative level.
On that last point, the majority contradicts itself when it says that findings of fact of administrative authorities must be respected and yet insists that there was manipulation in the bidding, when it was never held to be so by the same administrative authorities. It cannot be denied that the majority considered the matter as a substantial element or context when it upheld the disallowance made by respondent, when the presence of manipulation was never an official finding, expressly or impliedly, by the COA Commissioners. The conclusions reached by the majority are mere conjectures and speculations that the records never bore out, or that petitioner never had the chance to controvert at the earliest possible time.
The dangers posed by the Decision in this case cannot be overemphasized. To say the least, there is nothing to prevent respondent COA from comparing all government purchases with generic equipment without even conducting a valid canvass of prices. Overpricing is not necessarily based on equipment that qualified for the bidding process; it may be based even on generic, unbranded equipment. There is no legal impediment for COA to recall the regulations on excessive purchases it had issued in the past and to issue new ones following the Court’s interpretation of the matter. For the COA to be allowed to do so would further discourage industries from offering their equipment or services for government use. Finally, the bidding process will be rendered inutile.
Hence, following and applying the majority’s theory, the branded pieces of computer equipment that this Court itself uses in issuing its decisions may also be found to be excessively overpriced by respondent when these are compared to generic non-branded computer equipment. There is no need to conduct an actual canvass; present the canvass sheets; require a comparison of at least three (3) suppliers; compare the items with the same brands or specifications; or even with those that did not qualify for the bidding or have no known specifications at all. Thereafter, the determination of the overpriced amount would be based on the price of the cheapest generic brand having more or less similar but not necessarily identical specifications. Finally, all those who have approved the purchases would be held solidarily liable for the excess amount based on the prices of the cheapest equipment of different specifications and brands available in the market.
Equally important, the Decision also allows allegations to be belatedly raised despite the absence of any extraordinary reason to do so and thus, contradicts the basic tenets of due process. The ponente has not even provided any legal basis why we should consider and allow these belatedly raised allegations that clearly prejudice the rights of petitioner.
Lastly, the majority should categorically state in the dispositive portion that petitioner cannot be solely liable for the disallowed price. The majority, while affirming the findings of the COA, actually aggravated the latter’s baseless ruling when it apparently ordered petitioner singly to reimburse the full amount of disallowance in its original Decision, without mentioning the liability of his co-respondents in the original COA case. The difference between sole liability and solidary liability cannot be emphasized enough. Solidary obligations assume that the debt can be divided into as many equal shares as there are debtors. In addition, while the creditor may only demand payment from one debtor, that debtor nevertheless has the right of reimbursement from the other debtors. In the present case, there are eight (8) debtors.
Therefore, I maintain that the right of petitioner to due process was violated when respondents and the majority of this Court held him liable for the disallowed purchase price of the computer equipment.
Hence, I maintain my Dissent from the Decision dated 8 March 2011 and vote to grant petitioner’s Motion for Reconsideration dated 8 April 2011.
MARIA LOURDES P. A. SERENO
Associate Justice
[3] Letter dated 25 November 1992 from Dr. William Torres, Managing Director of the National Computer Center, consenting to the request for the additional purchase of computers and computer peripherals, id. at 299; Minutes of the board meeting of the CDA dated 8-10 January approving the recommendation of PBAC with regard to the awarding of the bid to Tetra, id. at 300-303; Minutes of the board meeting dated 24-25 August 1992, approving the Invitation to Pre-qualify to Bid, Instruction to Bidders and Bid Forms, id. at 304-305; Special Order No. 91-08 issued by the Office of the President delegating powers to petitioner as executive director of CDA, id. at 306; and Special Order No. 001, Series of 1995 on the Authority Specifications for the officers of CDA, id. at 307.
[4] Id. at 255-298.
[5] G.R. No. 90364, 30 September 1991, 202 SCRA 147.
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