Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 192591 June 29, 2011
EFREN L. ALVAREZ, Petitioner,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.
D E C I S I O N
VILLARAMA, JR., J.:
Before us is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, seeking to reverse and set aside the Decision1 dated November 16, 2009 and Resolution2 dated June 9, 2010 of the Sandiganbayan’s Fourth Division finding the petitioner guilty beyond reasonable doubt of violation of Section 3(e) of Republic Act (R.A.) No. 3019, otherwise known as the Anti-Graft and Corrupt Practices Act.
Petitioner Efren L. Alvarez, at the time of the subject transaction, was the Mayor of the Municipality (now Science City) of Muñoz, Nueva Ecija. In July 1995, the Sangguniang Bayan (SB) of Muñoz under Resolution No. 136, S-95 invited Mr. Jess Garcia, President of the Australian-Professional, Inc. (API) in connection with the municipal government’s plan to construct a four-storey shopping mall ("Wag-wag Shopping Mall"), a project included in its Multi-Development Plan. Subsequently, it approved the adoption of the project under the Build-Operate-Transfer (BOT) arrangement in the amount of ₱240 million, to be constructed on a 4,000-square-meter property of the municipal government which is located at the back of the Municipal Hall. API submitted its proposal on November 7, 1995.3
On February 9, 1996, an Invitation for proposals to be submitted within thirty (30) days, was published in Pinoy tabloid. On April 12, 1996, the Pre-qualification, Bids and Awards Committee (PBAC) recommended the approval of the proposal submitted by the lone bidder, API. On April 15, 1996, the SB passed a resolution authorizing petitioner to enter into a Memorandum of Agreement (MOA) with API for the project. Consequently, on September 12, 1996, petitioner signed the MOA with API, represented by its President Jesus V. Garcia, for the construction of the Wag-Wag Shopping Mall under the BOT scheme whereby API undertook to finish the construction within 730 calendar days.4
On February 14, 1997, the groundbreaking ceremony was held at the site once occupied by government structures which included the old Motor Pool, the old Health Center and a semi-concrete one-storey building that housed the Department of Agriculture, BIR Assessor, old Post Office, Commission on Elections and Department of Social Welfare and Development. These structures were demolished at the instance of petitioner to give way to the construction project. Thereafter, API proceeded with excavation on the area (3-meter deep) and a billboard was put up informing the public about the project and its contractor. However, no mall was constructed as API stopped work within just a few months.
On August 10, 2006, petitioner was charged before the Sandiganbayan for violation of Section 3(e) of R.A. No. 3019 (SB-06-CRM-0389), under the following Information:
That on or about 12 September 1996, and sometime prior or subsequent thereto, in the then Municipality (now Science City) of Muñoz, Nueva Ecija, and within the jurisdiction of this Honorable Court, the above-named accused EFREN L. ALVAREZ, a high ranking public official, being then the Mayor of Muñoz, Nueva Ecija, taking advantage of his official position and while in the discharge of his official or administrative functions, and committing the offense in relation to his office, acting with evident bad faith or gross inexcusable negligence or manifest partiality did then and there willfully, unlawfully and criminally give the Australian-Professional Incorporated (API) unwarranted benefits, advantage or preference, by awarding to the latter the contract for the construction of Wag-Wag Shopping Mall in the amount of Two Hundred Forty Million Pesos (Php 240,000,000.00) under a Buil[d]-Operate-Transfer Agreement, notwithstanding the fact that API was and is not a duly-licensed construction company as per records of the Philippine Construction Accreditation Board (PCAB), which construction license is a pre-requisite for API to engage in construction of works for the said municipal government and that API does not have the experience and financial qualifications to undertake such costly project among others, to the damage and prejudice of the public service.
CONTRARY TO LAW.5
On September 22, 2006, petitioner was duly arraigned, pleading not guilty to the charge.
At the trial, petitioner testified that during his term as Mayor of Muñoz, the municipal government planned to borrow money from GSIS to finance the proposed Wag-Wag Shopping Mall project. He learned about API when then Vice-Mayor Romeo Ruiz and other SB members showed him a copy of publication/advertisement in the Manila Bulletin and Business Bulletin showing that API was then building similar BOT projects for construction of shopping malls in Lemery, Batangas (₱150 million) and in Calamba, Laguna (₱300 million). Because it will not entail government funds and is an alternative to availment of GSIS loan, petitioner appointed Vice-Mayor Ruiz and other SB members to study the matter. A resolution was subsequently passed by the SB inviting API for detailed information on their mall projects. Thereafter, the SB approved the construction of Wag-Wag Shopping Mall under BOT scheme, which was favorably endorsed by the Municipal Development Council. A public hearing was also conducted by Municipal Engineer Armando E. Miranda. On November 8, 1995, the municipal government received the "unsolicited proposal" of API for the construction of Wag-Wag Shopping Mall. For three weeks, an Invitation to Bid was published in the Pinoy tabloid. But it was the lone bidder, API, whose proposal was eventually recommended by the PBAC and approved by the SB.6
Petitioner emphasized that not a single centavo was spent by the municipal government for the Wag-Wag Shopping Mall project. It was an unsolicited proposal under the BOT law. API was required to submit pre-qualification statements containing, among others, their accomplished projects. Eventually the SB passed a resolution authorizing him to enter into the MOA with API. The municipal government issued the notice of award to API on September 16, 1996 in which it required the contractor to post notices prior to the start of the project and to submit other requirements such as performance bond. However, API did not comply as its counsel, Atty. Lydia Y. Marciano said these are not required under the BOT law (R.A. No. 7718) since there will be no government undertaking, equity or subsidy in the project. After securing an environmental clearance certificate from DENR, the groundbreaking ceremony was held on February 1, 1997. API, as promised, paid ₱500,000.00 as disturbance or relocation fee considering that the municipal government has caused the demolition of old buildings at the site. A certification7 of such payment was issued by City Treasurer Luzviminda P. De Leon and City Accountant June Franklyn A. Fernandez on February 5, 2007. The materials were then utilized for the construction of the new motor pool and new City Library. Thereafter, API began excavating an area of 30 x 30 meters (1,000 sq. ms.), about 3 meters deep. However, only the sales office was constructed. The project was not completed and API gave as excuse the 1997 financial crisis. They wrote a letter to Mr. Garcia reminding him of the 730-days completion period but then he was nowhere to be found and did not answer the letter. Hence, the SB authorized him to file a case against API, and later also granted him authority to enter into a compromise agreement in Civil Case No. 161-SD 98). Their compromise agreement was approved but they could not find a copy anymore because the Regional Trial Court at Balok, Sto. Domingo, Nueva Ecija where the settlement was done, was burned down.8
On cross-examination, petitioner claimed that had the municipal government then borrowed funds from the GSIS, they envisioned annual return of ₱5 million from a ₱40 million loan for a modest mall (but for an area of 4,000 square meters, the loan would have to be ₱80 million). For a period of 8 years, the municipality would have an income of ₱40 million and the GSIS can be paid. As to the contractor’s financial capability, it presented a credit line of ₱150 million to ₱250 million for Australian-Professionals Realty, Inc. (APRI). Petitioner clarified that API and APRI were one and the same entity having the same board of directors, but when asked if he verified this from the Securities and Exchange Commission (SEC), he answered in the negative. Petitioner asserted that it was the Vice-Mayor who is accountable for this project as he headed the working panel. As to whether API was a licensed contractor, he admitted that he did not verify this before awarding the BOT contract involving an infrastructure project. He insisted that the Wag-Wag Shopping Mall Project, being an unsolicited proposal under BOT law, is exempt from the pre-qualification requirement although they still conducted it. As far as he knows, the project proponent in this case is the Municipality of Muñoz. However, petitioner admitted that he is not familiar with the BOT law. He also admitted that the Invitation published stated a shorter period of submission of proposal (30 days instead of 60 days provided under the BOT law) and that he just signed the said notice without consulting their legal counsel.9
On November 16, 2009, the Sandiganbayan rendered judgment convicting the petitioner after finding that: (1) petitioner railroaded the project; (2) there was no competitive bidding; (3) the contractor was totally unqualified to undertake the project; and (4) the provisions of the BOT law and relevant rules and regulations were disregarded and not followed. The said court also found that the municipal government suffered damage and prejudice with the resulting loss of several of its buildings and offices, and having deployed its resources including equipment, personnel and financial outlay for fuel and repairs in the demolition of the said structures. Damage suffered by the municipal government was quantified at ₱4.8 million, or 2% of the total project cost of ₱240 million, representing the amount of liquidated damages due under the performance security had the same been posted by the contractor as required by law. As to the allegation of conspiracy, the Sandiganbayan held that such was adequately shown by the evidence, noting that this is one case where the Ombudsman should have included the entire Municipal Council in the information for the latter had conspired if not abetted all the actions of the petitioner in his dealings with API to the damage and prejudice of the municipality.
The dispositive portion of the decision reads:
ACCORDINGLY, accused Efren L. Alvarez is found guilty beyond reasonable doubt for [sic] violation of Section 3 (e) of Republic Act No. 3019 and is sentenced to suffer in prison the penalty of 6 years and 1 month to 10 years. He also has to suffer perpetual disqualification from holding any public office and to indemnify the City Government of Muñoz (now Science), Nueva Ecija the amount of Four Million Eight Hundred Thousand Pesos (Php 4,800,000.00) less the Five Hundred Thousand Pesos (Php 500,000.00) API earlier paid the municipality as damages.
Costs against the accused.
SO ORDERED.10
The Sandiganbayan likewise denied petitioner’s motion for reconsideration. It ruled that upon examination of Section 4-A of R.A. No. 6957 as amended by R.A. No. 7718, it was clear that petitioner, with manifest partiality and gross inexcusable negligence, failed to comply with the requirements and procedures for competitive bidding in unsolicited proposals. It also reiterated that API was a contractor and not a mere project proponent; hence, the license requirement applies to it. Petitioner’s defense that he merely executed the resolutions of the SB was also rejected because as Chief Executive of the Municipality of Muñoz, it was his duty to protect the credits, rights and properties of the municipality and to exercise efficient, effective and economical governance for the general welfare of the municipality and its inhabitants under Section 444, R.A. No. 7160 (Local Government Code of 1991). Significant acts of the petitioner also showed that he opted to enter into the contract with API despite reckless disregard of the law.
Hence, this petition raising the following issues:
1. Whether or not the Honorable Sandiganbayan failed to observe the requirement of proof beyond reasonable doubt in convicting the Accused-Petitioner;
2. Whether or not the Honorable Sandiganbayan failed to appreciate the legal intent of the BOT project;
3. Whether or not the Honorable Sandiganbayan utterly failed to appreciate that the BOT was a lawful project of the Sangguniang Bayan and not the project of the Mayor Accused-Petitioner herein; and
4. Whether or not the Honorable Sandiganbayan utterly failed to appreciate that there was no damage on the then Municipality of Muñoz as contemplated by law, to warrant the conviction of the Accused-Petitioner.11
We deny the petition.
Petitioner was charged with violation of Section 3(e) of R.A. No. 3019. To be convicted under the said provision, the following elements must be established:
1. The accused must be a public officer discharging administrative, judicial or official functions;
2. He must have acted with manifest partiality, evident bad faith or inexcusable negligence; and
3. That his action caused any undue injury to any party, including the government, or giving any private party unwarranted benefits, advantage or preference in the discharge of his functions.12
In this case, the information alleged that while being a public official and in the discharge of his official functions and taking advantage of such position, petitioner "acting with evident bad faith or gross inexcusable negligence or manifest partiality" unlawfully gave API "unwarranted benefits, advantage or preference" by awarding to it the contract for the construction of the Wag-Wag Shopping Mall under the BOT scheme despite the fact that it was not a licensed contractor and "does not have the experience and financial qualifications to undertake such costly project, among others, to the damage and prejudice of the public service."
Petitioner argues that he cannot be held liable under Section 3(e) of R.A. No. 3019 since the Municipality of Muñoz did not disburse any money and the buildings demolished on the site of construction have been found to be a nuisance and declared structurally unsafe, as per notice issued by the Municipal Building Official. He points out that in fact, a demolition permit has been issued upon his application in behalf of the municipal government. API also paid ₱500,000.00 demolition/relocation fee.
We disagree.
This Court has clarified that the use of the disjunctive word "or" connotes that either act of (a) "causing any undue injury to any party, including the Government"; and (b) "giving any private party any unwarranted benefits, advantage or preference," qualifies as a violation of Section 3(e) of R.A. No. 3019, as amended.13 The use of the disjunctive "or" connotes that the two modes need not be present at the same time. In other words, the presence of one would suffice for conviction.14
As we explained in Bautista v. Sandiganbayan15:
Indeed, Sec. 3, par. (e), RA 3019, as amended, provides as one of its elements that the public officer should have acted by causing any undue injury to any party, including the government, or by giving any private party unwarranted benefits, advantage or preference in the discharge of his functions. The use of the disjunctive term "or" connotes that either act qualifies as a violation of Sec. 3, par. (e), or as aptly held in Santiago, as two (2) different modes of committing the offense. This does not, however, indicate that each mode constitutes a distinct offense, but rather, that an accused may be charged under either mode or under both.16 (Underscoring supplied.)
The Court En Banc likewise held in Fonacier v. Sandiganbayan17 that proof of the extent or quantum of damage is not essential. It is sufficient that the injury suffered or benefits received can be perceived to be substantial enough and not merely negligible.18 Under the second mode of the crime defined in Section 3(e) of R.A. No. 3019 therefore, damage is not required. In order to be found guilty under the second mode, it suffices that the accused has given unjustified favor or benefit to another, in the exercise of his official, administrative or judicial functions.19
The third element of Section 3(e) of R.A. No. 3019 may be committed in three ways, i.e., through manifest partiality, evident bad faith or gross inexcusable negligence. Proof of any of these three in connection with the prohibited acts mentioned in Section 3(e) of R.A. No. 3019 is enough to convict.20 Damage or injury caused by petitioner’s acts though alleged in the information, thus need not be proven for as long as the act of giving any private party unwarranted benefits, advantage or preference either through manifest partiality, evident bad faith or gross inexcusable negligence was satisfactorily established. Contrary to petitioner’s assertion, the prosecution was able to successfully demonstrate that he acted with manifest partiality and gross inexcusable negligence in awarding the BOT contract to an unlicensed and financially unqualified private entity.
R.A. No. 6957 as amended by R.A. No. 7718, requires that a BOT project be awarded to the bidder who has satisfied the minimum requirements, and met the technical, financial, organizational and legal standards provided in the BOT Law. Section 5 of said law provides:
SEC. 5. Public Bidding of Projects. - x x x
In the case of a build-operate-and-transfer arrangement, the contract shall be awarded to the bidder who, having satisfied the minimum financial, technical, organizational and legal standards required by this Act, has submitted the lowest bid and most favorable terms for the project, based on the present value of its proposed tolls, fees, rentals and charges over a fixed term for the facility to be constructed, rehabilitated, operated and maintained according to the prescribed minimum design and performance standards, plans and specifications. x x x (Emphasis supplied.)
Foremost of these minimum legal standards is the license accreditation of a contractor required under R.A. No. 4566 otherwise known as the Contractors’ License Law. The Philippine Licensing Board for Contractors created under said law is mandated to ensure that prospective contractors possess "at least two years of experience in the construction industry, and knowledge of the building, safety, health and lien laws of the Republic of the Philippines and the rudimentary administrative principles of the contracting business" which it deems necessary "for the safety of the contracting business of the public."21 In fact, a contractor must show that he is licensed by the board before his bid will be considered.22 As a general rule therefore, the prospective contractor for government infrastructure projects must have been duly licensed as such pursuant to R.A. No. 4566. API not being a licensed contractor as per the Certification23 issued by Philippine Contractors Accreditation Board (PCAB) board secretary Aaron C. Tablazon, is thus not qualified to participate in the bidding and much less be awarded the BOT project for the construction of Wag-Wag Shopping Mall.
Petitioner claimed that there was compliance with the law saying that API was not a contractor but a mere project proponent, for which a license is not a requisite to undertake BOT projects. But the Sandiganbayan correctly rejected this theory as the clear terms of the MOA itself confirm that API itself undertook to construct the Wag-Wag Shopping Mall, thus:
TERMS AND CONDITIONS
I. THE PROJECT SITE
1. The FIRST PARTY [Municipality of Muñoz] shall make available unto the SECOND PARTY a FOUR THOUSAND (4,000) SQUARE METERS lot located at Muñoz, Nueva Ecija where the SECOND PARTY [API] shall build for the FIRST PARTY a commercial building in accordance with this Memorandum of Agreement, RA 6957 AND RA 7718 as well as RA 7160 otherwise known as the Local Government Code of 1991.
II. PLANS AND SPECIFICATIONS
1. The commercial building, to be known as the WAG-WAG SHOPPING MALL, shall be constructed by the SECOND PARTY strictly in accordance with plans, specifications, engineering and construction designs prepared by the SECOND PARTY and duly reviewed and approved by the FIRST PARTY. x x x
x x x x
III. CONSTRUCTION
x x x x
3. The FIRST PARTY shall issue a written Notice to Proceed in favor of the SECOND PARTY. The SECOND PARTY, shall mobilize within 60 days from clearing of the site for official groundbreaking.
4. The SECOND PARTY hereby warrants that it shall finish the construction of the WAG-WAG SHOPPING MALL within SEVEN HUNDRED THIRTY (730) CALENDAR DAYS counted from the date of the official groundbreaking.
x x x x
6. x x x Compliance with all existing laws, rules and regulations regarding the construction of the project shall be [the] responsibility of the SECOND PARTY itself to save and hold the FIRST PARTY harmless from any and all liabilities in respect thereto or arising from violations thereof.
IV. BUILD-OPERATE-AND-TRANSFER SCHEME
1. The WAG-WAG SHOPPING MALL be constructed by the SECOND PARTY for the FIRST PARTY in accordance with this Memorandum of Agreement and with the Build-Operate-and-Transfer Scheme outlined RA 6957 and RA 7718. This Agreement is of course subject to the provisions of RA 7160 and other pertinent laws.
x x x x24
Section 2 of R.A. No. 6957 as amended by R.A. No. 7718, defined the terms "Contractor" and "Project Proponent" as follows:
(k) Project Proponent - The private sector entity which shall have contractual responsibility for the project and which shall have an adequate financial base to implement said project consisting of equity and firm commitments from reputable financial institutions to provide, upon award, sufficient credit lines to cover the total estimated cost of the project.
(l) Contractor - Any entity accredited under Philippine laws which may or may not be the project proponent and which shall undertake the actual construction and/or supply of equipment for the project.
Aside from the clear language of the MOA, the attendant circumstances unmistakably showed that API is both the project proponent and contractor of the BOT project, as it was the one who submitted the proposal and bid to the SB, through its President executed the MOA with petitioner, deployed manpower and equipment for the clearing of the site, conducted groundbreaking, performed excavation and initial construction works, and took responsibility for the stoppage and non-completion of the project when it entered into a compromise with the Municipality of Muñoz. It is to be noted that even as project proponent, API failed to meet the minimum financial standard considering that it has no adequate financial base to implement the Wag-Wag Shopping Mall project. API’s paid-up capital was only ₱2.5 million, while its stand-by credit line issued by Brilliant Star Capital Lending Co., Inc. was only for the amount of ₱150 million, way below the ₱240 million total project cost.
While API’s proposal passed through the pre-qualification stage, it failed to submit, except for the SEC registration certificate, a complete set of documents required for a BOT project, in accordance with the BOT Law Implementing Rules and Regulations (IRR):
Sec. 5.4. Pre-qualification Requirements. - To pre-qualify, a project proponent must comply with the following requirements:
a. Legal Requirements
i. For projects to be implemented under the BOT scheme whose operations require a public utility franchise, the project proponent and the facility operator must be a Filipino or, if a corporation, must be duly registered with the Securities and Exchange Commission (SEC) and owned up to at least sixty percent (60%) by Filipinos.
x x x x
v. If the contractor to be engaged by the project proponent to undertake the construction works of the project under bidding needs to be pre-identified as prescribed in the published Invitation to Pre-qualify and Bid and is a Filipino, it must be duly licensed and accredited by the Philippine Contractors Accreditation Board (PCAB). However, if the contractor is a foreigner, PCAB registration will not be required at pre-qualification stage, rather it will be one of the contract milestones.
b. Experience or Track Record: The proponent-applicant must possess adequate experience in terms of the following:
i. Firm Experience: By itself or through the member-firms in case of a joint venture/consortium or through a contractor(s) which the project proponent may have engaged for the project, the project proponent and/or its contractor(s) must have successfully undertaken a project(s) similar or related to the subject infrastructure/development project to be bid. The individual firms and/or their contractor(s) may individually specialize on any or several phases of the project(s). A joint venture/consortium proponent shall be evaluated based on the individual or collective experience of the member-firms of the joint venture/consortium and of the contractor(s) that it has engaged for the project.
x x x x
vi. Key Personnel Experience: The key personnel of the proponent and/or its contractor(s) must have sufficient experience in the relevant aspect of schemes similar or related to the subject project, as specified by the Agency/LGU.
e. Financial Capability: The project proponent must have adequate capability to sustain the financing requirements for the detailed engineering design, construction and/or operation and maintenance phases of the project, as the case may be. For purposes of pre-qualification, this capability shall be measured in terms of:
(i) proof of the ability of the project proponent and/or the consortium to provide a minimum amount of equity to the project measured in terms of the net worth of the company or in the case of joint ventures or consortia the combined net worth of members or a set-aside deposit equivalent to the minimum equity required, and
(ii) a letter testimonial from reputable banks attesting that the project proponent and/or members of the consortium are banking with them, and that they are in good financial standing. The government Agency/LGU concerned shall determine on a project-to-project basis, and before pre-qualification, the minimum amount of equity needed. In addition, the Agency/LGU will inform the proponents of the minimum debt-equity ratio required by the monetary authority for projects to be financed by foreign loans.
x x x x (Emphasis supplied.)
We have held that the Implementing Rules provide for the unyielding standards the PBAC should apply to determine the financial capability of a bidder for pre-qualification purposes: (i) proof of the ability of the project proponent and/or the consortium to provide a minimum amount of equity to the project and (ii) a letter testimonial from reputable banks attesting that the project proponent and/or members of the consortium are banking with them, that they are in good financial standing, and that they have adequate resources. The evident intent of these standards is to protect the integrity and insure the viability of the project by seeing to it that the proponent has the financial capability to carry it out.25 Unfortunately, none of these requirements was submitted by API during the pre-qualification stage.
Petitioner assails the Sandiganbayan for allegedly failing to appreciate the legal intent of the BOT Law which allows contracts on a negotiated basis for unsolicited proposals like the Wag-Wag Shopping Mall project. It asserts that the procedure and requirements for bidding have been complied with when the Municipality of Muñoz caused the publication of the invitation to submit comparative bids for the BOT project was published in Pinoy, a newspaper of general circulation for three consecutive weeks. Since no comparative bid/proposal was received within sixty (60) days, the BOT project was rightfully awarded to API, the original proponent.
The contention fails.
Unsolicited proposals refer to project proposals submitted by the private sector to undertake infrastructure or development projects which may be entered into by a government agency or local government unit.26 Section 4-a of R.A. No. 6957 as amended by R.A. No. 7718 governs unsolicited proposals:
SEC. 4-A. Unsolicited Proposals. -- Unsolicited proposals for projects may be accepted by any government agency or local government unit on a negotiated basis: Provided, That, all the following conditions are met: (1) such projects involved a new concept or technology and/or are not part of the list of priority projects, (2) no direct government guarantee, subsidy or equity is required, and (3) the government agency or local government unit has invited by publication, for three (3) consecutive weeks, in a newspaper of general circulation, comparative or competitive proposals, and no other proposal is received for a period of sixty (60) working days: Provided, further, That in the event another proponent submits a lower price proposal, the original proponent shall have the right to match that price within thirty (30) working days.
We note that it was the SB which invited the API to provide information on the construction of a shopping mall project under the BOT scheme. It cannot be said thus that the development project originated from the proponent/contractor. Nonetheless, even if the proposal is deemed unsolicited, still the requirements of the law have not been complied with.
The IRR specified the requirement of publication of the invitation for submission of proposals, as follows:
SEC. 10.11. Invitation for Comparative Proposals. - The Agency/LGU shall publish the invitation for comparative or competitive proposals only after ICC/Local Sanggunian issues a no objection clearance of the draft contract. The invitation for comparative or competitive proposals should be published at least once every week for three (3) weeks in at least one (1) newspaper of general circulation. It shall indicate the time, which should not be earlier than the last date of publication, and place where tender/bidding documents could be obtained. It shall likewise explicitly specify a time of sixty (60) working days reckoned from the date of issuance of the tender/bidding documents upon which proposals shall be received. Beyond said deadline, no proposals shall be accepted. A pre-bid conference shall be conducted ten (10) working days after the issuance of the tender/bidding documents. (Emphasis supplied.)
The above provision highlighted other violations in the bidding procedure for the subject BOT project. First, there was no prior approval by the Investment Coordinating Committee of the National Economic Development Authority (ICC-NEDA) of the Wag-Wag Shopping Mall project. Under the BOT Law, local projects to be implemented by the local government units concerned costing above ₱200 million shall be submitted for confirmation to the ICC-NEDA.27 Such requisite approval shall be applied for and should be secured by the head of the LGU prior to the call for bids for the project.28 Second, the law requires publication in a newspaper of general circulation. To be a newspaper of general circulation, it is enough that it is published for the dissemination of local news and general information, that it has a bona fide subscription list of paying subscribers, and that it is published at regular intervals. Over and above all these, the newspaper must be available to the public in general, and not just to a select few chosen by the publisher.29 Petitioner did not submit in evidence the affidavit of the publisher attesting to Pinoy tabloid as such newspaper of general circulation. And third, even assuming that Pinoy was indeed a newspaper of general circulation, the invitation published indicated a shorter period of submission of comparative proposals, only thirty (30) days instead of the prescribed sixty (60) days counted from the date of issuance of tender documents.
There is likewise no showing that API complied with the submission of a complete proposal required under the IRR:
SEC. 10.5 Submission of a Complete Proposal. - For a proposal to be considered by the Agency/LGU, the proponent has to submit a complete proposal which shall include a feasibility study, company profile as outlined in Annex A, and the basic contractual terms and conditions on the obligations of the proponent and the government. The Agency/LGU shall acknowledge receipt of the proposal and advice the proponent whether the proposal is complete or incomplete. If incomplete, it shall indicate what information is lacking or necessary. (Emphasis supplied.)
As correctly pointed out by the Sandiganbayan, API’s proposal showed that it lacked the above requirements as it did not include a company profile and the basic contractual terms and conditions on the obligations of the proponent/contractor and the government. Had such company profile been required of API, the municipal government could have been apprised of the fact that said contractor/proponent had been in existence for only three months at that time and had not yet completed a project, although APRI, which actually undertook the Calamba and Lemery shopping centers also under BOT scheme, is allegedly the same entity as API which have the same set of incorporators and directors. But more important, the municipality could have realized earlier, on the basis of financial statements and experience in construction included in the company profile, that API could not possibly comply with the huge financial outlay for the Wag-Wag Shopping Mall project. It could have also noted the fact that the aforesaid BOT shopping centers in Lemery and Calamba being implemented by APRI at that time were not yet finished or completed. In any event, such existing BOT contract of APRI with another LGU neither justified non-compliance by API with the submission of a complete proposal for the Wag-Wag Shopping Mall project for a competent evaluation by the PBAC.
Indeed, contrary to petitioner’s stance, the process of unsolicited proposals does involve public bidding where, in the end, the government is free to choose the bid or proposal most advantageous to it.30 Thus we held in Asia’s Emerging Dragon Corporation v. DOTC31:
The protestation by AEDC of our characterization of the process on unsolicited proposal as public bidding is specious.
We call attention to the following relevant sections of Rule 10 of the IRR specifically on Unsolicited Proposals:
Sec. 10.9. Negotiation With the Original Proponent. - Immediately after ICC/Local Sanggunian’s clearance of the project, the Agency/LGU shall proceed with the in-depth negotiation of the project scope, implementation arrangements and concession agreement, all of which will be used in the Terms of Reference for the solicitation of comparative proposals. The Agency/LGU and the proponent are given ninety (90) days upon receipt of ICC’s approval of the project to conclude negotiations. The Agency/LGU and the original proponent shall negotiate in good faith. However, should there be unresolvable differences during the negotiations, the Agency/LGU shall have the option to reject the proposal and bid out the project. On the other hand, if the negotiation is successfully concluded, the original proponent shall then be required to reformat and resubmit its proposal in accordance with the requirements of the Terms of Reference to facilitate comparison with the comparative proposals. The Agency/LGU shall validate the reformatted proposal if it meets the requirements of the TOR prior to the issuance of the invitation for comparative proposals.
Sec. 10.10. Tender Documents. - The qualification and tender documents shall be prepared along the lines specified under Rules 4 and 5 hereof. The concession agreement that will be part of the tender documents will be considered final and non-negotiable by the challengers. Proprietary information shall, however, be respected, protected and treated with utmost confidentiality. As such, it shall not form part of the bidding/tender and related documents.
x x x x
After the concerned government agency or local government unit (LGU) has received, evaluated, and approved the pursuance of the project subject of the unsolicited proposal, the subsequent steps are fundamentally similar to the bidding process conducted for ordinary government projects.
The three principles of public bidding are: the offer to the public, an opportunity for competition, and a basis for an exact comparison of bids, all of which are present in Sec. 10.9 to Sec. 10.16 of the IRR. First, the project is offered to the public through the publication of the invitation for comparative proposals. Second, the challengers are given the opportunity to compete for the project through the submission of their tender/bid documents. And third, the exact comparison of the bids is ensured by using the same requirements/qualifications/criteria for the original proponent and the challengers, to wit: the proposals of the original proponent and the challengers must all be in accordance with the requirements of the Terms of Reference (TOR) for the project; the original proponent and the challengers are required to post bid bonds equal in amount and form; and the qualifications of the original proponent and the challengers shall be evaluated by the concerned agency/LGU using the same evaluation criteria. (Additional emphasis supplied.)
In this case, the only attempt made to comply with the bidding requirements is the publication of the invitation which, as already mentioned, was even defective. As noted by the Sandiganbayan, there was no in-depth negotiation as to the project scope, implementation and arrangements and concession agreement, which are supposed to be used in the Terms of Reference (TOR). Such TOR would have provided the interested competitors the basis for their proposed cost, and its absence in this case is an indication that any possible competing proposal was intentionally avoided or altogether eliminated. The essence of competition in public bidding is that the bidders are placed on equal footing.32 In the award of government contracts, the law requires a competitive public bidding. This is reasonable because "[a] competitive public bidding aims to protect the public interest by giving the public the best possible advantages thru open competition. It is a mechanism that enables the government agency to avoid or preclude anomalies in the execution of public contracts."33
Despite API’s obvious lack of financial qualification and absence of basic terms and conditions in the submitted proposal, petitioner who chaired the PBAC, recommended the approval of API’s proposal just forty-five (45) days after the last publication of the invitation for comparative proposals, and subsequently requested the SB to pass a resolution authorizing him to enter into a MOA with API as the lone bidder for the project. It was only in the MOA that the details of the construction, terms and conditions of the parties’ obligations, were laid down at the time API was already awarded the project. Even the MOA provisions remain vague as to the parameters of the project, which the Sandiganbayan found as placing API "at an arbitrary position where it can do as it pleases without being accountable to the municipality in any way whatsoever." True enough, when API failed to execute the construction works and abandoned the project, the municipality found itself at extreme disadvantage without recourse to a performance security that API likewise failed to submit.
Petitioner as the local chief executive failed to ensure that API which was awarded the BOT contract, will submit such other requirements specified under the IRR:
Sec. 11.7. Conditions for Approval of Contract. - The Head of Agency/LGU shall ensure that all of the following conditions have been complied with before approving the contract:
a. Submission of the required performance security as prescribed under Section 12.7 hereof;
b. Proof of sufficient equity from the investors and firm commitments from reputable financial institution to provide sufficient credit lines to cover the total estimated cost of the project;
c. ICC clearance of the contract on a no-objection basis;
Failure by the winning project proponent to submit the requirements prescribed under items a, b and c above within the time period specified by the concerned Agency/LGU in the Notice of Award or failure to execute the contract within the specified time shall result in the disqualification of the bidder, as well as the forfeiture of the bid security of the bidder.
x x x x
Sec. 12.7. Performance Guarantee for Construction Works. - To guarantee the faithful performance by the project proponent of its obligations under the contract including the prosecution of the construction works related to the project, the project proponent shall post in favor of the Agency/LGU concerned, within the time and under the terms prescribed under the project contract, a performance security in the form of cash, manager’s check, cashier’s check, bank draft or guarantee confirmed by a local bank (in the case of foreign bidders bonded by a foreign bank), letter of credit issued by a reputable bank, surety bond callable on demand issued by the Government Service Insurance System (GSIS) or by surety or insurance companies duly accredited by the Office of the Insurance Commissioner, or a combination thereof, in accordance with the following schedules:
a. Cash, manager’s check, cashier’s check, irrevocable letter of credit, bank draft – a minimum of two percent (2%) of the total Project Cost.
b. Bank Guarantee – a minimum of five percent (5%) of the total Project Cost.
c. Surety Bond – a minimum of ten percent (10%) of the total Project Cost. (Emphasis supplied.)
In the Notice of Award dated September 16, 1996, petitioner directed API to submit the above requirements. However, API’s counsel, Atty. Lydia Y. Marciano, wrote in reply that such requirements do not apply because API’s project does not involve any government undertaking. API at that point should have been disqualified and its bid security forfeited, pursuant to Section 11.7 of the IRR. Yet, API was allowed to proceed with the execution of the project albeit only the site clearing, excavation and construction of a sales office were accomplished.
Under the facts established, it is clear that petitioner gave unwarranted benefits, advantage or preference to API considering that said proponent/contractor was not financially and technically qualified for the BOT project awarded to it, and without complying with the requirements of bidding and contract approval for BOT projects under existing laws, rules and regulations.
The word "unwarranted" means lacking adequate or official support; unjustified; unauthorized or without justification or adequate reason. "Advantage" means a more favorable or improved position or condition; benefit, profit or gain of any kind; benefit from some course of action. "Preference" signifies priority or higher evaluation or desirability; choice or estimation above another.34 As to "partiality," "bad faith," and "gross inexcusable negligence," we have explained the meaning of these terms, as follows:
"Partiality" is synonymous with "bias" which "excites a disposition to see and report matters as they are wished for rather than as they are." "Bad faith does not simply connote bad judgment or negligence; it imputes a dishonest purpose or some moral obliquity and conscious doing of a wrong; a breach of sworn duty through some motive or intent or ill will; it partakes of the nature of fraud." "Gross negligence has been so defined as negligence characterized by the want of even slight care, acting or omitting to act in a situation where there is a duty to act, not inadvertently but wilfully and intentionally with a conscious indifference to consequences in so far as other persons may be affected. It is the omission of that care which even inattentive and thoughtless men never fail to take on their own property."35
We sustain and affirm the Sandiganbayan in holding that petitioner violated Section 3(e) of R.A. No. 3019, and that he cannot shield himself from criminal liability simply because the SB passed the necessary resolutions adopting the BOT project and authorizing him to enter into the MOA. We find no error or grave abuse in its ruling, which we herein quote:
It is apparent that the unwarranted benefit in this case lies in the very fact that API was allowed to present its proposal without compliance of [sic] the requirements provided under the relevant laws and rules. To begin with, the municipal government never conducted a public bidding prior to the execution of the contract. The project was immediately awarded to the API without delay and without any rival proponents, when it was not qualified to participate in the first place. The legality and propriety of the agreement executed with the contractor is totally absent based on the testimonies of both the prosecution and the defense.
This Court also considers these particular acts significant. First. From the testimony of then Vice-Mayor Ruiz, Jesus V. Garcia, the president of API, attended the SB session after paying a courtesy call to the Accused who was then the Mayor. Second. It was the Accused who signed and posted the Invitation to Bid (Exhibit N) giving proponents 30 days to submit their proposals. Third. The Accused is the head of the Pre-Qualification Bids and Awards Committee which according to him recommended the approval of API’s proposal. This was the reason he used in requesting authority from the SB to grant him the authority to contract with API. Fourth. The Accused requested the SB to give him authority to enter into an agreement with API through a resolution (Exhibit S)[.] Fifth. It was the Accused who invited the SB members to go to the Mayor’s office to witness the signing of the Memorandum of Agreement between the municipality and API.36
As the local chief executive, petitioner is not only expected to know the proper procedure in the bidding and award of infrastructure contracts such as BOT projects, he is also duty bound to follow the same and his failure to discharge this duty constitutes gross and inexcusable negligence.37
Petitioner further assails the Sandiganbayan in not considering the previous dismissal of the criminal complaint filed by Alberto Castañeda against petitioner also involving the Wag-Wag Shopping Mall project. The Sandiganbayan pointed out that said case (OMB-1-97-1885) was dismissed by the Office of the Deputy Ombudsman for Luzon on March 26, 1999 at the time the construction works were supposedly only temporarily stopped by API, while in this case it is already apparent that the latter abandoned the project and reneged on its obligation.
We find nothing illegal in the reversal by the Ombudsman upon review of the September 9, 2002 resolution of the Office of the Deputy Ombudsman for Luzon which recommended the dismissal of the complaint-affidavit filed by Domiciano R. Laurena IV upon the ground that a similar criminal complaint filed by Castañeda had been dismissed in OMB-1-97-1885. The Office of the Ombudsman Chief Legal Counsel granted the petition for review filed by complainant Laurena IV and recommended that petitioner be indicted before the Sandiganbayan for violation of Section 3(e) of R.A. No. 3019. It pointed out that the dismissal of OMB-1-97-1885 was premised on the authority of a local legislature to accept unsolicited proposals and enter into a BOT project under R.A. No. 6957 as amended by R.A. No. 7718, and the lack of any showing of undue injury to the Municipality of Muñoz as a result of the temporary work stoppage. However, the issue of lack of API’s construction license was never brought out in the earlier case while in the present case, the PCAB attested to the fact that API is not a licensed contractor and petitioner’s approval of API’s proposal is a clear badge of giving unwarranted benefit, preference or advantage through manifest partiality, evident bad faith, or at the very least, gross inexcusable negligence. The OMB found that petitioner could have easily discovered such fact with basic prudence considering that a ₱240-million infrastructure was involved, but apparently he threw all caution to the wind and relied solely on the self-serving representation of API that it possesses the requisite contractor’s license.38 This ruling of the OMB Chief Legal Counsel was affirmed upon review by the Special Prosecutor and approved by Ombudsman Merceditas N. Gutierrez on August 4, 2006.39
It may be recalled that on motion of petitioner, the Ombudsman even conducted a reinvestigation of the case pursuant to the January 15, 2007 directive of the Sandiganbayan. In a memorandum40 dated March 5, 2007, then Special Prosecutor Dennis M. Villa-Ignacio approved the finding of probable cause against the petitioner and the recommendation that the information already filed in this case, for which petitioner had already been arraigned, be maintained. Petitioner cannot claim denial of his right to due process, as he had been given ample opportunity to present evidence on his defense in the proceedings before the Ombudsman and Sandiganbayan.
No grave abuse of discretion was committed by the Ombudsman in reversing the previous dismissal of a similar criminal complaint against the petitioner involving the anomalous award of the BOT contract to API. Indeed, the Ombudsman is not precluded from ordering another review of a complaint, for he or she may revoke, repeal or abrogate the acts or previous rulings of a predecessor in office. Thus we held in Trinidad v. Office of the Ombudsman41:
Petitioner’s arguments – that res judicata applies since the Office of the Ombudsman twice found no sufficient basis to indict him in similar cases earlier filed against him, and that the Agan cases cannot be a supervening event or evidence per se to warrant a reinvestigation on the same set of facts and circumstances – do not lie.
Res judicata is a doctrine of civil law and thus has no bearing on criminal proceedings.
But even if petitioner’s argument were to be expanded to contemplate "res judicata in prison grey" or the criminal law concept of double jeopardy, this Court still finds it inapplicable to bar the reinvestigation conducted by the Office of the Ombudsman. For the dismissal of a case during preliminary investigation does not constitute double jeopardy, preliminary investigation not being part of the trial.
Insisting that the case should be barred by the prior Joint Resolution of the Ombudsman, petitioner posits that repeated investigations are oppressive since he as respondent and other respondents would be made to suffer interminable prosecution since resolutions dismissing complaints would perpetually be subject to reopening at any time and by any party. Petitioner particularly points out that no new evidence was presented at the reinvestigation.
Petitioner’s position fails to impress.
The Ombudsman is not precluded from ordering another review of a complaint, for he or she may revoke, repeal or abrogate the acts or previous rulings of a predecessor in office. And Roxas v. Hon. Vasquez teaches that new matters or evidence are not prerequisites for a reinvestigation, which is simply a chance for the prosecutor, or in this case the Office of the Ombudsman, to review and re-evaluate its findings and the evidence already submitted. (Emphasis supplied.)
As to the propriety of damages awarded by the Sandiganbayan, we find that the same is proper and justified.1avvphi1 The term "undue injury" in the context of Section 3(e) of the Anti-Graft and Corrupt Practices Act punishing the act of "causing undue injury to any party," has a meaning akin to that civil law concept of "actual damage." Actual damage, in the context of these definitions, is akin to that in civil law.42
Article 2199 of the Civil Code provides that except as provided by law or by stipulation, one is entitled to an adequate compensation only for such pecuniary loss suffered by a party as he has duly proved. Liquidated damages, on the other hand, are those agreed upon by the parties to a contract, to be paid in case of a breach thereof.43
For approved BOT contracts, it is mandatory that a performance security be posted by the contractor/proponent in favor of the LGU in the form of cash, manager’s check, cashier’s check, irrevocable letter of credit or bank draft in the minimum amount of 2% of the total project cost.44 In case the default occurred during the project construction stage, the LGU shall likewise forfeit the performance security of the erring project proponent/contractor.45 The IRR thus provides:
SEC. 12.13. Liquidated Damages. - Where the project proponent of a project fails to satisfactorily complete the work within the construction period prescribed in the contract, including any extension or grace period duly granted, and is thereby in default under the contract, the project proponent shall pay the Agency/LGU concerned liquidated damages, as may be agreed upon under the contract by the parties. The parties shall agree on the amount and schedule of payment of the liquidated damages. The performance security may be forfeited to answer for any liquidated damages due to the Agency/LGU. The amount of liquidated damages due for every calendar day of delay will be determined by the Agency/LGU. In no case however shall the delay exceed twenty percent (20%) of the approved construction time stipulated in the contract plus any time extension duly granted. In such an event the Agency/LGU concerned shall rescind the contract, forfeit the proponent’s performance security and proceed with the procedures prescribed under Section 12.19. b.
Had the requirement of performance security been complied with, there is no dispute that the Municipality of Muñoz would have been entitled to the forfeiture of performance security when API defaulted on its obligation to execute the construction contract, at the very least in an amount equivalent to 2% of the total project cost. Hence, said LGU is entitled to such damages which the law mandates to be incorporated in the BOT contract, the parties being at liberty only to stipulate the extent and amount thereof. To rule otherwise would mean a condonation of blatant disregard and violation of the provisions of the BOT law and its implementing rules and regulations which are designed to protect the public interest in transactions between government and private business entities. While petitioner claims to have entered into a compromise agreement as authorized by the SB and approved by the trial court, no evidence of such judicial compromise was submitted before the Sandiganbayan.
WHEREFORE, the petition is DENIED. The Decision dated November 16, 2009 and Resolution dated June 9, 2010 of the Sandiganbayan in Criminal Case No. SB-06-CRM-0389 are AFFIRMED.
With costs against the petitioner.
SO ORDERED.
MARTIN S. VILLARAMA, JR.
Associate Justice
WE CONCUR:
RENATO C. CORONA
Chief Justice
Chairperson
TERESITA J. LEONARDO-DE CASTRO
Associate Justice |
LUCAS P. BERSAMIN
Associate Justice |
MARIANO C. DEL CASTILLO
Associate Justice
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 Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.
RENATO C. CORONA
Chief Justice
Footnotes
1 Rollo, pp. 53-85. Penned by Associate Justice Jose R. Hernandez with Associate Justices Gregory S. Ong and Roland B. Jurado concurring.
2 Id. at 109-117.
3 Id. at 153-155, 166-195.
4 Id. at 147-152.
5 Records (Vol. 1), pp. 1-2.
6 TSN, April 8, 2008, pp. 5-24.
7 Rollo, p. 146.
8 TSN, April 8, 2008, pp. 24-50.
9 Id. at 53-77.
10 Rollo, p. 84.
11 Id. at 20.
12 Cabrera v. Sandiganbayan, G.R. Nos. 162314-17, October 25, 2004, 441 SCRA 377, 386.
13 Santos v. People, G.R. No. 161877, March 23, 2006, 485 SCRA 185, 194-195, citing Uy v. Sandiganbayan, G.R. No. 100334, December 5, 1991 and Santiago v. Garchitorena, G.R. No. 109266, December 2, 1993, 228 SCRA 214, 222-223.
14 Sison v. People, G.R. Nos. 170339 & 170398-403, March 9, 2010, 614 SCRA 670, 681, citing Quibal v. Sandiganbayan (Second Division), G.R. No. 109991, May 22, 1995, 244 SCRA 224.
15 G.R. No. 136082, May 12, 2000, 332 SCRA 126, 135.
16 As cited in Cabrera v. Sandiganbayan, supra note 12.
17 G.R. Nos. 50691, 52263, 52766, 52821, 53350 & 53397, December 5, 1994, 238 SCRA 655.
18 Id. at 688. See also Soriquez v. Sandiganbayan, G.R. No. 153526, October 25, 2005, 474 SCRA 222, 230.
19 Sison v. People, supra 14 at 682.
20 Fonacier v. Sandiganbayan, supra note 18; Sison v. People, id. at 679.
21 Sec. 20, R.A. 4566.
22 Sec. 36, R.A. 4566.
23 Exhibit "H", Prosecution’s Exhibits.
24 Rollo, pp. 147-149.
25 Agan, Jr. v. Philippine International Air Terminals Co. Inc., G.R. Nos. 155001, 155547 & 155661, January 21, 2004, 420 SCRA 575, 588-589.
26 Sec. 1.3 (v), IRR of R.A. No. 6957 as amended by R.A. No. 7718.
27 Sec. 4 of R.A. No. 6957 as amended by R.A. No. 7718 provides:
SEC. 4. Priority Projects. – x x x
The list of local projects to be implemented by the local government units concerned shall be submitted for confirmation to the municipal development council for projects costing up to Twenty million pesos; those costing above Twenty up to Fifty million pesos to the provincial development council; those costing up to Fifty Million pesos to the city development council; above Fifty million up to Two hundred million pesos to the regional development councils; and those above Two hundred million pesos to the ICC of the NEDA.
28 Sec. 2.3, second par., IRR.
29 Metropolitan Bank and Trust Company, Inc. v. Penafiel, G.R. No. 173976, February 27, 2009, 580 SCRA 352, 360-361, citing Perez v. Perez, G.R. No. 143768, March 28, 2005, 454 SCRA 72, 81.
30 Asia’s Emerging Dragon Corporation v. Department of Transportation and Communications, G.R. Nos. 169914 & 174166, April 7, 2009, 584 SCRA 355, 376.
31 Id. at 373, 375. Resolution denying with finality the motions for reconsideration of the Decision dated April 18, 2008.
32 See JG Summit Holdings, Inc. v. Court of Appeals, G.R No. 124293, September 24, 2003, 412 SCRA 10, 33.
33 Garcia v. Burgos, G.R. No. 124130, June 29, 1998, 291 SCRA 546, 576.
34 Sison v. People, supra note 14 at 681-682.
35 Id. at 680.
36 Rollo, pp. 81-82.
37 See Ong v. People, G.R. No. 176546, September 25, 2009, 601 SCRA 47, 56.
38 Records (Vol. 1), pp. 4-7.
39 Id. at 8-15.
40 Id. at 339-347.
41 G.R. No. 166038, December 4, 2007, 539 SCRA 415, 423-425.
42 Santos v. People, supra note 13 at 197, citing Llorente, Jr. v. Sandiganbayan, 350 Phil. 820, 838 (1998).
43 Art. 2226, Civil Code.
44 Sec. 12.7 (a), IRR.
45 Sec. 12.19 (b), IRR.
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