ADMINISTRATIVE ORDER NO. 53 -
IMPOSING THE PENALTY OF PERPETUAL DISQUALIFICATION FROM RE-EMPLOYMENT
IN THE GOVERNMENT SERVICE ON RESPONDENTS ERNEST F.O. VILLAREAL,
BENJAMIN V. CARIÑO, JOEMARI D. GEROCHI, SULFICIO O. TAGUD, JR.,
MARTIN S. SANCIEGO, JR., RODOLFO T. TUAZON, and ANGELITO M. VILLANUEVA
Quoted hereunder are the findings of facts
and law by the Presidential Anti-Graft Commission (PAGC) embodied in
its Resolution dated 28 November 2002:
"THE CASE
This resolves the case against the members of the Board of Directors
and some employees of the Public Estates Authority pertaining to the
alleged irregularities surrounding the construction of the President
Diosdado Macapagal Boulevard (PDMB).
On 25 September 2002, Chief Presidential Legal Counsel Avelino "Nonong"
J. Cruz, Jr. referred 1 to the Presidential Anti-Graft Commission the
complaints against Public Estates Authority (PEA) and JD Legaspi
Construction relating to the Central Boulevard Project, popularly known
as the President Diosdado Macapagal Boulevard.
The President Diosdado Macapagal Boulevard (PDMB) is a 5.123-kilometer,
8-lane road starting from Buendia to Pacific Avenue, with 3 bridges.
Three contractors, namely, Shoemart Incorporated (SM), R-I Consortium,
and JD Legaspi Construction (JDLC), developed the PDMB. Each contractor
was assigned a portion of the road and a bridge to construct. The
approximate total cost of the PDMB is ONE BILLION ONE HUNDRED
THIRTY-FOUR MILLION SIX HUNDRED SIX THOUSAND FOUR HUNDRED ONE PESOS AND
SEVENTY-SEVEN CENTAVOS (P1,134,606,401.77).
The 73.80% of the total cost is the total contract price amount for the
JDLC portion of the PDMB, a 2.229-kilometer road and 42-meter inland
bridge, in the amount of P837,317,343.77. The actual payment made to
JDLC as of 31 August 2002, is P816,006,251.93.
The JDLC still has a collectible of P21,311,091.84 due it from the PEA.
Of the total project cost of P1,134,606,401.77, 14.52% of the total
cost in the amount of P164,798,866.00 was paid to R-I Consortium for
the 1.186-kilometer road and 55-meter bridge, and 11.68% of the total
cost in the amount P132,490,192.00 was paid to SM Inc. for the
1.426-kilometer road and 100-meter bridge, all components of the PDMB.
For the completion of the PDMB, the PEA entered into a Joint Venture
Agreement with SM 2 dated 9 August 1994; a Memorandum of Agreement 3
with R-I Consortium with Implementing Agreement No. 5 dated 21 December
2001, and a Construction Agreement 4 with JDLC dated 10 April 2000. The
PDMB was inaugurated on 5 April 2002 and was opened to the public in
July 2002.
Below is the sequence of events in the implementation of the President
Diosdado Macapagal Boulevard (PDMB) Project:
On 24 September 1998, pursuant to Administrative Order No. 224 5
ordering the PEA to implement plans, programs and the projects in the
Boulevard 2000, the PEA Board issued Resolution No. 1895, Series of
1998, ordering the construction of the Central Boulevard/PDMB and
adopting the proposed action plan of the PEA Management to borrow money
from various financial institution in an estimated amount of P1 Billion
to fund the construction of the Central Boulevard/PDMB with an
estimated project cost of P731,443,700.00 6.
The members of the Old PEA Board of Directors 7 then were:
NAME POSITION
TERM
1. Frisco F. San Juan
Chairman 3 Jul 1998 to 30 April '01
2. Carlos P. Doble General
Manager 3 Jul 1998 to 30 June '01
3. Carmelite De Leon-Chan Board
Member 3 Jul 1998 to 30 June '01
4. Daniel T. Dayan Board
Member 3 Jul 1998 to 30 June '01
5. Salvador P. Malbarosa Board
Member 3 Jul 1998 to 30 June '01
6. Leo V. Padilla Board
Member 3 Jul 1998 to 30 June '01
7. Elpidio G. Damaso Board
Member 3 Jul 1998 to 29 Aug. '01
On 22 April 1999, the PEA requested the Office of the President for
authority to bid and award contract packages thru Simplified Bidding.
On the same date, GM Carlos P. Doble of PEA issued Office Order No. 070
8 creating the Ad Hoc Committee tasked to handle the bid and award of
the Central Boulevard Project and the Ombudsman Building.
On 2 July 1999, the Office of the President approved 9 the request of
the PEA to bid and award contract packages through Simplified Bidding.
The simplified bidding was conducted by the Ad Hoc Committee from 8
July 1999 to 23 September 1999 based on the list of ten contractors
provided by the Department of Public Works and Highways (DPWH). The
following were the five prequalified bidders:
Bidders of the Proposed Central Boulevard Road Project 10
(Approved Agency Estimate: P549,713,194.00)
BIDDER BID PRICE
1. JD Legaspi Construction
P584,365,885.05
2. D.L. Cervantes Construction
P631,588,119.00
3. Tokwing Construction
P642,404,794.19
4. W. Red Construction and Development
Corporation P652,999,429.18
5. Egapol Construction
P656,373,738.03
On 3 November 1999, the PEA Board through Resolution No. 2032 11,
approved the award of the contract to JDLC and the appropriation of the
total contract amount of P584,365,885.05 chargeable against the
proceeds of the P1 billion loan from Land Bank of the Philippines
(LBP)/All Asia Capital. The Notice of Award to JDLC was subsequently
issued on 26 November 1999.
On 15 December 1999, the PEA Board through Resolution No. 2057 12,
approved the Construction Agreement executed between PEA and JDLC. The
same was approved by the Office of the President 13 on 29 January 2000
with the condition that any price adjustment or variation orders should
first be approved by the Office of the President before the changes
could be effected.
On 10 April 2000, the Construction Agreement was signed by the PEA and
JDLC; and the Notice to Proceed 14 subsequently issued to JDLC.
On 5 July 2000, the PEA Board through Resolution No. 3017 15 approved
the Variation Order No. 1 (Additional Works) in favor of JDLC in the
amount not exceeding P117,454,756.71, for the detailed design and
construction of the Proposed Seaside Drive Extension and the proposed
bridge connecting CBP II and CBP I B & C.
On 29 January 2001, the PEA Board through Resolution No. 3089 16,
confirmed the approved Variation Order No. 1 involving the realignment
of items of work with no additional cost and additional time to the
original Construction Agreement to suit actual field conditions. The
previously approved Variation Order No. 1 was changed to realignment of
additional works at no cost to PEA.
On 19 March 2001, Ernest F. O. Villareal was appointed as Chairman of
the PEA Board of Directors 17.
On 26 April 2001, the PEA Board through Resolution No. 3099, confirmed
the time extension of 37 days granted to JDLC. On the same date,
Resolution No. 3102 18 was issued approving the updated cost of
Variation Order No. 2, previously designated as Variation Order No. 1,
in the total amount of P126,440,810.20. The appropriation of additional
funds in the amount of P8,986,053.49 was charged against the balance of
the P1 Billion loan proceeds from LBP.
The following are the members of the new PEA Board of Directors 19:
NAME POSITION
APPOINTMENT
Ernest F. O. Villareal Chairman 1
March 2001
Benjamin V. Cariño General
Manager 1 Jul 2001
Joemari D. Gerochi Board Member 1
Jul 2001
Sulficio O. Tagud, Jr. Board Member
1 Jul 2001
Angelito M. Villanueva Board Member
1 Jul 2001
Salvador D. Sarabia, Jr. Board
Member 1 Jul 2001 to 18 March '02
Martin S. Sanciego, Jr. Board
Member 29 August 2001 to Present
Rodolfo T. Tuazon Board Member 18
March 2002
On 5 December 2001, the PEA Board deferred confirmation of the Board
Resolution No. 3153 20 series of 2001, since Dir. Sulficio O. Tagud,
Jr. questioned the Board's authority to approve the contract price
adjustment in favor of JDLC, considering that the amount involved was
P42,418,493.64 21. DGM Manuel Beriña informed the Board that the
said contract price adjustment was allowed under Items C1 12.1 par. 5
and IB 10.10 par. 2 of PD 1594. The confirmation of the said contract
price adjustment was likewise deferred on 14 December 2001 meeting 22
of the Board, pending the submission by Management of the basic
justifications on the increase in the general prices of construction
materials.
On 18 March 2002, Rodolfo T. Tuazon was appointed to office as member
of the Board of Directors vice Salvador D. Sarabia, Jr. Rodolfo T.
Tuazon assumed office on 19 April 2002. 23
On 19 April 2002, the PEA Board through Resolution No. 3203 24,
confirmed the approved Contract Price Adjustment to JDLC in the total
amount of P42,418,493.64.
On 23 July 2002, Beriña requested the Board for confirmation of
Variation Order No. 3 (Landscaping Works-Central Boulevard), Variation
Order No. 4 (Additional Items of Work) and Variation Order No. 5
Landscaping Works-Seaside Drive), amounting to P13,357,005.00,
P4,759,630.80 and P1,244,949.00, respectively as well as the final bill
of quantities in the total amount of P79,332,524.08. 25
On 13 August 2002, upon motion of Director Rodolfo T. Tuazon, the PEA
Board through Resolution No. 3272 26 series of 2002 approved Variation
Order No. 4 and the Final Bill of Quantities. In the minutes of the
said meeting, Director Tagud stated that he was abstaining and
withholding comment for or against the motion for approval, pending
clarification on the project components. Nonetheless, the Board
confirmed Variation Order No. 4 (Additional Items of Work) and the
Final Bill of Quantities (Overruns/Underruns) for the CBRP, with the
approximate amount of P4,759,630.80 and P79,332,524.08, respectively.
The said amount was to be charged against the proceeds of the P1
billion GSIS loan.
On 10 September 2002, Director Tagud registered his negative vote on
the motion for approval of Variation Order No. 4 (Additional Items of
Work) and the Final Bill of Quantities (Overruns/Underruns) for the
CBRP, in the approximate amount of P4,759,630.80 and P79,332,524.08,
respectively. 27
On 16 September 2002, Dir. Tagud sent a letter-complaint 28 to Her
Excellency President Gloria Macapagal-Arroyo alleging irregularities
surrounding the construction of the PDMB.
On 25 September 2002, the Office of the President referred to the PAGC
the letter-complaint of Dir. Tagud against PEA officials and the reply
of the PEA officials to said complaint.
On 12 November 2002, the Investigation Office of the PAGC, as a nominal
complainant, filed a Formal Charge against the members of the PEA Board
of Directors and some PEA employees involved in the alleged
irregularities surrounding the construction of the PDMB.
On 22 November 2002, the Preliminary Conference was conducted wherein
respondents were given the chance to raise clarificatory questions. The
Commission denied respondent Tagud's Motion to Refer Administrative
Case to the Ombudsman by virtue of the letter from the Ombudsman dated
17 October 2002, quoted herein:
This has reference to your letter dated 14 October 2002 requesting for
authority to conduct administrative disciplinary proceedings against
the presidential appointees at the Public Estates Authority (PEA) named
respondents in the case involving the construction of the President
Diosdado Macapagal Boulevard (PDMB).
It is our humble view that the authority is not necessary.
The Office takes the opportunity to confirm the fact that the case
filed with this Office on 3 October 2002, involving the subject
controversy, is criminal in nature. It now bears the docket number
OMB-C-C-02-0667-J, entitled "Sulficio Tagud, Jr., et al. versus Ernest
Villareal, et al." The basic complaint has not been further docketed as
an administrative case. Thus the same did not preclude the subsequent
filing with the PAGC of an administrative complaint against the
concerned PEA officials. (emphasis provided)
In the same hearing of 22 November 2002, the Commission granted the
request of the counsel of respondent Tagud to file an
Answer/Counter-Affidavit on 25 November 2002.
Upon agreement of the parties, the preliminary conference on 22
November 2002 was terminated. Immediately thereafter, the Commission
issued an Order 29 directing the parties to file their Position Paper
and/or Memorandum not later than 26 November 2002, after which the case
shall be deemed submitted for Resolution.
THE CHARGE
Among the members of the PEA Board of Directors charged are the
following:
1. Ernest F. O. Villareal, Chairman
2. Benjamin V. Cariño, General Manager and
Ex-Officio Member
3. Joemari D. Gerochi, Board Member
4. Sulficio O. Tagud, Jr., Board Member
5. Martin S. Sanciego, Jr., Board Member
6. Rodolfo T. Tuazon, Board Member
7. Angelito M. Villanueva, Board Member
The employees of the PEA (non-presidential appointees) included in the
Formal Charge are the following:
1. Jaime R. Millan, Assistant General Manager
2. Manuel R. Beriña, Jr., Deputy General
Manager
3. Theron V. Lacson, Deputy General Manager
4. Bernardo T. Viray, Deputy Manager
5. Ernesto L. Enriquez, Senior Corporate Attorney
The respondents were charged for violation of the following:
1. Item IB2 of IRR of Presidential Decree No. 1594
am. 30
2. Sec. 3 (i) (g) (e) of Republic Act No. 3019 31
3. Article 217 Chapter 4 Title 7 of the Revised Penal
Code 32
4. Sec. 46 (b) (3) (4) (9) (27) of Executive Order
No. 292 or the Administrative Code of the Philippines, 33 and
5. Article 8 of the Construction Agreement 34 signed
on 10 April 2000, between the
Public Estates Authority and J.D. Legaspi Construction;
For the following acts committed:
1. On 22 April 1999, notwithstanding the existence of
a duly constituted PBAC, former Public Estates Authority General
Manager Carlos P. Doble created an AD HOC Committee, through Office
Order No. 070, composed of the following: Deputy General Manager Manuel
R. Beriña, Jr., Chairman; with members, Deputy General Manager
Theron V. Lacson; Deputy Manager Bernardo T. Viray; and Senior
Corporate Attorney Ernesto L. Enriquez. This Ad Hoc Committee is
responsible for the bidding and award of the construction contract for
the Central Boulevard Road Project.
2. On 21 October 1999, the Ad Hoc Committee
recommended to the PEA Board of Directors, for approval, the contract
for the construction of the proposed Central Boulevard Road Project
(Package 1) to J.D. Legaspi Construction.
3. On 3 November 1999, the PEA Board of Directors
approved the award of contract for the Construction of the Proposed
Central Boulevard Road Project (Package 1), in the amount of
P584,365,885.05.
4. On 26 November 1999, the Notice of Award was
issued to J.D. Legaspi Construction. Subsequently, a Notice to Proceed
was likewise issued to Engr. Jesusito D. Legaspi, General Manager, J.D.
Legaspi Construction, on 10 April 2000, and the same was received on 11
April 2000.
5. On 10 April 2000, the Agreement for the
Construction of the Central Boulevard Road Project (Package 1) was
signed between JDL Construction and the PEA, represented by then
General Manager, Carlos P. Doble.
6. JDL Construction agreed to perform and complete
the Project, in strict compliance with the approved plans,
specifications, contract documents, relevant government laws, codes,
regulations and ordinances. The works in the Contract included the
furnishing by the JDL Construction of all labor, materials equipment
and supplies. (Article I, 1.1; 1.2), for a total contract price of
P584,365,885.05.
7. On 26 April 2001, notwithstanding his personal
knowledge of the fixed contract price of the said Project, Deputy
General Manager Manuel R. Beriña, Jr., requested PEA Board of
Directors for the approval the updated cost of Variation Order No. 2,
in the total amount of P126,440,810.20. PEA Board of Directors approved
Variation Order No. 2 through its Board Resolution No. 3102.
8. On 24 August 2001, Assistant General Manager Jaime
R. Millan and Deputy General Manager Manuel R. Beriña, Jr.
recommended to General Manager Benjamin V. Cariño, for approval,
the contract price adjustment in the amount of P42,418,493.64 to JDL
Construction, and the appropriation of funds chargeable to the project
for the said adjustment; which the latter approved.
9. On 16 April 2002, despite personal knowledge that
the contract price of the Central Boulevard Road Project was fixed at
P584,365,885.05, Deputy General Manager Manuel R. Beriña, Jr.
recommended, and noted by GM Benjamin V. Cariño, for the Board's
approval the contract price adjustment of P42,418,493.64 to JDL
Construction; which was subsequently approved by the Board on 19 April
2002 per Resolution No. 3203.
10. On 13 August 2002, PEA Board Member Rodolfo
Tuazon, despite having personal knowledge that the Central Boulevard
Road Project has a fixed contract price of P584,365,885.05, moved for
the approval of Variation Order No. 4 (Additional Items of Work) and
the Final Bill of Quantities (Overruns/Underruns) by the PEA Board of
Directors. The same was approved by the PEA Board of Directors in its
13 August 2002 meeting, with the approximate amount of P4,759,630.80
for Additional Items of Work and P79,332,524.08, for the Final Bill of
Quantities.
11. PEA authorized payment and has actually paid
J.D.L Construction the total amount of P816,006,251.93, as of 31 August
2002. The total amount of the contract escalated to P837,317,343.77
which is 43.29% escalation from the original contract price of
P584,365,885.05.
All the respondents, both the Presidential and the Non-Presidential
Appointees, are within the jurisdiction of the Presidential Anti-Graft
Commission (PAGC) pursuant to Sec. 4 and 4 (b) 35 of Executive Order
No. 12 dated 16 April 2001.
ISSUES
1. WHETHER OR NOT THE AD HOC COMMITTEE HAD THE
AUTHORITY TO CONDUCT THE BIDDING AND AWARD OF THE CONSTRUCTION CONTRACT
FOR THE CENTRAL BOULEVARD/PDMB;
2. WHETHER OR NOT PRIOR APPROVAL FROM THE OFFICE OF
THE PRESIDENT OF THE PHILIPPINES IS REQUIRED FOR THE CONTRACT PRICE
ADJUSTMENTS, OVERRUNS, AND/OR VARIATION ORDERS;
3. WHETHER OR NOT THE CONTRACT PRICE ADJUSTMENTS,
OVERRUNS, AND/OR VARIATION ORDERS ARE VALID AND JUSTIFIED; AND
4. WHETHER OR NOT THE RESPONDENTS ARE GUILTY OF
VIOLATION OF PERTINENT PROVISIONS OF P.D. 1594; REPUBLIC ACT NO. 3019;
THE REVISED PENAL CODE; EXECUTIVE ORDER NO. 292; AND THE CONSTRUCTION
AGREEMENT SIGNED ON 10 APRIL 2000 BETWEEN PEA AND JDLC.
DISCUSSION
Presidential Decree No. 1084, creating the Public Estates Authority
(PEA), provides in its First Whereas, the purpose of the agency which
is for the economical and efficient administration of lands and real
estate managed and/or operated by the government. The case at bar shows
how the members of the Board of Directors and some employees of the
Public Estates Authority miserably failed to uphold agency's mandate
resulting to the damage and injury of the government.
The Ad Hoc Committee Had No Authority To Conduct The Bidding And Award
Of The Construction Contract For The Central Boulevard or PDMB
The irregularity surrounding the construction of the PDMB started when
the former General Manager Carlos R. Doble created an Ad Hoc Committee,
through Office Order No. 070 36 dated 22 April 1999, for the bidding
and award of the construction contract of the Central Boulevard now
referred to as the President Diosdado Macapagal Boulevard,
notwithstanding the fact that there was an existing Pre/Post
Qualification, Bidding and Awards Committee or PBAC constituted in 9
July 1996, through Office Order 125 pursuant to PD 1084, PD 1594, EO
164, and the approval of the PEA Board of Directors.
Respondents Beriña as Chairman, and Lacson, Viray, and Enriquez
as members of the illegally constituted AD HOC Committee participated
in the opening of bids for the construction of the Central Boulevard as
evidenced by the Abstract of Bids dated 16 September 1999. Respondents
then awarded the contract to the JD Legaspi Construction and requested
for Board Approval for the said award.
In their Counter-Affidavits, respondents Lacson, Viray, and Enriquez
aver that they only performed their duties and responsibilities by
virtue of the Office Order No. 070 issued by former GM Carlos P. Doble.
They argued that being a member of the said committee could not be
considered as unlawful. They aver that they performed their functions
diligently and faithfully by securing the necessary clearances and
approval in the conduct of the Simplified Bidding up to the Award of
the Contract.
Respondent Lacson and Enriquez further stated that there is nothing in
Item IB 2 of the IRR of PD 1594 which prohibits the creation of an Ad
Hoc Committee for bids and awards nor a proscription that there should
only be one (1) PBAC in an agency. Further, they stated that the Ad Hoc
Committee substantially conformed to the composition indicated in the
said IRR of PD 1594. In addition, respondents aver that the government
did not suffer any undue injury because the bid of JDLC was the lowest
among the responsive bids submitted by the bidders. Neither could it be
said, according to the respondents, that this is grossly and manifestly
disadvantageous to the government.
The Commission finds the contentions of respondents Lacson, Viray, and
Enriquez to be without merit. The IRR of PD 1594, specifically IB 2-1,
directs each agency to constitute a PBAC that should have a total of
seven (7) members. The required composition is specified herein:
IB 2 — ORGANIZATION OF THE PBAC
1. Each office/agency/corporation shall have in its
head office or in its implementing offices a Prequalification, Bid and
Award Committee (PBAC) which shall be, responsible for the conduct of
prequalification, bidding, evaluation of bids and recommending award of
contracts. Each committee shall be composed of the following:
a. Chairman (regular) — At least third ranking
official of the office/agency/corporation.
b. Executive Office and Secretary (regular) — Legal
Officer of the office/agency/Corp.
c. Member (regular) — Technical member designated by
the head of office/agency/corporation
d. Member (provisional) — At least two, with
experience in the type of project to be bid and in project management,
duly designated by the head of the office/agency/corporation on a
project to project basis.
e. Members from the private sector —
To ensure the transparency of bidding process, one qualified
representative from a constructors' association DULY RECOGNIZED BY THE
CONSTRUCTION INDUSTRY AUTHORITY OF THE PHILIPPINES (CIAP) and one
qualified representative from any of the following organizations:
(1) End-user group or non-governmental organization
to be designated by the head of the office/agency/corporation concerned.
(2) Associations of Certified Public Accountants or
Civil Engineers duly recognized by the Professional Regulation
Commission (PRC).
Both representatives shall be non-voting members.
Furthermore, Sec. 2 of IB2 IRR of PD 1594 states that:
IB2.2. Government-owned or controlled corporations
shall organize their own PBACs, the members of which shall be appointed
by their respective boards preferably along the same line as other
government offices. (emphasis supplied)
It is therefore clear that the Ad Hoc Committee composed of only four
(4) members chosen by Doble did not conform at all with the
requirements indicated in the IB2, IRR of PD 1594. In addition there
was no Board approval of the said Office Order creating the Ad Hoc
Committee. Respondents could have taken all the necessary
steps/measures to protect the interest of the government to ensure that
everything is in accordance with the pertinent existing laws, rules and
regulations. They failed to act with the diligence of a good father of
a family and thus prejudiced the interest of the government.
Respondents' argument that being members of the said Ad Hoc Committee
is not illegal is bereft of merit. Performing the functions of the PBAC
as members of the Ad Hoc Committee without any color of authority is
patently against the law. The acts of the respondents as members of the
Ad Hoc Committee taint with irregularity the bidding and award of the
construction contract of the PDMB, which to date, has cost the
government more than a billion pesos. The duly constituted PBAC is
composed of the following: Theron V. Lacson as Chairman, and members
Atty. Jaime T. De Veyra, Engr. Rodolfo C. Hernandez, Architect Jorge L.
Regala, Mrs. Cristeta Q. Catral, and a Representative from a
Professional Organization.
The argument of the respondent that there is nothing in Item IB 2 of
the IRR of PD 1594 which prohibits the creation of an Ad Hoc Committee
for bids and awards nor a proscription that there should only be one
(1) PBAC in an agency is devoid of merit. The IB 2 of the IRR of PD
1594 sets the composition of the PBAC which, in effect, prohibits the
constitution of any other committee to be formed that is not in
conformity with the guidelines set in the IRR of PD 1594.
One of the objectives of PD 1594 in adopting a set of rules and
regulations covering government contracts for infrastructure is to
bring about maximum efficiency in project implementation and minimize
project cost and contract variations through sound practices in
contract management. 37 To depart from prescribed rules and regulations
will most often result in anomalies sought to be avoided by the
government in infrastructure projects. This is precisely what happened
in the PDMB project.
Respondent members of the Ad Hoc Committee's actions have caused undue
injury to the government.
Prior Approval From The Office Of The President Of The Philippines Is
Required For The Contract Price Adjustments, Overruns, And/Or Variation
Orders
Below is the summary of the contract price adjustments, overruns, and
variation orders approved by both the old and present members of the
PEA Board of Directors.
Board Resolution No.
Nature Amount
and Date
Resolution No. 3102 Variation Order No.
2 P126,440,810.20
26 April 2001 (42m. Bridge and Seaside Drive
Extension)
(OLD PEA BOARD) - originally Variation Order No. 1 in
the
amount of P117,454,756.71 per Board Res.
3089 but was later revised with the updated
cost of P126,440,810.20 and became V.O. No.
2 per Board Res. No. 3102.
Resolution No. 3203 Contract Price
Adjustment P42,418,493.64
19 April 2002 (7.26% of Orig. Price)
(NEW PEA BOARD)
Resolution No. 3272 Variation Order No. 4 (Additional
Items of P4,759,630.80
13 August 2002 Work)
(NEW PEA BOARD)
Final Bill of Quantities
(Overruns/Underruns) P79,332,524.08
TOTAL P252,951,458.72
Respondents Villareal, Cariño, Gerochi, Tuazon, and Villanueva
contend that by virtue of the repeal of Administrative Order No. 7 by
Executive Order 109, the requirement of prior Presidential Approval is
no longer needed for the contract price adjustments and/or variation
orders. Likewise, said respondents contend that nothing in CI 1, 2, 3
IRR of PD 1594 requires prior Presidential Approval for the issuance of
change orders, extra work orders, supplemental agreements,
overruns/underruns as along as the total aggregate amount does not
exceed 100% of the original contract. The Commission finds this
contention of the above respondents to be without merit.
First and foremost, the Construction Agreement or contract between the
JDLC and the PEA is the primary law between the parties, as in the case
of every contract. And Article 8 of the Construction Agreement was more
than emphatic in requiring the parties to first secure the approval of
the President before any change order could be effected. The pertinent
portion of the contract is quoted herein:
Article 8
Change Order and/or Additional Work
8.1. The PEA, may at any time, by written order, make
changes in the schedule and work required under this Agreement. If any
such change/s causes an increase or decrease in the work or the time
required for performing the work, an equitable adjustment shall be made
of the contract price and completion date upon mutual agreement of the
parties reflecting such adjustments by way of written order subject to
the provisions of the IRR of PD 1594, as last amended and the approval
of the President.
8.2. Should the PEA find it necessary to have any
additional work carried out for purposes of the Project in addition to
the contracted work, such additional work will be carried out
immediately by the CONTRACTOR upon receiving written approval from the
President, provided that the amount of the change order is within the
limitations and in accordance with conditions set forth in PD 1594 and
its IRR. (emphasis supplied)
Respondent Tuazon opines that the President's approval, taking into
consideration governmental hierarchy, should come after, not before,
the approval by the PEA Board. There is no logic at all in this
argument. The condition stated in the approval of the President of the
Construction Agreement between PEA. and JDLC on 29 January 2000, is
self-explanatory, to wit: "any price adjustment or variation orders
should first be approved by the Office of the President before the
changes could be effected." This statement does not require any
interpretation from any source, especially from the respondents.
Nothing in the records shows that the President's approval was secured
before the PEA Board approved the Variation Order No. 2, Contract Price
Adjustment, Variation Order No. 4, and Final Bill of Quantities. Former
President Joseph Estrada clearly did not approve Variation Order No. 2.
Neither did President Gloria Macapagal-Arroyo approve the Contract
Price Adjustment, Variation Order No. 4, and Final Bill of Quantities.
The members of the Old and New Board of Directors were therefore
clearly remiss in their duty to protect the interest of the government
as manifested in their refusal to follow the directive from the Office
of the President and the stipulations in the Construction
Agreement.
The contention of the respondents that the President's approval is no
longer required in EO 109 is not correct, because Sec. 9 of EO 109
states the following:
a. All Government Contracts required by law to be
acted upon and/or approved by the President, and any subsequent
amendments or supplements thereto, shall not be signed until after the
NEDA Board, which is chaired by the President of the Philippines, has
favorably acted upon or approved the same.
What is now required under EO 109 is not only the President's approval
but also that of the NEDA Board which is chaired by the President.
Legally, the President's approval is still required for contracts.
Moreover, there is nothing in the records which shows that approval
from the NEDA Board was secured by the respondents with respect to the
price adjustments and/or variation orders. Nor was there any attempt to
secure such approval from the President.
Respondents Gerochi and Tuazon contend that if there was failure to
secure Presidential Approval, the PEA Board may not be held answerable
for such administrative lapse because the Board acts mainly on policy
matters. The respondents argue that it was incumbent upon management to
secure such Presidential Approval after Board action on the matter.
The Commission finds the contention of respondent Gerochi and Tuazon
unmeritorious. The absence of a Presidential Approval for the contract
price adjustments, overruns, and/or variation orders is not a mere
administrative lapse but rather a reflection of utter disregard of the
very basic requirement before any contract price adjustments, overruns,
and/or variation orders should be approved and implemented.
The Board Members were chosen and appointed by Her Excellency President
Gloria Macapagal-Arroyo for their competence and good judgment in
always upholding national interest over and above any other
consideration. The Board Members of a corporation cannot simply pass
the buck to the Management or its subordinates otherwise the Board
itself becomes useless.
Whether Or Not The Contract Price Adjustments, Overruns, And/Or
Variation Orders Are Valid And Justified
Respondents Millan, Beriña, and Viray contend that as employees
of the PEA, they were just following the instructions from their
superiors and that their actions were only recommendatory. Respondent
Millan avers that as the designated Project Director of Construction
Task Force (CTF) for the Central Boulevard Road Project (CBRP), he made
sure that each and every segment of the contract were all approved by
COA. Respondent Beriña avers that because of the delay in
issuing Notice To Proceed which took seven (7) months, the contractor
requested for a contract price adjustment in the amount of
P42,418,493.64 on the basis of IB 10.10 of IRR PD 1594.
Respondent also contends that the 42-meter inland bridge was an
additional work to the JDLC because R-I Consortium declined to
construct it because it was outside its coverage area. The Commission
noted that there was no evidence presented to support this contention.
Respondents further contend that in every project, the
overruns/underruns are inevitable because there are no perfect plans
nor perfect estimates. Respondents also maintain that until actual
excavation and implementation of the design and the plans, there is no
absolute means of determining the soil condition or actual work to be
done or the precise amount of materials used.
Respondents Villareal, Cariño, Gerochi, Tuazon, and Villanueva
contend that the contract was not a "fixed price" contract, but a "unit
priced" contract. Respondents contend that Article 8 of the
Construction Agreement between PEA and JDLC allows for Change Order
and/or Additional Work.
Article 8 of the Construction Agreement providing for possible change
orders and/or additional work does not change the nature of the
contract to a "unit-priced contract." What is rather provided for in
Article 8 is the requirement needed for a change order to be effected,
that is, the President's Approval.
What is apparent in the arguments of the respondents is the utter
disregard of the very nature of the Construction Agreement entered into
by the PEA and JDLC, which is a fixed-price contract. Pertinent
provisions of the Construction Agreement is quoted herein:
Construction Agreement
Article I Scope of Work
1.2 The works to be done in this contract shall
include the furnishing by the contractor of ALL labor, materials,
equipment and supplies, and the performance by the Contractor of all
operations necessary for the complete construction of the project.
Article 3 Contract Price
3.1 As consideration for the full and faithful
performance and accomplishment of all obligations specified in Article
I above, which the Contractor agrees to undertake, perform, and
accomplish under this Agreement. PEA shall pay the Contractor the Total
Contract Price of FIVE HUNDRED EIGHTY FOUR MILLION, THREE HUNDRED SIXTY
FIVE THOUSAND EIGHT HUNDRED EIGHTY-FIVE & 05/100 PESOS
(594,365,885.05) inclusive of Value-Added Tax (VAT), as well as fees
and taxes for obtaining the necessary licenses and clearances from the
Department of Environment and Natural Resources, City of
Parañaque, Pasay City and other government agencies. (emphasis
supplied)
While it is true that there are no perfect plans, as argued by the
respondents, the Commission noted that the Construction Agreement
itself provides for a fixed contract price. Since the Construction
Agreement was not entered into at the price for each unit of work or
materials, but rather is a fixed price, lump sum contract, then there
can be no justified increase or decrease of the price. It follows that
any increase in the cost of constructing and completing the project
work must, under the Construction Agreement, be borne by the contractor.
Furthermore, the Supreme Court in the case of BAYLEN Corporation, et
al. vs. CA 38, ruled that the contractor can and commonly does, build
into its bid or negotiated price a realistic contingency factor to
protect its expected profit from erosion by drastic cost increases,
pertinent portion is quoted herein:
It is also perhaps well to note that there is nothing exotic about a
contractor assuming the risk of the costs of construction moving up
before completion of a project. Fixed priced, lump sum contracts are
quite common in the construction industry. The contractor can in the
first place, and commonly does, build into its bid or negotiated price
a realistic contingency factor to protect its expected profit from
erosion by drastic cost increases. In the second place, the
well-organized, credit-worthy contractor should be able substantially
to mitigate the impact of expected or possible increases in
construction costs. It is open to such a contractor to take advantage
of economies of scale by buying construction materials in bulk and thus
availing of bulk discounts, and to anticipate price increases by buying
such materials forward. The contractor can, furthermore, reduce its
effective costs by increasing the productivity and efficiency of its
work force and by keeping its administrative and other overhead costs
down. There is thus nothing unfair about holding a contractor to its
fixed price, lump sum contract even in an environment of rising prices.
(emphasis supplied)
The Commission believes that Article 4, Sec. 4.5 39 (Price
Escalation) of the Construction Agreement is a provision in the
contract inconsistent to Articles 1 and 3 of the Construction Agreement
and to the very nature of the contract that is "fixed-price". To
conclude otherwise would render the bidding an exercise in futility if
the Contractor will just be allowed to escalate the contract price
later in the guise of overruns and variation orders. Precisely, JDLC
won the bid over the other bidders on its contract price.
Respondent Cariño and Villareal contend that it is not
appropriate to compare the cost incurred by SM and R-I Consortium to
that of the JDLC because based on the studies of PEA Technical
Management, the scope of work, time factor, as well as materials used,
contributed to increased costs in the construction costs of the subject
contract. Respondents aver that with the limited time given to JDLC,
the latter was constrained to make use of stronger materials for the
construction of the roads and that the need to finish the project as
soon as possible left JDLC no choice but to get A1 quality materials
and resort to extra safety measures to ensure the strength and quality
of the roads.
This contention is bereft of merit. At the risk of being repetitious,
the three contractors, namely, SM, R-I, and JDLC, worked on the same
PDMB project. Therefore, it cannot be justified that only JDLC seemed
to have exerted more work and encountered more difficulties than the
two other contractors. The Commission takes judicial notice of the fact
that the land where the PDMB is located is a reclaimed portion of the
Manila Bay, and the reclamation had long been completed as early as the
1970's.
Since all three contractors, namely, SM, R-I Consortium, and JDLC,
worked on the same land it is extremely unlikely that the soil
condition of the area assigned to the JDLC is unstable (as it claimed)
whereas the areas assigned to the SM and R-I Consortium were stable.
JDLC's justification for the price adjustments and/or variation orders
borders on the realm of impossible. As such, it deserves to be ignored.
Records and the facts of the case belie the contention of respondents
Cariño and Villareal as to the extra works that the JDLC needed
to undertake, considering that neither the SM nor R-I Consortium
requested for any price adjustments as evidenced by the CERTIFICATION
dated 15 October 2002 issued by Dominador C. Villanueva, Manager of PEA
Construction Management Department, for the R-I Consortium 40, to wit:
This is to certify that as of today (15 October 2002) the R-I
Consortium who constructed the Roxas Canal West Bridge under
Implementing Agreement No. 5 and the Central Boulevard (PDMB) road
portion from sta. 2+400 to 3+620 under Implementing Agreement No. 6 has
not requested any price adjustment in the construction of the
abovementioned road and bridge.
and a CERTIFICATION dated 15 October 2002 from Cristina A. Catral,
Manager of PEA Legal Department, for the SM 41, to wit:
Therefore, any price adjustment resulting from increases in
construction costs cannot be given due course and has no basis in our
Joint Venture Agreement with SM.
The other two (2) contractors (SM, Inc. and R-I Consortium), as shown
in the above CERTIFICATIONS, did not ask for any price adjustments, and
yet all three (3) contractors worked on the same stretch of road. In
addition, the contract price of the two other contractors, SM and R-I
Consortium, is much lower than that of the JDLC. The price per
kilometer for SM is P86,821,882.04; and for R-I Consortium
P132,795,218.37 per kilometer. Compare this with the price per
kilometer of JDLC which is P262,165,045.09 as stipulated in the
original contract that was signed on 10 April 2000. This shows that
indeed variation orders and price adjustments granted to the JDLC
amounting to P252,951,458.72 over and above the original contract
price, have absolutely no justification.
Looking at the price difference between JDLC and the other two
contractors (SM and R-I Consortium), the thing speaks for itself (res
ipsa loquitor) that indeed there was an overprice in the construction
of the JDLC portion of the PDMB. It is even safe to conclude that the
PDMB can qualify as the most expensive road in the Philippines. And
come to think of it, the road is not even made of cement but of asphalt.
Respondent Tuazon contends that there is no basis to say JDLC contract
is grossly disadvantageous to the Philippine Government; citing the
case of Marcos vs. Sandiganbayan, where it was ruled that the lease
contract that provided for a monthly rental of P100,000.00, standing
alone, was not found grossly disadvantageous to the government even if
the sublease provided for a monthly rental of P700,000.00 monthly.
The Commission takes exception to the contention of respondent Tuazon
that contract price for the JDLC is not disadvantageous to the
government. The 43.20% escalation of the contract price, standing alone
and unexplained, is more than enough basis to conclude that the
variation orders and contract price adjustments are grossly
disadvantageous to the Filipino people and the Philippine Government.
Respondent Tagud avers that he questioned the contract price adjustment
amounting to P42 Million in the December 5 and 14, 2001 meetings of the
PEA Board. What respondent Tagud failed to aver, however, is that on 19
April 2002 the PEA Board approved the said contract price adjustment
through Resolution No. 3203, where he was present and raised no
objection to the said resolution.
Respondents aver that they relied on the recommendations of their
subordinates and on utmost good faith that they enjoy the legal
presumption of regularity in the performance of their official
functions, which presumption should prevail in the absence of
sufficient proof to the contrary. Respondents cited the case of Arias
vs. Sandiganbayan and Magsuci v. Sandiganbayan, in contention that the
members of the Board of Directors had only to rely on the executive
officers to guide them in their actions and decisions. They contend
that they had no reason to doubt information of the PEA management.
The Commission finds the above contentions of the respondents
unacceptable. The board of directors is the directing and controlling
body of the corporation. PD 1084 vests in the Board of Directors of PEA
the power to control and direct the affairs of the PEA. The Board of
Directors occupies a position of trusteeship in relation to the
stockholders in the sense that the board should exercise not only care
and diligence, but utmost good faith in the management of corporate
affairs. 42 Therefore the ultimate responsibility for all the
manifestly unlawful, inequitable, or irregular transactions pertaining
to the construction of the PDMB rests on the shoulders of the
respondents as members of the PEAS Board of Directors.
Respondents are expected to observe strict integrity and moral
responsibility as members of the Board of Directors of the PEA. They
should at all times protect, the interest of the government and perform
acts not repugnant to law. Sadly, they failed in this mission!
Other Issues Raised
Resignation of Respondent Does Not Divest The PAGC Jurisdiction
Respondent Gerochi's resignation was accepted by the Office of the
President on 26 September 2002. Respondent Sanciego resigned on 29
October 2002, followed by Tuazon on 30 October 2002, then Tagud on 7
November 2002. Respondents Villareal, Cariño, and Villanueva
filed their resignation on 14 November 2002.
By virtue of their resignation, respondents argue that they are no
longer within the jurisdiction of the PAGC. They contend that there is
no more reason for the Commission to continue with the proceedings,
considering that the remaining steps to take, based on the rules of
this Honorable Office, are either to recommend to the President
administrative actions against all the respondents, the worst of which
is dismissal from the service, or to refer the matter to the Ombudsman.
Respondents also contend that the Commission is effectively barred from
taking either of the above courses of action. According to respondents,
the submission of PAGC's report and recommendation to the President
would obviously be useless and any penalty to be imposed would be
ineffectual as they no longer occupy their respective offices.
Respondents also allege that the referral of this case to the Office of
the Ombudsman would be a superfluity since the said Office has already
commenced preliminary investigation of criminal charges (docketed as
OMB-C-C-02-0667-J) against them for the same subject matter. Therefore,
according to the respondents, the instant investigation has already
been rendered moot and academic.
Records show that the Office of the President referred the complaints
on the irregularity surrounding the construction of the PDMB to the
PAGC, for appropriate action, on 25 September 2002. It is thus clear
that this Commission had already acquired jurisdiction over the subject
matter of the complaint before any of the respondents' resignation was
accepted by the President. The PAGC does not only have jurisdiction
over the respondents but is duty bound to investigate the
irregularities in the construction of the PDMB, pursuant to Sec. 7
of Executive Order 12 (PAGC's Charter), as quoted herein:
Sec. 7. Resignation/Retirement of Respondent. —
The resignation or retirement of the public officer under investigation
shall not divest the Commission of jurisdiction to continue the
investigation or hearing and submit its recommendations to the
President as to the imposition of accessory penalties or such other
action be taken.
Furthermore, no less than the Supreme Court En Banc ruled in the 1975
case of Perez vs. Abiera 43, reiterated in the cases of People of the
Philippines vs. Valenzuela and Lai Man 44 Zarate and Chaves vs.
Romanillos, and Navarro, Jr. vs. Romanillos 45, that retirement from
the service does not warrant the dismissal of the administrative
complaint which was filed against the respondent while still in the
service; quoted herein is the pertinent portion of the decision:
The Court's jurisdiction, acquired at the time of the filing of the
administrative complaint, is not lost by the mere fact that the
respondent public official had ceased to be in office during the
pendency of his case. The Court retains its jurisdiction either to
pronounce him innocent of the charges or declare him guilty thereof. A
contrary rule would be fraught with injustices and pregnant with
dreadful and dangerous implications."(emphasis supplied)
There is likewise no merit to the contention of the respondents that
the PAGC can no longer recommend any sanctions since they have already
resigned and therefore cannot be dismissed from service anymore. It is
incorrect to state that the PAGC can no longer impose sanctions on the
respondents who have already resigned. The PAGC can still impose the
accessory penalties in an administrative investigation of a respondent.
We would like to bring to the attention of the respondents Sec. 7 of
the EO 12, which states that:
Sec. 7. Resignation/Retirement of Respondents. —
The resignation or retirement of the public officer under investigation
shall not divest the Commission of jurisdiction to continue the
investigation or hearing and submit its recommendations to the
President as to the imposition of accessory penalties or such other
action be taken.
Precisely the purpose of this investigation is the possible imposition
of accessory penalties in the event that substantial evidence will
establish the liability of the respondents.
PAGC Observed Due Process
Respondent Tuazon contends that the charges are vague, ambiguous, broad
and sweeping, cover not just one but tons of offenses, and virtually
deny herein respondent his right to be informed of the nature and cause
of the accusations against him and thus his fundamental right to due
process.
Due Process, as ruled by the Supreme Court En Banc in the case National
Development Company, et al. vs. Collector of Customs of Manila 46, to
wit:
Indeed, our Constitution provides that "No person shall be deprived of
life, liberty, or property without due process of law", which clause
epitomizes the principle of justice which hears before it condemns,
which proceeds upon inquiry and renders judgment only after trial. That
this principle applies with equal force to administrative proceedings .. . (emphasis supplied)
In addition, the Supreme Court ruled in the case Mark Roche
International vs. NLRC 47, to wit:
The requirements of due process are satisfied when the parties are
given the opportunity to submit position papers wherein they are
supposed to attach all the documents that would prove their claim in
case it be decided that no hearing should be conducted or was necessary.
Records will show that the Commission has observed the basic
requirements of due process throughout the whole proceedings of the
case. In fact, a preliminary conference was conducted to give the
parties a chance to raise clarificatory questions and other issues
related to the case. Respondents were allowed to submit Position
Papers, which they did.
DECISION
After thorough evaluation of the evidence in possession of the
Commission and that submitted by the parties, the Commission finds
substantial evidence against respondents Villareal, Carmo, Gerochi,
Tagud, Jr., Sanciego, Jr., Tuazon, and Villanueva, for violation of
Sec. 3 (i) (g) (e) of Republic Act No. 3019. 48 The Commission
recommends the penalty of removal or dismissal for all the respondents.
However, In light of the respondents' resignation and the acceptance by
H.E. President Gloria Macapagal-Arroyo of the respondents' resignation,
this Commission recommends the imposition of the accessory penalties
which are inherent in the imposable penalty pursuant to Sec. 7 of EO
12.
In the case at bar, one of the disabilities inherent in the penalty of
DISMISSAL is perpetual disqualification of reemployment in the
government service, as provided for in Sec. 58 EO 292. 49
Likewise the Commission finds substantial evidence against respondents
Millan, Beriña, Jr., Lacson, Viray, and Enriquez, who are
non-presidential appointees but who are involved with the presidential
appointees in violating Executive Order No. 292, to wit: (9) Committing
Acts Punishable under the Anti-Graft Laws and (27) Conduct Prejudicial
to the Best Interest of the Service. As provided for in Sec. 52 A (9)
(20) of CSC Resolution No. 991936 50, the imposable penalty for
violation of Section s 9 and 27 of EO 292 is Dismissal from the
government service.
The evidence also shows that the irregularities surrounding the
construction of the PDMB started with the Old Board of Directors
composed of Carlos P. Doble, General Manager and Ex-Officio Member;
Frisco F. San Juan, Chairman; and Board Members Carmelita De Leon-Chan,
Daniel T. Dayan, Salvador P. Malbarosa, Leo V. Padilla, and Elpidio G.
Damaso."
After a careful review of the records of the case, this Office affirms
in toto the findings of the Commission and holding the respondents
GUILTY AS CHARGED for VIOLATION OF Sec. 3 (E) (G) (I) OF R.A. 3019
AS AMENDED.
WHEREFORE, premises considered and as recommended by the Presidential
Anti-Graft Commission (PAGC), the penalty of PERPETUAL DISQUALIFICATION
FROM RE-EMPLOYMENT IN THE GOVERNMENT SERVICE IS IMPOSED ON RESPONDENTS
ERNEST F.O. VILLAREAL, BENJAMIN V. CARIÑO, JOEMARI D. GEROCHI,
SULFICIO O. TAGUD, JR., MARTIN S. SANCIEGO, JR., RODOLFO T. TUAZON, and
ANGELITO M. VILLANUEVA.
SO ORDERED.
Done in the City of Manila,
this 13th day of December in the year of Our Lord, year two thousand
two.
Footnotes
1. Records, p. 224.
2. Records, p. 106.
3. Records, p. 120.
4. Records, p. 9.
5. Records, p. 563.
6. Records, p. 301.
7. Records, p. 2050.
8. Records, p. 35.
9. Records, p. 318.
10. Records, p. 32. Abstract of Bids dated 16
September 1999.
11. Records, p. 319.
12. Records, p. 331.
13. Records, p. 333.
14. Records, p. 689.
15. Records, p. 356.
16. Records, p. 436.
17. Records, p. 3035.
18. Records, p. 448.
19. Records, p. 2937.
20. Records, p. 466.
21. Records, p. 467.
22. Records, p. 470.
23. Records, p. 2754.
24. Records, p. 448.
25. Records, p. 523.
26. Records, p. 553.
27. Records, p. 554.
28. Records, p. 226.
29. Records, p. 3272.
30. Item IB2 — Organization of the Prequalification,
Bid and Award Committee (PBAC), IRR of Presidential Decree No. 1594, as
amended: "IB 2 — ORGANIZATION OF THE PBAC-1. Each
office/agency/corporation shall have in its head office or in its
implementing offices a Prequalification, Bid and Award Committee (PBAC)
which shall be responsible for the conduct of prequalification,
bidding, evaluation of bids and recommending award of contracts. . . .2. Government-owned or controlled corporations shall organize their
own PBACs, the members of which shall be appointed by their respective
boards preferably along the same line as other government offices."
31. Republic Act No. 3019, as amended, in particular,
Sec. 3 (i) Directly or indirectly becoming interested, for personal
gain, or having a material interest in any transaction or act requiring
the approval of a board, panel or group of which he is a member and
which exercises discretion in such approval even if he votes against
the same or does not participate in the action of the board, committee,
panel or group. Interest for personal gain shall be presumed against
those public officers responsible for the approval of manifestly
unlawful, inequitable, or irregular transactions or acts by the board,
panel or group to which they belong.
Sec. 3(g) Entering, on behalf
of the government, into any contract or transaction manifestly and
grossly disadvantageous to the same, whether or not the public officer
profited or will profit thereby.
Sec. 3 (e) Causing any undue
injury to any party, including the Government, or giving any private
party any unwarranted benefits, advantage or preference in the
discharge of his official administrative or judicial functions through
manifest partiality, evident bad faith or gross inexcusable negligence.
This provision shall apply to officers and employees of offices or
government corporations charged with the grant of licenses or permits
or other concessions.
32. Revised Penal Code. Article 217 — Malversation of
public funds or property. Presumption of malversation. — Any public
officer who, by reason of the duties in his office, is accountable for
public funds or property, shall appropriate the same, or shall take or
misappropriate or shall consent, or through abandonment or negligence,
shall permit any other person to take such public funds or property,
wholly or partially, or shall otherwise be guilty of the
misappropriation of malversation of such funds or property, . . .
33. Executive Order No. 292 Sec. 46 (b) (3)
Neglect Of Duty; (4) Misconduct; (9) Committing Acts Punishable under
the Anti-Graft Laws; and (27) Conduct Prejudicial to the Best Interest
of the Service.
34. Construction Agreement. Article 8. Change Order
And/Or Additional Work, 8.1. The PEA, may at any time, by written
order, make changes in the schedule and work required under this
Agreement. If any such change/s causes an increase or decrease in the
work or the time required for performing the work, an equitable
adjustment shall be made of the contract price and completion date upon
mutual agreement of the parties reflecting such adjustments by way of
written order subject to the provisions of the IRR of PD 1594, as last
amended and the approval of the President. 8.2. Should the PEA find it
necessary to have any additional work carried out for purposes of the
Project in addition to the contracted work, such additional work will
be carried out immediately by the CONTRACTOR upon receiving written
approval from the President, provided that the amount of the change
order is within the limitations and in accordance with conditions set
forth in PD 1594 and its IRR.
35. Sec. 4. Jurisdiction, Powers
and Functions. — (b) . . . . In the same manner, the Commission shall
have jurisdiction to investigate a non-presidential appointee who may
have acted in conspiracy or may have been involved with a presidential
appointee or ranking officer mentioned in this subsection. . . . .
36. Records, page 39.
37. Sec. 1 (b), PD 1594.
38. Baylen Corporation, Reynaldo M. Reyes, Edna L.
Reyes and Emmanuel I. Astillero, Petitioners, vs. Hon. Court of Appeals
(14th Division) and Jose Rizal College, Respondents. [G.R. No. 76787.
December 14, 1987.] SC Third Division.
39. 4.5 Price Escalation. Adjustment of contract
price due to price escalation shall be effected in accordance with P.D.
1594 and its IRR, upon written agreement of the parties and subject to
availability of funds.
40. Records, p. 29.
41. Records, p. 88.
42. Sec. 28, Corporation Law; Angeles vs. Santos
[1937], 36 Off. Gaz., 921.
43. SC En Banc, Atty. Romeo S. Perez vs. Hon. Judge
Carlos Abiera [Adm. Case No. 223-J. June 11, 1975.]
44. SC En Banc, People Of The Philippines vs. Hon.
Manuel E. Valenzuela And George Lai Man [G.R. Nos. L-63950-60. April
19, 1985.]
45. SC En Banc, Atty. Noe Cangco Zarate and Atty.
Rosendo Chaves vs. Judge Roberto B. Romanillos [A.M. No. RTJ-941140.
March 23, 1995] and Police Superintendent Marcelo E. Navarro, Jr. vs.
Judge Roberto B. Romanillos [A.M. No. RTJ-94-1218]
46. NDC vs. Collector of Customs of Manila [G.R. No.
L-19180. October 31, 1963.]
47. Mark Roche International vs. NLRC, G.R. No.
123825, 31 August 1999.
48. Republic Act No. 3019, as amended, in particular,
Sec. 3 (i) Directly or indirectly becoming interested, for personal
gain, or having a material interest in any transaction or act requiring
the approval of a board, panel or group of which he is a member and
which exercises discretion in such approval even if he votes against
the same or does not participate in the action of the board, committee,
panel or group. Interest for personal gain shall be presumed against
those public officers responsible for the approval of manifestly
unlawful, inequitable, or irregular transactions or acts by the board,
panel or group to which they belong.
Sec. 3(g) Entering, on behalf
of the government, into any contract or transaction manifestly and
grossly disadvantageous to the same, whether or not the public officer
profited or will profit thereby.
Sec. 3 (e) Causing any undue
injury to any party, including the Government, or giving any private
party any unwarranted benefits, advantage or preference in the
discharge of his official administrative or judicial functions through
manifest partiality, evident bad faith or gross inexcusable negligence.
This provision shall apply to officers and employees of offices or
government corporations charged with the grant of licenses or permits
or other concessions.
49. EO 292. Sec. 58. Administrative Disabilities
Inherent in Certain Penalties. (a) The penalty of DISMISSAL shall carry
with it that of cancellation of eligibility, forfeiture of retirement
benefits, and the perpetual disqualification of reemployment in the
government service, unless otherwise provided in the decision.
50. EO 292, Sec. 52 Classification of Offenses. A.
The following are grave offenses with their corresponding penalties:
(9) . . . committing acts punishable under the anti-graft laws. (20)
Conduct prejudicial to the best interest of service.
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