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CONCERNED OFFICIALS OF METROPOLITAN WATERWORKS v. OMBUDSMAN VASQUEZ

FACTS:

The Metropolitan Waterworks and Sewerage System (MWSS) launched the Angat Water Supply Optimization Project (AWSOP) for the construction of the water distribution system. The Philippine Large Diameter Pressure Pipes Manufacturers' Association (PLDPPMA) sent letters seeking clarification on technical specifications. PLDPPMA and other bidders participated in the public bidding. PLDPPMA filed a letter-complaint with the Office of the Ombudsman alleging favoritism towards suppliers of fiberglass pipes. MWSS issued several addenda to the bidding documents incorporating suggestions from PLDPPMA. MWSS Administrator Luis Sison explained the need for additional thickness for steel pipes. The PBAC-CSTE recommended a rebidding or awarding the contracts to the lowest or second lowest bidder. Contract APM-01 was awarded to F.F. Cruz & Co., Inc. PLDPPMA filed a letter-complaint with the Ombudsman prior to the awarding of the contract.

The Philippine Pipe Manufacturers Association (PPMA) filed a letter-complaint with the Office of the Ombudsman alleging favoritism by MWSS towards a particular supplier of pipes. PPMA claimed that bid documents were amended multiple times, resulting in increased costs for steel pipes. They also alleged that bids using fiberglass pipes, which have had failures in the United States, were accepted despite prior agreement not to use them. PPMA claimed that the lowest bidders submitted bids using fiberglass pipes. The Ombudsman ordered the awarding of the contract to be held in abeyance and later directed MWSS to set aside the recommendation to award the contract to the bidder offering fiberglass pipes.

MWSS filed a petition seeking the reversal of the Ombudsman's orders. MWSS argued that the Ombudsman failed to properly consider expert findings that the specifications were fair and erroneously concluded that fiberglass pipes were favored. The Court granted the petition and required the parties to submit memoranda. Titan Construction Corporation filed a motion to intervene but it was denied. The primary issues raised in the case are whether due process was observed in the issuance of the Ombudsman's orders and whether the Ombudsman had jurisdiction to take cognizance of the complaint and issue the orders. The Court found that due process was observed and that the petitioners were given ample opportunity to be heard.

ISSUES:

  1. Whether or not the rudiments of due process have been properly observed in the issuance of the assailed orders by the Ombudsman.

  2. Whether or not the Ombudsman has jurisdiction to take cognizance of PLDPPMA's complaint and to issue its challenged orders.

  3. The issue in this case is whether the Ombudsman has the authority to investigate and inquire into alleged irregularities in the bidding conducted by the Metropolitan Waterworks and Sewerage System (MWSS) leading to the recommendation made by the Prequalification, Bids and Awards Committee (PBAC-CSTE) on contract APM-01.

  4. Whether the Office of the Ombudsman has jurisdiction over the investigation and prosecution of public officers accused of malfeasance, misfeasance, and non-feasance.

  5. Whether the Office of the Ombudsman has the power to investigate and order the preventive suspension of public officers.

  6. Whether the technical specifications prescribed by the MWSS in projects APM 01 and 02 were designed to favor Fiberglass Pipes-Contractors/Bidders.

  7. Whether the MWSS has the technical knowledge and expertise with fiberglass pipes.

  8. Whether the contractors and local manufacturers of fiberglass pipes have the experience and qualification to undertake the APM-01 and APM-02 projects.

  9. Whether the deficiency in the acknowledgment of Addendum No. 6 is a major defect that affects the validity of the bid.

  10. Whether the bid of the Consortium should be rejected as non-complying.

  11. Whether the bid submitted by the second lowest Bidder F.F. CRUZ, & CO., INC. should be considered the lowest complying bid.

RULING:

  1. The court found that petitioners were given ample opportunity to be heard. They were asked to comment on the letter-complaint, and they filed their letter-comment and rejoinder. The court emphasized that the essence of due process is an opportunity to be heard, which can be done through pleadings. In administrative proceedings, technical rules of procedure and evidence are not strictly applied.

  2. The court ruled in favor of the petitioners on the second issue. They argued that the complaint falls under the exceptions provided in Section 20 of the Ombudsman Act of 1989. The Solicitor-General, on the other hand, argued that the Ombudsman has jurisdiction based on constitutional and statutory provisions. However, the court agreed with the petitioners that the Ombudsman should not have taken cognizance of the complaint.

  3. The Supreme Court held that the Ombudsman has the authority to investigate and inquire into the alleged irregularities in the bidding conducted by the MWSS. The Court relied on various provisions of the 1987 Constitution and Republic Act No. 6770, or the Ombudsman Act, which grant the Ombudsman broad investigative powers to look into any act or omission of any public official, employee, office, or agency that appears to be illegal, unjust, improper, or inefficient. The Court emphasized that the creation of the office of the Ombudsman and the grant of broad investigative authority to it aims to insulate it from the long tentacles of officialdom and promote high standards of ethics and efficiency in government service.

  4. Yes, the Office of the Ombudsman has jurisdiction over the investigation and prosecution of public officers accused of malfeasance, misfeasance, and non-feasance. The Ombudsman Act specifically provides that the jurisdiction of the Ombudsman encompasses all kinds of malfeasance, misfeasance, and non-feasance committed by any officer or employee during his or her tenure of office.

  5. Yes, the Office of the Ombudsman has the power to investigate and order the preventive suspension of public officers. The Ombudsman Act grants the Ombudsman the power to conduct preliminary investigations and to preventively suspend public officers facing administrative charges, pending the final resolution of the case.

  6. The Office of the Ombudsman has assumed jurisdiction over and preempted the exercise of discretion by the Board of Trustees of MWSS in issuing its orders. The Ombudsman's interference in the adjudicative responsibility of MWSS is viewed as undue interference rather than a mere directive requiring compliance with the law. The fact-finding report submitted by the Ombudsman's office reveals its predisposition against the use of fiberglass pipes, which is a technical matter. The MWSS Board of Trustees has yet to consider and act on the recommendation of the PBAC-CSTE to award Contract APM-01. Consequently, the Ombudsman's orders are considered to be an undue interference in the exercise of discretion by the MWSS Board of Trustees.

  7. The bid of the consortium should be rejected as non-complying due to the deficiency in the acknowledgment of Addendum No. 6. The lowest complying bid is therefore submitted by the second lowest bidder, F.F. CRUZ, & CO., INC.

PRINCIPLES:

  • The essence of due process is an opportunity to be heard.

  • Technical rules of procedure and evidence are not strictly applied in administrative proceedings.

  • The Ombudsman's jurisdiction is limited by the exceptions provided in the Ombudsman Act of 1989.

  • The Ombudsman has the authority to investigate and inquire into any act or omission of any public official, employee, office, or agency that appears to be illegal, unjust, improper, or inefficient.

  • The creation of the office of the Ombudsman and the grant of broad investigative authority to it aim to insulate it from the influence of other branches of government and promote high standards of ethics and efficiency in government service.

  • The Office of the Ombudsman has the authority to investigate and prosecute public officers accused of malfeasance, misfeasance, and non-feasance.

  • The Office of the Ombudsman has the power to order the preventive suspension of public officers facing administrative charges.

  • The Ombudsman Act provides the framework for the functions and responsibilities of the Office of the Ombudsman.

  • The broad authority of the Ombudsman to investigate acts and omissions does not confer veto or revisory power over an agency or officer's lawful exercise of judgment or discretion.

  • The Ombudsman may not interfere in the adjudicative responsibility of a government agency or officer unless it is necessary to ensure compliance with the law.

  • Technical matters should be left to the expertise of the concerned agency or officer. The Ombudsman's office should not interfere in technical matters unless there is evidence of illegal, unjust, improper, or inefficient conduct.

  • Bids should be evaluated based on the required documents submitted before the opening of bids.

  • The exercise of discretion in evaluating bids is a policy decision that should be discharged by the government agency in the best position to evaluate feasibility.

  • Courts should not interfere in matters that are addressed to the sound discretion of government agencies entrusted with technical knowledge and training.

  • The discretion to accept or reject a bid and award contracts is vested in the government agencies entrusted with that function, unless it is used as a shield to a fraudulent award.