EN BANC
[ A.M. No. 17-12-02-SC, July 16, 2019 ]RE: CONSULTANCY SERVICES OF HELEN P. MACASAET +
RE: CONSULTANCY SERVICES OF HELEN P. MACASAET
R E S O L U T I O N
RE: CONSULTANCY SERVICES OF HELEN P. MACASAET +
RE: CONSULTANCY SERVICES OF HELEN P. MACASAET
R E S O L U T I O N
CARPIO, J.:
The Case
This administrative matter involves the legality of the Contracts of Services between the Court and Ms. Helen P. Macasaet (Ms. Macasaet) for her rendition of consultancy services for the Enterprise Information Systems Plan (EISP) for the years 2010-2014.
The Facts
The EISP is intended to serve as the framework of the Information and Communications Technology (ICT) initiatives of the Judiciary. INDRA Sistemas S.A. (INDRA) was designated to provide Management and Consultancy Services for the development of the Judiciary's ICT Capability as part of the Judicial Reform Support Project financed by the World Bank. In the 23 June 2009 Resolution in A.M. No. 08-11 -09-SC,[1] the Court approved the EISP submitted by INDRA. However, the 2009 Budget did not include a budget for the judiciary-wide technical infrastructure, nationwide connectivity, and network security, which are prerequisites to the nationwide implementation of the EISP and on-going ICT projects like the eCourts.[2] Thus, there was a need to hire the services of an ICT consultant to review the status of the implementation of the EISP and related ICT and computerization projects.
In its 10 September 2013 Memorandum,[3] the Bids and Awards Committee for Consultancy Services (BAC-CS) considered the procurement as highly technical in nature and primarily requires trust and confidence owing to the fact that the EISP is a priority program of the Court. In the same Memorandum, the BAC-CS recommended three (3) consultants who may be considered by the Supreme Court for the procurement of consultancy services. In a Joint Memorandum dated 12 September 2013[4] to then Chief Justice Maria Lourdes P. A. Sereno, Atty. Michael B. Ocampo (Atty. Ocampo) of the Office of the Chief Justice (OCJ) and Mr. Edilberto A. Davis (Mr. Davis), then the Acting Chief of the Management Information Systems Office (MISO), stated that after reviewing and evaluating the three proposed consultants by the BAC-CS, they found Ms. Macasaet to be the most qualified. Their recommendation that Ms. Macasaet be hired for the procurement was approved by the then Chief Justice. The Supreme Court, ostensibly represented by its then Chief Administrative Officer Atty. Eden T. Candelaria (Atty. Candelaria), entered into a six-month Contract of Services with Ms. Macasaet on 1 October 2013.[5] The consultancy fee of Ms. Macasaet under the Contract of Services dated 1 October 2013 was P600,000.00, to be paid in six (6) equal monthly installments.
In a Memorandum to the Chief Justice dated 16 April 2014,[6] Atty. Ocampo stated that there was a need for a technical and policy consultant for the implementation of the Updated EISP Work Plan. Atty. Ocampo proposed to directly negotiate a six-month contract with the consultant, who would be paid a fee of P250,000.00 a month, inclusive of all applicable taxes. Atty. Ocampo based his proposal on Section 53.7 of the Revised Implementing Rules and Regulations (IRR) of Republic Act (RA) No. 9184 (Government Procurement Reform Act),[7] where a procuring entity can forego public bidding and directly negotiate a six-month contract with a consultant, who will perform work that is highly technical, proprietary, primarily confidential or policy determining. Atty. Ocampo stated that the proposed consultancy is clearly highly technical and policy determining, which would be subject to the confirmation of the BAC-CS.[8] Again, in its 15 May 2014 Memorandum,[9] the BAC-CS reiterated that the subject procurement can proceed without the Committee's involvement as it was "highly technical in nature and primarily requires trust and confidence, owing to the fact that it is a priority program of the Supreme Court." The BAC-CS stated, in the same Memorandum, that in addition to the consultant previously engaged, the other consultants named in their previous memorandum should also be considered for the procurement of the consultancy services.[10] Acting on the Memorandum of the BAC-CS, Atty. Ocampo and Mr. Davis determined, in their Joint Memorandum dated 20 May 2014,[11] that Ms. Macasaet was the most qualified among the three proposed consultants. This Joint Memorandum was approved by then Chief Justice Sereno.
However, the records are bereft of any explanation as to how the three (3) consultants were chosen by the BAC-CS for the purpose of recommending to the Supreme Court the procurement of consultancy services. As aptly pointed out by the report of the Office of the Chief Attorney (OCAt) dated 6 November 2017 (OCAt Report):
There are no documents from the BAC-CS that would show the following: (i) posting of opportunity in PhilGEPS website, SC website and SC bulletin boards or letter/s addressed to prospective individual consultant/s to submit his/her/their resume with respective financial proposal/s; (ii) that any or all three (3) prospective individual consultants named by the BAC-CS submitted his/her/their resume with respective financial proposal/s to the BAC-CS; (iii) the conduct of the negotiation; [iv] resolution recommending the award; [v] notice of award; [vi] proof that the notice of award was posted in the PhilGEPS website, SC website and in the SC bulletin boards; and [vii] notice to proceed.
If at all, the BAC-CS terminated its role after having "resolved to consider the subject procurement as highly technical in nature and primarily requires trust and confidence owing to the fact that it is the priority program of the Supreme Court." After holding "that there is no need for said procurement to pass through the regular process of engaging consultants being conducted by it", the procurement got off the hands of the BAC-CS through a disposition "that the Supreme Court, through the Office of the Chief Justice, can and should exercise its discretion to act on the subject procurement so as not to delay the same." The BAC-CS, instead of proceeding as prescribed, merely submitted three (3) names of "consultants which can be considered by the Supreme Court for the subject procurement." Even the process through which the BAC-CS had this list of three (3) names, which includes Ms. Macasaet, is not on record.[12] (Emphasis supplied)
On 23 May 2014, the Court, ostensibly represented by Atty. Candelaria as Chief Administrative Officer, entered into a second six-month Contract of Services with Ms. Macasaet.[13]
In the meantime, the Court issued an En Banc Resolution dated 16 September 2014[14] in A.M. No. 14-09-06-SC, approving the updated EISP work and its budget (2014-2019), which were supposedly the output of the 1 October 2013 Contract of Services with Ms. Macasaet.
In the Joint Memorandum dated 1 December 2014,[15] Mr. Davis and Atty. Ocampo stated that there was a continuing need for the services of a consultant to provide technical advice and assistance in the first year implementation of the plan and in developing ICT policies to support it. Thus, they recommended the extension of Ms. Macasaet's contract for another six (6) months.[16] Then Chief Justice Sereno approved the Joint Memorandum, and a Contract of Services was entered into on 10 December 2014[17] between Ms. Macasaet and the Court, where Atty. Candelaria signed for and in behalf of the Court. Thereafter, the Contract of Services was extended five more times, for a total of six extensions of six months for every extension. In total, the Court entered into a Contract of Services with Ms. Macasaet for a total of eight times.
The Issue
The issue at hand is the legality of the eight Contracts of Services, entered into by the Court by negotiated procurement, ostensibly represented by Atty. Candelaria, with Ms. Macasaet. This issue was initially part of A.M. No. 17-08-05-SC entitled "Re: Letter-Request of Atty. Lorenzo G. Gadon for Certified True Copies of Certain Documents in Connection with the Filing of an Impeachment Complaint."
In a Resolution dated 19 September 2017,[18] the question of the legality of the Contracts of Services was referred to the OCAt and former Chief Justice Sereno was given the opportunity to comment on Atty. Gadon's request for documents in relation to the Contracts of Services with Ms. Macasaet. In compliance with the Court's Resolution dated 19 September 2017,[19] the OCAt submitted the OCAt Report.[20] Acting on the OCAt Report, then Chief Justice Sereno submitted her Preliminary Comment on 20 November 2017 to the other members of the Court En Banc.[21] The Court, in its Resolution dated 21 November 2017,[22] required the BAC-CS and Ms. Macasaet to comment. The BAC-CS and Ms. Macasaet filed their respective Comments on 25 January 2018[23] and 22 January 2018.[24] The Court noted the Comment of Ms. Macasaet in its Resolution dated 23 January 2018.[25] In its Resolution dated 30 January 2018,[26] the Court noted the Comment of the BAC-CS. In the same Resolution, Attys. Candelaria and Ocampo were required by the Court to comment on the OCAt Report, which comment they filed on 20 February 2018 and 25 April 2018, respectively.
The Ruling of the Court
Based on the facts and applicable laws and regulations, all the Contracts of Services should be declared void ab initio.
SIGNATORY HAD NO WRITTEN AUTHORITY
The signatory in all the eight (8) Contracts of Services with Ms. Macasaet was Atty. Candelaria in her capacity as Chief Administrative Officer and Deputy Clerk of Court.[27] However, the records fail to show that she was authorized in writing by the Supreme Court En Banc to act as signatory of the Court in entering into these Contracts of Services with Ms. Macasaet. In fact, in her Comment dated 20 February 2018,[28] Atty. Candelaria herself admitted that she was not given any express full written authority by then Chief Justice Sereno to sign the Contracts of Services with Ms. Macasaet. In her Comment, Atty. Candelaria states:
In these particular Contracts of Services with Ms. Macasaet, since the Chief Justice as the Head of the Procuring Entity has already approved the award of the contract to the consultant and that the contract was already prepared by the Office of the Chief Justice (OCJ) indicating therein the Deputy Clerk of Court and Chief Administrative Officer as the Court's representative, it was understood as an implied authority and designation for the undersigned to act as signatory for and in behalf of the Court.[29] (Boldfacing and italicization supplied)
Atty. Candelaria stated that since the then Chief Justice had already approved the contract with Ms. Macasaet and the Office of the Chief Justice had already prepared the contract, she took it as an "implied authority" to sign on behalf of the Court.[30] Even assuming for the sake of argument that there was an "implied authority," as in fact nothing of such authority can be implied from the contract, an "implied authority" is not the "full authority" in writing required under Sections 4 and 5 of Executive Order (EO) No. 423.
EO No. 423 dated 20 April 2005[31] prescribed the rules and procedures on the review and approval of all government contracts to conform with the Government Procurement Reform Act.[32] EO No. 423 was issued in accordance with Section 75 of the Government Procurement Reform Act, which provides:
SEC. 75. Implementing Rules and Regulations and Standard Forms. — Within sixty (60) days from the promulgation of this Act, the necessary rules and regulations for the proper implementation of its provisions shall be formulated by the GPPB, jointly with the members of the Oversight Committee created under Section 74 hereof. The said rules and regulations shall be approved by the President of the Philippines. For a period not later than thirty (30) days upon the approval of the implementing rules and regulations, the standard forms for Procurement shall be formulated and approved.
Specifically, Sections 4 and 5 of EO No. 423 provide:
Section 4. Approval of Government Contract Entered Into Through Alternative Methods of Procurement. -
x x x x
b. For Government Contracts Involving An Amount Below Five Hundred Million Pesos (P500 Million). — Except for Government contracts required by law to be acted upon and/or approved by the President, the Heads of the Procuring Entities shall likewise have full authority to give final approval and/or to enter into Government contracts of their respective agencies, entered into through alternative methods of procurement allowed by law. Provided, that the Department Secretary certifies under oath that the contract has been entered into in faithful compliance with all applicable laws and regulations.
The Heads of the Procuring Entities may delegate in writing this full authority to give final approval and/or to enter into Government contracts involving an amount below Five Hundred Million Pesos (P500 Million) entered into through alternative methods of procurement allowed by law, as circumstances may warrant (i.e., decentralization of procurement in a Government Agency), subject to existing laws and such limitations imposed by the Head of the Procuring Entity concerned (Section 5(j), Republic Act No. 9184).
Section 5. Authority to Bind the Government. — All Government contracts shall require the approval and signature of the respective Heads of the Procuring Entities or their respective duly authorized officials, as the case may be, as required by law, applicable rules and regulations, and by this Executive Order, before said Government contracts shall be considered approved in accordance with law and binding on the government, except as may be otherwise provided in Republic Act No. 9184. For Government contracts required by law to be acted upon and/or approved by the President, Section 6 of this Executive Order governs the process by which such Government contracts shall be considered entered into with authority and binding on the Government.
The Heads of the Procuring Entities or their respective duly authorized officials, as the case may be, shall be responsible and accountable for ensuring that all Government contracts they approve and/or enter into are in accordance with existing laws, rules and regulations and are consistent with the spending and development priorities of Government.
All Government contracts entered into in violation of the provisions of law, rules and regulations, and of this Executive Order shall be considered contracts entered into without authority and are thus invalid and not binding on the Government. (Boldfacing and italicization supplied)
From the foregoing, it is clear that it is the Head of the Procuring Entity who is authorized to enter into binding government contracts, when such contracts are entered into through alternative methods of procurement such as directly negotiated contracts like the Contracts of Services with Ms. Macasaet. This authority may be delegated, but this must be done only "in writing" with "full authority" to give "final approval and/or to enter into" the contract delegated to such duly authorized official. Since the alternative method of procurement is an exception to the general rule that procurement shall be through public bidding, the written "full authority" cannot be general, but must refer specifically to the particular contract being entered into through the alternative method of procurement.
The Head of the Procuring Entity is defined by the IRR of the Government Procurement Reform Act as follows:
Section 5. Definition of Terms
x x x x
t)
In this case, the Procuring Entity is the Supreme Court. The Head of the Supreme Court is the Supreme Court En Banc. Thus, any government contract below P500 Million entered into by the Supreme Court through alternative methods of procurement should be approved by the Supreme Court En Banc as Head of the Procuring Entity.
Article VIII, Section 6 of the Constitution provides that the Supreme Court "shall have administrative supervision over all courts and the personnel thereof." Thus, the administrative powers of the Court - which include entering into government contracts in the exercise of these powers of administration - are vested in the members of the Supreme Court sitting en banc, as a collegial body. To repeat, any government contract entered into on and in behalf of the Supreme Court must be authorized by the Supreme Court En Banc.
The powers of the Supreme Court - whether judicial or administrative supervision - are exercised by the members of the Court sitting en banc or by the members sitting in their respective Divisions. Rule 2, Section 1 of the Internal Rules of the Supreme Court[33] provides:
Section 1. Exercise of judicial and administrative functions. — The Court exercises its judicial functions and its powers of administrative supervision over all courts and their personnel through the Court en banc or its Divisions. It administers its activities under the leadership of the Chief Justice, who may, for this purpose, constitute supervisory or special committees headed by individual Members of the Court or working committees of court officials and personnel.[34] (Emphasis supplied)
The Supreme Court is first and foremost a collegial body, with one vote for each Justice, including the Chief Justice, in all judicial or administrative matters for decision. The Supreme Court exercises its functions through the Court En Banc or its Divisions. As the Court is a collegial body, absent a proper authorization by the Court En Banc, even the Chief Justice who is primus inter pares cannot act on his or her own. This Court has previously emphasized the collegial nature of the Supreme Court, to wit:
To reiterate, the Court, whether sitting En Banc or in Division, acts as a collegial body. By virtue of the collegiality, the Chief Justice alone cannot promulgate or issue any decisions or orders. In Complaint of Mr. Aurelio Indencia Arrienda Against SC Justices Puno, Kapunan, Pardo, Ynares-Santiago, the Court has elucidated on the collegial nature of the Court in relation to the role of the Chief Justice, viz.:
The complainant's vituperation against the Chief Justice on account of what he perceived was the latter's refusal "to take a direct positive and favorable action" on his letters of appeal overstepped the limits of proper conduct. It betrayed his lack of understanding of a fundamental principle in our system of laws. Although the Chief Justice is primus inter pares, he cannot legally decide a case on his own because of the Court's nature as a collegial body. Neither can the Chief Justice, by himself, overturn the decision of the Court, whether of a division or the en banc.
There is only one Supreme Court from whose decisions all other courts are required to take their bearings. While most of the Court's work is performed by its three divisions, the Court remains one court - single, unitary, complete and supreme. Flowing from this is the fact that, while individual justices may dissent or only partially concur, when the Court states what the law is, it speaks with only one voice. Any doctrine or principle of law laid down by the court may be modified or reversed only by the Court en banc.[35]
While the powers are vested in the Supreme Court as a collegial body, such powers may be delegated by the Supreme Court En Banc. In A.M. No. 99-12-08-SC (Revised),[36] the Supreme Court En Banc delegated some of its administrative functions to the Divisions of the Court, the Chief Justice, and the Chairpersons of the Divisions. The delegation of these administrative powers over all courts and its personnel was done through a resolution issued by the Supreme Court En Banc because the power of administrative supervision is vested in the Supreme Court En Banc as a collegial body.
In particular, A.M. No. 99-12-08-SC (Revised) authorized the Divisions, the Chief Justice, and the Chairpersons of the Divisions, to act on certain administrative matters to relieve the Supreme Court En Banc from additional burden brought about by the considerable number of administrative matters or judicial cases. Specifically, the Chief Justice was authorized to act or resolve the following matters:
III. To REFER to the Chief Justice for appropriate action or resolution, for and in behalf of the Court En Banc, administrative matters relating to, or in connection with,
Similarly, in A.M. No. 10-1-10-SC,[37] the Supreme Court En Banc authorized the Clerk of Court En Banc, the Court Administrator, the Chief Justice, the Chairpersons of the Divisions to approve certain procurement requests, subject to certain threshold amounts. A.M. No. 10-1-10-SC also stated which procurement requests must be approved by the Supreme Court En Banc. A.M. No. 10-1-10-SC issued by the Supreme Court En Banc reads in part:
The Court [r]esolved, upon the recommendation of the Procurement Planning Committee (PPC), to
x x x x
(d) AUTHORIZE the PPC to indorse to the appropriate Property Division the procurement of items or projects, subject to approval as follows:
Thus, while the Chief Justice may approve procurement requests if it meets the threshold amount approved by the Supreme Court En Banc through its resolution, this authority to approve is still delegated by the Supreme Court En Banc and is not inherent in the position of Chief Justice. To repeat, even the authority to approve procurement requests is delegated by the Supreme Court En Banc. Without such delegated authority from the Supreme Court En Banc, the Chief Justice simply cannot approve any procurement requests on behalf of the Supreme Court. It is with more reason that the Chief Justice cannot approve procurement contracts, as distinguished from procurement requests, without the delegated authority from the Supreme Court En Banc.
Based on the foregoing, it is clear that the Chief Justice is not authorized by the Court En Banc to independently act on behalf of the Supreme Court to enter into government contracts that are highly technical, proprietary, primarily confidential or policy determining such as the subject Contracts of Services. The power to enter into such contracts was clearly not delegated by the Supreme Court En Banc to the Chief Justice. Thus, the Contracts of Services should have been authorized by the Supreme Court En Banc which has administrative power over all courts and personnel thereof, and not merely by the then Chief Justice. A.M. No. 99-12-08-SC (Revised) expressly provides that those administrative matters not referred in the said resolution shall be acted upon by the Court En Banc, to wit:
All other administrative matters or cases which are either expressly declared above to be cognizable by the Court En Banc or are not covered by the foregoing referrals shall be acted upon or resolved by the Court En Banc. The Chief Justice may likewise refer to the Court En Banc for its action or resolution any other matter which, in his opinion, should be resolved by it. (Emphasis supplied)
Moreover, it is important to note that the full written authority to approve or sign to be given to the authorized official by the Head of the Procuring Entity should refer to a specific government contract to be entered into by the Procuring Entity through an alternative method of procurement.
A general authority to sign contracts on behalf of a government entity is insufficient for the official to sign a government contract entered into through any of the alternative methods of procurement. A government contract procured through any of the alternative methods of procurement is an exceptional method of entering into government contracts because the policy of the government is to conduct public bidding in all procurements in order to extend equal opportunity to all eligible and qualified private parties to participate in government procurement.[38] Thus, the alternative methods of procurement such as negotiated contracts are an exception to the general practice of procurement of government contracts which generally involves public bidding. As such, the law explicitly requires the Head of the Procuring Entity to be responsible for such government contract. Section 5 of EO No. 423 provides:
Section 5. Authority to Bind the Government. — x x x x
The Heads of the Procuring Entities or their respective duly authorized officials, as the case may be, shall be responsible and accountable for ensuring that all Government contracts they approve and/or enter into are in accordance with existing laws, rules and regulations and are consistent with the spending and development priorities of Government.
x x x x (Emphasis supplied)
Thus, the law requires that it should be the Head of the Procuring Entity who approves or signs the government contract or in the alternative, an official who is duly authorized by the Head of the Procuring Entity through a written delegation of full authority to enter into the government contract. The requirement of a written authority is to ensure that the Head of the Procuring Entity or his or her respective duly authorized representative is responsible and accountable for the government contracts entered into on behalf of the Procuring Entity, and prevent unauthorized officials from signing and approving contracts. In this case, however, the written authority delegated to Atty. Candelaria, the alleged authorized official, is non-existent.
Atty. Candelaria alleges in her Comment that her authority to enter into the Contracts of Services with Ms. Macasaet on behalf of this Court was the Joint Memorandum recommending Ms. Macasaet to be hired as ICT consultant and that steps be undertaken to execute a contract for consultancy services between the Court and Ms. Macasaet.[39] This is not the written "full authority" required by EO No. 423.
As expressly stated in Section 4 of EO No. 423, "full authority" must be delegated in writing to the authorized official by the Head of the Procuring Entity. Being a special authority availed as an exception to the general rule on public bidding, the written "full authority" must refer specifically to the particular contract that is being entered into through the alternative method of procurement. The Joint Memorandum dated 20 May 2014 prepared for then Chief Justice Sereno and signed by Atty. Ocampo and Mr. Davis cannot be considered as a delegation by the Supreme Court En Banc of full authority to Atty. Candelaria to act and sign on behalf of the Supreme Court. The Joint Memorandum was not even addressed to the Supreme Court En Banc - it was prepared only for then Chief Justice Sereno. Thus, the other members of the Supreme Court were not informed of the subject Contracts of Services. The Supreme Court En Banc was notified of the existence of the Contracts of Services only upon the filing of the letter-request of Atty. Gadon. Since the other members of the Supreme Court En Banc were clearly unaware of the Contracts of Services with Ms. Macasaet, it is obvious that the power to enter into such contracts was not delegated to anyone. The Supreme Court En Banc could not have delegated the power to enter into such contracts which it did not know even existed.
While then Chief Justice Sereno signed the Joint Memorandum dated 20 May 2014 to signify her approval to the Joint Memorandum prepared by Atty. Ocampo and Mr. Davis, it does not vest any authority on Atty. Candelaria to sign the Contracts of Services with Ms. Macasaet. To repeat, then Chief Justice Sereno had no authority to delegate the power to enter into the Contracts of Services with Ms. Macasaet. Such power is vested only with the Supreme Court En Banc and not with the Chief Justice. Likewise, under Section 4 of EO No. 423, only the Head of the Procuring Entity may delegate in writing the full authority to give approval and/or enter into government contracts. Thus, the Supreme Court En Banc, as Head of the Procuring Entity, exercises the power to delegate the signing of government contracts entered into through alternative methods of procurement as allowed by law. The delegated official could have been the Chief Justice, another member or members of the Supreme Court En Banc, or any other official of the Court. However, in this case, it is clear that the Supreme Court En Banc did not delegate such power to anyone because it was not informed of the Contracts of Services with Ms. Macasaet.
Moreover, even assuming that the Supreme Court En Banc had delegated to the then Chief Justice the power to enter into the Contracts of Services, then Chief Justice Sereno could no longer re-delegate such power to another official. It is well-settled that what has been delegated can no longer be further delegated or re-delegated by the original delegate to another - Delegata potestas non potest delegari.[40] The power of administrative supervision over all courts and its personnel is vested by the Constitution in the Supreme Court En Banc. It is the Supreme Court En Banc which exercises administrative power over the courts and personnel, which includes the authority to enter into government contracts through alternative methods of procurement allowed by law. While the Supreme Court En Banc may delegate its administrative powers to another such as its Divisions, the Chairpersons of the Divisions or the Chief Justice - as it has done in A.M. No. 99-12-08-SC (Revised) - the delegates may no longer re-delegate the authority or power delegated to them. Therefore, even assuming that the Supreme Court En Banc delegated to the then Chief Justice the power to enter into the government contracts with Ms. Macasaet, then Chief Justice Sereno could no longer re-delegate such authority.
Even assuming for the sake of argument, although incorrectly, that then Chief Justice Sereno had the authority to delegate the power to enter into the Contracts of Services, Atty. Candelaria still failed to show any written authority from the then Chief Justice authorizing her to enter into the said Contracts of Services. Atty. Candelaria attached several Memoranda where authority was given to her to sign for and in behalf of previous Chief Justices. This is not the full written delegation of authority required by Section 4 of EO No. 423. Evidently, any written authority, if ever such authority could be delegated by a Chief Justice, should have been given by then Chief Justice Sereno, who was the Chief Justice at the time the contracts were entered into with Ms. Macasaet, and not by any other previous Chief Justices. Previous Chief Justices had no authority to sign, much less delegate the authority to sign, government contracts after their term of office.
More importantly, the authority given to Atty. Candelaria by the previous Chief Justices, which was also the same authority given to her by then Chief Justice Sereno, referred only to the authority to sign for and in behalf of their communications with other government agencies and the transmittal of Court En Banc Resolutions to concerned agencies, as well as to "internal personnel matters."[41] The Memorandum of Atty. Candelaria dated 29 August 2012[42] approved by then Chief Justice Sereno specifically enumerated the documents for which Atty. Candelaria asked authority to sign on Chief Justice Sereno's behalf: "Notice of Salary Adjustment; Notice of Step Increment; Notice of Entitlement/Adjustment of Longevity Pay; Notice of Acceptance of Resignation; Permission to Transfer; and the like, except those pertaining to the Honorable Justices of the Supreme Court."[43] This is not the full written authority to be delegated by the Head of the Procuring Entity as expressly required by law for the approval of government contracts entered into through alternative methods of procurement such as the directly negotiated contracts in this case.
Justice Caguioa, in his Dissenting Opinion, maintains that Atty. Candelaria was actually given the authority by then Chief Justice Sereno to sign the Contracts of Services with Ms. Macasaet, and that the basis of this authority is the action slip issued by Atty. Ocampo which states:
"I am pleased to furnish your office a copy of the Contract of Services between the Supreme Court and Ms. Helen Macasaet.
Also attached for your reference is the authorization from the Chief Justice to execute the said Contract of Services."[44] (Emphasis supplied)
Contrary to the argument of Justice Caguioa that the action slip is "proof that she was in fact given express written authority by the former Chief Justice to sign and execute the Contracts of Services on the latter's behalf,"[45] the Court finds that the action slip issued by Atty. Ocampo cannot be considered at all as "proof that full written authority was issued by the Head of the Procuring Entity, as required by law.
First, the action slip merely stated that the authority from then Chief Justice Sereno was attached to it, without expressly stating what the attachment was.
Second, the action slip was not even addressed to Atty. Candelaria, the actual signatory to the Contract of Services with Ms. Macasaet, but rather, it was addressed to Deputy Court Administrator Raul B. Villanueva. The name of Atty. Candelaria, or her position as Chief Administrative Officer and Deputy Clerk of Court, is not even mentioned in the action slip.
Third, there were two (2) attachments to the action slip of Atty. Ocampo: (1) the Contract of Services dated 23 May 2014; and (2) the Joint Memorandum dated 20 May 2014 prepared by Atty. Ocampo and Mr. Davis. The Contract of Services dated 23 May 2014 signed by Atty. Candelaria and Ms. Macasaet does not contain any written authorization from then Chief Justice Sereno to Atty. Candelaria. On the other hand, the Joint Memorandum merely contained the recommendation by Atty. Ocampo and Mr. Davis to then Chief Justice Sereno that Ms. Macasaet is the most qualified among the proposed consultants. This recommendation is entirely different from a recommendation to authorize Atty. Candelaria to sign the Contract of Services, a recommendation not found in the Joint Memorandum.
There is no mention or statement whatsoever in the Joint Memorandum delegating to Atty. Candelaria or to the Chief Administrative Officer and Deputy Clerk of Court the full authority to enter into the Contract of Services with Ms. Macasaet. The Joint Memorandum does not even mention the name of Atty. Candelaria or her position as Chief Administrative Officer and Deputy Clerk of Court. The Joint Memorandum merely states that "[i]f the Honorable Chief Justice approves the recommendation of the undersigned, appropriate steps shall be undertaken to execute a contract of consultancy services between the Supreme Court and Ms. Macasaet."[46] One essential appropriate step is an express full written authority given by the Supreme Court En Banc, or by the then Chief Justice, assuming arguendo, although incorrectly, she had the power, authorizing Atty. Candelaria as the signatory to the Contract of Services, which essential step was never taken.
To repeat, there is no mention whatsoever in the Joint Memorandum that Atty. Candelaria or the Chief Administrative Officer and Deputy Clerk of Court was being designated as the authorized signatory on behalf of the Supreme Court En Banc or on behalf of the Chief Justice for the Contract of Services with Ms. Macasaet. For ready reference, attached are copies of (1) the action slip of Atty. Ocampo (Annex "A"); the (2) Joint Memorandum dated 20 May 2014 of Atty. Ocampo and Mr. Davis (Annex "B"); and (3) the Contract of Services with Ms. Macasaet (Annex "C").
The approval of then Chief Justice Sereno of this Joint Memorandum was merely for the execution of the Contract of Services to proceed. This is not the full written authority required by law delegating to a specific official the power to sign and approve a government contract entered into under an alternative method of procurement as this written authority should specify not only the particular contract to be signed but more importantly the name of the authorized signatory to whom the delegation of power is being entrusted. Thus, the statement of Atty. Ocampo in the action slip that there was "authorization from the Chief Justice to execute the said Contract of Services" is misleading, or even false because the attached Joint Memorandum refers only to the approval by then Chief Justice Sereno of the recommendation of Atty. Ocampo and Mr. Davis that Ms. Macasaet is the most qualified consultant, and there is no delegation whatsoever of any authority to Atty. Candelaria or to any other official to execute and sign the Contract of Services on behalf of the Court En Banc or even on behalf of then Chief Justice Sereno.
To reiterate, there is no mention whatsoever in the Joint Memorandum that Atty. Candelaria or the Chief Administrative Officer and Deputy Clerk of Court is authorized to sign the Contract of Services. The name of Atty. Candelaria or the Chief Administrative Officer and Deputy Clerk of Court is not even mentioned in the Joint Memorandum. In fact, there is no one named in the Joint Memorandum as the authorized signatory to sign the Contract of Services.
Indisputably, all of the Contracts of Services with Ms. Macasaet were signed by Atty. Candelaria without the written "full authority" of the Supreme Court En Banc or even the then Chief Justice. There was a blatant violation of Section 4 of EO No. 423. Thus, these Contracts of Services must be declared "invalid and not binding on the Government," as expressly mandated in Section 5 of EO No. 423.
QUALIFICATIONS OF MS. MACASAET
Aside from the lack of authority of the signatory to the said Contracts of Services in violation of Sections 4 and 5 of EO No. 423, the procurement of the services of Ms. Macasaet was also in violation of the provisions of the Government Procurement Reform Act.
The Contracts of Services between the Court and Ms. Macasaet did not pass through the regular process of engaging consultants because it was considered to be "highly technical in nature and primarily requires trust and confidence owing to the fact that it is a priority program of the Supreme Court."[47] The BAC-CS considered the procurement to be highly technical in nature, citing Section 53.7 of the IRR of the Government Procurement Reform Act which provides:
53.7. Highly Technical Consultants. In the case of individual consultants hired to do work that is (i) highly technical or proprietary; or (ii) primarily confidential or policy determining, where trust and confidence are the primary consideration for the hiring of the consultant: Provided, however, That the term of the individual consultants shall, at the most, be on a six month basis renewable at the option of the appointing [Head of the Procuring Entity], but in no case shall exceed the term of the latter. (Emphasis supplied)
This Court finds that Ms. Macasaet was not qualified to be considered a Highly Technical Consultant in relation to the implementation of the Updated EISP Project. Moreover, there was no actual need to hire a consultant for the mere overview of the implementation of the Updated EISP Project as the MISO Head is already sufficiently qualified to implement such project.
The Updated EISP Project includes, among others, the upgrading of the Judiciary Data Center, cabling and site preparation and connectivity and network security. These activities require highly specialized technical ICT expertise, not general business management expertise. More specifically, based on the Scope of Work of the 23 May 2014 Contract of Services as quoted below, the Updated EISP Project includes the upgrade of existing judiciary Data Center and the design and construction of the Judiciary Data Center Disaster Site. Thus, the Updated EISP Project is not merely a general business project, but primarily a highly technical ICT infrastructure project, which Ms. Macasaet is not specially qualified to review or oversee.
The Scope of Work of the Contract of Services will show that the work did not require the additional services of a general business management consultant. More specifically, Article I, Section 1.1 of the Contract of Services dated 23 May 2014 provides:
ARTICLE 1 - SCOPE OF WORK AND PERIOD OF THE ENGAGEMENT
1.1 SCOPE OF WORK. The CONSULTANT shall perform the following:
Ms. Macasaet has no academic degree in any field related to Information and Communications Technology. According to Ms. Macasaet, she received her undergraduate degree in BS Mathematics for Teachers from the Philippine Normal College.[49] She also states that aside from her Master's degree in Business Administration from the Ateneo de Manila University Graduate School of Business, she has completed the academic requirements for a Doctoral Degree (PhD) in Education at the University of the Philippines.[50] However, she does not hold any educational degree directly related to ICT. Evidently, Ms. Macasaet's academic background shows that her studies focused mainly on mathematics and education - not on ICT or even the broader area of computer sciences or information systems. Ms. Macasaet's ICT training comes from several short-term non-degree courses, which can hardly be the basis to consider her as an expert in this field. Ms. Macasaet's Master's degree in Business Administration and certification in Customer Relationship Management, which were the factors considered by Atty. Ocampo and Mr. Davis to recommend Ms. Macasaet as the most qualified, are not qualifications that directly relate to ICT to justify the engagement of her consultancy services in relation to the highly technical Updated EISP Project.
While the Contract of Services evidently requires the procurement of the services of a highly technical consultant, the Terms of Reference for the said contract requires the consultant to have an advanced degree in business management OR any ICT-related degree, and be a certified customer relationship management system (CRM) specialist and manager.[51] Justice Caguioa argues in his Dissenting Opinion that since Ms. Macasaet has an advanced degree in business management and has a certification in Customer Relationship Management in accordance with the Terms of Reference, she is a qualified consultant for the Updated EISP Project.[52] We find otherwise.
A highly technical project requires a highly technical consultant. To require in the alternative that a consultant may only have a business management degree and a certification as a Customer Relationship Management specialist truly defies reason or logic. Simply put, this is a tell-tale sign that the Terms of Reference for the consultancy was expressly tailor-made for Ms. Macasaet who is merely a general business consultant and who does not possess the qualifications to handle a highly technical ICT project. One cannot rely on a business management degree holder for the implementation of a highly technical ICT project. This is simply absurd. For the implementation of a highly technical project such as the EISP, a consultant with highly technical qualifications is required. For the Terms of Reference to substitute an advanced degree in ICT with an advanced degree in business management is a highly irregular and inconsistent requirement. This Court cannot give its imprimatur to such a contract.
Ms. Macasaet's experience in developing and participating in ICT systems in both private and public sectors is not the highly technical qualification required for the implementation of the Updated EISP Project. Ms. Macasaet's experience is on the business and management side of ICT systems. As the Updated EISP Project was already approved by the Supreme Court En Banc, the general ICT services required under such EISP could have been implemented by the Supreme Court's MISO. The Chief of MISO is also already qualified to oversee the general implementation of such project. There was no need to engage the services of a general business consultant for the mere implementation of the Updated EISP Project.
The qualifications of the Chief of MISO, as provided in A.M. No. 06-3-07-SC,[53] are as follows:
MISO Chief of Office
Education
or
Bachelor's Degree in computer science or information technology and post-graduate degree, preferably in computer science or information technology (Emphasis supplied)
Experience
Training
32 hours of relevant experience in management and supervision Eligibility
RA 1080 (Bar), CSC Professional or IT eligibility
Thus, it is evident that the Chief of MISO, who has 10 years or more of relevant supervisory work experience and at least 5 years of relevant experience in the field of computer science or ICT, is already sufficiently qualified to oversee the implementation of the Updated EISP Project.
Any highly technical consultancy agreement, if needed, should have been for specific and highly specialized ICT consultancy services, such as for security of information systems, which the MISO may identify as an area where it needs special assistance during the implementation of the Updated EISP Project. General business and management consultancy services, such as those provided by Ms. Macasaet, cannot be considered highly technical consultancy services for the purpose of reviewing and implementing the Updated EISP Project and related ICT and computerization projects.
As the services that Ms. Macasaet provided, based on her qualifications and experience, were mere general business and management services, these services do not fall under the requirement of being a highly technical ICT consultant which would justify the procurement through direct negotiation. Thus, the procurement of her services and the method through which such services were procured - direct negotiation - were unnecessary and unwarranted.
AMOUNT OF COMPENSATION WAS NOT JUSTIFIED
The compensation for Ms. Macasaet for the first contract was P600,000.00 for six (6) months, or P100,000.00 per month.[54] From the Second Contract of Services until the Eighth Contract of Services, she received a monthly compensation of P250,000.00.[55] This Court finds these amounts to be unreasonable and without any basis in law.
When the Contracts of Services were entered into with Ms. Macasaet, DBM Circular Letter No. 2000-11 dated 1 June 2000[56] was applicable in determining the ceiling or maximum amount of compensation that may be paid to individual professional consultants such as Ms. Macasaet.[57] DBM Circular Letter No. 2000-11 provides in part:
- Pending the issuance of the guidelines governing the compensation of professional consultancy services, these individual professional consultants shall be paid remuneration of not more than 120% of the minimum basic salary of his equivalent position in the agency based on the allocation list duly approved by the Department of Budget and Management pursuant to National Budget Circular No. 433 dated March 1, 1994. (Emphasis supplied)
Thus, DBM Circular Letter No. 2000-11 sets the maximum amount that may be paid to individual consultants as compensation - not more than 120% of the minimum basic salary of the equivalent position in the agency.
In this case, to determine the maximum amount of compensation that may be paid to Ms. Macasaet under the Contracts of Services, the equivalent position to the consultant must be determined. As correctly found by the OCAt Report, based on the various positions in the Supreme Court, the equivalent position of Ms. Macasaet as a technical consultant to implement the Updated EISP Project is the post of Chief of the MISO.[58] The Chief of the MISO is a highly technical or policy determining position, and one that requires knowledge and expertise in computer science or information and communications technology. A.M. No. 05-9-29-SC[59] provides in part:
IV. Classify all third level positions in the Supreme Court, including those in the OCA, PHILJA, JBC, and MCLEO, below those of Chief Justice, Associate Justices, and Regular Members of the JBC, with Salary Grade 26 and above as highly technical or policy determining, to wit:
x x x x
15. Deputy Clerk of Court and Chief, Management Information System Office (MISO) (Boldfacing and underscoring supplied)
Clearly, the position of Chief of the MISO in the Supreme Court is equivalent to the position of the consultant under the Contracts of Services. Thus, the remuneration of Ms. Macasaet should not be more than 120% of the basic minimum monthly salary of the Chief of MISO. At the time the first Contract of Services was entered into with Ms. Macasaet, the basic monthly salary of the MISO Chief of Office was P73,099.99.[60] Thus, the ceiling, or maximum amount of compensation for a consultant in relation to the implementation of the Updated EISP Project, was 120% of this amount or P87,718.80.[61] The monthly consultancy fees of Ms. Macasaet which was P100,000.00 monthly under the first Contract of Services, and P250,000.00 monthly for the seven succeeding Contracts of Services, far exceeded this amount. The monthly consultancy fees of Ms. Macasaet were clearly unreasonable and excessive.
At this point, this Court notes that DBM Circular Letter No. 2000-11 has been expressly revoked by DBM Circular Letter No. 2017-9[62] dated 16 May 2017. DBM Circular Letter No. 2017-9 provides:
It was only upon the issuance of DBM Circular Letter No. 2017-9 on 16 May 2017 that the ceiling of 120% under DBM Circular Letter No. 2000-11 was revoked. Before such time, the compensation to be paid to individual professional consultants could not exceed the amount set by DBM Circular Letter No. 2000-11.
Moreover, DBM Circular Letter No. 2017-9 set the guidelines on how to determine the proper amount of compensation for individual professional consultants:
While DBM Circular Letter No. 2017-9 refers to the Manual of Procedures for the Procurement of Consulting Services to guide the agencies in determining the consultancy rate, this could not have been applicable before DBM Circular Letter No. 2000-11 was expressly revoked. Volume IV of the Generic Procurement Manuals[63] provides for the guidelines in determining the fees for procurement of consultancy services. However, this manual is merely a generic manual for procurement, while DBM Circular Letter No. 2000-11 pertained specifically to individual professional consultants. Thus, before the express revocation of DBM Circular Letter No. 2000-11, the guidelines provided for in Generic Procurement Manuals could not have applied to individual consultancy agreements such as the Contracts of Services with Ms. Macasaet.
On the other hand, Joint Circular No. 1, series of 2017, dated 15 June 2017 (Joint Circular) provided guidelines on how the payment of services under Individual Contract of Services should be determined, to wit:
8.0 Payment of Services under Individual Contract of Service
Individuals hired through contract of service shall be paid the prevailing market rates, subject to the provisions of RA 9184 and its Implementing Rules and Regulations.
The payment of services shall be charged against the Maintenance and Other Operating Expenses in the approved agency budget.
x x x x (Emphasis supplied)
Thus, upon effectivity of the Joint Circular on 15 June 2017, the consultancy fees of individual consultants were fixed at the "prevailing market rates." To repeat, it was only upon the issuance of the Joint Circular on 15 June 2017 that "prevailing market rates" applied to consultancy fees of individuals. Nonetheless, in this case, the only Contract of Services which was entered into after 15 June 2017 was the eighth or last Contract of Services of Ms. Macasaet which was entered into on 24 July 2017. It is worth noting, however, that the period of engagement for this last contract was for a period of six (6) months from 24 May 2017, which was before the issuance of the Joint Circular.
Atty. Ocampo conducted his market research for the prevailing market rates in his Memorandum dated 16 April 2014,[64] which was referred to in his Memorandum dated 22 June 2015, and again in his Memorandum dated 7 December 2015.[65] In his Memorandum dated 7 December 2015, Atty. Ocampo benchmarked the compensation of Ms. Macasaet using an online tool, and found that the fees were comparable to and within the pay scale range of ICT positions in the Philippines.[66] This was the justification given for the amount of P250,000.00 monthly compensation for Ms. Macasaet under the Second to Eighth Contracts of Services.
Again, before the revocation on 15 June 2017 by the Joint Circular of DBM Circular Letter 2000-11, the amount of compensation for individual consultants such as Ms. Macasaet could not exceed 120% of the minimum basic salary of an equivalent position in the Supreme Court, which is that of the Chief of MISO. Thus, prevailing market rates could not have applied to the Contracts of Services entered into from 2013 to 2016, or prior to 15 June 2017. Worse, there was absolutely no basis given for the cost of consultancy services in the first Contract of Services with Ms. Macasaet. The first market research was embodied only in Atty. Ocampo's Memorandum dated 16 April 2014,[67] which was long after the First Contract of Services dated 1 October 2013.[68]
If we assume that Ms. Macasaet should have been paid according to the prevailing market rates for her consultancy services for the contract entered into in 2017, which was the last Contract of Services between the Court and Ms. Macasaet - as DBM Circular Letter No. 2000-11 had been revoked by then, this Court still finds her compensation to be unjustified as there was no proper market research made to determine such rates as of 2017. The market research conducted by Atty. Ocampo was in 2015 while the last Contract of Services was entered into in 2017, more than two (2) years thereafter. Thus, when the eighth and last Contract of Services was entered into on 24 July 2017, there was no proper market research conducted to determine the prevailing market rates as of 2017, which prevailing market rates should be the applicable amount of compensation payable to an individual professional consultant.
PROCUREMENT WAS NOT IN ACCORDANCE WITH THE
ANNUAL APPROPRIATION PLAN
There was a violation of Section 7 of the Government Procurement Reform Act when the second Contract of Services was entered into on 23 May 2014 without the proper Annual Procurement Plan (APP).
The APP is defined as the document that consolidates the various Project Procurement Management Plans (PPMPs) submitted by the various Project Management Offices and end-user units within the Procuring Entity.[69] It reflects the entirety of the procurement activities that will be undertaken by the Procuring Entity within the calendar year.[70] Section 7 of the Government Procurement Reform Act provides that all procurements shall be included in the APP, and the APP must be consistent with the yearly approved budget of the Procuring Entity.
Sec. 7. Procurement Planning and Budgeting Linkage - All procurement[s] should be within the approved budget of the Procuring Entity and should be meticulously and judiciously planned by the Procuring Entity concerned. Consistent with government fiscal discipline measures, only those considered crucial to the efficient discharge of governmental functions shall be included in the Annual Procurement Plan to be specified in the IRR.
No government Procurement shall be undertaken unless it is in accordance with the approved Annual Procurement Plan of the Procuring Entity. The Annual Procurement Plan shall be approved by the Head of the Procuring Entity and must be consistent with its duly approved yearly budget. The Annual Procurement Plan shall be formulated and revised only in accordance with the guidelines set forth in the IRR. In the case of Infrastructure Projects, the Plan shall include engineering design and acquisition of right of way. (Emphasis supplied)
Further, Section 7.3 of the Revised IRR of the Government Procurement Reform Act provides the guidelines on how the APP shall be formulated: the APP is prepared for the succeeding calendar year to support the Procuring Entity's proposed budget, taking into consideration the framework for that year in order to reflect the Procuring Entity's priorities and objectives. To prepare the APP, the implementing units of the Procuring Entity shall formulate the PPMPs for their different Programs, Activities, and Projects (PAPs). The PPMPs shall be submitted to the Procuring Entity's Budget Office for evaluation to ensure consistency with the budget proposal and compliance with existing budget rules. As soon as the General Appropriations Act (GAA) is enacted, the end-user or implementing units shall revise and adjust the PPMPs to reflect the budgetary allocation for their respective PAPs. The APP shall be submitted to the Government Procurement Policy Board on or before the end of January of the budget year, and shall be posted in accordance with law.
Thus, the inclusion of all the planned procurements in the APP is crucial to ensure that all expenses and expenditures of a government entity in relation to its procurement are within the approved appropriation as reflected in the corresponding GAA.
In this case, when the second Contract of Services dated 23 May 2014 was entered into, the APP for the year 2014 did not include the line item for "Technical and Policy Consultants" for purposes of procurement.[71] This was only included when the APP was subsequently revised, in accordance with the Memorandum of the Procurement Planning Committee (PPC), where the PPC requested the amendment of the APP with the inclusion of the line item for "Technical and Policy Consultants" to be sourced from the savings of the Court.[72] The recommendation to include the line item for "Technical and Policy Consultants" in the addendum to the 2014 Annual Procurement Plan was only approved by the Court in A.M. No. 10-1-10-SC dated 23 September 2014.[73] Clearly, when the Contract of Services dated 23 May 2014 was entered into with Ms. Macasaet, the APP did not cover the hiring of services of a technical and policy consultant for procurement purposes.
While it is true that the APP refers to and pertains to the entire fiscal year, and that an APP may be revised in accordance with the guidelines set forth in the IRR,[74] the fact remains that before procurement is actually undertaken, such procurement must have been included in the existing APP of the Procuring Entity. Thus, the inclusion of the line item for "Technical and Policy Consultants" in the revised APP must have first been approved before any contract with technical and policy consultants could be entered into by the Court. To repeat, while the APP may be revised in accordance with the applicable guidelines, such revision should precede the procurement of services not found in the original APP for the applicable fiscal year.
Moreover, it is doubtful that the savings of the Court could be transferred to the hiring of a technical and policy consultant, which was a non-existent item before the APP was amended. In Sanchez v. Commission on Audit,[75] the Court held that for a transfer of appropriation, two essential requisites must be complied with - first, there must be savings in the programmed appropriation of the transferring agency, and second, there must be an existing item, project or activity with an appropriation in the receiving agency to which the savings will be transferred. In Sanchez v. Commission on Audit, the Court held:
Clearly, there are two essential requisites in order that a transfer of appropriation with the corresponding funds may legally be effected. First, there must be savings in the programmed appropriation of the transferring agency. Second, there must be an existing item, project or activity with an appropriation in the receiving agency to which the savings will be transferred.
Actual savings is a sine qua non to a valid transfer of funds from one government agency to another. The word "actual" denotes that something is real or substantial, or exists presently in fact as opposed to something which is merely theoretical, possible, potential or hypothetical.
As a case in point, the Chief Justice himself transfers funds only when there are actual savings, e.g., from unfilled positions in the Judiciary.
The thesis that savings may and should be presumed from the mere transfer of funds is plainly anathema to the doctrine laid down in Demetria v. Alba as it makes the prohibition against transfer of appropriations the general rule rather than the stringent exception the constitutional framers clearly intended it to be. It makes a mockery of Demetria v. Alba as it would have the Court allow the mere expectancy of savings to be transferred.
Contrary to another submission in this case, the President, Chief Justice, Senate President, and the heads of constitutional commissions need not first prove and declare the existence of savings before transferring funds, the Court in Philconsa v. Enriquez, x x x, categorically declared that the Senate President and the Speaker of the House of Representatives, as the case may be, shall approve the realignment (of savings). However, "[B]efore giving their stamp of approval, these two officials will have to see to it that: (1) The funds to be realigned or transferred are actually savings in the items of expenditures from which the same are to be taken; and (2) The transfer or realignment is for the purpose of augmenting the items of expenditure to which said transfer or realignment is to be made."
As it is, the fact that the permissible transfers contemplated by Section 25(5), Article VI of the 1987 Constitution would occur entirely within the framework of the executive, legislative, judiciary, or the constitutional commissions, already makes wanton and unmitigated malversation of public funds all too easy, without the Court abetting it by ruling that transfer of funds ipso facto denotes the existence of savings.[76]
In this case, there was no item, project or activity for the hiring of the technical and policy consultants in 2014 before the APP was amended to include such line item. Thus, clearly, any savings from the budget of the Supreme Court could not have been transferred to a then non-existent item. As this Court held in Sanchez v. Commission on Audit:
As regards the requirement that there be an item to be augmented, which is also a sine qua non like the first requirement on the existence of savings, there was no item for augmentation in the appropriation for the Office of the President at the time of the transfers in question. Augmentation denotes that an appropriation was determined to be deficient after the implementation of the project or activity for which an appropriation was made, or after an evaluation of the needed resources. To say that the existing items in the appropriation for the Office of the President already needed augmentation as early as 31 January 1992 is putting the cart before the horse.
x x x x
The absence of any item to be augmented starkly projects the illegality of the diversion of the funds and the profligate spending thereof.[77]
NO PROPER APPROPRIATION
Moreover, since the line item for "Technical and Policy Consultants" was not initially included in the APP for 2014,[78] it was also not considered in the evaluation of the budgetary proposal of the Supreme Court for consistency and compliance with existing budget rules. The budget proposal is submitted to Congress for the enactment of the GAA. Thus, the GAA for 2014 did not include the procurement of Technical and Policy Consultants. Before the APP was amended, there was clearly no budget or appropriation for the Contract of Services for ICT consultancy services.
The funds for the proposed line item for "Technical and Policy Consultants" were to be sourced from the savings of the Court.[79] However, before the approval of the revised APP, there was no appropriation for the consultancy agreement of Ms. Macasaet that could be augmented from the savings of the Court. The procurement of consultancy services without the prior amendment of the APP clearly renders void the Contract of Services dated 23 May 2014 with Ms. Macasaet. To hold otherwise would be to contravene the requirement that there must first be a proper appropriation before public funds are expended.
Under Presidential Decree No. 1445[80] or the Government Auditing Code of the Philippines, the expenditure of public funds without the required appropriation renders the contract void:
Section 85. Appropriation before entering into contract.
1. No contract involving the expenditure of public funds shall be entered into unless there is an appropriation therefor, the unexpended balance of which, free of other obligations, is sufficient to cover the proposed expenditure.
x x x x
Section 87. Void contract and liability of officer. Any contract entered into contrary to the requirements of the two immediately preceding sections shall be void, and the officer or officers entering into the contract shall be liable to the government or other contracting party for any consequent damage to the same extent as if the transaction had been wholly between private parties. (Emphasis supplied)
Sections 85 and 87 of PD No. 1445 implement Section 29(1), Article VI of the Constitution, which mandates:
Section 29. (1) No money shall be paid out of the Treasury except in pursuance of an appropriation made by law.
A violation of Section 85 of PD No. 1445 constitutes at the same time a violation of Section 29(1), Article VI of the Constitution.
It is clear that there must first be an appropriation before any contract involving expenditure of public funds is entered into, and any contract entered into in violation of this requirement renders such contract void. In this case, before the approval of the revised APP, there was no proper appropriation for the Contract of Services dated 23 May 2014.
Further, based on the Contract of Services dated 23 May 2014, the payment for the services was to be made in six equal monthly installments -the first payment to be made within fifteen (15) days from the signing of the Contract, and the next installment to be paid every 15th of the month beginning on 15 July 2014.[81] Thus, from the signing of the Contract and until 15 September 2014, there was actual payment for consultancy fees which was not covered by proper appropriation. It was only on 23 September 2014 when the APP was revised to include the line item for "Technical and Policy Consultants."[82] Thus, not only was a contract entered into without proper appropriation, there was even actual expenditure of public funds without the required appropriation. Thus, the Contract of Services dated 23 May 2014 is in blatant violation of Section 85 of PD No. 1445, and must be declared void as expressly mandated in Section 87 of PD No. 1445.
LACK OF CERTIFICATE OF AVAILABILITY OF FUNDS
Finally, we address the lack of Certificate of Availability of Funds (CAF) for the Contracts of Services with Ms. Macasaet.[83] The CAF was issued only for the first two Contracts of Services in the amounts of P600,000.00 and P1,500,000.00, respectively.[84] The rest of the six Contracts of Services, which had a consultancy fee of P1,500,000.00 each, were not covered by any CAF. The absence of the CAF for the procurement of the consultancy services of Ms. Macasaet is in blatant violation of Sections 86 and 87 of PD No. 1445, which provide:
Section 86. Certificate showing appropriation to meet contract. Except in the case of a contract for personal service, for supplies for current consumption or to be carried in stock not exceeding the estimated consumption for three months, or banking transactions of government-owned or controlled banks, no contract involving the expenditure of public funds by any government agency shall be entered into or authorized unless the proper accounting official of the agency concerned shall have certified to the officer entering into the obligation that funds have been duly appropriated for the purpose and that the amount necessary to cover the proposed contract for the current fiscal year is available for expenditure on account thereof, subject to verification by the auditor concerned. The certificate signed by the proper accounting official and the auditor who verified it, shall be attached to and become an integral part of the proposed contract, and the sum so certified shall not thereafter be available for expenditure for any other purpose until the obligation of the government agency concerned under the contract is fully extinguished.
Section 87. Void contract and liability of officer. Any contract entered into contrary to the requirements of the two immediately preceding sections shall be void, and the officer or officers entering into the contract shall be liable to the government or other contracting party for any consequent damage to the same extent as if the transaction had been wholly between private parties. (Boldfacing and italicization supplied)
Section 86 of PD No. 1445 is clear and categorical: "no contract xxx shall be entered into" without the required CAF being "attached to and become an integral part of the proposed contract." This means that no government official shall sign a contract unless the CAF is "attached" to the "proposed contract" so as to "become an integral part" of the proposed contract. The CAF must be attached to the "proposed contract," at the latest, at the time of the signing of the contract, before the "proposed contract" is entered into by the signing of the contract.
The CAF cannot be attached to the contract after the contract is entered into because Section 86 expressly requires that "no contract x x x shall be entered into" without the required CAF being "attached to x x x the proposed contract." Unless the CAF is so attached to the contract so as to become an integral part of the contract before the signing of the contract, the contract "shall be void" as expressly declared in Section 87 of PD No. 1445. In the present case, no CAF was attached to the third and subsequent contracts at the time these contracts were entered into, rendering these contracts clearly void.
EO No. 292 (Administrative Code of 1987) also provides a similar provision on the requirement of a CAF before expenditures are incurred. Section 40, Chapter 5, Book VI of the Administrative Code of 1987 provides:
SECTION 40. Certification of Availability of Funds.—No funds shall be disbursed, and no expenditures or obligations chargeable against any authorized allotment shall be incurred or authorized in any department, office or agency without first securing the certification of its Chief Accountant or head of accounting unit as to the availability of funds and the allotment to which the expenditure or obligation may be properly charged.
No obligation shall be certified to accounts payable unless the obligation is founded on a valid claim that is properly supported by sufficient evidence and unless there is proper authority for its incurrence. Any certification for a non-existent or fictitious obligation and/or creditor shall be considered void. The certifying official shall be dismissed from the service, without prejudice to criminal prosecution under the provisions of the Revised Penal Code. Any payment made under such certification shall be illegal and every official authorizing or making such payment, or taking part therein or receiving such payment, shall be jointly and severally liable to the government for the full amount so paid or received. (Emphasis supplied)
Correspondingly, Section 43, Chapter 5, Book VI of the Administrative Code of 1987 provides that any contract entered into without the proper appropriation is void:
SECTION 43. Liability for Illegal Expenditures.— Every expenditure or obligation authorized or incurred in violation of the provisions of this Code or of the general and special provisions contained in the annual General or other Appropriations Act shall be void. Every payment made in violation of said provisions shall be illegal and every official or employee authorizing or making such payment, or taking part therein, and every person receiving such payment shall be jointly and severally liable to the Government for the full amount so paid or received.
Any official or employee of the Government knowingly incurring any obligation, or authorizing any expenditure in violation of the provisions herein, or taking part therein, shall be dismissed from the service, after due notice and hearing by the duly authorized appointing official. If the appointing official is other than the President and should he fail to remove such official or employee, the President may exercise the power of removal. (Emphasis supplied)
This Court has consistently held that the absence of the proper appropriation and the CAF attesting to the availability of such funds shall render the government contract void. In Philippine National Railways v. Kanlaon Construction Enterprises Co., Inc.,[85] this Court held that contracts entered into without an appropriation law authorizing the expenditure in the contract and a CAF attesting that funds are available for such contract shall render the contract void. The failure to comply with any of these two requirements shall render the contract void. The Court held:
Thus, the Administrative Code of 1987 expressly prohibits the entering into contracts involving the expenditure of public funds unless two prior requirements are satisfied. First, there must be an appropriation law authorizing the expenditure required in the contract. Second, there must be attached to the contract a certification by the proper accounting official and auditor that funds have been appropriated by law and such funds are available. Failure to comply with any of these two requirements renders the contract void.
In several cases, the Court had the occasion to apply these provisions of the Administrative Code of 1987 and the Government Auditing Code of the Philippines. In these cases, the Court clearly ruled that the two requirements - the existence of appropriation and the attachment of the certification - are "conditions sine qua non for the execution of government contracts."
In COMELEC v. Quijano-Padilla, we stated:
It is quite evident from the tenor of the language of the law that the existence of appropriations and the availability of funds are indispensable pre-requisites to or conditions sine qua non for the execution of government contracts. The obvious intent is to impose such conditions as a priori requisites to the validity of the proposed contract.
The law expressly declares void a contract that fails to comply with the two requirements, namely, an appropriation law funding the contract and a certification of appropriation and fund availability. The clear purpose of these requirements is to insure that government contracts are never signed unless supported by the corresponding appropriation law and fund availability.
The three contracts between PNR and Kanlaon do not comply with the requirement of a certification of appropriation and fund availability. Even if a certification of appropriation is not applicable to PNR if the funds used are internally generated, still a certificate of fund availability is required. Thus, the three contracts between PNR and Kanlaon are void for violation of Sections 46, 47, and 48, Chapter 8, Subtitle B, Title I, Book V of the Administrative Code of 1987, as well as Sections 85, 86, and 87 of the Government Auditing Code of the Philippines.[86]
Clearly, based on the pronouncements of this Court, the CAF must be attached to the contract at the time the contract is entered into by the government and not later. Failure to do so shall render such contract void. This has been reaffirmed in the recent case of Guillermo v. Philippine Information Agency,[87] where the Court held that for the validity of contracts involving the expenditure of public funds, the requisites of Sections 46, 47 and 48 of Book V, Title I, Subtitle B, Chapter 8 of the Administrative Code of 1987 must be present, to wit:
CHAPTER 8
Application of Appropriated FundsSECTION 46. Appropriation Before Entering into Contract. — (1) No contract involving the expenditure of public funds shall be entered into unless there is an appropriation therefor, the unexpended balance of which, free of other obligations, is sufficient to cover the proposed expenditure;
x x x x
SECTION 47. Certificate Showing Appropriation to Meet Contract. — Except in the case of a contract for personal service, for supplies for current consumption or to be carried in stock not exceeding the estimated consumption for three (3) months, or banking transactions of government-owned or controlled banks, no contract involving the expenditure of public funds by any government agency shall be entered into or authorized unless the proper accounting official of the agency concerned shall have certified to the officer entering into the obligation that funds have been duly appropriated for the purpose and that the amount necessary to cover the proposed contract for the current calendar year is available for expenditure on account thereof, subject to verification by the auditor concerned. The certificate signed by the proper accounting official and the auditor who verified it, shall be attached to and become an integral part of the proposed contract, and the sum so certified shall not thereafter be available for expenditure for any other purpose until the obligation of the government agency concerned under the contract is fully extinguished.
SECTION 48. Void Contract and Liability of Officer. — Any contract entered into contrary to the requirements of the two (2) immediately preceding sections shall be void, and the officer or officers entering into the contract shall be liable to the Government or other contracting party for any consequent damage to the same extent as if the transaction had been wholly between private parties. (Emphasis supplied)
Atty. Ocampo, in his Comment, argues that despite the absence of the CAFs for the third to eighth contracts, there was compliance with the CAF requirement, as the payments to Ms. Macasaet were covered by an Obligation Request and a Disbursement Voucher, where the chief accountant of the Supreme Court certified the availability of the funds for the consultancy fees.[88]
This Court finds his arguments untenable.
The law is absolutely clear on the requirement that before any obligation chargeable against any authorized allotment is incurred, there must be a CAF or a certification from the Chief Accountant as to the allotment against which the expenditure will be charged, and that funds are available for such expenditure. This certificate required by law cannot be replaced by mere Obligation Requests and Disbursement Vouchers, which serve different purposes from that of a CAF which certifies that there are funds actually appropriated for the contract to be executed, and that such funds are actually available to be expended. The Obligation Requests and Disbursement Vouchers are not the certification from the chief accountant that is required by Section 40 of Book VI, Chapter 5 and Section 47, Title I, Book V, Subtitle B, Chapter 8 of the Administrative Code of 1987 or Section 86 of PD No. 1445.
In an Obligation Request, the Head of the Requesting Office or his authorized representative certifies on the necessity and legality of the charges to the budget under his supervision, and the validity, propriety and legality of the supporting documents.[89] In the same Obligation Request, the Head of the Budget Unit or his authorized representative certifies on the availability of allotment obligated for the purpose as indicated therein. In particular, COA Circular No. 003-06[90] provides:
Thus, it is clear that the obligation indicated in the Obligation Request has already been incurred, and that the Head of the Budget Unit simply certifies as to the availability of the allotment obligated for such purpose. This Obligation Request is prepared in three copies and distributed as follows - the original is attached to the Disbursement Voucher, the duplicate is given to the Budget Unit, and the triplicate is given to the Accounting Unit. This differs from a CAF which is signed by the Chief Accountant and is required to be attached to the contract entered into by the government before any obligation chargeable against any authorized allotment is incurred or authorized. The obligation becomes chargeable upon perfection of the contract, and that takes place upon the signing of the contract by the parties.
On the other hand, a Disbursement Voucher contains the certification by the Head of Accounting Unit or his authorized representative on the availability of cash, subject to Advice to Debit Accounts, on the completeness of the supporting documents.[91] It also contains the approval by the Head of the Agency or his authorized representative on the payment covered by the Disbursement Voucher. Finally, the same Disbursement Voucher contains the acknowledgment by the claimant or his duly authorized representative for the receipt of the check or cash, and the date of such receipt. Simply put, the Disbursement Voucher merely records the mode of payment made to the payee indicated therein, and certifies that the cash for such disbursement is available and that the supporting documents for such disbursement are complete.
It is clear, therefore, that the Obligation Requests and the Disbursement Vouchers are not the certification required by law to be secured before an obligation is incurred by the government, which certification shows that funds have been appropriated by law and that such funds are available therefor. Obligation Request, Budget Utilization Request, and Disbursement Voucher are mere forms prescribed by the Commission on Audit, to be used in recording obligations incurred, budget utilization, and disbursements.[92]
Justice Caguioa, in his Dissenting Opinion, agrees with the finding of the OCAt that no CAF was issued prior to entering into the third to eighth Contracts of Services with Ms. Macasaet[93] but raises the argument that since there is no particular form required to be followed for the issuance of the CAF, the Obligation Requests and Disbursement Vouchers which were issued before the payments to Ms. Macasaet are compliant with the CAF requirement under the law.
The Court disagrees.
Again, what is required by law is a CAF before any obligation chargeable against any authorized allotment is incurred. This also means that the CAF must be secured before the services are performed or the goods are delivered. That there were an Obligation Request and a Disbursement Voucher before payment was made to Ms. Macasaet is entirely irrelevant and immaterial because the law requires the CAF before the obligation is incurred - not thereafter when the obligation is paid. Clearly, when payment is made, the obligation had already been incurred and performed.
The Obligation Request and Disbursement Voucher, while made before payment, are issued after the obligation chargeable against the authorized allotment is incurred. Even if the law does not require the CAF to be in any particular form, an Obligation Request or a Disbursement Voucher cannot replace the CAF required by law because the law clearly states that there must be a CAF before such obligation is actually incurred or authorized.
ALL THE CONTRACTS OF SERVICES ARE VOID
In summary, all the eight (8) Contracts of Services must be declared void ab initio.
It is beyond doubt that (1) the lack of authority of the government signatory; (2) lack of qualifications of Ms. Macasaet; (3) the excessive amount of consultancy fees; (4) the incurrence of obligation and the expenditure of public funds without the proper appropriation; and (5) the absence of the required CAFs render the subject Contracts of Services with Ms. Macasaet void ab initio.
WHEREFORE, the Court DECLARES the subject eight (8) Contracts of Services with Ms. Helen P. Macasaet, for Information and Communications Technology consultancy services in relation to the Supreme Court's Enterprise Information Systems Plan, VOID ab initio.
Ms. Helen P. Macasaet is hereby DIRECTED to reimburse all the amounts received as consultancy fees from the subject eight (8) Contracts of Services with the Supreme Court of the Philippines amounting to Eleven Million One Hundred Thousand Pesos (P11,100,000.00) less whatever taxes were withheld, within thirty (30) days from finality of this Resolution, with legal interest at the rate of six percent (6%) per annum from the expiration of the same thirty (30) day period until the same shall have been fully paid.
SO ORDERED.
Bersamin (C.J.), Peralta, Leonen, A. Reyes, Jr., Gesmundo, J. Reyes, Jr., Hernando, Carandang, Lazaro-Javier, and Inting, JJ., concur.
Caguioa, J., see dissenting opinion.
Del Castillo and Jardeleza, JJ., join the dissent of J. Caguioa.
Perlas-Bernabe, J., on official leave.
NOTICE OF JUDGMENT
Sirs/Mesdames:
Please take notice that on July 16, 2019 a Resolution, copy attached herewith, was rendered by the Supreme Court in the above-entitled administrative matter, the original of which was received by this Office on September 16, 2019 at 11:40 a.m.
Very truly yours,
|
[1] Rollo, pp. 50-51.
[2] Id. at 2 (OCAt Report).
[3] Id. at 61-62.
[4] Id. at 63-64.
[5] Id. at 67-70.
[6] Id. at 80-83.
[7] Approved on 10 January 2003 and took effect on 1 April 2003.
[8] Rollo, p. 83.
[9] Id. at 95-96.
[10] Id. at 96.
[11] Id. at 614-616.
[12] Id. at 27.
[13] Id. at 606-613.
[14] Id. at 77.
[15] Id. at 114-117.
[16] Id. at 115.
[17] Id. at 118-126.
[18] Id. at 49-49A.
[19] Id.
[20] Id. at 1-48.
[21] Id. at 409-421.
[22] Id. at 407.
[23] Id. at 464-488.
[24] Id. at 433-460.
[25] Id. at 462-463.
[26] Id. at 668-669.
[27] Id. at 46 (OCAt Report).
[28] Id. at 670-672.
[29] Id. at 671-672.
[30] Id.
[31] Repealing Executive Order No. 109-A, dated 18 September 2003, Prescribing the Rules and Procedures on the Review and Approval of All Government Contracts to Conform with Republic Act No. 9184, Otherwise Known as "The Government Procurement Reform Act."
[32] Under Chapter 2, Title 1, Book III of the Administrative Code of 1987, the President has the authority to issue Executive Orders to implement and execute statutes. In particular, Section 2 provides:
Chapter 2. Ordinance Power
Section 2. Executive Orders. — Acts of the President providing for rules of a general or permanent character in implementation or execution of constitutional or statutory powers shall be promulgated in executive orders.
[33] A.M. No. 10-4-20-SC, as amended. Dated 4 May 2010.
[34] Id.
[35] Flight Attendants and Stewards Association of the Philippines (FASAP) v. Philippine Airlines, Inc., G.R. No. 178083, 13 March 2018.
[36] Referral of Administrative Matters and Cases to the Divisions of the Court, the Chief Justice, and to the Chairmen of the Divisions for Appropriate Action or Resolution. Dated 22 April 2003.
[37] Re: [2018] Procurement Plan for the Supreme Court and the Lower Courts. Dated 6 March 2018.
[38] See Section 3(b), Government Procurement Reform Act.
[39] Rollo, p. 672.
[40] Gonzales v. Philippine Amusement and Gaming Corporation, 473 Phil. 582 (2004). See Heirs of Santiago v. Lazaro, 248 Phil. 593 (1988).
[41] Rollo, p. 675.
[42] Id.
[43] Id.
[44] Id. at 605.
[45] J. Caguioa's Dissenting Opinion, p. 63.
[46] Rollo, p. 616.
[47] Id. at 95.
[48] Id. at 607.
[49] Id. at 455.
[50] Id.
[51] Id. at 87.
[52] J. Cagiuoa's Dissenting Opinion, pp. 22-23.
[53] Re: Request for Approval of the Revised Qualification Standard for the Chief of MISO. Dated 25 November 2009.
[54] Rollo, pp. 67-70.
[55] Id. at 39 (OCAt Report). See rollo, pp. 100-107, 118-126, 138-146, 156-164, 177-185, 200-208 and 221- 229.
[56] Compensation of Contractual Personnel and Individual Professional Consultants.
[57] Rollo, p. 41 (OCAt Report).
[58] Id.
[59] In the Matter of Classifying as Highly Technical and/or Policy Determining the Third Level Positions Below that of Chief Justice and Associate Justices in the Supreme Court, Including those in the Philippine Judicial Academy and the Judicial and Bar Council, and for Other Purposes. Dated 27 September 2005.
[60] Rollo, p. 42 (OCAt Report).
[61] Id.
[62] Clarification on the Guidelines on the Procurement of Consulting Services.
[63] Manual of Procedures for the Procurement of Consulting Services.
[64] Rollo, pp. 80-83.
[65] Id. at 397-406.
[66] Id. at 399-406.
[67] Id. at 80-83.
[68] Id. at 67-70.
[69] Procurement Manual, Volume 1 - Guidelines on the Establishment of Procurement Systems and Organizations.
[70] Id.
[71] Rollo, p. 22 (OCAt Report).
[72] Id. See also rollo, p. 252.
[73] Id. at 710 (OCAt Report).
[74] See Section 7.3, Rule III, Revised IRR of the Government Procurement Reform Act.
[75] 575 Phil. 428 (2008).
[76] Id. at 454-455.
[77] Id. at 462-463.
[78] Rollo, p. 710 (OCAt Report).
[79] Id.
[80] Dated 11 June 1978.
[81] Rollo, pp. 102-103.
[82] Id. at 710 (OCAt Report).
[83] Id. at 35 (OCAt Report).
[84] See rollo, pp. 53 and 89.
[85] 662 Phil. 771 (2011).
[86] Id. at 779-780.
[87] 807 Phil. 555 (2017).
[88] Rollo, pp. 769-770.
[89] See Annex A1 of COA Circular No. 003-06 dated 31 January 2006.
[90] Restatement with Amendments of COA Circular No. 2005-001 on Accounting Policies Related to the Budget, Accounting and Disbursement Functions in National Government Agencies Under the New Government Accounting System (NGAS). Dated 31 January 2006.
[91] See Annex B of COA Circular No. 003-06 dated 31 January 2006.
[92] COA Circular No. 003-06 dated 31 January 2006.
[93] J. Caguioa's Dissenting Opinion, pp. 53, 55.
DISSENTING OPINION
CAGUIOA, J.:
I dissent.
Factual Antecedents
This matter involves the legality of the eight (8) Contracts of Services (subject contracts) executed between the Court and Ms. Helen P. Macasaet (Ms. Macasaet) for her rendition of Information and Communications Technology (ICT) consulting services from 2013 to 2017, in relation to the Court's Enterprise Information Systems Plan (EISP).
This was initially part of A.M. No. 17-08-05-SC entitled "Re: Letter-Request dated August 8, 2017 of Atty. Lorenzo G. Gadon for Certified True Copies of Certain Documents in connection with the filing of an Impeachment Complaint" It was re-docketed as A.M. No. 17-12-02-SC in a Resolution[1] dated December 5, 2017.
Through the Court's Resolution dated September 19, 2017 in A.M. No. 17-08-05-SC, the question of the legality of the subject contracts was referred to the Office of the Chief Attorney (OCAt), and former Chief Justice Maria Lourdes P. A. Sereno (former Chief Justice) was given the opportunity to comment on Atty. Gadon's request for the documents in connection with Ms. Macasaet's consultancy.
OCAt Report
In compliance with the Court's Resolution, the OCAt submitted its Report[2] (OCAt Report) dated November 6, 2017. Below are the OCAt's factual findings on the EISP and the subject contracts:
Brief Background on the EISP
The EISP was intended to serve as the framework of ICT initiatives of the Judiciary for the years 2010 to 2014. It contained the then present ICT needs of the Judiciary and proposed solutions regarding the organization's mandate, objectives, and programs through the development of new Information Systems and provision of additional state-of-the-art IT equipment. It included the functional and technical requirements of the systems, cost estimates, and a discussion on the implementation plan and change management network.[3]
INDRA Sistemas S.A. (INDRA) was designated to provide the Management and Consultancy Services for the development of the Judiciary's ICT Capability as part of the Judicial Reform Support Project (JRSP) which was financed by the World Bank.[4]
In the June 23, 2009 Resolution in A.M. No. 08-11-09-SC,[5] the Court approved the EISP submitted by INDRA. However, the 2009 EISP Budget did not include a budget for the judiciary-wide technical infrastructure, nationwide connectivity, and network security, which are pre-requisites to the nationwide implementation of the EISP and on-going ICT projects like the eCourts.[6]
To review the status of the implementation of the EISP and related ICT and computerization projects, the services of a technical consultant had to be engaged.[7]
First Contract of Services
In her Memorandum dated September 2, 2013, Atty. Ma. Carina M. Cunanan (Atty. Cunanan), then Assistant Chief of Office, Office of Administrative Services (OAS) and Chairperson of the Procurement Planning Committee (PPC), requested from Atty. Corazon G. Ferrer-Flores (Atty. Flores), then Deputy Clerk of Court and Chief, Fiscal Management and Budget Office (FMBO), a Certification to the effect that the amount of P600,000.00 be certified and allotted from the Regular Funds of the Court to cover the consultancy fee for the Consultancy Agreement in relation to the EISP and related ICT projects. The requested Certification was issued and signed on the same day by Ms. Estrella D. Eje (Ms. Eje), Chief Judicial Staff Officer, and noted by Atty. Flores.[8]
On September 4, 2013, Atty. Cunanan issued a Memorandum for the former Chief Justice recommending the approval of the Terms of Reference (TOR) of the subject consultancy agreement and reiterating her request in the earlier Memorandum for the approval of P600,000.00 for allocation from the Regular Funds of the Court allotted for the purpose under the General Appropriations Act (GAA) to cover the cost of the consultancy fee. She also requested that the same be referred to Hon. Raul B. Villanueva (DCA Villanueva), Deputy Court Administrator and Chairperson, Bids and Awards Committee for Consultancy Services (BAC-CS) for appropriate action. Atty. Cunanan's requests and recommendation were approved by the former Chief Justice on September 6, 2013.[9]
In her 1st Indorsement dated September 9, 2013, Atty. Cunanan referred to DCA Villanueva the following:
- APPROVED AUTHORITY for the procurement of Consultancy Services for the Review of the Implementation and Update of the [EISP] and Related ICT Projects of the Judiciary;
- Certificate of Availability of Fund issued by [Ms. Eje], SC Chief Judicial Staff Officer, Budget Division, [FMBO], and duly noted by [Atty. Flores], Deputy Clerk of Court and Chief of Office, FMBO; and,
- Terms of Reference of the Consultancy Services.[10]
In its September 10, 2013 Memorandum, the BAC-CS "resolved to consider the subject procurement as highly technical in nature and primarily requires trust and confidence owing to the fact that it is a priority program of the Supreme Court. As such, it is the view of the Committee that there is no need for said procurement to pass through the regular process of engaging consultants being conducted by it." The BAC-CS cited Section 53.7 of the Revised Implementing Rules and Regulations (IRR) of Republic Act No. (R.A.) 9184, otherwise known as the Government Procurement Reform Act.[11]
The last paragraph of the Memorandum reads:
Thus, the Committee respectfully recommends that the Supreme Court, through the Office of the Chief Justice, can and should exercise its discretion to act on the subject procurement so as not to delay the same. In this connection, and by way of recommendation, the committee submits the following consultants which can be considered by the Supreme Court for the subject procurement, to wit:
(1) Enrique I. Metra
(2) Randal R. Lozano
(3) Helen P. Macasaet (emphasis supplied)[12]
In a Joint Memorandum to the former Chief Justice dated September 12, 2013, Atty. Michael B. Ocampo (Atty. Ocampo), then Court Attorney V, Office of the Chief Justice (OCJ), and Mr. Edilberto A. Davis (Mr. Davis), then Acting Chief, Management Information Systems Office (MISO), stated that after reviewing and evaluating the qualifications of the three consultants vis-a-vis the requirements of the TOR, they had determined that Ms. Macasaet was the most qualified among the three proposed consultants; hence, they recommended that Ms. Macasaet be hired for the procurement. This recommendation was approved by the former Chief Justice.[13]
On October 1, 2013, the services of Ms. Macasaet as consultant were engaged through a Contract of Services. The Contract was entered into by the Supreme Court "represented by its Chief Administrative Officer Atty. Eden T. Candelaria" (Atty. Candelaria), and was signed in the presence of Atty. Ma. Lourdes E.B. Oliveros (Atty. Oliveros), Chief Justice Staff Head, OCJ, Atty. Ruby C. Esteban-Garcia (Atty. Garcia), SC Assistant Chief of Office, FMBO, and Ms. Eje, as witnesses, and acknowledged before Atty. Enriqueta E. Vidal, then Clerk of Court en banc.[14]
On March 24, 2014, or six days before the end of the first Contract of Services, Ms. Macasaet wrote a letter to the former Chief Justice submitting the Final Report on the review of the EISP implementation. Relative thereto, she requested the (1) approval of the Final Report; (2) issuance of the Certificate of Final Acceptance attesting to the completion of her work under the contract; and (3) release of the performance security in the amount of P30,000.00 which she posted. These requests were approved by the former Chief Justice on April 1, 2013.[15]
The first contract ended on March 30, 2014. In the Certificate of Final Acceptance signed by the former Chief Justice and issued to Ms. Macasaet, Atty. Ocampo certified that "the deliverables per Article II of the Consultancy Services have been completed." Atty. Oliveros and Mr. Davis recommended the issuance of the Certificate of Final Completion.[16]
In A.M. No. 14-09-06-SC,[17] the Court en banc issued a Resolution dated September 16, 2014 approving the updated EISP and budget (2014-2019) which is the output of the first Contract of Services with Ms. Macasaet.[18]
Second Contract of Services
Prior to the approval of the Updated EISP Workplan by the Court en banc, Atty. Ocampo, in his Memorandum to the former Chief Justice dated April 16, 2014, stated that there is "a need for a technical and policy consultant for the implementation of the Updated EISP Work Plan," thereby enumerating the scope of work of the consultant. He proposed that the consultant be paid a fee of P250,000.00 a month or P1,500,000.00 for the six-month contract period, inclusive of all applicable taxes, and to directly negotiate a six-month contract with the consultant.[19] For the mode of procurement, the Memorandum states the following:
Under Section 53.7 of the Revised Implementing Rules and Regulations of Republic Act No. 9184, a procuring entity can forego public bidding and directly negotiate a 6-month contract (subject to renewal) with a consultant, who will perform work that is highly technical or proprietary and primarily confidential or policy determining.
The proposed consultancy is clearly highly technical and policy determining; however, this will be subject to the confirmation of the [BAC-CS] in line with the procedures previously observed in the case of the EISP Review and Update consultancy. x x x[20]
This Memorandum was approved by the former Chief Justice upon the recommendation of Atty. Oliveros.
On May 2, 2014, Atty. Oliveros referred to Atty. Cunanan, as PPC Chairperson, the proposed TOR for the Consultancy on the Implementation of the Updated Work Plan of the EISP of the Judiciary.
On May 9, 2014, upon the request of Atty. Cunanan, Atty. Garcia issued a Certification, noted by Atty. Flores, which reads:
CERTIFICATION
This is to certify that the amount of ONE MILLION FIVE HUNDRED THOUSAND PESOS (P1,500,000.00) will be made available to cover the consultancy fee for the Consultancy Agreement, in connection with the Implementation of the Updated Enterprise Information Systems Plan (EISP) of the Judiciary. The amount will be charged against the regular budget of the Supreme Court allotted for the purpose under the General Appropriations Act on the year the expense is incurred.[21]
In her 1st Indorsement dated May 12, 2014, Atty. Cunanan referred to DCA Villanueva the Certificate of Availability of Fund (CAF) issued by Atty. Garcia and the TOR for the Consultancy Services on the Implementation of the Updated Work Plan of the EISP of the Judiciary.[22]
In its May 15, 2014 Memorandum, the BAC-CS reiterated that "the subject procurement can proceed without the Committee's involvement."[23] The BAC-CS posited that the subject procurement is highly technical in nature and primarily requires trust and confidence owing to the fact that it is a priority program of the Court. As such, the BAC-CS was of the view that there was no need for the procurement to pass through the regular process of engaging consultants being conducted by it, citing Section 53 of the Revised IRR of R.A. 9184 on Negotiated Procurement.[24]
In a Memorandum dated May 20, 2014, acting on the recommendation of the BAC-CS, Mr. Davis and Atty. Ocampo reviewed the qualifications of the three consultants vis-a-vis the requirements of the TOR and determined that Ms. Macasaet was the most qualified among the three proposed consultants.[25] This Memorandum was approved by the former Chief Justice.[26]
On May 23, 2014, the Court entered into a second Contract of Services with Ms. Macasaet. Like the first contract, the Court was represented by Atty. Candelaria, as Chief Administrative Officer, with Attys. Ocampo and Garcia as witnesses, and the same was acknowledged before then Clerk of Court Atty. Vidal. On the same day, Ms. Macasaet posted a performance bond in the amount of P75,000.00.[27]
The second Contract of Services ended on November 23, 2014. A Certificate of Final Acceptance signed by the former Chief Justice was issued to Ms. Macasaet. Atty. Ocampo recommended the issuance of the Certificate of Completion while Atty. Oliveros and Mr. Davis recommended the issuance of the Certificate of Final Completion.[28]
Third to Eighth Contracts of Services
(Extensions/Renewal of Contracts)
In a Joint Memorandum dated December 1, 2014, Mr. Davis and Atty. Ocampo recommended the extension of Ms. Macasaet's contract for another six months, explaining that:
Considering that the implementation of the Updated EISP is just at its starting point, there is a continuing need for the services of the Consultant to provide technical advice and assistance in the first year implementation of the plan and in developing ICT policies to support it. Under the Government Procurement Reform Act, a procuring entity may directly negotiate a contract with a highly technical consultant like Ms. Macasaet, and the contract shall, at the most, be on a six month basis, renewable at the option of the appointing Head of the Procuring Entity, but in no case shall exceed the term of the latter. (This has been confirmed by the Procurement Planning Committee and the Supreme Court Bids and Awards Committee for Consultancy Services).[29] (Emphasis in the original)
This recommendation was approved by the former Chief Justice. Hence, on December 10, 2014, the Court entered into a third Contract of Services with Ms. Macasaet. Again, the Contract was signed by Atty. Candelaria for and in behalf of the Court, with Attys. Ocampo and Garcia as witnesses, and acknowledged before Atty. Vidal.[30]
The third Contract of Services ended on May 23, 2015. On June 9, 2015, a Certificate of Final Acceptance was issued to Ms. Macasaet. Atty. Ocampo recommended the issuance of the Certificate of Completion while Atty. Oliveros and Mr. Davis recommended the issuance of the Certificate of Final Completion. The same was signed by the former Chief Justice.[31]
In a Memorandum dated June 10, 2015, Mr. Davis and Atty. Ocampo requested for the second extension of the contract of Ms. Macasaet for another six months. They stated that "[considering that the implementation of the Updated EISP is continuing, with the procurement for key application systems scheduled for the 2nd half of 2015, there is a continuing need for the services of the Consultant to provide technical advice and assistance in the first- and second-year EISP implementation and in developing ICT policies to support it."[32]
To validate the findings with respect to the consultancy fees of Ms. Macasaet, Atty. Ocampo reiterated in his Memorandum dated June 22, 2015 the following pertinent sections of his April 16, 2014 Memorandum as regards the Second Contract:
To further benchmark Ms. Macasaet's consultancy fees, in June 2015, I requested information regarding the cost of similar consultancies from the Office of Usec. Richard Moya of the Department of Budget and Management (DBM), who serves as the DBM's Chief Information Officer in charge of reviewing IT-related expenditures in the DBM and other government offices.
According to Mr. Christopher A. Kuzhuppilly of the Digitization Project Coordination Unit under the Office of Usec. Moya, the DBM hired "an individual IT consultant [2012] to craft the TOR, conduct requirements gathering, consultation, coordination, provide policy advice, etc. x x x for the Comprehensive Human Resource Information System (CHRIS), commonly known as the National Payroll System." Mr. [Kuzhuppilly] also furnished a copy of the terms of reference of the said consultancy, which shows that the monthly fee given to DBM consultant was P92,000 per month.
Comparing the scope of work of the DBM consultant and the proposed TOR of Ms. Macasaet, it is my assessment that the consultancy fees of Ms. Macasaet are reasonable. First, the DBM consultant was only required to develop the terms of reference of one application, which is just a sub-component of the Enterprise Resource Planning System that Ms. Macasaet will work on. In addition, Ms. Macasaet will work on the TOR of another application system, the Philippine Judicial Academy eLearning System. Second, unlike the DBM consultant, Ms. Macasaet is also required to be part of the technical working group that will review the bid documents for twelve (12) ICT procurement projects. This will require her to attend pre-bid conferences and review technical bids during the post-qualification stage of 12 procurements. Third, Ms. Macasaet is doing quality assurance for another application system development project, the eCourts, which is the case management system of the Judiciary. Thus, all in all, Ms. Macasaet is involved in 9 application system projects, 6 ICT infrastructure projects (including the construction of regional data centers) and 1 human resource development project. Finally, Ms. Macasaet has to attend the monthly meetings of the CCL and its subcommittees (2-3 meetings per month) aside from addressing regular technical questions regularly referred to her by the [OCJ] and MISO.
In view of the foregoing, the recommendation in the 10 June 2015 Memorandum to extend Ms. Macasaet's contract for another 6 months is respectfully reiterated. (emphasis and italics in the original)[33]
Acting on the two Memoranda dated June 10 and 22, 2015, the former Chief Justice approved on June 23, 2015 the recommended extension of the Contract of Services of Ms. Macasaet for another six months. Thus, another Contract of Services was executed on June 23, 2015 between the Court and Ms. Macasaet which was signed by Atty. Candelaria for and in behalf of the Court, with Attys. Ocampo and Garcia as witnesses, and acknowledged before Atty. Vidal.[34]
At the end of each Contract of Services, a Certificate of Final Acceptance is issued to Ms. Macasaet and a Joint Memorandum is submitted to the former Chief Justice for approval, citing the "continuing need for the services of the Consultant to provide technical advice and assistance" as basis for the extension of the services of Ms. Macasaet.[35] The details of the issuance of the Certificates of Final Acceptance at the end of each contract period and the submission of a Joint Memorandum for the extension of the services of Ms. Macasaet are shown in the table below as contained in the OCAt Report:
Contract Period
Justifying the Extension
(1st extension)
(6 months)
(2nd extension)
(6 months)
(3rd extension)
(6 months)
(4th extension)
(6 months)
(5th extension)
(6 months)
(6th extension)
(6 months)
In sum, the Court had entered into a total of eight (8) Contracts of Services with Ms. Macasaet, as listed below:
1. October 1, 2013
2. May 23, 2014
3. December 10, 2014 (1st extension)
4. June 23, 2015 (2nd extension)
5. November 23, 2015 (3rd extension)
6. June 20, 2016 (4th extension)
7. December 28, 2016 (5th extension)
8. July 27, 2017 (6th extension)
In the last four Contracts of Services, Atty. Candelaria signed for and in behalf of the Court, with Attys. Ocampo and Garcia as witnesses. The Contracts were acknowledged before the then Clerk of Court, Atty. Felipa Borlongan-Anama (Atty. Anama). The WHEREAS clauses and the Terms and Conditions of the Contracts of Services are substantially the same as the previous Contracts.[38]
Findings and Recommendations of the OCAt
The OCAt found that all contracts of services between the Court and Ms. Macasaet are void for not having been procured in accordance with R.A. 9184 and its Revised IRR, and for being violative of other statutory laws and pertinent auditing rules pertaining to the CAF. This is based on the following representations of the OCAt:
As a result of these findings, the OCAt made the following recommendations to the Court:
- DECLARE as void, in a Court Resolution, the eight (8) Contracts of Services of Ms. Helen P. Macasaet for having been procured not in accordance with Republic Act No. 9184 and its Revised Implementing Rules and Regulations, and violative of other statutory laws and pertinent auditing rules that pertain to the Certificate of Availability of Funds;
- DIRECT the Office of the Clerk of Court to furnish Ms. HELEN P. MACASAET a copy of the resolution informing her that all her Contracts of Services are void and therefore, payments for her services rendered shall be based on the principle of quantum meruit;
- DIRECT the Fiscal Management and Budget Office (FMBO), Office of Administrative Services (OAS) and the Management Information Systems Office (MISO) to immediately determine the amount corresponding to the reasonable value of the services rendered by Ms. Helen P. Macasaet to the Court; and
- DIRECT Ms. Helen P. Macasaet to immediately refund the difference between the amount paid by the Court to her and the reasonable compensation due her as determined by the offices of the Court.[39]
Letter of the former Chief Justice
On November 20, 2017, the former Chief Justice circulated a letter[40] to the members of the Court en banc containing her preliminary comments on the OCAt Report. Her discussion was limited to three points: first, the legal premises utilized by the OCAt to determine the legality of the contract were patently erroneous; second, the OCAt came up with conclusions without factual support and sufficient research or were based on flawed presumptions; and third, there is a conspicuous absence in the OCAt Report of any comment or explanation from the offices and committees involved in the procurement, which renders questionable the procedure followed in the review.[41]
On the first point, the former Chief Justice claimed that while the OCAt does not opine that public bidding should have been conducted for the procurement of Ms. Macasaet's services, it nonetheless applied legal provisions that are either inapplicable, taken out of their proper legal context, and/or pertain to an evaluation of short-listed consultants in a procurement project undertaken through competitive bidding. The former Chief Justice states that these rules are irrelevant and inapplicable to the procurement of consulting services using the negotiated method.[42]
According to the former Chief Justice, the OCAt also applied rules that, by their express wording, and by the OCAt's own admission, exclude the hiring of individual highly technical consultants from their coverage, as well as standards not yet in existence during the procurement of the services of Ms. Macasaet.[43]
Regarding the second point, the former Chief Justice identified certain conclusions made by the OCAt that were bereft of any factual support or based on flawed premises.[44]
On the last point, the former Chief Justice emphasized that the OCAt appeared to have circulated its opinion without reference to any comment or explanation from the BAC-CS, PPC, and the end-users of the services — the Committee on Computerization, MISO, and the OCJ. Since the conclusions contained in the OCAt Report involve the previous actions and findings of these committees and offices, the former Chief Justice claims that the basic tenets of due process and fairness dictate that the parties all be given a right to be heard — including Ms. Macasaet, the other party to the subject contracts.[45]
In a Resolution[46] dated January 10, 2018, the Court en banc resolved to note the former Chief Justice's letter.
Comments of the Parties
Acting on the OCAt Report, the Court en banc issued a Resolution[47] dated November 21, 2017 in A.M. No. 17-08-05-SC requiring BAC-CS and Ms. Macasaet to comment thereon.
Comment of Ms. Macasaet
In her Comment,[48] Ms. Macasaet narrated the events that led to her involvement in the EISP and the process of her engagement as ICT consultant. She stated that, as admitted in the OCAt Report, the services of a technical consultant had to be engaged to review the status of the EISP implementation and related ICT and computerization projects of the Judiciary because "nobody in the Judiciary, including any member of the MISO or the [Committee on Computerization and Library (CCL)], was competent to undertake such a monumental and unique task."[49]
Ms. Macasaet claimed that due to her limited personal knowledge of and participation in the procurement process of her ICT consultancy projects, in addition to her not being a legal professional, she is not competent to render a legal opinion regarding the validity of her eight Contracts of Services. Nevertheless, she maintains that she was made to believe, and still believes in all good faith, that all contracts are valid and lawful especially considering that she contracted with no less than the highest court of the land.[50]
Assuming arguendo that the subject contracts are void and that she should be compensated on the basis of quantum meruit as the OCAt suggests, Ms. Macasaet avers that the compensation she received is reasonable from the government's perspective even though, from her perspective, such compensation is substantially below market rate. She argues that the factors[51] considered in determining the fees of lawyers may be applied by analogy to her case because lawyers and ICT consultants are both professionals, thus similarly situated.[52]
Ms. Macasaet avers that, applying the foregoing factors, she should have instead charged or have been paid a monthly fee of P880,000.00, which is more than three times of what she actually received for the second to eighth contracts and almost nine times of what she received for the first one. Nonetheless, she maintains that she accepted the engagement as an ICT consultant not for the compensation but for a desire to give back to the country and contribute to its development.[53]
Additionally, Ms. Macasaet disagrees with the OCAt's finding that the MISO Chief is an equivalent position; hence, the salary of the MISO Chief should not be used in determining the reasonableness of her compensation. She argues that nobody in MISO possesses her qualifications and expertise and that the EISP and other related ICT projects never took off until her services were engaged.[54]
Moreover, Ms. Macasaet claims that since the OCAt did not conduct any benchmarking or market research, it is in no position to conclude that the compensation she received was unreasonable. She notes the OCAt's suggestion that the benchmarking or market research on the value of the services that she rendered be undertaken by the FMBO, OAS, and MISO. In this regard, she requests for an opportunity to comment on their own benchmarking or market research.[55]
Finally, Ms. Macasaet disagrees with the OCAt's finding that the six-month term of each Contract of Services is "disadvantageous to the government" and that she should have been engaged instead for a longer period such as five years. She avers that such finding is completely speculative, unfounded, erroneous, and contrary to law.[56]
In a Resolution[57] dated January 23, 2018, the Court en banc noted the Comment filed by Ms. Macasaet.
Comment of BAC-CS
On January 25, 2018, the BAC-CS filed its Comment[58] wherein it asserted in the main that the procedural requirements of prevailing procurement law were sufficiently met with respect to the subject contracts.
In a Resolution[59] dated January 30, 2018, the Court en banc noted the Comment filed by the BAC-CS and required Attys. Ocampo and Candelaria to comment on the OCAt Report.
Comment of Atty. Candelaria, Chief Administrative Officer
On February 20, 2018, Atty. Candelaria filed her Comment,[60] which focused on the issue of her being an authorized signatory to the subject contracts entered for and in behalf of the Court. In gist, Atty. Candelaria maintains that as Deputy Clerk of Court (DCC) and Chief Administrative Officer, she is one of the authorized officials and signatories of the Court in the execution of its contracts. She attached several Memoranda[61] where she requested for authority to sign for and in behalf of the previous Chief Justices, beginning from the time of Chief Justice Reynato S. Puno.
Comment of Atty. Ocampo, OCJ
On April 25, 2018, Atty. Ocampo filed his Comment[62] disputing point by point the findings contained in the OCAt Report. In its Resolutions dated June 5, 2018[63] and July 3, 2018,[64] the Court en banc noted the Comment filed by Atty. Ocampo.
Issue
The main issue presented before the Court is the validity of the eight Contracts of Services entered into by the Court and Ms. Macasaet for the latter's rendition of consultancy services in relation to the EISP and other ICT projects.
The Ruling of the Court
The Court, through Senior Associate Justice Antonio T. Carpio, partially adopted the OCAt Report. In the said Resolution, the Court resolved to declare the subject contracts void ab initio for five reasons: (1) the lack of authority of the government signatory; (2) the lack of qualifications of Ms. Macasaet; (3) the excessive amount of consultancy fees; (4) the incurrence of obligation and the expenditure of public funds without appropriation; and (5) the absence of the required CAFs.[65]
Aside from declaring the subject contracts void ab initio, the Court likewise directed Ms. Macasaet to reimburse all the amounts she received under the subject contracts amounting to Eleven Million One Hundred Thousand Pesos (P11,100,000.00).[66]
I strongly resister my dissent. With due respect, I deem the Court's act of nullifying the subject contracts as egregiously erroneous, and compelling Ms. Macasaet to reimburse the subject consultancy fees is a grave injustice.
Reasons for the Dissent
I discuss the merits of the factual and legal findings of the OCAt Report, including the grounds[67] not ruled upon by the ponencia:
I. | There is no lack of support of the Second Contract of Services in the 2014 Annual Procurement Plan (APP). |
With respect to the subject contracts having support in the APPs approved by the Court en banc, the OCAt readily acknowledged that "there was diligent compliance with the requirements under Section 7 of R.A. 9184 that all procurements shall be included in the Annual Procurement Plan, x x x."[68]
The OCAt alleged, however, that with respect to the Second Contract of Services entered into on May 23, 2014, the 2014 APP supposedly does not support its execution because of the purported failure of the 2014 APP to include an item on "Technical and Policy Consultants."[69] The ponencia agreed with the OCAt's findings and found that the subject procurement was not in accordance with an annual appropriation plan, and that there was no proper appropriation allotted to support the Second Contract.[70]
Under Section 7, Article II of R.A. 9184, no government procurement shall be undertaken unless it is in accordance with the approved APP of the Procuring Entity:
SEC. 7. Procurement Planning and Budgeting Linkage. - All procurement should be within the approved budget of the Procuring Entity and should be meticulously and judiciously planned by the Procuring Entity concerned. Consistent with government fiscal discipline measures, only those considered crucial to the efficient discharge of governmental functions shall be included in the Annual Procurement Plan to be specified in the IRR.
No government Procurement shall be undertaken unless it is in accordance with the approved Annual Procurement Plan of the Procuring Entity. The Annual Procurement Plan shall be approved by the Head of the Procuring Entity and must be consistent with its duly approved yearly budget. The Annual Procurement Plan shall be formulated and revised only in accordance with the guidelines set forth in the IRR. In the case of Infrastructure Projects, the Plan shall include engineering design and acquisition of right-of-way. (Emphasis and underscoring supplied)
Applying the foregoing provision of the law to the Second Contract of Services, it must be emphasized that in the 2014 APP, which was approved by the Court en banc in A.M. No. 10-1-10-SC,[71] a total of P436,448,080.00 was already specifically allotted for the EISP.[72] Further, in the approved budget under the 2014 APP, funds were allotted for the further development of infrastructure and application systems under the EISP.[73]
To stress, the engagement of technical and policy consultants was part and parcel of the 2014 APP's allocation for the further development of infrastructure and application systems under the EISP. The very rationale and underlying purpose for the hiring of consultancy services under the subject contracts was precisely the further development of the EISP system.[74] Hence, it cannot be said that the execution of the Second Contract of Services was without any basis in the 2014 APP as it was pursued for the further development of infrastructure and application systems under the EISP — an item provided for in the 2014 APP. Otherwise stated, even without the amended 2014 APP, with the 2014 APP having already provided allotments for the further development of infrastructure and application systems under the EISP, the Second Contract was entered into in accordance with an approved APP.
More importantly, even assuming arguendo that the 2014 APP did not cover the Second Contract of Services, the OCAt Report itself readily acknowledged that in another Resolution[75] dated September 23, 2014 in A.M. No. 10-1-10-SC, the Court en banc approved an amended procurement plan for 2014 (amended 2014 APP), which provided additional funds for infrastructure and application systems development for the implementation of the EISP:
"x x x The Court Resolved, upon the recommendation of the Procurement Planning Committee, to APPROVE the amendment of the 2014 Procurement Plan for the Supreme Court and Lower Courts to include (i) infrastructure and application systems development for the implementation of the Enterprise Information Systems Plan (EISP) of the Judiciary and (ii) hardware requirements for the eCourts project in the amounts of P330,000,000.00 and P43,920,000.00, respectively."[76]
With the OCAt Report expressly recognizing that an amended 2014 APP sufficiently covered the hiring of consultancy services under the Second Contract of Services, even assuming arguendo that the previously approved 2014 APP failed to cover the Second Contract, it cannot reasonably be said that there is no procurement plan that supports the execution of the Second Contract in violation of R.A. 9184 because the amended 2014 APP refers and pertains to the entire fiscal year, and not only the period subsequent to its issuance. It must be noted that under R.A. 9184, the law states that APPs relate to the entire duly approved yearly budget.[77]
It must be emphasized as well that Section 7, Article II of R.A. 9184 specifically grants procuring entities (in this case, the Court) the power to revise and update their respective APPs that govern the procuring entities' spending in a fiscal year. Thus, the Court should recognize the ability of the amended 2014 APP to cover the Second Contract of Services that was entered into within the fiscal year as it is within the ambit of the Procuring Entity's power under R.A. 9184 to revise the APP applicable for a given fiscal year. Adopting a different stance to the effect that an amended APP would not be able to sufficiently cover a prior procurement activity would render futile, useless, and nugatory the power specifically granted to procuring entities under Section 7, Article II of R.A. 9184 to revise and update their respective APPs. Therefore, it is certainly the intent of the law that an amended APP refers and pertains to the entire fiscal year, and not only the period subsequent to its issuance. Regrettably, however, the ponencia strayed away from the intent of Section 7, Article II of R.A. 9184.
Hence, with both the 2014 APP covering the further development of the EISP and the amended 2014 APP providing additional funds for infrastructure and application systems development for the implementation of the EISP, I maintain that the findings of the OCAt and the ponencia that there is no procurement plan supporting the execution of the Second Contract of Services is indubitably erroneous.
II. | There is no violation of the procurement law by the BAC-CS in the conduct of procurement of the subject contracts. |
The OCAt alleged that the procurement of the subject contracts entailed several violations of R.A. 9184, its IRR, and the Manual of Procedures for the Procurement of Consulting Services (Manual of Procedures),[78] which contains the applicable guidelines issued by the Government Procurement Policy Board (GPPB) regarding the procurement of consultancy services.
Specifically, the OCAt found that the procurement process observed in procuring the subject contracts failed to follow the applicable procurement law because of the supposed "hands-off" approach adopted by the BAC-CS in the whole procurement process.
The OCAt alleged that the BAC-CS failed to participate "actively" in the procurement of the subject contracts. When the BAC-CS determined that the subject contracts were highly technical in nature and primarily required trust and confidence owing to the fact that they are priority programs of the Court, and that there was no need for the said procurement to pass through regular bidding, the BAC-CS purportedly prematurely terminated its role without following the prescribed procedure of negotiation supposedly required, i.e., evaluation of the qualifications of the consultant, preparation of the TOR, conducting the required negotiation, finalization of the contract, recommendation of the awarding of the contract, and posting of results of the award.[79]
The OCAt further alleged that the BAC-CS failed to produce any document showing that: (1) the BAC-CS recommended the award of the subject contracts to Ms. Macasaet; (2) it issued a Notice of Award; (3) it posted the Notice of Award in the PhilGEPs website, in the Court's website and bulletin boards; and (4) it issued a Notice to Proceed.[80]
In the main, the OCAt Report alleges that the BAC-CS' level of participation in the procurement process involving the subject contracts was sorely lacking, with the BAC-CS apparently failing to observe certain procedural and documentary requirements purportedly required under procurement law.
In determining whether the BAC-CS failed to observe procedural and documentary requirements for the procurement of consultancy services that are highly technical in nature and primarily require trust and confidence, a careful examination of the applicable procurement law is necessary.
R.A. 9184 or the Government Procurement Reform Act
R.A. 9184[81] applies to the procurement of infrastructure projects, goods, and consulting services, regardless of source of funds, whether local or foreign, by all branches and instrumentalities of government, including the Court.[82]
On the method of procurement, the general rule is that all procurements shall be done through Competitive Bidding.[83] Competitive Bidding is defined as a method of procurement which is open to participation by any interested party and which consists of the following processes: advertisement, pre-bid conference, eligibility screening of prospective bidders, receipt and opening of bids, evaluation of bids, post-qualification, and award of contract, the specific requirements and mechanics of which are defined in the law's IRR.[84]
However, this general rule admits of exceptions.
Under Section 10 of R.A. 9184, the procurement process under Competitive Bidding need not be followed in instances provided by Article XVI of the law. Otherwise stated, in the instances identified under Article XVI, another mode of procurement that follows a different set of procedures than Competitive Bidding may be pursued by the Procuring Entity. R.A. 9184 provides that the BAC has the power to recommend to the Head of the Procuring Entity the use of Alternative Methods of Procurement as provided in Article XVI.[85]
Article XVI - Alternative Methods of Procurement
Section 48, Article XVI of R.A. 9184 states that a Procuring Entity may resort to alternative methods of procurement, subject to the prior approval of the Head of the Procuring Entity or his duly authorized representative, and whenever justified by the conditions provided in the law.
Negotiated Procurement
One of the identified alternative methods of procurement is Negotiated Procurement, defined as a method of procurement that may be resorted to under (1) the extraordinary circumstances provided for in Section 53 of the law, and (2) other instances specified in the IRR, whereby the Procuring Entity directly negotiates a contract with a technically, legally and financially capable supplier, contractor or consultant.[86]
Taking together Section 53[87] of R.A. 9184 and Section 53[88] of the 2009 IRR, negotiated procurement — whereby the procuring entity directly negotiates a contract with a technically, legally and financially capable supplier, contractor or consultant — may be pursued in any of the following cases: (1) two failed biddings, (2) emergency cases, (3) take-over of contracts, (4) adjacent or contiguous contracts, (5) agency-to-agency procurement, (6) request for a procurement agent, (7) highly technical consultants, (8) defense cooperation agreement, (9) small value procurement, (10) lease of real property, (11) NGO participation, (12) community participation, and (13) procurement from specialized agencies of the United Nations.
Negotiated Procurement for Highly Technical Consultants |
One of the identified instances wherein the alternative method of Negotiated Procurement may be pursued by a Procuring Entity is the procurement of Highly Technical Consultants.
Under Section 53.7 of the 2009 IRR, Negotiated Procurement, which entails the direct negotiation of a contract, may be done by the Procuring Entity in the case of individual consultants or partnerships hired to do work that is (i) highly technical or proprietary; or (ii) primarily confidential or policy determining, where trust and confidence are the primary consideration for the hiring of the consultant.
The Subject Contracts procured via Negotiated Procurement of Highly Technical Consultants |
It is not disputed that the subject contracts were and could be subjected to the alternative method of procurement of Negotiated Procurement of Highly Technical Consultants.
As previously mentioned, the subject contracts were recommended by the BAC-CS to be subjected to Negotiated Procurement based on its finding that the subject contracts were highly technical in nature and primarily requiring trust and confidence, owing to the fact that it is a priority program of the Supreme Court. This recommendation was approved by the Head of the Procuring Entity, which in this case was the former Chief Justice.
The ponencia found that Ms. Macasaet was not qualified to be considered a Highly Technical Consultant in relation to the implementation of the Updated EISP Project.[89] Moreover, it held that the nature of the work involved in the subject contracts are not highly technical, and that "there was no actual need to hire a consultant for the mere overview of the implementation of the Updated EISP Project as the MISO Head is already sufficiently qualified to implement such project."[90] The ponencia added that since the nature of the work is not highly technical in nature, thus not requiring the engagement of a highly technical consultant, "the general ICT services required under such EISP could have been implemented by the Supreme Court's MISO."[91]
On the qualifications of Ms. Macasaet, the ponencia highlighted the fact that Ms. Macasaet has no academic degree in any field directly related to ICT and that her ICT training from several short-term courses can hardly be the basis to consider her as an expert in the field. Also, the ponencia found that her Master's degree in Business Administration and certification in Customer Relationship Management are not qualifications that directly relate to ICT in order to justify her engagement in relation to the highly technical Updated EISP Project.[92]
With due respect, these conclusions are simply wrong. While Ms. Macasaet's educational background indeed shows that she does not hold any degree directly related to ICT, the TOR for the Consultancy on the Implementation of the Updated EISP[93] expressly required, among others, that the consultant sought must: (1) have an advanced degree in business management or any ICT-related degree; and (2) be a certified customer relationship management system (CRM) specialist and manager.[94] The records show that Ms. Macasaet holds a Master's degree in Business Administration from the Ateneo de Manila University Graduate School of Business and is a certified CRM specialist and manager.[95] In other words, based on her educational background, Ms. Macasaet was qualified for the consultancy under the TOR.
Moreover, her lack of academic degree in a field directly related to ICT hardly makes her less of an expert in the field as, in fact, the records show her sterling record in the ICT industry. On this note, the Court quotes the following statements by Ms. Macasaet, unrebutted by anybody, as regards her qualifications:
I have industry experience stretching more than 30 years. I am also one of the pioneers in the ICT profession both as an end-user and as a solutions provider;
As an end-user:
As a solutions provider:
In those jobs, I have successfully delivered some of the most challenging ICT projects such as:
In spite of this, the ponencia still mistakenly insists that Ms. Macasaet's experience in developing and participating in ICT systems in both private and public sectors is not the highly technical qualification required for the implementation of the Updated EISP Project as her experience is on the business and management side of ICT Systems.[97] However, the ponencia miserably fails to explain how Ms. Macasaet's qualifications were classified as merely "on the business and management side of ICT systems."[98]
More importantly, however, it should be emphasized that Ms. Macasaet's qualifications were, as they should be, gauged against the TOR for the Consultancy on the Implementation of the Updated EISP.
In addition to the requirements on an advance degree and CRM specialization, the TOR requires that the consultant: (1) must have at least 10 years of experience in developing, managing, implementing, or consulting on enterprise and management information systems, customer relationship management systems and related ICT projects for the government or private sector (experience as Chief Information Officer of a business/government entity is necessary); (2) must have an experience in implementing enterprise-wide ICT projects, preferably nation-wide in scope; and (3) must have had extensive participation in formulating ICT policy and e-governance framework in the country, whether in an official or advisory capacity.[99] Based on these required qualifications in the TOR, Atty. Ocampo and Mr. Davis chose Ms. Macasaet as the most qualified among the proposed consultants for the EISP Project, to wit:
Considering the foregoing, it is only fair to conclude that Ms. Macasaet possessed the highly technical qualification needed for the implementation of the Updated EISP Project. As well, based on these required qualifications in the TOR, it is evident that the head of the MISO was not, contrary to the sweeping conclusion of the ponencia, qualified to undertake the job required.
As regards the classification of the work required under the subject contracts, it is inaccurate for the ponencia to classify the implementation, review, assessment, and updating of the EISP — the very task assigned to Ms. Macasaet under the subject contracts — as mere "general ICT services."[101] Surely, it cannot be sufficiently argued that the nature of the work covered by the subject contracts is not highly technical, which does not require the engagement of a highly technical consultant.
Jurisprudence holds that the nature of the functions attaching to an office or a position ultimately determines whether such position is policy-determining, primarily confidential, or highly technical.[102] In the instant case, the functions pertaining to Ms. Macasaet under the subject contracts do not merely refer to conducting an in-depth, critical, exhaustive, and comprehensive review and assessment of the EISP project and other related ICT and computerization projects. Part of Ms. Macasaet's functions under the subject contracts was the making of actual recommendations for the updating of this complex and multifaceted technological system.[103]
The highly technical nature of the review and updating of the EISP project was, in fact, recognized and underscored by the Court en banc itself when, in its June 23, 2009 Resolution[104] in A.M. No. 08-11-09-SC, the Court en banc described the EISP as a comprehensive framework of several ICT initiatives, involving the development of new information systems and provision of state-of-the-art IT equipment. It must be stressed that the project pertains not only to the Court alone, but to the entire judiciary, composed of all the courts and its adjunct offices around the Philippines. The Court en banc explained that:
The EISP is intended to serve as the framework of ICT initiatives of the Judiciary for the next five years (Yr. 2010-2014). It contains the present ICT needs of the Judiciary and proposed solutions vis-a-vis the [organization's] mandate, objectives, and programs through the development of new Information Systems (IS) and provision of additional state-of-the-art IT equipment. It also includes functional and technical requirements of the systems, cost estimates, and a discussion on the implementation plan and change management framework.[105]
Aside from the Court en banc manifestly saying that the project involves an in-depth assessment of "functional and technical requirements of the systems,"[106] the fact that the EISP project is a highly technical and policy-determining endeavor, where trust and confidence are significant factors, is further underscored by the Court en banc's own explanation that the EISP is an initiative that goes into the fulfillment of the judiciary's "mandate, objectives, and programs."[107] Hence, as the EISP is a priority program of the Court, being an innovative initiative that would greatly aid the judiciary in achieving its mandate, Ms. Macasaet's functions under the subject contracts to assess and update the EISP clearly entailed work that was highly technical and primarily confidential or policy determining, where trust and confidence is necessarily required.
In fact, it is important to emphasize that while the ponencia expressed the belief that the nature of the work found in the subject contracts is not highly technical in nature, in the same breath, the ponencia also recognized that "[t]he Updated EISP Project includes, among others, the upgrading of the Judiciary Data Center, cabling and site preparation and connectivity and network security. These activities require highly specialized technical ICT expertise, not general business management expertise. More specifically, based on the Scope of Work of the [May 23, 2014] Contract of Services as quoted below, the Updated EISP Project includes the upgrade of existing Judiciary Data Center and the design and construction of the Judiciary Data Center Disaster Site. Thus, the Updated EISP Project is not merely a general business project, but primarily a highly technical ICT infrastructure project, x x x."[108]
Hence, this belies the ponencia's own assessment that "the general ICT services required under such EISP could have been implemented by the Supreme Court's MISO"[109] considering that there is already an acknowledgment that the work involved in the subject contracts "is not merely a general business project, but primarily a highly technical ICT infrastructure project."[110]
Further, the task of reviewing, assessing, and updating the EISP could not have been simply left to MISO and its Chief of Office. While not questioning the competency and qualifications of the MISO and its Chief of Office, the latter cannot be expected to sufficiently handle the EISP project because, to reiterate, the EISP encompasses not merely the ICT system of the Court alone; it involves the development of the complex IT framework and other computerization projects covering the entire judiciary as an institution. According to A.M. No. 92-3-021-SC,[111] the mandate of the MISO is limited to providing technological services and managing the computerized monitoring system installed in the Supreme Court — this does not include the other courts in the country. The ponencia completely and utterly failed to consider that the review of the IT framework of the entire judiciary is beyond the scope of the MISO's mandate.
Furthermore, it must be noted that since the EISP encompasses the IT initiatives of the entire judiciary, its review necessarily includes an evaluation of the projects and initiatives of the MISO. Thus, in the TOR, among the tasks of the consultant for the Updated EISP are: (a) to provide technical and policy advice to the OCJ and the MISO regarding the implementation of the Updated EISP Work Plan and related computerization and ICT Projects; and (b) review the MISO Reengineering Development Plan (MRDP) and update it according to the requirements of the Updated EISP Work Plan.[112] Surely, asking the MISO to review, assess, and evaluate its own IT projects and initiatives, instead of by an independent, highly technical consultant, would be inimical to developing an improved IT system for the judiciary.
Lastly, it should be noted that along with Atty. Ocampo, it was Mr. Davis, then Acting Chief of the MISO, who recommended Ms. Macasaet to be the consultant for the Updated EISP.[113] Verily, the MISO itself recognized the need to hire a consultant in the person of Ms. Macasaet for such undertaking.
Therefore, considering that the EISP involves the development and implementation of a complex web of IT systems that will cover the entire judiciary, including the provision of state-of-the-art IT equipment, designed to assist the judiciary in achieving its very mandate, any pronouncement that the EISP is a "simple" IT project that can be reviewed by any IT consultant fails to fully comprehend the intricacy, complexity, and importance of the EISP.
Telling is the fact that even the OCAt Report itself does not question the recommendation of the BAC-CS that the work involved in reviewing and updating the EISP, as well as the related ICT and computerization projects, is highly technical in nature. In recognizing the highly technical nature of the EISP, the OCAt even acknowledged that the instant case involved '"x x x the hiring of individual consultants under special cases', such as these instant procurements."[114] Thus, it is quite bewildering how the ponencia can take a contrary position.
Therefore, the question now redounds to whether or not the procurement of the subject contracts followed the prescribed procedure required for the alternative method of Negotiated Procurement of Highly Technical Consultants.
Alleged Faulty Participation of the BAC-CS in the Negotiated Procurement of the Subject Contracts |
In essence, the OCAt Report alleges that the procurement of the subject contracts was legally infirm because the BAC-CS did not participate in the Negotiated Procurement process in the manner required by law. This is because, as soon as it resolved that the subject contracts were to be subjected to Negotiated Procurement, the BAC-CS "purportedly prematurely terminated its role" — the OCAt Report asserting that the BAC-CS should have itself conducted the rigors of negotiation, i.e., that it should have discussed, clarified, finalized the TOR and the Scope of Services; conducted extensive discussions on the methodology and work program, qualifications and compensation, financial proposal, and the other aspects of the subject contracts; posted an opportunity to bid in the required websites; recommended not only the resort to alternative modes of procurement but also the actual awarding of the subject contracts to Ms. Macasaet; issued Notices of Award; and issued Notices to Proceed.
Upon close examination of the applicable law and rules applicable to Negotiated Procurement of Highly Technical Consultants, the OCAt's findings on the supposed failure of the BAC-CS to actively participate in the subject procurement are egregiously mistaken.
First and foremost, it must be reiterated that Negotiated Procurement is defined by R.A. 9184 as an alternative method of procurement whereby "the Procuring Entity directly negotiates a contract with a technically, legally and financially capable supplier, contractor or consultant."[115] It is a cardinal rule of statutory construction that where the terms of the statute are clear and unambiguous, no interpretation is called for, and the law is applied as written.[116] Hence, it is clear that in procuring goods or services through Negotiated Procurement, the negotiation process is directly managed and facilitated by the Procuring Entity itself, and not by the BAC as alleged by the OCAt Report.
Consistent with the clear and unequivocal provision of law that it is the Procuring Entity that directly negotiates in a Negotiated Procurement, there is nothing in the prevailing provisions governing alternative methods of procurement that even remotely suggests that the BAC shall be responsible for the actual negotiation process in a Negotiated Procurement. What R.A. 9184 provides is that the BAC shall recommend to the Procuring Entity if an alternative mode of procurement should be pursued. In the instant case, it is undisputed that the BAC-CS indeed issued such recommendations for the procurement of the subject contracts via Negotiated Procurement of Highly Technical Consultants.
Thus, the overall theory posed by the OCAt that the BAC-CS should have "taken the lead" in the process of Negotiated Procurement of the subject contracts is completely lacking in legal basis.
In arguing that the BAC-CS itself should have facilitated the nitty gritty process of negotiating with the highly technical consultant, the OCAt Report refers to Section 33.2.5 of the 2009 IRR which provides the coverage of the negotiation process. However, even just a cursory perusal of these provisions would make it readily evident that such provision is not applicable to Negotiated Procurement.
The aforementioned provision explaining the acts that make up the process of negotiation is under Section 33 of the 2009 IRR on "Bid Evaluation of Short Listed Bidders for Consulting Services". Moreover, Section 33 and its sub-sections are under Rule IX on "Bid Evaluation." Evidently, these provisions of the law apply only to the procurement of goods and services through the bidding process — they do not apply to the procurement of goods and services through Negotiated Procurement.
It must be stressed that under R. A. 9184, the advertisement of bidding, holding of a pre-bid conference, eligibility screening of prospective bidders, and receipt, opening and evaluation of bids are at the very center of the procurement method of Competitive Bidding or Public Bidding.[117] Clearly, the concept of bidding is generally incongruent with the concept of procurement under Negotiated Procurement of a Highly Technical Consultant, wherein instead of undergoing a bidding procedure where interested parties are open to participate, the Procuring Entity and the consultant directly engage each other in negotiation. Hence, the manifest error committed by the OCAt Report was to apply legal provisions governing bidding procedure to a procurement process that does not involve bidding. To stress, this was unwarranted, completely baseless and therefore egregiously erroneous.
Moreover, it must also be noted that Section 5(d) of R.A. 9184 defines a bid as a signed offer or proposal submitted by a supplier, manufacturer, distributor, contractor or consultant in response to the Bidding Documents.
As acknowledged by the OCAt Report itself, the procurement of the subject contracts is a "special case" wherein the "tender of the usual bid documents" is "done away" with.[118] Thus, in expressly recognizing that the process of Negotiated Procurement of Highly Technical Consultants does not include bidding documents, the OCAt concedes that the concept of a bid does not apply to the procurement of the subject contracts. Necessarily, therefore, provisions that apply only to bidding should not be made to apply in the instant case.
It must also be noted that the provision on the coverage of the negotiation process under Section 33.2.5 of the 2009 IRR which, again, was the legal basis of the OCAt Report to find fault against the BAC-CS, was expressly included in the process of procuring consultancy services under Competitive Bidding in the Manual of Procedures.[119] It is very telling that the same provision was NOT included in the process of procuring consultancy services under Negotiated Procurement in the same Manual. This should have convinced the Court that the acts of negotiation under Section 33.2.5 of the 2009 IRR do not find application in the instant case.
Aside from Section 33.2.5 of the 2009 IRR, the OCAt Report likewise cited as legal basis the Manual of Procedures. It argued that under the section on Negotiated Procurement found in the Manual of Procedures, it explicitly states that the BAC shall participate in the Negotiated Procurement of consultancy services:
Who are the parties involved in negotiated procurement?
The following must participate in the procurement of consulting services using the negotiated procurement method:
1. The Head of the Procuring Entity;
2. The BAC[.][120] (Emphasis supplied)
The OCAt Report made the argument that since the Manual of Procedures expressly identified the BAC as a party that must participate in the Negotiated Procurement process, then it should have actively participated in the actual negotiation process. This reasoning by the OCAt is an unjustified leap in logic and fatally flawed.
There is no serious dispute that even as Negotiated Procurement involves direct negotiations between the Procuring Entity and the consultant, the BAC still has some level of participation in the process. That participation, however, is, as previously discussed, confined to merely recommending that the procurement of consultancy services may undergo Negotiated Procurement. In the case at hand, the BAC-CS did participate in the Negotiated Procurement of the subject contracts when it made such recommendation to the Procuring Entity. The OCAt, however, committed false equivalency in making its argument; it equated "participation" with "negotiation" — without any legal basis. Simply stated, requiring the BAC to participate in the Negotiated Procurement does not mean that it is required to conduct the negotiation process itself. Otherwise, the clear and unequivocal provision of R.A. 9184 that the Procuring Entity directly negotiates with the consultant in a Negotiated Procurement is subrogated.
Still on the Manual of Procedures, the OCAt also argued that it requires the observance of a set of requirements for Negotiated Procurement:
How is negotiated procurement conducted?
Except for adjacent or contiguous projects and for the hiring of individual consultants under special cases, negotiated procurement is conducted in the following manner:
x x x x
- If the Head of the Procuring Entity disapproves of the recommendation, he shall state the reason(s) of this disapproval and instruct the BAC on the subsequent steps to be adopted. If its recommendation is approved, the BAC, through the TWG and the BAC Secretariat, finalizes the TOR and other action documents, including draft contracts, in accordance with the procedures laid down in this Manual and in the IRR-A.[121] (Emphasis and underscoring supplied)
The OCAt Report maintained that since the aforementioned set of procedures expressly states that the BAC should finalize the TOR and other action documents, the BAC-CS' failure to observe such procedure made the subject procurement infirm.
Again, the OCAt's finding is wholly unavailing. As manifestly evident in the cited provision itself, the procedural requirements referred to shall not apply to the hiring of individual consultants under special cases. The subject procurement certainly falls under such "special cases". As already explained above, the subject contracts involve extremely technical and complex matters that are not easily comprehensible to laymen. Further, these contracts touch upon one of the priority projects of the Court. Thus, it is not difficult to understand that such procurement involved primarily confidential or policy determining matters where trust and confidence are the primary considerations for the hiring of the consultant.
In any case, it bears much stressing that no less than the OCAt Report itself unequivocally acknowledged that [t]he above quoted procedure on how the alternative method of negotiated procurement is conducted, through its first line, categorically takes out from its coverage 'x x x the hiring of individual consultants under special cases', such as these instant procurements."[122]
The OCAt's argument that the BAC-CS is still required to undergo the "required negotiation" despite the foregoing unmistakable provision in the Manual of Procedures accordingly lacks legal basis.
The OCAt mentioned a GPPB Non-Policy Opinion which purportedly states that the verification, validation, and the ascertainment of the eligibility and qualifications of the consultant should still be pursued in negotiations.[123] However, a fair reading of the said GPPB Non-Policy Opinion shows that it only mentions that the aforementioned procedure be done in the negotiation stage; it does not hold that such acts must be done by the BAC and not the Procuring Entity.
To further bolster the fact that the procedures found in the Manual of Procedures do not apply to Negotiated Procurement of Highly Technical Consultants, it is worthy to mention that one of the procedures found in the cited list of procedures, i.e., item no. 6 or the posting by the BAC of the Invitation to Apply for Eligibility and to Bid, was expressly excluded for Negotiated Procurement of Highly Technical Consultants under the 2009 IRR.[124] The rationale of this exclusion of the posting requirement with respect to Negotiated Procurement of Highly Technical Consultants is obvious — because in such a mode of procurement, the Procuring Entity directly and personally negotiates with the consultant based on his/her qualifications, skills, and other personal circumstances, with trust and confidence being the primary considerations. Hence, the OCAt's finding that the BAC-CS violated the procurement law because it failed to show "posting of opportunity in the PhilGEPS website, SC website, and the SC bulletin boards x x x"[125] is terribly erroneous.
Even with respect to the BAC-CS' alleged failure to submit and evaluate the eligibility requirements of Ms. Macasaet, such argument of the OCAt Report fails to find any legal basis. There is absolutely no provision under R.A. 9184, its 2009 IRR, and the Manual of Procedures which requires the BAC to manage and evaluate the eligibility requirements of a consultant engaged through Negotiated Procurement of a Highly Technical Consultant.
In fact, even the GPPB itself recognized in its Resolution No. 18-2015 that the law is "[still] silent whether or not eligibility documents mentioned under the above-mentioned provisions must be submitted when resorting to any of the Alternative Methods of Procurement, except those where competitive bidding or a semblance thereof is still present."[126]
In further insisting that the BAC-CS should have engaged in negotiations with Ms. Macasaet, the OCAt Report also cited Section V, D(7b)(ii) of the Consolidated Guidelines for the Alternative Methods of Procurement of the 2016 IRR of R.A. 9184, which states that the "BAC shall undertake the negotiation with the individual consultant based on the Terms of Reference prepared by the End-User."
However, the cited provision of the 2016 IRR cannot be made to apply to the subject contracts because at the time of the procurement of the said contracts, the 2009 IRR was the prevailing applicable rule.
With respect to the OCAt's allegation that the BAC-CS was required to issue a resolution recommending not only the resort to an alternative method of procurement, but the actual awarding of the subject contracts to Ms. Macasaet, it cites a certain Non-Policy Opinion of the GPPB to that effect.[127] However, it bears stressing that such a stand fails to find any legal support under R.A. 9184 and its IRR.
To restate, there is absolutely no provision under R.A. 9184 and its 2009 IRR which requires or otherwise compels the BAC to recommend the actual awarding of the contract when a Negotiated Procurement is pursued by the Procuring Entity.
While R.A. 9184 identifies the recommendation of the awarding of contracts to the Head of the Procuring Entity or his duly authorized representative as a function of the BAC,[128] such provision is read together with the applicable provision on the awarding of contracts under Section 37 of R.A. 9184, which states that:
SEC. 37. Notice and Execution of Award. - Within a period not exceeding fifteen (15) calendar days from the determination and declaration by the BAC of the Lowest Calculated Responsive Bid or Highest Rated Responsive Bid, and the recommendation of the award, the Head of the Procuring Entity or his duly authorized representative shall approve or disapprove the said recommendation. In case of approval, the Head of the Procuring Entity or his duly authorized representative shall immediately issue the Notice of Award to the bidder with the Lowest Calculated Responsive Bid or Highest Rated Responsive Bid. (Emphasis and underscoring supplied)
It is clear from this provision that the requirement of the BAC recommendation of awarding contracts applies only to procurement involving bidding and not to Negotiated Procurement of Highly Technical Consultants. In fact, it is significant to note that even in the list of procedures for Negotiated Procurement under the Manual of Procedures, there is no requirement for the BAC to recommend the awarding of the contract, aside from recommending the resort to an alternative mode of procurement.
While the OCAt Report cited a certain GPPB Non-Policy Opinion on the BAC's function of recommending awards that were subject to Negotiated Procurement, it must be noted that such opinion is inconsistent with, if not totally opposite to other GPPB opinions. In GPPB Non-Policy Matter (NPM) 068-2004, the GPPB held that:
Under Section 12.1 of the IRR-A of R.A. 9184, one of the responsibilities entrusted to the BAC is to recommend the award of contracts to the head of the procuring entity or his duly authorized representative. However, this responsibility is performed by the BAC in cases where the agency procures through competitive bidding or under the alternative methods of procurement where public bidding procedures are required to be adopted, such as Limited Source Bidding under Section 49 of the IRR-A of R.A. 9184, and Negotiated Procurement under Section 53 (a) and (b) of the same rules.
On the other hand, with respect to those alternative methods of procurement where the public bidding procedures are not mandated to be undertaken, such as, Direct Contracting, Repeat Order and Shopping, under Sections 50, 51 and 52 of the IRR-A of R.A. 9184, respectively, there is no need for the BAC to perform such function. x x x. (Emphasis and underscoring supplied)
As regards the supposed failure of the BAC-CS to issue a Notice of Award and Notice to Proceed, again, the OCAt Report has no legal basis to support its assertion. In the list of procedures applicable to Negotiated Procurement under the Manual of Procedures, there is no requirement for the BAC to issue a Notice of Award and Notice to Proceed. Moreover, according to Section 37of R.A. 9184, it is the Procuring Entity and not the BAC who shall issue the Notice of Award and Notice to Proceed:
"x x x In case of approval, the Head of the Procuring Entity or his duly authorized representative shall immediately issue the Notice of Award to the bidder with the Lowest Calculated Responsive Bid or Highest Rated Responsive Bid.
x x x x
The Procuring Entity shall issue the Notice to Proceed to the winning bidder not later than seven (7) calendar days from the date of approval of the contract by the appropriate authority. x x x" (Emphasis supplied)
Hence, contrary to the position of the OCAt, there is no fault in the manner by which the BAC-CS participated in the Negotiated Procurement on the subject contracts.
III. | There is no violation of the procurement law with respect to the renewal of the subject contracts. |
Under Section 53.7 of the 2009 IRR, contracts procured through Negotiated Procurement of Highly Technical Consultants may be renewable at the option of the appointing Head of the Procuring Entity:
The OCAt Report itself acknowledged that the subject contracts are not "extensions" but renewals under the abovementioned provision of the 2009 IRR.[129]
The OCAt likewise conceded, citing GPPB NPM 111-2004, that "it is sufficient for the end-user unit to submit the renewal of contract of the individual consultant to the head of the procuring entity for approval."[130] Thus, with the renewal of the subject contracts having been duly approved by the Head of the Procuring Entity, i.e., the Chief Justice, the renewals were in line with the prevailing rules on procurement.
Nonetheless, the OCAt still questioned the validity of the renewals of the subject contracts since, supposedly, "R.A. No. 9184 and its Revised IRR prescribe other mandatory procedural and documentary requirements which have to be complied with,"[131] referring to the purported legal infirmities it had previously raised against the BAC-CS' participation in the Negotiated Procurement of the subject contracts.
As already exhaustively and comprehensively discussed in the immediately preceding section, the alleged findings of the OCAt Report on the claimed violations of procedural and documentary requirements under procurement law are all wrong. Indeed, they are all baseless. To be sure, they are egregious errors. Hence, there is no reason to find any error with respect to the renewals of the subject contracts.
IV. | The subject contracts should not be nullified due to the failure to publicly post the Notice of Award. |
The OCAt found that the subject contracts violated the supposed mandatory requirement under the 2009 IRR regarding the posting of notices of award by the BAC. Since there was a non-observance of a legal requirement, the OCAt posited that the subject contracts should automatically be deemed null and void.
The OCAt Report referred to Section 54.3 of the 2009 IRR:
The aforementioned provision seems to be categorical in stating that in all instances of alternative methods of procurement, including Negotiated Procurement, the BAC is required to post, "for information purposes," the notice of award in the PhilGEPS website, the website of the Procuring Entity concerned, and at any conspicuous place reserved for this purpose in the premises of the Procuring Entity.
However, upon closer examination of R.A. 9184, the 2009 IRR requirement on the posting of the Notice of Award is of doubtful application to contracts procured through Negotiated Procurement of Highly Technical Consultants.
The requirement for the issuance of a formal Notice of Award as a prerequisite for the entering of a contract is governed by Section 37 of R.A. 9184:
SEC. 37. Notice and Execution of Award. - Within a period not exceeding fifteen (15) calendar days from the determination and declaration by the BAC of the Lowest Calculated Responsive Bid or Highest Rated Responsive Bid, and the recommendation of the award, the Head of the Procuring Entity or his duly authorized representative shall approve or disapprove the said recommendation. In case of approval, the Head of the Procuring Entity or his duly authorized representative shall immediately issue the Notice of Award to the bidder with the Lowest Calculated Responsive Bid or Highest Rated Responsive Bid.
Within ten (10) calendar days from receipt of the Notice of Award, the winning bidder shall formally enter into contract with the Procuring Entity. When further approval of higher authority is required, the approving authority for the contract shall be given a maximum of twenty (20) calendar days to approve or disapprove it. (Emphasis and underscoring supplied)
A reading of the aforesaid provision makes it apparent that the issuance of a Notice of Award in the procurement process refers to contracts procured through the bidding process.
Under the law, the required period for the issuance of the Notice of Award is within a period not exceeding fifteen (15) calendar days from the determination and declaration by the BAC of the Lowest Calculated Responsive Bid or Highest Rated Responsive Bid. Further, the said provision requires the Head of the Procuring Entity or his duly authorized representative to immediately issue the Notice of Award to the bidder with the Lowest Calculated Responsive Bid or Highest Rated Responsive Bid. Furthermore, within ten (10) calendar days from receipt of the Notice of Award, the law refers to the winning bidder formally entering into contract with the Procuring Entity.
As already explained, under R.A. 9184, the concept of bidding is divergent from the concept of procurement under Negotiated Procurement of Highly Technical Consultants where, instead of undergoing a bidding procedure wherein interested parties may participate, the Procuring Entity and the consultant directly engage each other in negotiation, owing to the highly technical nature of the contact, as well as the factor of trust and confidence involved. Moreover, it must be reiterated that Section 5(d) of R.A. 9184 defines a bid as a signed offer or proposal submitted by a supplier, manufacturer, distributor, contractor or consultant in response to the Bidding Documents.
As acknowledged by the OCAt Report itself, the procurement of the subject contracts, as it involves Negotiated Procurement of a Highly Technical Consultant, is a "special case" wherein the "tender of the usual bid documents" is "done away" with.[132] Consequently, it is admitted that the concept of a bid does not apply as regards the subject contracts which were procured via Negotiated Procurement of Highly Technical Consultants.
Hence, the foregoing provision on the issuance of a Notice of Award and, corollarily, the posting requirement under the 2009 IRR, should not be applied with respect to the Negotiated Procurement of Highly Technical Consultants, which obviates any semblance of competitive or public bidding.
A statute must be so construed as to harmonize and give effect to all its provisions whenever possible. In short, every meaning to be given to each word or phrase must be ascertained from the context of the body of the statute since a word or phrase in a statute is always used in association with other words or phrases and its meaning may be modified or restricted by the latter.[133]
Thus, in order to harmonize the 2009 IRR requirement of public posting of Notices of Award with the provision on when a Notice of Award is required under R.A. 9184, the rule should be construed to mean that the BAC is required to post, for information purposes, the notice of award in the PhilGEPS website, the website of the Procuring Entity concerned, and at any conspicuous place reserved for this purpose in the premises of the Procuring Entity in instances involving Competitive Bidding and alternative methods of procurement which entail Competitive Bidding or a semblance thereof.[134]
Such interpretation is more in harmony, not only with R.A. 9184 itself, but also with the Manual of Procedures. In the steps for conducting Negotiated Procurement found in the Manual of Procedures, the requirement of posting of the award is NOT imposed on the procurement of the services of individual consultants under special cases, such as in the instant case where there is Negotiated Procurement of a Highly Technical Consultant.[135]
Moreover, restricting the mandatory requisite of posting Notices of Award to instances involving Competitive Bidding and alternative methods of procurement which involve Competitive Bidding or a semblance thereof is likewise consistent with several GPPB issuances, which recognized differentiations of requirements applicable to alternative methods of procurement that involve or have a semblance of Competitive Bidding and to those that do not.
The GPPB has acknowledged the absence of any requirement of eligibility documents when resorting to any of the alternative methods of procurement where competitive bidding or a semblance thereof is not present.[136]
Further, in its Resolution No. 30-2013, the GPPB opined that while registration by the supplier or consultant with PhilGEPS is still required for procurements through alternative methods in order to ensure the widest dissemination of the procurement activity, it nonetheless identified Negotiated Procurement of Highly Technical Consultants and other alternative modes of procurement that preclude any semblance of Competitive Bidding procedure as procurement methods where registration with PhilGEPS would be impractical and unnecessary.[137]
Furthermore, in its Non-Policy Opinion NPM 068-2004, the GPPB explained that the task of the BAC to recommend the award of contracts apply only in cases where the agency procures through competitive bidding or under the alternative methods of procurement where public bidding procedures are observed. On the other hand, the GPPB held that with respect to those alternative methods of procurement where the public bidding procedures are not mandated to be undertaken, there is no need for the aforementioned rule to apply.[138]
Hence, it is evidently clear that the rules referring to bidding should not be slavishly made to apply to alternative methods of procurement that do not involve bidding procedures or do not have a semblance thereof, such as the Negotiated Procurement of Highly Technical Consultants. Therefore, the failure of the BAC-CS to publicly post the awarding of the subject contracts to Ms. Macasaet in the PhilGEPS, the Court's website, and the Court's bulletin board should not lead to the nullification of the validity of the subject contracts.
| V. | There are no infirmities regarding the consultancy fees: | |
A. | The exclusion of reimbursable costs from the consultancy fees is not in violation of the rule on fixed price contracts | |
The OCAt Report stated that in determining the budget for a consultancy contract, Ms. Macasaet's travel and accommodation expenses should have been included or factored in her contract. It observed that Section 4.1 of the subject contracts expressly excluded the reimbursable "travel" and "accommodation" costs from her consultancy fees of P600,000.00 and P1,500,000.00, respectively. The OCAt thus concludes that the contractual provisions which exclude the reimbursable travel and accommodation fees from the consultancy fees violate Section 61, 61.1 and Annex F of the Revised IRR of R.A. 9184 pertaining to fixed price consultancy contracts.[139]
However, contrary to the OCAt's findings, the Manual of Procedures, which was allegedly violated because of the exclusion of reimbursable costs from the consultancy fees, in fact provides that the reimbursement of accommodation and transportation expenses actually spent by a technical consultant does not result in violation of the rule on fixed-price contract. It states that "the cost of a consultancy shall consist of [remuneration and reimbursable costs, which can either be based on agreed fixed rates or actual costs][140] and shall be presented in the agreement in the like manner."[141] Thus, it allows payment of reimbursable expenses based on actual cost and not on fixed rate as part of the contract price as long as this arrangement is put in writing and forms part of the contract with the consultant. As correctly argued by Atty. Ocampo, even if one talked of fixed rates for travel and accommodation, it is clear that they need not be integrated into the consultancy fees fixed in the contract.[142]
In addition, the OCAt's conclusion does not conform with the applicable Commission on Audit (COA) guidelines. The 2012 Updated Guidelines for the Prevention and Disallowance of IUEEU Expenditures only prohibit the "[g]rant of [C]hristmas bonuses, cash gift and other fringe benefits to consultants... who are not salaried officials of the government as they are not considered employees of the hiring agency."[143] As identified in the Manual of Procedures, there is no prohibition against "reimbursable costs based on actual expenses" including "other expenses associated with the execution of services".[144] In this connection, to show that the OCAt's conclusion is clearly misplaced, it must be pointed out that the COA never issued any adverse finding or notice of disallowance against the reimbursement of Ms. Macasaet's travel expenses.[145]
Thus, given that the Manual of Procedures allows the payment of reimbursable travel expenses based on actual cost, the subject contracts cannot be voided based on the allegation of the OCAt that the rule on fixed price contracts was violated.
B. | The consultancy fees were not unreasonable | ||
| i. | There was proper market research benchmarking | ||
In its Report, the OCAt said that the market research previously conducted by Atty. Ocampo and Mr. Davis was flawed. The OCAt questioned the Memorandum dated April 16, 2014 which states that the consultancy fees of Ms. Macasaet were fair and reasonable, considering the scope of her work and comparing it with the cost of similar ICT consultancies that the Court approved in 2012, i.e., consultancy for the review of the terms for Judiciary Case Management System and Enterprise Information System, which cost P1.8 million per consultancy.[146] The OCAt questioned the validity of this comparison, arguing that firms were hired for the two consultancies and not individual consultants; hence, their rates were incomparable with Ms. Macasaet's.[147]
However, credence should be given to the explanation of Atty. Ocampo that the Memorandum dated April 16, 2014 did not compare the rates of firms to the rates of an individual consultant like Ms. Macasaet.[148] The point of comparison used was the scope of work of the two consultancies (costing P1.8 million,) vis-a-vis the scope of Ms. Macasaet's consultancy (costing less, at P1.5 million). Whether the consultancy was done by a firm or by an individual was irrelevant to the analysis of Atty. Ocampo and Mr. Davis.[149]
In fact, as amply explained by Atty. Ocampo in his Comment, comparing the scope of Ms. Macasaet's contract with the scope of the two P1.8 million contracts awarded or about to be awarded to the firm, the two consultancy contracts were actually more expensive, considering that each firm had only one deliverable under the contract: the review of one specific project TOR. In contrast, by the time the consultancy of Ms. Macasaet ended in November 2017, she had submitted 18 project TORs. Even assuming that these were her only deliverables and the TORs are divided with the total fees she would have received under the contracts (i.e., P11.1 million), then each project TOR would roughly cost P617,000.00.[150] Thus, the 2012 consultancies cost 300% more per TOR compared to what was paid to Ms. Macasaet, assuming that her total fees are divided by the 18 TORs that she produced.[151]
Finally, the rate of P250,000.00 per month was also lower than Ms. Macasaet's going rate based on her salary history, which is one of the factors considered in determining the cost of consultancy under the Manual of Procedures.[152] According to Ms. Macasaet, she was paid almost P1 million per month as GSIS-CIO consultant.[153] She received P500,000.00 as consulting center director at James Martin & Co., exclusive of car plan, gas allowance, communication allowance and other allowances.[154] As President and COO of MISNet, she also received a monthly salary of P500,000.00 plus allowances.[155]
In addition, not only did Ms. Macasaet agree to a rate lower than her previous consulting fees and salaries, but she also resigned as President of her company, Pentathlon Systems Resources Inc., and discontinued providing consultancies to other clients in order to avoid conflict of interest, especially when the projects she helped develop for the Court reached the procurement stage where private IT companies were expected to participate.[156] Based on the records, these factors were among those considered in evaluating Ms. Macasaet's consultancy fees.[157]
Thus, the ponencia is evidently mistaken in agreeing with the OCAt's finding that there was no proper market research conducted for the prevailing market rates.[158]
| ii. | There was no violation of the ceiling provided in DBM Circular Letter No. 2000-11 |
The OCAt Report also stated that the proposed consultancy fee of Ms. Macasaet should have been subjected to the ceiling of compensation provided under DBM Circular Letter No. 2000-11.[159]
Under paragraphs 3 and 4 of DBM Circular Letter No. 2000-11 on the subject of Compensation of Contractual Personnel and Individual Professional Consultants, the ceiling for remuneration is fixed at 120% of the minimum basic salary of his equivalent position.[160] Upon this premise, the OCAt adopted the basic monthly salary of the MISO Chief (i.e., P73,099.00) in view of the latter's classification as highly technical and policy-determining.[161] After considering the MISO Chief as a comparable position, the OCAt then concludes that the maximum limit of the compensation of the consultant should have been P87,718.80, which was exceeded by the subject contracts covering the period of 2013-2016.[162]
I strongly disagree.
It is noteworthy that DBM Circular Letter No. 2000-11 was issued almost three (3) years before the effectivity date of R.A. 9184, which was the basis for the procurement of Ms. Macasaet's Consultancy. The OCAt should not have relied on DBM Circular Letter No. 2000-11 since it was no longer in line with R.A. 9184, which became effective in 2003, as well as the Procurement Manual on Consulting Services issued under Section 6 of R.A. No. 9184, which states:[163]
SEC. 6. Standardization of Procurement Process and Forms. — To systematize the procurement process, avoid confusion and ensure transparency, the procurement process, including the form to be used, shall be standardized insofar as practicable.
For this purpose, the [Government Procurement Policy Board] shall pursue the development of generic procurement manuals and standard bidding forms, the use of which once issued shall be mandatory upon all Procuring Entities. (Emphasis and underscoring supplied)
As can be gleaned from above, the GPPB was mandated to prepare the standardized procurement manuals. Thus, on June 14, 2006, the GPPB adopted and approved the Generic Procurement Manuals (including the Manual of Procedures), which states that all government offices are mandated to use the procurement manuals issued by the GPPB as a reference guide in the conduct of its actual procurement operations effective January 2007.[164] Verily, at the time of the procurement of the First Contract of Services with Ms. Macasaet, government offices were already mandated by Section 6 of R.A. 9184 to use the procurement manuals issued by GPPB.[165] In this regard, it must be pointed out that the GPPB is chaired by the DBM Secretary himself.[166]
In relation to this, Section 2 of the Manual of Procedures discusses how to compute the cost of consultancy.[167] It states that the following factors should be considered in determining the basic rates: (i) salary history; (ii) industry rates; and (iii) two hundred percent (200%) of the equivalent rate in the Procuring Entity as the floor.[168]
Thus, it is obvious that the 120% ceiling cited by the OCAt based on DBM Circular Letter No. 2000-11 and the Manual of Procedures issued by the GPPB are contradictory to each other. It must also be noted that it was Atty. Ocampo's contention that under the Manual of Procedures, the procurement entity will not just use the 200% salary rate as floor (as opposed to a ceiling), but may also consider the previous salary history of the consultant and industry market rates. Indeed, with respect to the latter, the Manual of Procedures states that "[t]he end-user must estimate the cost of consulting services through cost research in the local market."[169] Since the Manual of Procedures issued by the GPPB is a later rule and it is wholly inconsistent with the earlier rule stated in DBM Circular Letter No. 2000-11, as a rule of construction, DBM Circular Letter No. 2000-11 is deemed repealed by the Manual of Procedures. Moreover, the Manual of Procedures was issued under the statutory authority of R.A. 9184, which cannot be overridden by a mere administrative issuance of the DBM, especially a prior one.[170]
Further, as admitted by the OCAt itself, DBM Circular Letter No. 2000-11 has been revoked by DBM Circular Letter No. 2017-9 under the following terms:
While acknowledging that DBM Circular Letter No. 2000-11 was revoked, the OCAt's boorish insistence that it still governs the standard compensation of consultants from 2011 until May 16, 2017 when DBM Circular No. 2017-9 was issued is totally unavailing.
The ponencia maintains that before the revocation of DBM Circular Letter No. 2000-11 by DBM Circular Letter No. 2017-9, the compensation to be paid to individual professional consultants could not exceed the 120% ceiling set by DBM Circular Letter No. 2000-11. While DBM Circular Letter No. 2017-9 refers to the Manual of Procedures to guide agencies in determining consultancy rates, this could not have been applicable before DBM Circular Letter No. 2000-11 was expressly revoked.[172]
Regrettably, the ponencia fails to appreciate the import and clarification made in DBM Circular Letter No. 2017-9 which plainly and quite categorically states that the provisions of DBM Circular Letter No. 2000-11 were inconsistent with RA 9184, its IRR, and the Manual of Procedure. To reiterate, DBM Circular Letter No. 2000-11 has already been repealed by R.A. No. 9184. Needless to say, the DBM itself acknowledged that it is not DBM Circular Letter No. 2000-11 which governs the determination of the cost of consultancy, rather it is governed by R.A. 9184, its IRR, and the Manual of Procedures.
In this connection, it should be emphasized that R.A. 9184 took effect on January 23, 2003, its IRR on September 2, 2009,[173] and the Manual on Consulting Services in January 2007.[174] Evidently, the OCAt was incorrect in implying that it was DBM Circular Letter No. 2017-9 which gave effect to the abovementioned rules. These rules did not become valid only in 2017, but on the respective dates of their effectivity as provided by law. Therefore, contrary to the ponencia's holding,[175] even before the express revocation of DBM Circular Letter No. 2000-11, the guidelines provided for in the Manual of Procedures were already applicable to the consultancy agreements with Ms. Macasaet.
As for ceilings, the 20% premium used by the OCAt to say that the compensation for the subject contracts are unreasonable had been recognized as only applicable to payment of services under job order, thus:
Specifically, for individual contracts of service, as the subject contracts, Joint Circular No. 1, s. 2017 provides:
Thus, it was erroneous for the OCAt to apply the 20% premium requirement to the subject contracts.
It is the OCAt's assertion that the COA used "market rate" as standard for determining the reasonableness of consultancy fees for the first time only in 2017 by virtue of DBM-CSC-COA Joint Circular No. 1, s. 2017.[177]
However, such assertion is belied by the fact that as early as 2012, the COA had already recognized the use of market rates instead of the 120% ceiling imposed by DBM Circular Letter No. 2000-11. Moreover, the COA uses the following earlier issuances as bases for auditing government transactions: the procurement law (2003), the Manual of Procedures (2006) and the 2012 Updated Guidelines for the Prevention and Disallowance of Irregular, Unnecessary, Excessive, Extravagant and Unconscionable (IUEEU) Expenditures (Guidelines for IUEEU Expenditures) (2012).[178]
To further bolster this fact, it is important to note that the Guidelines for IUEEU Expenditures does not in any way mention the 120% ceiling in DBM Circular Letter No. 2000-11 as a ground to invalidate government transactions. On the contrary, consistent with R.A. 9184 and its Manual of Procedure, it uses the "current and prevailing market value" as a guidepost to determine whether an expenditure is unconscionable.
Hence, contrary to the ponencia's holding,[179] it was not only Joint Circular No. 1, s. 2017 which provided that the prevailing market rates should apply for individual professional consultants. The use of "market rate" as the standard for determining the reasonableness of consultancy fees was already applicable prior to the issuance of said Joint Circular in 2017.
In any case, even assuming that the appropriate ceiling remains to be that set forth in the 2000 DBM Circular, it does not appear that there exists an equivalent position to which the 120% compensation ceiling can be attached.
In the ponencia, it was held that the position of MISO Chief in the SC is equivalent to the position of Ms. Macasaet under the Contracts of Services. Thus, the remuneration of Ms. Macasaet should not be more than 120% of the basic minimum monthly salary of the MISO Chief.[180]
However, it should be emphasized that the position of Ms. Macasaet as an ICT consultant is in no way equivalent to the position of the MISO Chief. The qualifications of Ms. Macasaet as an ICT consultant and that of the MISO Chief, as well as the scope of their work, are entirely different. Stated simply, it is obvious that there exists no equivalent position for the same.
In this connection, the work performed by Ms. Macasaet was not merely to oversee or overview the implementation of the Updated EISP. A perusal of her accomplishment reports per contract would reveal that she did not only perform general IT consultancy which could have been done by the MISO Chief.
Hence, the OCAt's conclusion that Ms. Macasaet's compensation is unreasonable based on the assumption that the basic salary of the MISO Chief is the appropriate government sector benchmark as "equivalent position" plainly rests upon wrong premises.
As discussed earlier, the scope of work of the ICT Consultant is sufficiently distinct from the functions of the MISO Chief. The work of the MISO Chief is general in scope, while Ms. Macasaet's work is specific to the development and implementation of the EISP. Moreover, it bears reiterating anew that the EISP encompasses not merely the ICT system of the Court alone; it involves the development of the complex IT framework and other computerization projects covering the entire judiciary. To illustrate, the integrated automation program under the EISP encompasses more than 3,500 trial court locations and stands to benefit more than 30,000 court employees.[181] This is in stark contrast with the mandate of the MISO[182] which is limited to providing technological services and managing the computerized monitoring system installed in Supreme Court alone. The review of the IT framework of the entire judiciary is clearly beyond the scope of the MISO's functions.
Additionally, it should be stressed once more that since the EISP encompasses the IT initiatives of the entire judiciary, its review necessarily includes an evaluation of the projects and initiatives of the MISO. Thus, the MISO cannot possibly be tasked to assess and evaluate its own IT projects. Indeed, an independent, highly technical consultant is better equipped to ensure the development of an improved IT system for the judiciary.
Finally, it bears reiterating that, along with Atty. Ocampo, it was Mr. Davis, then Acting Chief of the MISO, who recommended Ms. Macasaet to be the consultant for the Updated EISP.[183] Verily, the MISO itself recognized the need to hire a consultant for such undertaking.
Considering the level of expertise and the magnitude and scope of work required for the review and implementation of the EISP, it is clear that the consultancy position of Ms. Macasaet is the first of its kind and has no equivalent post in the Court.
As important, it should be emphasized that R.A. 9184 itself recognizes that the need for consulting services arises precisely from the lack of capacity or capability of the government or its organic personnel to undertake:
SEC. 5. Definition of Terms. - For purposes of this Act, the following terms or words and phrases shall mean or be understood as follows:
x x x x
(f) Consulting Services - refer to services for Infrastructure Projects and other types of projects or activities of the Government requiring adequate external technical and professional expertise that are beyond the capability and/or capacity of the government to undertake such as, but not limited to: (i) advisory and review services; (ii) pre-investment or feasibility studies; (iii) design; (iv) construction supervision; (v) management and related services; and (vi) other technical services or special studies. (Emphasis supplied)
Clearly, therefore, given the inapplicability of DBM Circular Letter No. 2000-11 as the measure for the determination of the compensation of the individual professional consultant, the ponencia gravely erred when it ruled that the fees were unreasonable. I maintain that there is no cogent reason for the Court to declare the subject contracts void on the basis of unreasonableness of the fees.
| VI. | On the Infirmities regarding the CAF: | |
A. | There was no insufficiency of the CAFs pertaining to the 1st and 2nd Contracts due to non-inclusion of reimbursable travel and accommodation costs | |
There is no dispute as to the existence of the CAFs for the 1st and 2nd Contracts of Services of Ms. Macasaet, which the OCAt Report itself acknowledged.[184] Moreover, the issue as to the reimbursable travel and accommodation costs has already been discussed above. Hence, this discussion will be focused on the CAFs for the 3rd to 8th Contracts of Services.
B. | The 3rd to 8th Contracts Sufficiently Complied with the CAF Requirements |
The OCAt Report noted that there appears to be no CAFs for the 3rd to 8th Contracts of Services of Ms. Macasaet; hence, these contracts should be declared void for violating Section 40, Chapter 5 and Section 58, Chapter 7, Book VI of Executive Order No. (E.O.) 292 of 1987 (Administrative Code) and Sections 85, 86, 87 of Presidential Decree No. (P.D.) 1445 (Government Auditing Code).[185] Nonetheless, the OCAt recommends that Ms. Macasaet be compensated on the basis of quantum meruit considering that she completely delivered the services required for the contracts involved.[186]
In his Comment, Atty. Ocampo stresses that the issuance of a CAF is only mentioned in Section 20 of R.A. 9184, which refers to the pre-procurement procedure for regular bidding. In contrast, the provisions on alternative modes of procurement are silent as regards the CAF. The same distinction appears in the 2009 Revised IRR and the Manual of Procedures. Accordingly, the PPC was not required to issue a CAF for procurements using an alternative mode of procurement.[187]
Nevertheless, Atty. Ocampo maintains that all fees paid to Ms. Macasaet were covered by funds appropriated by law and that the availability of funds had been certified by the Court's financial officers in several financial documents.[188]
Before ruling on this matter, it is imperative to discuss the legal provisions involved under the Government Auditing Code and Administrative Code.
Chapter Four (Application of Appropriated Funds) of the Government Auditing Code states:
SECTION 85. Appropriation Before Entering into Contract. — (1) No contract involving the expenditure of public funds shall be entered into unless there is an appropriation therefor, the unexpended balance of which, free of other obligations, is sufficient to cover the proposed expenditure.
(2) Notwithstanding this provision, contracts for the procurement of supplies and materials to be carried in stock may be entered into under regulations of the Commission provided that when issued, the supplies and materials shall be charged to the proper appropriation account.
SECTION 86. Certificate Showing Appropriation to Meet Contract. — Except in the case of a contract for personal service, for supplies for current consumption or to be carried in stock not exceeding the estimated consumption for three months, or banking transactions of government-owned or -controlled banks, no contract involving the expenditure of public funds by any government agency shall be entered into or authorized unless the proper accounting official of the agency concerned shall have certified to the officer entering into the obligation that funds have been duly appropriated for the purpose and that the amount necessary to cover the proposed contract for the current fiscal year is available for expenditure on account thereof, subject to verification by the auditor concerned. The certificate signed by the proper accounting official and the auditor who verified it, shall be attached to and become an integral part of the proposed contract, and the sum so certified shall not thereafter be available for expenditure for any other purpose until the obligation of the government agency concerned under the contract is fully extinguished.
SECTION 87. Void Contract and Liability of Officer. — Any contract entered into contrary to the requirements of the two immediately preceding sections shall be void, and the officer or officers entering into the contract shall be liable to the government or other contracting party for any consequent damage to the same extent as if the transaction had been wholly between private parties. (Emphasis and underscoring supplied)
The same provisions also appear in the Administrative Code, specifically in Sections 46, 47, and 48, Chapter 8, Subtitle B, Title I, of Book V. In addition, the Administrative Code also contains the following provision in Book VI, Chapter 5:
SECTION 40. Certification of Availability of Funds. — No funds shall be disbursed, and no expenditures or obligations chargeable against any authorized allotment shall be incurred or authorized in any department, office or agency without first securing the certification of its Chief Accountant or head of accounting unit as to the availability of funds and the allotment to which the expenditure or obligation may be properly charged.
No obligation shall be certified to accounts payable unless the obligation is founded on a valid claim that is properly supported by sufficient evidence and unless there is proper authority for its incurrence. Any certification for a non-existent or fictitious obligation and/or creditor shall be considered void. The certifying official shall be dismissed from the service, without prejudice to criminal prosecution under the provisions of the Revised Penal Code. Any payment made under such certification shall be illegal and every official authorizing or making such payment, or taking part therein or receiving such payment, shall be jointly and severally liable to the government for the full amount so paid or received. (Emphasis and underscoring supplied).
Based on the cited provisions, it appears that there are two different and distinct requirements involved: (1) a Certificate Showing Appropriation to Meet Contract (Certificate Showing Appropriation); and (2) a CAF. These provisions are hereby reproduced again in tabular form for easy reference:
Section 86, Chapter 4 of the Government Auditing Code; and Section 47, Chapter 8, Subtitle B, Title I, of Book V of the Administrative Code
Section 40, Chapter 5, Book VI of the Administrative Code
Certificate Showing Appropriation to Meet Contract. — Except in the case of a contract for personal service, for supplies for current consumption or to be carried in stock not exceeding the estimated consumption for three (3) months, or banking transactions of government-owned or controlled banks, no contract involving the expenditure of public funds by any government agency shall be entered into or authorized unless the proper accounting official of the agency concerned shall have certified to the officer entering into the obligation that funds have been duly appropriated for the purpose and that the amount necessary to cover the proposed contract for the current calendar year is available for expenditure on account thereof, subject to verification by the auditor concerned. The certificate signed by the proper accounting official and the auditor who verified it, shall be attached to and become an integral part of the proposed contract, and the sum so certified shall not thereafter be available for expenditure for any other purpose until the obligation of the government agency concerned under the contract is fully extinguished. (Underscoring supplied)
Certification of Availability of Funds. — No funds shall be disbursed, and no expenditures or obligations chargeable against any authorized allotment shall be incurred or authorized in any department, office or agency without first securing the certification of its Chief Accountant or head of accounting unit as to the availability of funds and the allotment to which the expenditure or obligation may be properly charged.
No obligation shall be certified to accounts payable unless the obligation is founded on a valid claim that is properly supported by sufficient evidence and unless there is proper authority for its incurrence. Any certification for a non-existent or fictitious obligation and/or creditor shall be considered void. The certifying official shall be dismissed from the service, without prejudice to criminal prosecution under the provisions of the Revised Penal Code. Any payment made under such certification shall be illegal and every official authorizing or making such payment, or taking part therein or receiving such payment, shall be jointly and severally liable to the government for the full amount so paid or received. (Underscoring supplied)
A plain reading of the two provisions reveals that these are different and distinct certificates: first, while the CAF does not appear in the Government Auditing Code, both Certificates appear in the Administrative Code under different Chapters; second, the Certificate Showing Appropriation provides for an exception clause, while the CAF does not provide any; third, the Certificate Showing Appropriation is made upon entering into a contract and the same is attached to the proposed contract; while the CAF only provides that the certification shall be made before funds are disbursed and expenditures or obligations are incurred or authorized; and fourth, the Certificate Showing Appropriation certifies that "funds have been duly appropriated for the purpose and that the amount necessary to cover the proposed contract for the current calendar year is available for expenditure," while the CAF certifies the "availability of funds and the allotment to which the expenditure or obligation may be properly charged."
While the OCAt Report mentions CAF, it cites the provisions covering both the Certificate Showing Appropriation and the CAF. Since it is clear that these are distinct certificates required by law, they should be treated separately in relation to the matter at hand.
In its Report, the OCAt did not raise any issue regarding the Certificate Showing Appropriation and consequently, the other parties were not apprised of the same. Accordingly, the ponencia should not have delved into the matter,[189] as it was unfair to the court officials involved who are not able to present any evidence as regards this issue.
In any case, the existence of the actual appropriation to cover the fees of Ms. Macasaet under the Court's budget is not disputed. As stated in Atty. Ocampo's Comment, there were available appropriations in the Supreme Court budget to fund the consultancy fees of the IT consultant for the years 2014-2017 (the period covering the 3rd to 8th Contracts). He attached a certification issued by the FMBO which shows that the fees paid to Ms. Macasaet were charged against the budget line item of "Professional Services" under the Court's Maintenance and Other Operating Expenditures (MOOE) budget. Specifically, the following amounts were appropriated in the Supreme Court for the said budget line item: P28.52 million for 2014; P28.52 million for 2015; P267.42 million for 2016, and P267.42 million for 2017. Hence, there was sufficient money appropriated to cover the consultancy fees, which is P1.5 million per contract.[190]
As regards the CAF, the OCAt Report found that there were no CAFs issued for the 3rd to 8th Contracts. This was belied by Atty. Ocampo, however, who claimed that the availability of funds had been certified in various financial documents.
It is undisputed that there were CAFs issued by the FMBO Budget Division prior to the execution of the 1st and 2nd Contracts. The CAF dated September 2, 2013 states:
This is to certify that the amount of SIX HUNDRED THOUSAND Pesos (P600,000.00), inclusive of applicable taxes, will be made available for the payment of a consultancy contract agreement for a period of six (6) months for the Review of the Implementation and Update of the [EISP] and Related ICT Projects of the Judiciary. The amount will be charged against the regular budget of the Supreme Court allotted for the purpose under the General Appropriations Act on the year the expense is incurred.[191] (Emphasis in the original)
As for the 2nd Contract, the CAF dated May 9, 2014 states:
This is to certify that the amount of ONE MILLION FIVE HUNDRED THOUSAND Pesos (P1,500,000.00) will be made available to cover the consultancy fee for the Consultancy Agreement, in connection with the Implementation of the Updated [EISP] of the Judiciary. The amount will be charged against the regular budget of the Supreme Court allotted for the purpose under the General Appropriations Act on the year the expense is incurred.[192] (Emphasis in the original)
As found by the OCAt, no similar certification had been issued prior to entering into the 3rd to 8th Contracts. However, this does not necessarily mean that there is non-compliance with Section 40, Chapter 5 of the Administrative Code on the CAF requirement.
To recall, the provision on CAF requires that "[n]o funds shall be disbursed, and no expenditures or obligations chargeable against any authorized allotment shall be incurred or authorized in any department, office or agency without first securing the certification of its Chief Accountant or head of accounting unit as to the availability of funds and the allotment to which the expenditure or obligation may be properly charged." Two things are apparent: first, there is no particular form required to be followed for the issuance of the CAF; and second, unlike the Certificate Showing Appropriation which is required to be issued before entering into the contract, no such requirement appears regarding the CAF. On the contrary, a plain reading of Section 40 readily reveals that the certification by the chief accountant as to availability of funds must be done before funds are disbursed and expenditures or obligations chargeable against authorized allotments are incurred or authorized.
Based on these premises, it appears that the 3rd to 8th Contracts duly complied with the CAF requirement. Below are the pertinent statements made by Atty. Ocampo:
60. Third, the OCAT report failed to state that every monthly payment to Ms. Macasaet is covered by an Obligation Request, a form that has a certification from the Supreme Court budget officer on the availability of funds. Each monthly payment is also supported by a Disbursement Voucher, where the Supreme Court chief accountant likewise certifies the availability of the funds for the consultancy fees. (See Annexes S and T for the Obligation Request and Disbursement Voucher covering the August 24 to September 23 monthly fee of Ms. Macasaet. The same forms are used in all other monthly payments.) All other alternative modes of procurement such as shopping, small value procurement, and procurement through the Procurement Service are also certified in the same manner (see sample Obligation Request and Disbursement Voucher attached as Annexes U and V).
61. As a final point, before any payment was made to Ms. Macasaet, the [OCJ] and the [MISO] certified that the deliverables under her contract had been submitted and attached supporting documents. The certification and supporting documents then passed through the [OAS], and the finance, budget, and accounting and divisions of the FMBO, and then through the Internal Audit Division. (See Annex W for the Action Flow Slip for Payment.) The offices, which are in charge of ensuring our compliance with all accounting and auditing rules and are better versed with auditing and accounting guidelines compared to OCAT, did not find any irregularity in the Ms. Macasaet's contracts and renewals. No payment[s] were withheld because all required documentation were available to support the payments. All of our financial and auditing units had to do due diligence to ensure that no post-audit findings would be raised by the Commission on Audit. Indeed, 5 years hence since the first contract of Ms. Macasaet was executed, the COA has yet to issue any adverse observation or notice of disallowance against any of the payments made to Ms. Macasaet on the grounds cited by OCAT.[193] (Emphasis and underscoring supplied)
Nonetheless, the ponencia is of the position that the certification required by law cannot be replaced by mere Obligation Requests and Disbursement Vouchers as they serve different purposes from that of a CAF which certifies that there are funds actually appropriated for the contract to be executed and that such funds are actually available to be expended.[194]
However, as mentioned earlier, the law does not require a specific form for the CAF. As such, the certifications by the Chief Accountant (as to the availability of appropriation and funds) contained in the Obligation Requests[195] and Disbursement Vouchers,[196] which were issued before the payments were made to Ms. Macasaet should be deemed, as they are, compliant with the CAF requirement under Section 40, Chapter 5 of the Administrative Code.
On this note, the following averments of Atty. Ocampo must be noted to the effect that the auditing bodies, including the COA, had not made any adverse findings on the subject contracts:
x x x As a final point, before any payment was made to Ms. Macasaet, the [OCJ] and the [MISO] certified that the deliverables under her contract had been submitted and attached supporting documents. The certification and supporting documents then passed through the Office of the Administrative Services, and the finance, budget, and accounting x x x divisions of the FMBO, and then through the Internal Audit Division. x x x The offices, which are in charge of ensuring our compliance with all accounting and auditing rules and are better versed with auditing and accounting guidelines compared to OCAT, did not find any irregularity in Ms. Macasaet's contracts and renewals. No payment were withheld because all required documentation were available to support the payments. All of our financial and auditing units had to do due diligence to ensure that no post-audit findings would be raised by the Commission on Audit. Indeed, 5 years hence since the first contract of Ms. Macasaet was executed, the COA has vet to issue any adverse observation or notice of disallowance against any of the payments made to Ms. Macasaet on the grounds cited by OCAT.[197] (Emphasis and underscoring supplied)
| VII. | There was no splitting of contracts. |
The OCAt also found that the continuous renewal and/or extension of the subject contracts after every six months amounted to splitting of contracts as defined under the 2009 IRR, which reads as follows:[198]
The OCAt averred that the division of five-year EISP implementation period into a series of short term consultancy contracts of six months may be disadvantageous to the government.[199] Contrary to this allegation, the following observations can be made:
First, it bears stressing that it is the 2009 IRR that imposes the time limitation of six months for directly negotiated contracts:
Hence, the IRR itself specifically mandates that contracts for highly technical, primarily confidential or policy determining consultants be limited to a six-month term. This allows the end-user to evaluate every six months whether there is a further need for the consultant's service.[200]
This is consistent with the GPPB clarification as to the meaning of splitting of contracts in GPPB NPM 136-2014 issued on December 6, 2014, which states:
Clarification on the interpretation the term splitting of contracts under Section 53.1 of the IRR of RA 9184.
[I]t does not follow that once a contract is divided into smaller quantities or phases, there is splitting of contract. In order to determine whether the division of the procurement project into two (2) packages amounts to splitting of contract, it must be clearly shown that the act must have been done for the purpose of circumventing or evading legal and procedural requirements, i.e., there should be a determination that, despite resorting to public bidding for both packages, the division into two (2) packages was done to circumvent or evade the legal and procedural requirements under RA 9184 and its IRR. (Additional emphasis supplied)
Clearly, the renewal of the subject contracts cannot be described as prohibited splitting because there is no showing that the repeated renewals were done to circumvent or evade the legal and procedural requirements under RA. 9184. In fact, given that the appropriate modality for the services required is direct negotiation, the Court as the Procuring Entity had no other choice but to enter into the subject contracts with terms not longer than six months as provided under Section 53.7 of the 2009 IRR.
Second, while another consultant could have been engaged for a longer period, there is no law, rule, or regulation that mandates such course of action. Indeed, it is up to the end-user to determine the necessity and wisdom of a particular mode of consultancy. The OCAt has absolutely no technical expertise to determine whether one mode of procurement is better than another. Moreover, the OCAt did not cite any basis to support its conclusion that hiring a consultant for a six-month term is "disadvantageous to the government"[201] compared to hiring a consultant for a five (5)-year period.
In fact, it may actually be argued that it is even more disadvantageous to the government to change or hire another consultant midstream. If a new consultant was hired in the middle of the project, he or she would have to spend a lot of time understanding and learning what had already been done. This would be a waste of time and money, as compared to merely renewing the contract of Ms. Macasaet who was undeniably already very familiar with the project.
As pointed out by Atty. Ocampo, many of the project TORs submitted by Ms. Macasaet included provisions for the training of Supreme Court IT personnel to ensure that knowledge transfer occurred, which would increase internal technical capacity and enable the IT personnel to develop, implement and maintain IT projects, without the need for an external consultant like Ms. Macasaet. The training provisions are found in the TORs of the following IT projects: (i) Hearing Management System; (ii) Judiciary Email System; (iii) Judiciary Portal; (iv) ePHILJA System; (v) Enterprise Resource Planning System; (vi) Digitization of Court Records; (vii) Disaster Recovery Data Center; (viii) Legal Resource Management System; (ix) Systems Integration Services (Phase 1); (x) Systems Integration Services (Phase 2); (xi) Judiciary Data Center Upgrade (Phase 1); (xii) Judiciary Infrastructure Upgrade (Phase 2); and (xiii) Regional Data Centers.[202] Based on this, it is quite obvious that a change of consultant cannot be done midstream because it would require extensive training over a long period of time to become familiar with the current projects given their very technical and complex nature.
Lastly, an examination of the nature of the deliverables involved in the subject contracts shows that the prohibition against splitting of government contracts cited by the OCAt does not apply, as the EISP is implemented in delineated phases.
Hence, there is no reason for the subject contracts to be declared null and void on the allegation that the continuous renewal and/or extension of the subject contracts every after six months purportedly amounted to splitting of contracts.
VIII. | The Chief Administrative Officer has the authority to sign the subject contracts |
With respect to the signing authority of Atty. Candelaria, the OCAt Report observed the following:
In all of these Contracts of Services, Atty. Candelaria, in her capacity as Chief Administrative Officer and Deputy Clerk of Court, entered into the said Contracts with Ms. Macasaet, for and in behalf of the Court. Based on record, it appears that while there was no authority to act as signatory of the Court, Atty. Candelaria signed these Contracts on the basis for the series of Joint Memoranda, either recommending that (a) Ms. Macasaet be hired and that steps be undertaken to execute a contract for consultancy services between the Supreme Court and Ms. Macasaet, or (b) the extension of the Contract of Ms. Macasaet for another six (6) months, all of which were duly approved by the Chief Justice.[203]
The ponencia finds that "the records fail to show that [Atty. Candelaria] was authorized in writing by the Supreme Court En Banc to act as signatory of the Court in entering into these Contracts of Services with Ms. Macasaet."[204] According to the ponencia, the Procuring Entity is the Supreme Court and the head of the Supreme Court is the Supreme Court en banc. Thus, the subject contracts should have been approved by the Supreme Court en banc as Head of the Procuring Entity, not the Chief Justice alone.[205] Since the former Chief Justice was not given the authority to enter into the subject contracts by the Supreme Court en banc, she, in turn, had no authority to further delegate said power to Atty. Candelaria.[206]
In this regard, it must be emphasized that the OCAt Report did not question the authority of the Chief Justice as the Head of the Procuring Entity. What the OCAt Report questioned was the authority of Atty. Candelaria. Not once did the OCAt Report mention that the Supreme Court en banc was the Head of the Procuring Entity. For all intents and purposes, the OCAt referred to the Chief Justice as the Head of the Procuring Entity, not the Supreme Court en banc.
More importantly, it should be stressed that during the duration of the eight contracts from 2013 to 2017, the Supreme Court en banc itself did not raise any objection on the matter. To elaborate, for her first Contract of Service (October 1, 2013 to March 30, 2014) with the Court, Ms. Macasaet was tasked to review the implementation and update of the EISP and related ICT projects of the judiciary. As part of the final report for her first contract, Ms. Macasaet submitted a revised 5-year work plan and budget for the EISP, which became the Updated EISP.[207] In a Resolution dated September 16, 2014 in A.M. No. 14-09-06-SC, the Supreme Court en banc approved the Updated EISP Workplan and Budget for 2014 to 2019. One of the whereas clauses therein stated that "an updated work plan and budget of P3.97 billion — that address the plan's critical gaps outlined above — have been developed after a technical expert's review of the implementation of the EISP."[208] The technical expert referred to in the Resolution was none other than Ms. Macasaet and the updated work plan was the Updated EISP itself which she had developed under her first contract of service. Evidently, from the very beginning, the Supreme Court en banc was aware that the former Chief Justice, as the Head of the Procuring Entity, gave her authority for the Court to enter into a consultancy contract with Ms. Macasaet, and yet the en banc did not object to the same. This is true as well for the succeeding contracts with Ms. Macasaet.
Indubitably, for the Court to now claim that it is the Court en banc that is the Head of the Procuring Entity and the former Chief Justice was not authorized to enter into the subject contracts — after its silence for the entire duration of the contracts and after the consultant had already completed the services required of her — goes against the principles of fairness and equity.
In support of this position, the ponencia cited A.M. No. 99-12-08-SC (Revised) dated April 22, 2003 on the Referral of Administrative Matters and Cases to the Divisions of the Court, the Chief Justice, and to the Chairmen of the Divisions for Appropriate Action or Resolution. The ponencia quoted the following provisions:
III. To REFER to the Chief Justice for appropriate action or resolution, for and in behalf of the Court En Banc, administrative matters relating to, or in connection with,
Based on this, the ponencia posits that the Chief Justice is not authorized by the Court en banc to independently act on behalf of the Supreme Court to enter into government contracts that are highly technical, proprietary, primarily confidential, or policy determining such as the subject contracts. Thus, according to the ponencia, the subject contracts should have been authorized by the Supreme Court en banc which has administrative power over all courts and personnel thereof, and not merely by the former Chief Justice.[210]
On this note, however, attention is invited to the latter part of the above-quoted provision, to wit: "(i) [s]uch other matters where the decision, action, or resolution thereon or approval thereof is vested in the Chief Justice x x x or those which are traditionally vested in the Chief Justice as head of the Judiciary."[211]
Evidently, the provision relied upon by the ponencia itself expressly recognizes the Chief Justice as the head of the Judiciary. Thus, contrary to the ponencia's erroneous assertion that the Head of the Procuring Entity is the Supreme Court en banc, there is already an express recognition that the Chief Justice is the head of the Judiciary.
This interpretation is not novel as the sitting Chief Justice has been generally and traditionally regarded as the Head of the Procuring Entity. Even the Supreme Court en banc made this recognition in its Resolution dated December 4, 2012 in A.M. No. 12-9-4-SC.[212] Consider the following statements therein:
The OCAT thereby recommended that the Chief Justice, as Head of the Procuring Entity (HoPE): (1) declare that no contract shall be awarded in the procurement project; (2) note the letter-protest of Keng Hua; (3) direct the Court Administrator to immediately facilitate the procurement of basic office supplies for the lower courts through the DBM Procurement Service; and (4) remind the BAC-GS to exercise caution in the conduct of procurement processes.
x x x x
x x x Aside from this, the sensitive and confidential nature of the procurement process in the Judiciary requires that personnel tasked with the functions of the Secretariat should enjoy the trust and confidence, not only of the BAC Chairperson but also of the Head of the Procuring Entity. And as stated by the BAC-GS, "[designating coterminous employees as Secretary is necessarily inevitable in the Court, as such is the nature of positions not only in the office of the ACAs (Assistant Court Administrator) but also in the higher offices of the Supreme Court Justices, and the Deputy Court Administrators (DCAs)." These are presumably the reasons why the Chief Justices, as Heads of the Procuring Entity, deem it more expedient to maintain the practice of delegating to the BAC Chairpersons the discretion to appoint the heads of their respective Secretariats.[213] (Emphasis and underscoring supplied)
Even at present, the bidding documents released by the SC-BAC refers to the Chief Justice as the Head of the Procuring Entity.[214] Accordingly, that the Chief Justice is the Head of the Procuring Entity is, as it should be, indisputable. To insist otherwise is totally nonsensical.
The ponencia further stated that assuming arguendo that the former Chief Justice had the authority to delegate the power to enter into the subject contracts, there was still no showing that Atty. Candelaria was authorized in writing by the former Chief Justice to act as signatory of the Court in entering into the Contracts of Services with Ms. Macasaet.[215] The ponencia found that the series of Joint Memoranda prepared and signed by Atty. Ocampo and Mr. Davis cannot be considered as a delegation by the former Chief Justice of full authority to Atty. Candelaria to act and sign on behalf of the Supreme Court.[216] Although the former Chief Justice signed the Joint Memoranda to signify her approval, it did not contain any express delegation of authority to Atty. Candelaria to sign the Contract of Services with Ms. Macasaet.[217]
Such view is wholly mistaken. The records would show that aside from an implied authority and designation to act as signatory, Atty. Candelaria was, in fact, also given an express written authority as required by law.
In this relation, Atty. Candelaria explained in her Comment that the functions of the Deputy Clerk of Court and Chief Administrative Officer is to plan, recommend and implement personnel management and development programs and administrative service functions of the Court. According to her, it is for this purpose that she had requested from the former Chief Justice the authority to sign for and in behalf of the Chief Justice and Associate Justices the documents involving internal personnel matters,[218] to wit:
This is to respectfully inform her Honor that the undersigned was granted by former Honorable Chief Justices x x x and Senior Associate Justice Antonio T. Carpio the authority to sign for and in their behalf, communications with other government agencies and the transmittal of Court En Banc Resolutions to concerned agencies particularly to the Civil Service Commission (CSC) and the Department of Budget and Management (DBM) regarding appointments and other personnel matters pertaining to the Supreme Court (SC) and the Presidential Electoral Tribunal (PET).
Likewise, the undersigned was authorized to sign the following documents involving internal personnel matters x x x.
In this regard, may the undersigned respectfully request the same authority to sign for and in her Honor's behalf, the documents aforestated x x x in order to alleviate her Honor from signing voluminous papers pertaining to personnel matters x x x.[219]
As the Deputy Clerk of Court and Chief Administrative Officer, she is likewise authorized to sign Contracts for Infrastructure Projects recommended by the BAC. Aside from these is the all-encompassing duty to do related tasks that may from time to time be assigned by the Chief Justice, Associate Justices, or the Clerk of Court.[220]
With respect to the subject contracts, Atty. Candelaria explained that the former Chief Justice, as Head of the Procuring Entity, already approved the award of the subject contracts to Ms. Macasaet and that the said contracts were already prepared by the OCJ indicating the Deputy Clerk of Court and the Chief Administrative Office as the Court's representatives.[221] If this is not an implied authority and designation to act as a signatory for and in behalf of the Court, then what is?[222]
More importantly, aside from the abovementioned implied authority and designation to act as signatory, it is undisputed that she was also given the written authority required by law. An action slip was issued to Atty. Candelaria by Atty. Ocampo of the OCJ stating that the former Chief Justice is authorizing Atty. Candelaria to sign the contract of services of Ms. Macasaet, to wit:
I am pleased to furnish your office a copy of the Contract of Services between the Supreme Court and Ms. Helen Macasaet.
Also attached for your reference is the authorization from the Chief Justice to execute the said Contract of Services.[223]
Despite the obvious, the ponencia posits that said action slip issued by Atty. Ocampo cannot be considered as "proof that full written authority was issued by the Head of the Procuring Entity.[224] The ponencia further states that the action slip merely stated that an authorization from the former Chief Justice was attached to it, "without expressly stating what the attachment was".[225] However, contrary to this, it is evident from the above-quoted action slip that the attachment refers to the written authorization issued by the former Chief Justice to "execute said Contracts of Services", which by plain reading of the first paragraph of the action slip, refers to the Contracts of Services between Ms. Macasaet and the Court.
Thus, contrary to the finding of the ponencia that Atty. Candelaria was not given the express authority to sign the Contracts of Services with Ms. Macasaet,[226] the above-quoted action slip is proof that she was in fact given express written authority by the former Chief Justice to sign and execute the Contracts of Services on the latter's behalf.
Atty. Candelaria maintained that her act of signing the subject contracts is a valid exercise of her task of acting as signatory thereto for and in behalf of the Court, in which she exercised due diligence and acted within the authority given to her by the former Chief Justice as Head of the Court.[227]
Hence, the ponencia seriously erred when it failed to hold that Atty. Candelaria, in her capacity as Deputy Clerk of Court, is indeed authorized to sign the subject contracts. As the Chief Administrative Officer of the Court, there is no question that she may be authorized to sign documents on behalf of the Court or the Chief Justice. Moreover, she was expressly authorized by the former Chief Justice, as Head of the Procuring Entity, to sign the subject contracts on her behalf. Therefore, there is no reason to declare the subject contracts null and void on the ground that there was lack of authority on the part of the signing officer.
The Contracts of Services are valid
In sum, a careful examination of the records of the instant case, as well as a thorough review of the applicable laws, rules, and regulations, would show that, contrary to the findings of the OCAt Report and the ponencia, the subject contracts are indeed valid.
These contracts were sufficiently covered by APPs as required under R.A. 9184. The procurement of the subject contracts also followed the requirements under R.A. 9184, its IRR, and the Manual of Procedures regarding the level of participation undertaken by the BAC-CS in the Negotiated Procurement process, and with respect to the other applicable procedural and documentary requirements.
Further, there are no infirmities regarding the consultancy fees granted to Ms. Macasaet. The requirement of issuing CAFs had also been sufficiently met. Moreover, there was no splitting of contracts extant in the instant case. Finally, there is no doubt that the Chief Administrative Officer had the authority to sign the subject contracts on behalf of the Court.
A Final Note
Through the resolution of the instant matter, the Court has strayed away from the trail of justice and instead moved towards the path of unfairness.
The beginning of this matter was less than ideal. To put things into perspective, recall that this administrative matter was initially part of a letter-request for certified true copies of certain documents in connection with the filing of an impeachment complaint against the former Chief Justice. The Court referred the determination of the legality of the subject contracts to the OCAt. Subsequently, the OCAt submitted its Report which recommended that the subject contracts be declared void.
Notably, despite grave findings of liability, the OCAt Report was made without any comment from the parties involved — including Ms. Macasaet, the person who stands to be most affected by any ruling on the matter. While the parties were subsequently ordered by the Court to file their comments, these were submitted already after the fact — that is, they were not considered at all by the OCAt Report.
Moreover, it appears that the person who initially requested for certain documents in view of the filing of an impeachment complaint had already filed several cases against court officials involving the subject contracts.[228] The grounds he cited were among the grounds used in the OCAt Report in finding the subject contracts void.
Even beyond the actual and possible charges that may be brought against Court officials, this matter also affects one of the major projects of the Court, i.e., the EISP.
These factors should have alerted the Court to be more judicious in resolving this matter. Unfortunately, this was not the case. Contrary to the dictates of prudence, the Court made a declaration of nullity of the contracts on the basis of a mere request for documents and a report made without first hearing the parties involved.
The unfairness is most palpably demonstrated in its order for Ms. Macasaet to return the entire amount she had received as consultancy fees from all eight contracts of services, which amount to P11,100,000.00.[229] Even the OCAt Report recommended that despite the nullity of the contracts, payments for Ms. Macasaet's services must still be made on the basis of quantum meruit considering that she completely delivered the services required for the contracts involved.[230] Regrettably, the Court did not heed such recommendation. The Court did not even take into consideration that Ms. Macasaet was the only non-lawyer among the key parties in this matter and that most likely, she had to rely on the officials she was dealing with, who were from no less than the Supreme Court and the Office of the Chief Justice.
For the Court now to deny Ms. Macasaet payment for the services she had rendered for the EISP and other ICT projects — which, in fact, the Court has benefited and continues to benefit from — is the height of injustice. I commiserate with Ms. Macasaet on the following statements she made in her Comment:
16. Due to my limited personal knowledge of and participation in the procurement process of my ICT consultancy projects, and not being a legal professional, I am not competent to render a legal opinion on the validity of my eight (8) Contracts of Services.
17. Nevertheless, I must stress that I was made to believe, and I still believe, in all good faith that my eight (8) Contracts of Services are valid and lawful. After all, I contracted with no less than the Highest Court of the land, and I dealt with several lawyers and magistrates. It is my belief and understanding that they carefully drafted, studied and reviewed the contracts, and made sure that they are valid and legal. I had no reason to believe that x x x they did not act in good faith, and in the best interest of the government and the public at large. Also, I presumed that those who drafted, studied and reviewed the contracts performed their duties in a regular manner.
18. Assuming for argument's sake that my eight (8) Contracts of Services are void and unlawful and that I should be compensated therefor based on the principle of quantum meruit, as the OCAT suggests, there is ample basis in asserting that the compensation I received for the services I rendered is reasonable from the government's perspective even though, from my perspective, such compensation is substantially below market rate.
x x x x
20. Indubitably, I deserve to be recompensed for completing the work for which I was engaged. Significantly, the Report noted that this Honorable Court duly issued Certificates of Completion for the first to seventh Contracts of Services. Since the Report was issued prior to the expiration of the eight[h] Contract of Service on 23 November 2017, it failed to note that this Honorable Court has not issued a Certificate of Completion for the eighth and final Contract of Service, and has not released its final payment.[231]
Indeed, it is dishonorable for the Court to turn a blind eye to Ms. Macasaet's accomplished work and disregard all her efforts on the EISP and other ICT projects of the Court. She had rendered services to the Court from 2013 to 2017. How can the Court, within the bounds of fair play, order her to return what she had received for services she had already rendered in the span of four years? For the Court to reap the fruits of Ms. Macasaet's labor while taking what is due her is, in a word, a disgrace. This is unjust enrichment perpetrated by the highest court of the land.
The Court is supposed to be a bastion of fairness, justice, and equity. Regrettably, the Court failed to fulfill its role in the instant matter. I cannot, in good conscience, be part of this injustice. This explains my dissent.
Accordingly, I vote to DECLARE the eight (8) Contracts of Services executed between the Court and Ms. Helen P. Macasaet for her rendition of Information and Communications Technology (ICT) consulting services from 2013 to 2017 in relation to the Court's Enterprise Information Systems Plan and related ICT projects VALID.
[1] Rollo, p. 408.
[2] Id. at 1-48.
[3] Id. at 2.
[4] Id.
[5] Re: Management and Consultancy Services for the Development of the Philippine Judiciary's ICT Capability Assessment Report Executive Summary (Final Report).
[6] Rollo, p.2.
[7] Id.
[8] Id. at 2-3.
[9] Id. at 3.
[10] Id.
[11] Id. at 4.
[12] Id.
[13] Id. at 4-5.
[14] Id. at 6.
[15] Id. at 8.
[16] Id.
[17] Re: Approval of the Updated Enterprise Information Systems Plan Work Plan and Budget; see rollo, p. 77.
[18] Rollo, pp. 8-9.
[19] Id. at 9.
[20] Id. at 10.
[21] Id.
[22] Id. at 11.
[23] Id.
[24] Id.
[25] Id. at 12.
[26] Id. at 13.
[27] Id. at 13-14.
[28] Id. at 16.
[29] Id.
[30] Id. at 16-17.
[31] Id. at 17.
[32] Id. at 17-18. Emphasis omitted.
[33] Id. at 18-19.
[34] Id. At 19.
[35] Emphasis omitted.
[36] Id. at 19-21.
[37] See id. at 21-21A.
[38] Id. at 22.
[39] Id. at 47.
[40] Id. at 409-421.
[41] Id. at 409.
[42] Id. at 410.
[43] Id. at 410-411.
[44] Id. at 418-420.
[45] Id. at 420.
[46] Id. at 428.
[47] Id. at 407.
[48] Id. at 433-461.
[49] Id. at 435.
[50] Id.
[51] Id. at 436-437, citing Ignacio v. Alviar, 813 Phil. 782, 794 (2017). These factors are: (1) time spent and the extent of the services rendered or required; (2) novelty and difficulty of the question involved; (3) importance of the subject matter; (4) skill demanded; (5) probability of losing other employment as a result of acceptance of the proffered case; (6) customary charges for similar services and the schedule of fees of the IBP Chapter to which he belongs; (7) amount involved in the controversy and the benefits resulting to the client from the service; (8) contingency or certainty of compensation; (9) character of the employment, whether occasional or established; and (10) professional standing of the lawyer.
[52] Id.
[53] Id. at 457.
[54] Id.
[55] Id. at 458.
[56] Id.
[57] Id. at 462-463.
[58] Id. at 464-489.
[59] Id. at 668-669.
[60] Id. at 670-672.
[61] Id. at 675-679.
[62] Id. at 747-789. On February 27, 2018, Atty. Ocampo filed his first Motion for Extension of Time to file his Comment, which was granted by the Court in its Resolution dated March 6, 2018. On March 23, 2018, Atty. Ocampo filed his second Motion for Extension of Time to file his Comment, which was likewise granted by the Court in its Resolution dated April 3, 2018. Id. at 740-746.
[63] Id. at 790-791.
[64] Id. at 792-793.
[65] Ponencia, p. 35.
[66] Id.
[67] The ponencia did not make a ruling on the following grounds raised in the OCAt Report: (1) lack of participation by the BAC-CS in the negotiated procurement; (2) failure of the BAC-CS to comply with various documentary requirements for procurement; (3) lack of posting in the Philippine Government Electronic Procurement System (PhilGEPS) of the opportunity, requirements, and notice of award; (4) renewal of the consultancy contracts; (5) violation of the rule on fixed price contracts; and (6) the splitting of contracts.
[68] Rollo, p. 22.
[69] Id.
[70] Ponencia, pp. 24-29.
[71] See Resolution dated February 25, 2014, rollo, p. 232.
[72] A copy of the 2014 APP for the Supreme Court is accessible at the official website of the Government Procurement Policy Board: < http://www.gppb.gov.ph/gppb-admin/monitoring/app/APP14- SupremeCourt.pdf >
[73] Id.
[74] See rollo, pp. 100-107. The Second Contract provides: "[t]he Supreme Court seeks to engage the services of the CONSULTANT to provide technical and policy advice to the Office of the Chief Justice and the Management Information Systems Office (MISO) of the Supreme Court regarding implementation of Updated EISP Work Plan and related ICT projects; x x x." (Id. at 100; emphasis in the original)
[75] Id. at 246.
[76] Id.
[77] R.A. 9184, Sec. 7.
[78] Under Section 6 of R.A. 9184, the GPPB is mandated to pursue the development of generic procurement manuals and standard bidding forms, the use of which once issued shall be mandatory upon all Procuring Entities.
[79] See rollo, pp. 26-28.
[80] Id. at 29.
[81] R.A. 9184 was signed by President Gloria Macapagal-Arroyo on January 10, 2003, and was published on January 11, 2003, in two (2) newspapers of general nationwide circulation, namely, Manila Times and Malaya. It took effect fifteen (15) days after its publication or on January 26, 2003.
[82] R.A. 9184, Sec. 4.
[83] Id., Sec. 10.
[84] Id., Sec. 5(e).
[85] Id., Sec. 12.
[86] R.A. 9184, Sec. 48(e).
[87] SEC. 53. Negotiated Procurement. -Negotiated Procurement shall be allowed only in the following instances:
(a) In cases of two (2) failed biddings, as provided in Section 35 hereof;
(b) In case of imminent danger to life or property during a state of calamity, or when time is of the essence arising from natural or man-made calamities or other causes where immediate action is necessary to prevent damage to or loss of life or property, or to restore vital public services, infrastructure facilities and other public utilities;
(c) Take-over of contracts, which have been rescinded or terminated for causes provided for in the contract and existing laws, where immediate action is necessary to prevent damage to or loss of life or property, or to restore vital public services, infrastructure facilities and other public utilities;
(d) Where the subject contract is adjacent or contiguous to an on-going infrastructure project, as defined in the IRR: Provided, however, That the original contract is the result of a Competitive Bidding; the subject contract to be negotiated has similar or related scopes of work; it is within the contracting capacity of the contractor; the contractor uses the same prices or lower unit prices as in the original contract less mobilization cost; the amount involved does not exceed the amount of the ongoing project; and, the contractor has no negative slippage: Provided, further, That negotiations for the procurement are commenced before the expiry of the original contract. Whenever applicable, this principle shall also govern consultancy contracts, where the consultants have unique experience and expertise to deliver the required service; or,
(e) Subject to the guidelines specified in the IRR, purchases of Goods from another agency of the Government, such as the Procurement Service of the DBM, which is tasked with a centralized procurement of commonly used Goods for the government in accordance with Letters of Instruction No. 755 and Executive Order No. 359, series of 1989.
[88] Note: the applicable and prevailing IRR with respect to the subject contracts is the 2009 IRR, issued by the GPPB in its Resolution No. 03-2009 dated July 22, 2009.
[89] Ponencia, p. 17.
[90] Id.
[91] Id. at 19.
[92] Id. at 18-19.
[93] Rollo, pp. 85-87.
[94] Id. at 87. Italics supplied.
[95] Id. at 615.
[96] Id. at 454.
[97] Ponencia, p. 19.
[98] Id.
[99] Rollo, p. 87.
[100] Rollo, p. 615.
[101] Ponencia, p. 19.
[102] Samson v. Court of Appeals, 230 Phil. 59, 64 (1986).
[103] See rollo, p. 67.
[104] Id. at 50-51.
[105] Id. at 50.
[106] Id. Underscoring supplied.
[107] Id.
[108] Ponencia, p. 17. Emphasis and underscoring supplied; emphasis in the original omitted.
[109] Id. at 19.
[110] Id. at 17.
[111] Re: Creation of the Management Information Systems Office, March 5, 1992.
[112] Rollo, pp. 85-86.
[113] See id. at 614-616.
[114] Id. at 26. Emphasis and underscoring supplied.
[115] R.A. 9184, Art. XVI, Sec. 48(e).
[116] Commissioner of Internal Revenue v. Limpan Investment Corporation, 145 Phil. 191, 194 (1970), citing Luzon Stevedoring Corp. v. Court of Tax Appeals, 124 Phil. 1013, 1015 (1966) and POACO v. CBP, 131 Phil. 2, 7 (1968).
[117] R.A. 9184, Sec. 5(e).
[118] Rollo, p. 26.
[119] Manual of Procedures, p. 83
[120] Id. at 85.
[121] Id. at 85-86.
[122] Rollo, p. 26. Emphasis and underscoring supplied.
[123] GPPB NPM 032-2005; see rollo, p. 26.
[124] Section 54. Terms and Conditions for the use of Alternative Methods
x x x x
[125] Rollo, p. 27.
[126] 5th WHEREAS Clause. Emphasis supplied.
[127] GPPB NPM 040-2005.
[128] R.A. 9184, Sec. 12.
[129] Rollo, p. 31.
[130] Id.
[131] Id.
[132] Id. at 26. Emphasis and underscoring supplied.
[133] Chavez v. Judicial and Bar Council, et al., 691 Phil. 173, 200-201 (2012)
[134] An example of which is the alternative method of procurement of Limited Source Bidding under Section 48(a), Article XVI of R.A. 9184: "Limited Source Bidding, otherwise known as Selective Bidding - a method of Procurement that involves direct invitation to bid by the Procuring Entity from a set of pre-selected suppliers or consultants with known experience and proven capability relative to the requirements of a particular contract[.]"
[135] Manual of Procedures, pp. 85-86.
[136] GPPB Resolution No. 18-2015, 5th WHEREAS Clause.
[137] GPPB Resolution No. 30-2013.
[138] GPPB NPM 068-2004.
[139] Rollo, p. 33.
[140] See Manual of Procedures, pp. 11, 13-14. In summary, the Manual on Consulting Services allows for the payment of reimbursable costs such as transportation expenses, per diems, communication expense, cost of preparing documents to be submitted, acquisition of software licenses, equipment purchases, and cost of other items deemed necessary for the project. Such reimbursable costs can either be based on agreed fixes rates or on actual cost.
[141] Id. at 11, par. 5.
[142] Rollo, p. 779.
[143] Commission on Audit Circular 2012-003 (29 October 2012), Annex A, No. 1.4
[144] Manual of Procedures, pp. 11-14.
[145] Rollo, pp. 779-780.
[146] Id. at 775.
[147] See id. at 41.
[148] Id. at 775, citing A.M. No. 12-11-4-SC and A.M. No. 12-11-3-SC.
[149] Id.
[150] 11.1 million/18 = 616,666.67.
[151] Rollo, p. 776.
[152] Manual of Procedures, p. 11, 1(a), which states: The basic rates represent the salaries actually being received by the professional staff from the consulting firms as certified by the consultant with a sworn statement to be submitted to the Procuring Entity. The basic rates of all individual members of the staff shall be clearly indicated in the contract. In determining the basic rates, the following may be considered as bases:
i. Salary history;
ii. Industry rates; and
iii. Two hundred percent (200%) of the equivalent rate in the Procuring Entity as the floor.
[153] Rollo, p. 455.
[154] Id. at 456.
[155] Id.
[156] Id. at 778.
[157] See id. at 777-778.
[158] Ponencia, pp. 23-24.
[159] Compensation of Contractual Personnel and Individual Professional Consultants, dated June 1, 2000 and signed by Secretary Benjamin E. Diokno.
[160] | 3. | On the other hand, under Section 81 of the General Provisions of RA 8760 or the FY 2000 General Appropriations Act, individual professional consultants refer to those experts in a field of special knowledge or training who is contracted through service contracts to render particular outputs or services primarily advisory in nature requiring highly specialized or technical expertise which cannot be provided by the regular staff of the agency. Such hiring creates no employer-employee relationship between the individual professional consultants and the agency. |
4. | Pending the issuance of the guidelines governing the compensation of professional consultancy services, these individual professional consultants shall be paid remuneration of not more than 120% of the minimum basic salary of his equivalent position in the agency based on the allocation list duly approved by the Department of Budget and Management pursuant to National Budget Circular No. 433 dated March 1, 1994. | |
5. | The remuneration of these individual professional consultants shall be inclusive of all benefits accruing for the services rendered. Thus, they are not entitled to any other benefits otherwise accruing to regular personnel of the government. | |
6. | Under existing laws, rules and regulations the remuneration of individual professional consultants shall be chargeable against Maintenance and Other Operating Expense. |
[161] Re: Classifying as Highly Technical or Policy-Determining the Position of Chief of MISO, a Permanent Item in the Court's List of Personnel, A.M. No. 05-9-29-SC, September 27, 2005.
[162] See rollo, p. 42.
[163] Id. at 771.
[164] GPPB Resolution No. 013-2006, Approving and Adopting the Generic Procurement Manuals as Harmonized with the ADB, JBIC, and the World Bank Procurement Rules, June 14, 2006.
[165] Rollo, p. 771.
[166] R.A. 9184, 2009 and 2016 Implementing Rules and Regulations, Section 64, which states: "Membership. The GPPB shall be composed of the Secretary of the Department of Budget and Management, as Chairman, the Director-General of National Economic and Development Authority, as Alternate Chairman, with the following as Members: the Secretaries of the Departments of Public Works and Highways, Finance, Trade and Industry, Health, National Defense, Education, Interior and Local Government, Science and Technology, Transportation and Communications, and Energy, or their duly authorized representatives and a representative from the private sector to be appointed by the President upon recommendation of the GPPB.
[167] Manual of Procedures, pp. 11-15.
[168] Id. at 11.
[169] Id. at 15.
[170] Rollo, pp. 772-773.
[171] Emphasis supplied, citations omitted.
[172] Ponencia, p. 22.
[173] GPPB Resolution No. 03-2009, Approving the Revised Implementing Rules and Regulations of Republic Act No. 9184, July 22, 2009. The revised rules were published on the Official Gazette on August 3, 2009.
[174] GPPB Resolution No. 013-2006, Approving and Adopting the Generic Procurement Manuals as Harmonized with the ADB, JBIC, and World Bank Procurement Rules, June 14, 2006.
[175] See ponencia, p. 23.
[176] CSC-COA-DBM Joint Circular No. 1, s. 2017, June 15, 2017.
[177] See rollo, p. 774.
[178] Commission on Audit, Circular 2012-003, Updated Guidelines for the Prevention and Disallowance of Irregular, Unnecessary, Excessive, Extravagant and Unconscionable (IUEEU) Expenditures, October 29, 2012.
[179] Ponencia, p. 23.
[180] Id.
[181] Rollo, p. 452.
[182] See A.M. No. 92-3-021 -SC, Re: Creation of the Management Information Systems Office.
[183] Rollo, pp. 614-616.
[184] Id. at 35.
[185] Id. at 33-38.
[186] Id. at 38.
[187] Id. at 769.
[188] Id. at 768.
[189] Ponencia, pp. 29-30.
[190] Rollo, p. 768.
[191] Id. at 53.
[192] Id. at 89.
[193] Id. at 769-770.
[194] Ponencia, pp. 33-34.
[195] See Annex S of Atty. Ocampo's Comment.
[196] See Annex T of Atty. Ocampo's Comment.
[197] Rollo, p. 770.
[198] Id. at 45.
[199] Id.
[200] Id. at 419.
[201] Id. at 420.
[202] Id. at 781-782.
[203] Id. at 46.
[204] Ponencia, p. 5. Emphasis omitted.
[205] Id. at 8.
[206] Id. at 13.
[207] Rollo, p. 756.
[208] Id. at 77. Emphasis and underscoring supplied.
[209] Ponencia, pp. 9-10.
[210] Id. at 11.
[211] A.M. No. 99-12-08-SC (Revised), April 22, 2003. Emphasis and underscoring supplied.
[212] Re: Protest Against Bids and Awards Committee for Goods and Services for Disqualifying Keng Hua Paper Products Co., Inc. from Participating in the Procurement of Basic Office Supplies (Unsigned Resolution).
[213] Id.
[214] See SC-BAC-GS Bidding Documents accessible at < http://sc.judiciary.gov.ph/files/bids-and-awards/03-22-19-2-LOT1.pdf and http://sc.judiciary.gov.ph/files/bids-and-awards/04-26-19-2.pdf. >
[215] Ponencia, p. 14.
[216] Id. at 15-16.
[217] Id. at 16.
[218] Rollo, p. 671.
[219] Id. at 675.
[220] Id. at 671.
[221] Id. at 606-613.
[222] Id. at 671-672.
[223] Id. at 605.
[224] Ponencia, p. 15.
[225] Id.
[226] Id. at 15-16.
[227] Rollo, p. 672.
[228] See "Gadon files graft raps vs 5 Supreme Court officials, consultants," < https://news.abs- cbn.com/news/03/12/18/gadon-files-graft-raps-vs-5-supreme-court-officials-consultant > and < https://www.gmanetwork.com/news/news/nation/646273/gadon-files-raps-vs-sc-officials/story/ > (last accessed on July 14, 2019).
[229] Ponencia, p. 35.
[230] Rollo, p. 38.