Case Digest (G.R. No. 252079)
Facts:
Armando G. Estrella and Lydia G. Chua v. Commission on Audit, G.R. No. 252079, September 14, 2021, Supreme Court En Banc, Lopez, M., J., writing for the Court. Petitioners Armando G. Estrella (then Assistant Regional Director and BAC Chairman, DPWH‑NCR) and Lydia G. Chua (BAC member) sought relief by petition for certiorari under Rule 64 in relation to Rule 65, challenging COA Proper Decision No. 2018‑046 (Jan. 22, 2018) and Resolution No. 2020‑008 (Nov. 25, 2019) that sustained Notice of Disallowance (ND) No. 10‑003 (May 12, 2011).The facts begin with the DPWH‑NCR project “Restoration of the Damaged Revetment/Dredging of Flood Control of Meycauayan River (Valenzuela Side),” funded by SARO No. A‑09‑09064 (Dec. 21, 2009) with P40,000,000 released under Sub‑Allotment SR2009‑12‑007232 (Dec. 22, 2009). On Dec. 22, 2009 Regional Director Edilberto D. Tayao requested that the project be modified into eight phases of P5,000,000 each; the request was recommended and approved by Assistant Secretary Dimas S. Soguilon and Undersecretary Manuel M. Bonoan on Dec. 28, 2009. The DPWH‑NCR BAC purportedly conducted bidding on that same day; each of the eight phases was won by a lone bidder and the eight phases were awarded among four contractors (RNN, R.M. Nunez, RAIN, AKN).
A COA post‑audit resulted in Audit Observation Memorandum No. 10‑09 (Nov. 9, 2010), which found: (1) interlocking ownership/directorship among the winning contractors that restrained competition and produced single bidders per phase; (2) non‑compliance by two contractors with the experience requirement in Section 23.5.2.5 of the IRR of RA No. 9184; (3) apparent splitting of the SARO/contract (potential violation of IRR‑A Sec. 54.1); and (4) non‑observance of pre‑procurement/post‑qualification requirements including inadequate advertisement and pre‑bid procedures. A COA inspection on Nov. 9, 2010 also observed structural defects (cracks, an alleged collapsed midsection) which the contractors later repaired; contractors claimed repairs were done at no government expense and pointed to prior completed similar projects to justify experience.
COA issued ND No. 10‑003 (May 12, 2011) disallowing aggregate payments of P36,084,006.06 and charging Estrella and Chua (among DPWH officers and BAC members) with liability; the contractors were not charged in the ND. Only Estrella appealed to COA National Government Section (NGS) Cluster D. In Decision No. 2013‑001 (Jan. 11, 2013) the COA NGS absolved Bonoan, Soguilon and Tayao (those who recommended/approved the modification) but affirmed liability of Estrella and the BAC members for procurement irregularities and confirmed government loss from the structural defects; that decision was elevated to COA Proper for automatic review under Section 7, Rule V of the 2009 Revised Rules of Procedure of COA.
COA Proper, in Decision No. 2018‑046 (Jan. 22, 2018), affirmed the COA NGS decision in full, excluding Bonoan, Soguilon and Tayao but maintaining Estrella’s liability; it directed issuance of s...(Subscriber-Only)
Issues:
- Did the Commission on Audit Proper commit grave abuse of discretion in sustaining ND No. 10‑003?
- If the ND is proper, are petitioners solidarily liable to return the entire disallowed amount (P36,084,006.06), or only to the extent of the net disallowed amount after accounting for contractors...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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