G.R. No. 218428 - People vs. Bricero y Ferdez

On 15 September 1977, the Philippine Tourism Authority (PTA) entered into a “Contract for Project Design and Management Services for the development of the proposed Zamboanga Golf and Country Club, Calarian, Zamboanga City” with Flavio K. Macasaet (later assignee Flavio K. Macasaet & Associates, Inc.).
Article IV of the Contract provided for a professional fee of seven percent (7%) of the “actual construction cost,” while Article V prescribed a five-stage payment schedule based initially on a “reasonable estimated construction cost” and finally on the “final actual project cost.”

Upon project completion, PTA paid what it deemed the final balance but later granted the main contractor, Supra Construction Company, an additional P3,148,198.26 for price escalation due to increased material costs.

Petitioner claimed an additional professional fee of P219,302.47 (7% of P3,148,198.26), arguing that the escalation formed part of the “final actual project cost.”
On 3 July 1985, PTA denied the claim, invoking Article VI (Change of Orders) on the ground that no extra services were rendered by petitioner.
Petitioner sought reconsideration from PTA and then to the Commission on Audit (COA), which on 10 July 1987 likewise denied the claim, finding no basis for additional payment in the absence of extra work.

Petitioner filed a Petition for Certiorari under Section 7, Article IX of the 1987 Constitution to overturn COA’s ruling.
The central dispute: whether price escalation costs must be included in the “final actual project cost” for computing the balance of the professional fee.

Whether the price escalation granted to the main contractor is part of the “final actual project cost” under the Contract, thereby entitling petitioner to an additional professional fee.
Whether Article VI’s requirement of additional services for extra compensation applies to petitioner’s claim.