G.R. No. 214690 - Movertrade Corp. vs. Commission on Audit

On February 7, 1996, DPWH contracted Movertrade Corporation for dredging works in the Pampanga Bay and the primary Pasac-Guagua-San Fernando waterways affected by the Mount Pinatubo eruptions.
The contract was for a total amount of P188,698,000.00, which included:

Paragraph 19 of the Agreement stipulated a “No Loss, No Gain” basis for adjusting the contract price if increased costs resulted from government actions.

During the project’s implementation, Movertrade undertook additional dredging works as a measure to counter fast siltation in the river system.
The additional work amounted to 984,354.26 cubic meters, equating to an extra cost of P43,725,016.23.
Movertrade submitted its request for reimbursement of these additional costs through letters in July and August 1998 addressed to DPWH’s Secretary, seeking evaluation by the Price Escalation and Arbitration Committees.
The claim was based on:

The “No Loss, No Gain” provision of the contract;
An OIC memorandum suggesting recovery by quantum meruit for works performed without a written contract; and
A memorandum from the Emergency-Project Management Office Project Director recommending the approval of the additional claim.

After repeated demands and the DPWH’s failure to settle the outstanding amount, Movertrade formally demanded payment in January 2005 for a slightly lesser volume of 948,767.70 cubic meters.
In February 2007, an OIC from the DPWH Legal Service opined that recovery might be allowed on a quantum meruit basis, though noting the absence of a valid contract covering the additional works.
On November 8, 2010, DPWH advised Movertrade that its claim should be properly filed with the Commission on Audit (COA), as it is a money claim against the government.
Movertrade subsequently filed a petition before COA Proper, seeking reimbursement of P43,725,016.23.

The claim was supported by the contractual “No Loss, No Gain” provision;
The additional work was performed under quantum meruit given that DPWH’s engineers supervised and expected these works; and
DPWH’s nonpayment violated its own procedural guidelines.

Movertrade had no factual basis for its claim;
The contract expressly provided that any work not authorized or ordered would not be compensated (per Section 15 of the Conditions of Contract and Item III of the Bid Book Form); and
The law, including Section 85 of PD No. 1445 (the Government Auditing Code), prohibited executing work without an appropriation.

Movertrade had previously sought compensation for additional works such as side dumping in 1997, which was similarly denied by COA Proper.
In Decision No. 2014-234 dated September 11, 2014, COA Proper denied Movertrade’s additional claim by holding that:

The principle of quantum meruit did not apply since a written contract governed the project;
Movertrade’s failure to obtain project engineer or DPWH approval prior to commencing additional works constituted a breach of contract;
The absence of an approved price adjustment or variation order negated the claim; and
DPWH’s procedural guidelines merely provided rules for processing extraordinary claims without altering the contractual obligations.

Whether Movertrade’s resort to filing a petition for certiorari without first availing a motion for reconsideration before COA Proper renders the petition procedurally defective.
Whether the COA Proper committed grave abuse of discretion in denying Movertrade’s money claim for the additional dredging works.