G.R. No. 227069 - Lamsen vs. People

The Cooperative Development Authority (CDA) purchased 46 units of computer equipment and peripherals from Tetra Corporation on two separate occasions in December 1992 for a total amount of ₱2,285,279.
The bidding involved three qualified bidders—Tetra, Microcircuits, and Columbia—with Tetra ultimately being awarded the contract despite offering the highest bid.

CDA engaged the Development Academy of the Philippines-Technical Evaluation Committee (DAP-TEC) to conduct the technical evaluation of the bids in accordance with the Approved Guidelines for IT procurement and Memorandum Order No. 237.
Petitioner, Candelario L. Verzosa, Jr., then Executive Director of CDA, was instrumental in reconstituting the Pre-qualifications, Bids and Awards Committee (PBAC) and ordering the engagement of DAP-TEC even though such functions were ordinarily those of the PBAC Chairman.
The DAP-TEC produced two separate technical evaluation reports; the initial report ranked Tetra lowest while the second (antedated) report showed Tetra winning, following modifications in the grading system allegedly directed by the petitioner.

On May 18, 1993, the Resident Auditor of CDA sought assistance from the COA Technical Services Office (TSO) to evaluate the reasonableness of the computer purchase prices.
In its October 18, 1993 reply, the TSO found that the computers were overpriced by ₱881,819, based on the absence of volume discounts and price discrepancies with available market data.
The COA issued Notice of Disallowance No. 93-0016-101 on November 17, 1993, disallowing the excessive expenditure.

Petitioner filed a motion for reconsideration (and later a Notice, Manifestation, and Apology submitted by his counsel noting his demise on June 24, 2010) asserting that he was not directly involved in any act of bad faith.
His arguments included that:

There was no finding of fact establishing that he manipulated or directed changes in the technical evaluation to favor Tetra.
His role was merely ministerial (signatory approvals) and he relied on the apparatus of the PBAC and DAP-TEC.
The COA’s determination of overpricing was based on an improper canvass and erroneous price comparisons (branded versus generic or non-branded items), and the applicable standards, such as those declared in Arriola and subsequent jurisprudence, were not properly applied.

The Office of the Solicitor General (OSG) submitted a comment arguing that there was no substantial evidence of his direct responsibility in manipulating the bidding process.

The COA maintained that the comparison of prices and the absence of volume discount clearly demonstrated overpricing, and that petitioner’s directives in reconstituting the PBAC and engaging DAP-TEC were operations reflecting bad faith or at least irregularity.
The Supreme Court’s Decision dated March 8, 2011, affirmed the COA’s disallowance and held the petitioner personally and solidarily liable for the ₱881,819 disallowed amount.
A dissenting opinion, notably by Justice Sereno, raised several points contending that there was no basis for imputing bad faith and that the petitioner’s actions were within the bounds of his ministerial responsibilities.

Whether the purchase price of the computer equipment was excessive in comparison to prevailing market prices and proper benchmarks.
Whether the COA’s methods of canvassing — including the use of a telephone confirmatory canvass and comparisons between branded and non-branded items — complied with due process and established procedures.

Whether the petitioner, through his actions (such as reconstituting the PBAC and engaging DAP-TEC), can be held personally and solidarily liable for the ₱881,819 disallowance.
Whether there was sufficient evidence to establish that the petitioner acted in bad faith, malice, or gross negligence in influencing or directing the technical evaluation process.

Whether the COA's audit and evidence-gathering methods (including the non-production of canvass sheets and reliance on limited price comparisons) violated the procedural rights of the CDA and petitioner.
Whether the COA and the court appropriately applied the guidelines established in prior cases (e.g., Arriola, National Center for Mental Health Management) regarding evidence in overpricing cases.

Whether COA Memorandum No. 97-012 and other later-issued guidelines should be applied retroactively to a transaction and audit conducted in 1993.
Whether the failure to adhere to these guidelines affects the validity of the findings and the imputation of liability on the petitioner.