G.R. No. 256720 - Maibarara Geothermal, Inc. vs. Commissioner of Internal Revenue

The petitioners are officials and employees of the Davao City Water District (DCWD), namely:

The respondents are Danilo C. Castro and George F. Inventor, who initiated administrative and criminal actions against the petitioners.

On November 21, 1997, the DCWD Board of Directors approved Board Resolution No. 97-248 to undertake the Cabantian Water Supply System Project with an overall budget of ₱33,200,000.00.
The project involved drilling two wells (VES 15 in Cabantian and VES 21 in Communal) with an estimated cost of ₱4,000,000.00 each.
Included in the recommendation was the proposal to negotiate directly with Hydrock Wells, Inc. (Hydrock) for the drilling phase.

On November 24, 1997, Hydrock’s president, Roberto G. Puentespina, communicated Hydrock’s willingness to undertake the drilling work even before receiving formal approval from DCWD.
On November 25, 1997, the Pre-Bidding and Awards Committee-B (PBAC-B) adopted Resolution No. 05-97 to dispense with the advertisement requirement and instead send invitations to accredited well drillers (inviting Hydrock, AMG Drilling and Construction, Inc., and Drill Mechanics Incorporated).
Only Hydrock and AMG submitted quotations; however, AMG later cited equipment unavailability as a reason to delay implementation.
Given the declared urgency and necessity, the PBAC-B passed Resolution No. 06-97 on December 16, 1997, recommending a negotiated contract with Hydrock.
The DCWD Board later approved this recommendation via Resolution No. 98-27 on February 13, 1998, awarding the projects to Hydrock; a notice to proceed was issued on February 20, 1998.

In January 2005, respondents filed separate joint Affidavit-Complaints with the Office of the Ombudsman alleging violations of Section 3(e) of Republic Act No. 3019 (the Anti-Graft and Corrupt Practices Act) in connection with the VES 15 and VES 21 Projects.
Additional complaints accused the petitioners of grave misconduct, grave abuse of authority, dishonesty, and gross negligence due to:

Failure to observe proper public bidding procedures
Premature commencement of drilling by Hydrock before contract award
Unauthorized or “surreptitious” change orders and irregularities in documentation
Alleged collusion among PBAC-B members to pre-award contracts

The petitioners submitted Joint Counter-Affidavits denying these accusations, arguing that:

The limited source bidding was legally justified under Executive Order No. 164
The urgency due to public outcry over water shortages warranted the expedited procurement process
The ultimate authority for contract award rested with the DCWD Board of Directors, not solely the PBAC-B.

The Ombudsman, in decisions dated October 26, 2007 (OMB-M-A-05-104-C for the VES 15 Project) and November 28, 2007 (OMB-M-A-05-093-C for the VES 21 Project), found the petitioners administratively liable for grave misconduct.
Specific findings included:

Failure to conduct public bidding as mandated by P.D. No. 1594 and its Implementing Rules and Regulations (IRR).
Initiation of drilling work prior to formal contract award and appropriate documentation.
Implementation of change orders without the requisite approvals.

Penalties varied among the petitioners, with some being dismissed from service (or facing accessory penalties) and others being recommended for suspension pending reinstatement if still in service.
The petitioners appealed these findings, contending specifically on issues of forum shopping and the proper classification of their offense (grave misconduct versus simple neglect/misconduct).

Whether the procurement for the VES 15 and VES 21 Projects conformed to the competitive public bidding requirements mandated by P.D. No. 1594 and its IRR.
Whether the justification of “public outcry” for water supply constitutes an adequate basis for resorting to a negotiated (simplified) bidding procedure.

Whether the petitioners, by failing to observe the proper bidding procedures and by allowing early commencement and unauthorized change orders, are liable for grave misconduct or for lesser offenses such as Simple Neglect of Duty and Simple Misconduct.
The degree of culpability of each petitioner given their respective roles in the PBAC-B and managerial positions within the DCWD.

Whether the filing of separate administrative complaints by the respondents in connection with the VES 15 and VES 21 Projects, based on similar sets of facts, constitutes forum shopping.
The admissibility of these separate complaints under the administrative rules, even considering the inclusion of a Certificate of Non-Forum Shopping.

Whether the responsibility for the irregularities should be solely attributed to the PBAC-B members or also to the DCWD General Manager (Carbonquillo) who made the initial recommendation for direct negotiation.
Whether the actions of the petitioners, particularly in certifying project completion or in endorsing negotiations, demonstrate bad faith or constitute a mere neglect of duty.