Case Summary (G.R. No. 203834)
Antecedent Facts
The case originates from a civil action for specific performance and damages initiated by Diosdado M. Mendoza, operating under Da Superior Builders, against the DPWH and its officials, including the then DPWH Secretary Fiorello R. Estuar. Mendoza was awarded contracts for two road construction projects in Benguet, with a total bid amount exceeding P26 million. Upon commencement, he identified a critical issue regarding the absence of a right-of-way for a significant portion of the project, allegedly leading to project delays. Subsequent allegations included the conspiratorial actions of DPWH officials that culminated in the forfeiture of Mendoza's contracts and his blacklisting from future bidding opportunities.
Trial Court Decision
The Regional Trial Court ruled in favor of Mendoza, declaring the termination of the contract unjustified. The court indicated that the DPWH had failed to secure the necessary right-of-way, thus precluding Mendoza’s ability to comply with contract terms. The trial court awarded Mendoza significant damages, including reimbursement for materials and labor, performance bond forfeiture, moral damages, and attorney's fees, while also recognizing the moot status of the requested preliminary injunction concerning contract performance.
Court of Appeals Decision
The Court of Appeals overturned the trial court's decision, asserting that the DPWH's actions in terminating the contract and rebidding the project were justified due to Mendoza's excessive negative slippage, reaching 31.852%. The Court emphasized Mendoza's failure to mobilize resources effectively and noted ongoing reminders and warnings from UTI regarding delays. The appellate court determined that right-of-way issues applying only to segments of the 15-kilometer project could not excuse the overall performance deficiencies exhibited by Mendoza.
Analysis of Negative Slippages
The analysis derived from the case revealed Mendoza's project incurred substantial negative slippages from the outset, exceeding permissible levels set under government guidelines for such projects. Mendoza's delays were attributed to inadequate mobilization of equipment and resources, with evidence showing the contractor did not attempt to work on accessible segments of the project. The court found that Mendoza's reliance on right-of-way issues was insufficient to justify the performance failures, noting that he received several warnings and did not take prompt corrective actions.
Governmental vs. Proprietary Functions
Petitioners contended that the DPWH’s entry into contracts constituted a waiver of its sovereign immunity. However, the Court of Appeals maintained that such contracts were executed in a governmental capacity, which does not imply a waiver
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Case Background
- The case is a petition for review on certiorari challenging the decisions of the Court of Appeals, which reversed the Regional Trial Court's ruling in favor of Mendoza.
- Diosdado M. Mendoza, operating as Da Superior Builders, sought specific performance and damages against the Department of Public Works and Highways (DPWH) and its officials for contract violations related to construction projects in Benguet.
Antecedent Facts
- Mendoza won the bid for two projects under the Highland Agriculture Development Project (HADP): Package VI (15-kilometer road) and Package IX (barangay roads).
- He received a Notice to Proceed on March 2, 1989, for Package VI but encountered issues with the right-of-way, which he claimed violated Ministry Order No. 65.
- Despite resolving the right-of-way issue months later, Mendoza faced accusations of negative slippage in project implementation.
Legal Proceedings
- Mendoza filed a complaint in Civil Case No. 90-53649 against the DPWH, its Secretary, and United Technologies, Inc. (UTI) for specific performance and damages, including a request for a preliminary injunction.
- The trial court issued a Temporary Restraining Order to prevent rebidding of Package VI and the awarding of Package IX to other contractors.
- The defendants claimed lack of jurisdiction and that Mendoza did not exhaust administrative remedies.