Title
Office of the Ombudsman-Mindanao vs. Martel
Case
G.R. No. 221134
Decision Date
Mar 1, 2017
Provincial officials bypassed public bidding for vehicle procurement, violating procurement laws. SC upheld dismissal for grave misconduct and gross neglect, emphasizing public trust and strict legal compliance.
administrative penalty
dismissal from service
illegal procurement
A

Case Summary (G.R. No. 221134)

Factual Background

The provincial government of Davao del Sur, through the Office of the Governor, requested the acquisition of five service vehicles for the Governor and Vice-Governor. The Purchase Requests were dated January 24, 2003, February 18, 2003, and July 15, 2003. The vehicles sought were two Toyota Hilux 4x4 SR5, one Mitsubishi L300 Exceed DX, and two Ford Ranger XLT 4x4 M/T. The procurement was not subjected to public bidding. Instead, it was immediately effected through direct purchase based on the recommendation of Putong as PGSO. The recommendation was approved by the PBAC members, including Martel and Guinares. The vehicles were purchased and delivered to the provincial government. The disbursement vouchers for the vehicles were signed by Martel and Guinares in their respective capacities as Provincial Accountant and Provincial Treasurer.

After a concerned citizen reported the absence of public bidding, the Ombudsman initiated an investigation on the acquisition and procurement of the vehicles.

Ombudsman’s Ruling and Initial Penalties

In its Decision dated June 14, 2012, the Ombudsman found Martel, Guinares, Putong, and Mier guilty of grave misconduct and gross neglect of duty for improperly resorting to direct purchase while disregarding the requirement of public bidding. The Ombudsman ruled that Gan’s administrative liability was dismissed due to re-election and applied the doctrine of condonation as declared in Aguinaldo vs. Santos, 212 SCRA 768. The Ombudsman imposed the penalty of dismissal from service for the implicated respondents and directed the Governor to implement the decision and submit a compliance report.

Motions for Reconsideration and Modification as to Putong

Martel and Guinares moved for reconsideration, arguing that they had no intent to commit irregularity because they merely approved the PGSO’s recommendation to directly purchase the vehicles. Putong, in turn, argued that he adopted an existing practice in his office that vehicles were purchased from car dealers because no one participated in public bidding, and he further asserted that he had been removed as PGSO in 2004 and was not a party to the entire process.

In its Order dated February 28, 2013, the Ombudsman partially granted Putong’s motion for reconsideration. Because Putong had been relieved of the PGSO position in 2004 pursuant to Memorandum Order No. 221-2004, the Ombudsman assessed that his participation in the anomalous procurement was limited. It thus reduced his penalty from dismissal to one (1) year suspension without pay. The Ombudsman, however, sustained the penalty of dismissal for Martel, Guinares, and Mier, reasoning that they fully participated in the purchase and acquisition of the service vehicles.

Appeal to the Court of Appeals

Martel and Guinares appealed to the CA under Rule 43 of the Rules of Court. The CA, in its February 4, 2015 Decision, agreed that the PBAC violated procurement rules by resorting to negotiated purchase despite the absence of prior public bidding. The CA applied the procurement law framework under R.A. No. 9184 and ruled that negotiated procurement could be resorted to only when there were two failed biddings. It found no failure of bidding because no public bidding had been conducted.

The CA also observed additional procurement-related violations. It noted that the PBAC violated Section 18 of R.A. No. 9184, which prohibits reference to brand names for procurement purposes, and it also noted a violation of COA Circular No. 75-6, which precludes government officials or employees from using more than one motor vehicle.

The CA declined to give weight to Martel and Guinares’ claim that they only followed Putong’s recommendation. It stressed that under R.A. No. 9184, the PBAC had final and independent authority to determine the mode of procurement.

Despite affirming administrative guilt, the CA lowered the penalty imposed on Martel and Guinares from dismissal to one year suspension without pay. It justified the reduction on the absence of proof of overpricing or damage to the government, and on Martel and Guinares’ length of service. It further reasoned that a graver penalty would violate the right to equal protection because Putong, whom it found to be similarly situated as a PBAC member, received a lesser penalty.

Issue Raised in the Supreme Court

The Ombudsman elevated the matter, raising the sole issue of whether the CA committed an error in interpreting the law when it automatically considered length of service as a mitigating circumstance in favor of the respondents.

The Parties’ Contentions

The Ombudsman, through the Office of the Solicitor General, argued that the CA should not have reduced the penalty based on length of service. It maintained that the respondents’ tenure should have reinforced the expectation of integrity and proper compliance with procurement laws. The Ombudsman asserted that their experience should have made them aware that bypassing public bidding was a blatant violation of R.A. No. 9184, constituting grave misconduct and gross neglect of duty. It also argued that mitigation was unwarranted because Putong’s participation was limited, unlike the respondents whose participation was active and involved signing disbursement vouchers, indicating knowledge and continuing participation in the illegal procurement.

Martel and Guinares countered that the Ombudsman’s motion for reconsideration before the CA was improperly served and thus did not toll the period to appeal. Substantively, they asserted that the CA properly exercised authority to reduce the penalty because they acted without bad faith and that they should receive the same penalty as Putong, considering both were PBAC members.

Legal Basis and Reasoning

The Court determined that the procurement of the service vehicles was governed by R.A. No. 9184, which took effect on January 26, 2003. Prior to that date, procurement rules under R.A. No. 7160 would have applied. The Court also held that COA Circular No. 92-386, issued under Section 383 of R.A. No. 7160, applied to acquisitions by local government units. It emphasized that Section 10 of R.A. No. 9184 mandated that all procurement be conducted through competitive bidding, subject to the exceptions under Article XVI of the Act. It similarly cited Section 27 of COA Circular No. 92-386, which required competitive public bidding unless otherwise provided.

The Court explained that public bidding protects public interest by enabling open competition and preventing anomalies. It also held that strict observance of bidding rules is the only safeguard to fair and honest bidding.

The Court then addressed the statutory exceptions. It held that only exceptional circumstances provided by R.A. No. 9184 and R.A. No. 7160 allow negotiated procurement. Section 53 of R.A. No. 9184 permitted negotiated procurement only upon specific occasions, including when there are two failed biddings. Section 369 of R.A. No. 7160 similarly allowed negotiated purchase when public bidding had failed for two consecutive times. It further noted that under Section 35 of R.A. No. 9184, there is failure to bid when no bids are received. In the case, the Court found that no public bidding had been conducted. Therefore, there was no failure to bid, and the procurement arrangement could not be justified as negotiated procurement under the law.

The Court rejected Martel and Guinares’ principal defense that they merely approved the PGSO’s recommendation. It held that the PBAC had independent authority to determine the mode of procurement and could not pass the decision-making responsibility to the PGSO. It stated that, under the procurement framework, the PBAC conducts evaluation of bids and recommends award to the head of the procuring entity. Thus, as PBAC members, Martel and Guinares were not bound by the PGSO’s recommendation as to the mode of procurement. Their participation in choosing and approving the procurement mode was an active act, not a passive one, and they could not “wash their hands” from liability.

The Court also found additional violations that reinforced the respondents’ administrative culpability. It cited the Purchase Requests stamped “direct purchase,” which contained brand names of the intended vehicles instead of technical specifications, a violation of Section 24 of COA Circular No. 92-386. It further invoked Section 18 of R.A. No. 9184 prohibiting reference to brand names in procurement of goods. The Court explained that the prohibition prevents undue preference and ensures fair competition.

The Court also identified a violation of COA Circular No. 75-6, which limited the use of service vehicles by government officials. It noted that the respondents permitted the Governor of Davao del Sur to purchase and use more than one service vehicle, contrary to the circular’s rule that no government official or employee authorized to use a vehicle from decree funds may use more than one such motor vehicle, with only an exception for the President and a special exception for the Chief Justice.

The Court stressed that Martel and Guinares actively participated in the acquisition by signing disbursement vouchers for the vehicles as Provincial Accountant and Provincial Treasurer, respectively. Because of these actions, public funds were disbursed for illegally procured service vehicles.

On the administrative characterization, the Court reiterated that misconduct involves transgression of established rules, including unlawful behavior or gross neglect of duty. It noted that misconduct becomes grave when corruption, clear intent to violate the law, or willful disregard of established rules is evident, and it must be proven by substantial evidence. It described gross negligence as want or absence of care or failure to exercise even slight care, reflecting a thoughtless disregard of consequences without effort to avoid them. It cited Lagoc v. Malaga to underscore that when bidding rule

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