A.M. No. 17-12-02-SC - Re: Helen P. Macasaet

Case Summary (A.M. No. 17-12-02-SC)

Contracts Challenged and Governing Legal Framework

The challenged arrangements consisted of eight Contracts of Services between the Court and Ms. Macasaet for ICT consultancy work for the EISP and related computerization and ICT projects. The Contracts of Services were entered through negotiated procurement, justified on the basis that the work was allegedly highly technical, primarily confidential, and policy determining, where trust and confidence would be the primary consideration. The procurement strategy cited Section 53.7 of the Revised Implementing Rules and Regulations (IRR) of Republic Act (RA) No. 9184, which allows direct negotiation for Highly Technical Consultants, subject to the maximum term of six months, renewable at the option of the appointing Head of the Procuring Entity but not exceeding the latter’s term. The challenged contracts were also measured against executive and administrative procurement contract controls under Executive Order (EO) No. 423, the Government Procurement Reform Act (RA No. 9184), the Government Auditing Code under Presidential Decree (PD) No. 1445, and relevant provisions of the Administrative Code of 1987 (EO No. 292).

EISP Background and Need for a Consultant

The EISP was designed to structure the Judiciary’s ICT roadmap. After approval of the 2009 EISP, the Court faced a gap because the 2009 Budget did not include funding for judiciary-wide technical infrastructure, nationwide connectivity, and network security, which were prerequisites to the nationwide rollout of the EISP and ongoing ICT programs such as the eCourts. The Court therefore found it necessary to hire an ICT consultant to review the status of EISP implementation and related ICT and computerization projects and to develop policy and technical guidance for implementation.

BAC-CS Action and the Recruitment of Ms. Macasaet

As part of the consultancy procurement, the Bids and Awards Committee for Consultancy Services (BAC-CS) issued a 10 September 2013 Memorandum finding the procurement to be highly technical and requiring trust and confidence because it was a priority program of the Court. The BAC-CS recommended three consultants it believed could be considered, among them Ms. Macasaet, for consideration by the Supreme Court.

A Joint Memorandum dated 12 September 2013 to then Chief Justice Maria Lourdes P. A. Sereno, signed by Atty. Michael B. Ocampo and Mr. Edilberto A. Davis, stated that after evaluating the three proposed consultants, the offices found Ms. Macasaet to be the most qualified. This recommendation was approved by the then Chief Justice. Pursuant thereto, the Supreme Court entered into a six-month Contract of Services with Ms. Macasaet on 1 October 2013. The consultancy fee under this first Contract of Services was P600,000.00, payable in six equal monthly installments.

Approval for Direct Negotiation for the Updated EISP Work Plan

In a 16 April 2014 Memorandum, Atty. Ocampo stated that the Court needed a technical and policy consultant for the implementation of the Updated EISP Work Plan and proposed direct negotiation of a six-month contract at P250,000.00 per month, inclusive of applicable taxes. This proposal was anchored on Section 53.7 of the Revised IRR of RA No. 9184, allowing direct negotiation for consultants whose work is highly technical, proprietary, primarily confidential, or policy determining. A subsequent 15 May 2014 Memorandum reiterated that the procurement could proceed without the BAC-CS’s involvement due to being highly technical and prioritised for the Supreme Court. The BAC-CS nonetheless named the previously considered consultants for consideration.

A Joint Memorandum dated 20 May 2014 concluded that Ms. Macasaet was the most qualified among the three proposed consultants and was approved by Chief Justice Sereno. On 23 May 2014, the Court entered into a second six-month Contract of Services with Ms. Macasaet.

Extensions and Total Number of Contracts

In the En Banc approval process, the Court later issued an En Banc Resolution dated 16 September 2014 in A.M. No. 14-09-06-SC, approving the Updated EISP Work Plan and its budget (2014-2019) as the output of the first Contract of Services. A Joint Memorandum dated 1 December 2014 recommended extension of Ms. Macasaet’s engagement for another six months to assist with first-year implementation of the plan and development of ICT policies. Chief Justice Sereno approved the recommendation, and a Contract of Services was entered on 10 December 2014.

Thereafter, the contracts were extended five more times, resulting in a total of eight Contracts of Services signed between the Court and Ms. Macasaet. The record reflects that each extension covered a period of six months per extension and that the Court entered into the first contract on 1 October 2013, the second on 23 May 2014, and subsequent renewals/ extensions thereafter, culminating in the eighth contract with execution on 24 July 2017 (as discussed in the resolution’s treatment of compensation and the final contract window).

Procedural History of the Administrative Matter

The question of legality began as part of A.M. No. 17-08-05-SC. In a Resolution dated 19 September 2017, the Court referred the legality issue to the Office of the Chief Attorney (OCAt) and directed then former Chief Justice Sereno to comment. The OCAt Report was submitted on 6 November 2017. Former Chief Justice Sereno submitted a Preliminary Comment on 20 November 2017, and the Court then required the BAC-CS and Ms. Macasaet to comment through a Resolution dated 21 November 2017. The BAC-CS and Ms. Macasaet filed their comments on 25 January 2018 and 22 January 2018, respectively. Further, Atty. Candelaria and Atty. Ocampo were required to comment on the OCAt Report, with their submissions filed on 20 February 2018 and 25 April 2018, respectively.

Main Issue

The issue presented was the legality of the eight Contracts of Services entered through negotiated procurement, ostensibly represented by Atty. Eden T. Candelaria as Chief Administrative Officer and Deputy Clerk of Court, with Ms. Macasaet for ICT consultancy related to the Supreme Court’s EISP.

Ruling of the Court

The Court declared that all the eight Contracts of Services should be declared void ab initio. It grounded the declaration of nullity on multiple independent bases, namely: (i) lack of written authority of the government signatory; (ii) lack of qualifications of Ms. Macasaet for a highly technical consultant position under the TOR; (iii) unreasonable and excessive compensation; (iv) procurement without proper appropriation and violation of requirements on fiscal authorization; and (v) absence of the required Certificate of Availability of Funds (CAF) for the later contracts.

The Court directed Ms. Macasaet to reimburse the total amounts received as consultancy fees under the eight Contracts of Services from the Supreme Court amounting to P11,100,000.00, less whatever taxes were withheld, within thirty (30) days from finality of the resolution, with legal interest at six percent (6%) per annum from the expiration of that thirty-day period until fully paid.

Legal Basis and Reasoning: Lack of Written Authority of the Signatory

The Court focused first on the signature process. It held that the signatory in the eight Contracts of Services was Atty. Candelaria, acting as Chief Administrative Officer and Deputy Clerk of Court, but that the records failed to show she was authorized in writing by the Supreme Court En Banc to sign the contracts.

Even Atty. Candelaria admitted that she was not expressly given a written authorization by then Chief Justice to sign these contracts, asserting instead an implied authority because the Chief Justice had already approved the award and the Office of the Chief Justice prepared the contract. The Court rejected this theory and held that implied authority does not satisfy the requirement of EO No. 423, which mandates that government contracts require the approval and signature of the Head of the Procuring Entity or duly authorized officials, with such delegation of authority must be done in writing and must carry full authority to enter into or give final approval for the particular contract.

The Court described the Supreme Court as the Procuring Entity and held that the Supreme Court’s Head of the Procuring Entity is the Supreme Court En Banc. It relied on constitutional and internal rules showing that administrative supervision and related administrative powers are exercised through the Court en banc or Divisions, and not by the Chief Justice acting alone absent proper collegial authorization. The Court emphasized the collegial nature of the Supreme Court, citing its jurisprudence that the Chief Justice cannot decide administrative matters alone.

The Court further reasoned that even if power had been delegated to the Chief Justice, re-delegation to another official could not occur because delegata potestas non potest delegari. It held that Atty. Candelaria did not demonstrate any valid written delegation from the Supreme Court En Banc or from the Chief Justice that would vest in her full authority to sign this particular consultancy contract.

Legal Basis and Reasoning: Qualification Requirements for “Highly Technical Consultants”

The Court next concluded that Ms. Macasaet did not meet the qualifications required for engagement as a Highly Technical Consultant under the Updated EISP consultancy scope. While the procurement was treated as highly technical under Section 53.7 of the IRR, the Court found that Ms. Macasaet lacked an educational degree directly related to ICT and had only short-term non-degree ICT training. Her academic background, as found by the Court, focused on mathematics and education, with her graduate degree being in Business Administration, plus certification in Customer Relationship Management (CRM).

The Court relied on the Scope of Work and found that the terms required the consultant t

Case Syllabus (A.M. No. 17-12-02-SC)

This administrative matter involved the legality of eight Contracts of Services entered into by the Court and Ms. Helen P. Macasaet for her rendition of consultancy services for the Enterprise Information Systems Plan (EISP) for the years 2010–2014, subsequently extended and reflected in the Updated EISP Work Plan covering 2014–2019.
The Court treated the procurement and contracting arrangements as negotiated procurement through the exception for Highly Technical Consultants under the Government Procurement Reform Act.
The Court ultimately declared all eight contracts void ab initio and ordered Ms. Macasaet to reimburse the amounts paid as consultancy fees, subject to taxes withheld, plus legal interest.
Justice Caguioa dissented and voted to declare the contracts VALID, insisting that the procurement complied with applicable rules and that nullification and reimbursement were unjust.

Parties and Procedural Posture

The administrative issue began as part of A.M. No. 17-08-05-SC, a letter-request by Atty. Lorenzo G. Gadon for certified true copies of documents connected with an impeachment complaint, which later resulted in the referral of the legality question.
By a Resolution dated 19 September 2017 in A.M. No. 17-08-05-SC, the Court referred the issue on the legality of the contracts to the Office of the Chief Attorney (OCAt) and allowed former Chief Justice Maria Lourdes P. A. Sereno to comment.
The OCAt Report was submitted on 6 November 2017.
Former Chief Justice Sereno filed a Preliminary Comment on 20 November 2017.
By a Resolution dated 21 November 2017, the Court required the Bids and Awards Committee for Consultancy Services (BAC-CS) and Ms. Macasaet to comment.
The BAC-CS and Ms. Macasaet filed their respective Comments on 25 January 2018 and 22 January 2018.
By a Resolution dated 30 January 2018, the Court required Attys. Eden T. Candelaria and Michael B. Ocampo to comment on the OCAt Report, which they complied with on 20 February 2018 and 25 April 2018.
The case was resolved by a later Court en banc resolution, with the majority opinion authored by Justice Carpio, and a dissent filed by Justice Caguioa.

Key Factual Allegations

The EISP served as the framework for the Judiciary’s Information and Communications Technology (ICT) initiatives.
The Court approved an initial EISP submitted by INDRA Sistemas S.A. (INDRA) through a 23 June 2009 Resolution in A.M. No. 08-11-09-SC, but the 2009 Budget lacked funding for nationwide technical infrastructure, connectivity, and network security—prerequisites for nationwide EISP implementation and ongoing ICT projects.
The Court therefore needed to engage an ICT consultant to review implementation status and related ICT and computerization projects.
In a 10 September 2013 Memorandum, the BAC-CS treated the procurement as highly technical and primarily requiring trust and confidence, recommending three consultants for consideration by the Court.
A Joint Memorandum dated 12 September 2013 recommended Ms. Macasaet as the most qualified, and then-Chief Justice approved the hiring.
The Supreme Court, through then-Chief Administrative Officer Atty. Eden T. Candelaria, entered into a six-month Contract of Services on 1 October 2013, with a consultancy fee of P600,000.00, payable in six equal monthly installments.
In a 16 April 2014 Memorandum, Atty. Ocampo proposed directly negotiating a six-month consultancy with a fee of P250,000.00 per month, citing Section 53.7 of the Revised IRR of RA No. 9184, which allows direct negotiation for Highly Technical Consultants.
The BAC-CS, in a 15 May 2014 Memorandum, reiterated that the procurement could proceed without its involvement, again citing trust and confidence due to the priority status of the program.
Between 23 May 2014 and the final extension reflected in the matter, the Court executed eight contracts in total, with the second contract starting 23 May 2014 and subsequent extensions carried out through repeated six-month renewals.
The OCAt Report emphasized gaps in the documentary and procedural record, including the absence of evidence of required postings, submissions, negotiation steps, resolutions recommending awards, notices of award, notices to proceed, and proof of required postings.
The contracts were repeatedly signed by Atty. Candelaria as Chief Administrative Officer and Deputy Clerk of Court, despite the Court’s later finding that records did not show written authority from the Court en banc for her to sign.

Statutory and Regulatory Framework

The Court grounded its analysis on the Government Procurement Reform Act, Republic Act (RA) No. 9184, including its IRR provision on Highly Technical Consultants under Section 53.7.
The Court applied Executive Order (EO) No. 423 (20 April 2005), particularly Sections 4 and 5, on approval of alternative procurement contracts and the authority to bind the Government.
Under EO No. 423, the Court treated the Head of the Procuring Entity (HoPE) as responsible for approval and entry into alternative procurement contracts, with delegation requiring written full authority.
The Court also relied on internal rules governing how the Supreme Court exercises administrative supervision, invoking Article VIII, Section 6 of the 1987 Constitution and Rule 2, Section 1 of the Internal Rules of the Supreme Court, which recognizes that the Court exercises administrative functions through the Court en banc or its Divisions.
The Court further applied PD No. 1445, the Government Auditing Code of the Philippines, particularly Sections 85, 86, and 87 on appropriation before entering into contract, Certificate of Availability of Funds (CAF), and the legal consequences of violations.
The decision also invoked the Administrative Code of 1987, EO No. 292, particularly provisions on certification of availability of funds and void contracts for illegal expenditures.
With respect to procurement planning, the Court treated Section 7 of RA No. 9184 as requiring that procurement be included in the Annual Procurement Plan (APP) consistent with the yearly budget.
For compensation limits, the Court used DBM Circular Letter No. 2000-11 and later DBM Circular Letter No. 2017-9, while emphasizing that the consultancy fees were determined unreasonable and unjustified for the periods in question.
The decision considered the classification of positions and referenced A.M. No. 05-9-29-SC on classifying the Chief of MISO position as highly technical or policy determining.

Issues Presented

The Court addressed the legality of all eight Contracts of Services executed via negotiated procurement with Ms. Macasaet.
The main issues included:
- Whether Atty. Candelaria had the required written authority from the proper delegating authority to sign the contracts on behalf of the Court.
- Whether Ms. Macasaet was qualified as a Highly Technical Consultant for the Updated EISP implementation.
- Whether the consultancy fees were reasonable and supported by applicable compensation rules.
- Whether the contracts were executed without proper APP inclusion and without proper appropriation, violating RA No. 9184 and PD No. 1445.
- Whether the contracts were void for lack of required CAF for the latter contracts.

Parties’ Contentions

The majority recorded that the OCAt Report concluded the contracts were void due to: lack of signing authority, lack of qualifications, excessive consultancy fees, procurement not in accordance with RA No. 9184, and violations of CAF and appropriation requirements.
The Court’s majority also relied on the contention that the BAC-CS effectively took a “hands-off” approach, and that necessary documentary steps for negotiated procurement w