The Supreme Court (SC) has upheld the Commission on Audit (COA) decision disallowing the P2.3 million payment made by state-run Tourism Infrastructure and Enterprise Zone Authority (TIEZA) in 2011 to a supplier of Christmas decorations.
The decision stemmed from the TIEZA transaction that paid P2.3 million to Kabukiran Garden for the Christmas decorations project through direct contracting.
The SC said while the Procurement Law allows alternative mode of procurement including direct contracting, resorting to such alternative mode must be justified.
“The procuring entity must justify the necessity for an item that may only be procured through direct contracting, and it must be able to prove that there is no suitable substitute in the market that can be obtained at more advantageous terms,” the high court said in a statement released Wednesday.
“In the case of the TIEZA officials, the Court found that they failed to show that Kabukiran Garden has an interest in the conceptualization, supply, and installation of Christmas decorations which isprotected by intellectual property.”
The SC pointed out that TIEZA officals “did not conduct the required survey to ensure the exclusivity of the source of the procured services and that there is no suitable alternative that can be obtained at a lower cost.”
It also cited COA’s observation that providers of Christmas decoration are abundant in the country.
“For failing to justify the TIEZA officials’ resort to direct contracting, the disallowance by the COA must be affirmed,” the SC said.