The Supreme Court has affirmed the dismissal from government service of a district engineer of the Department of Public Works and Highways (DPWH) in Zamboanga del Norte for his alleged role in the anomalous purchase of guardrails and guardrail posts worth P5.5 million in 2004.
In a 20-page decision, the SC’s Second Division through Associate Justice Ramon Paul Hernando denied the petition by Arturo Miñao, officer-in-charge of the 1st engineering district of the DPWH in Sta. Isabel, Dipolog City, seeking the reversal of a Court of Appeals decision issued on August 23, 2016 and resolution issued on March 30, 2017, which sustained the Office of the Ombudsman-Mindanao’s order of dismissal against him.
The anti-graft body found Miñao along with two others administratively liable for grave misconduct, gross neglect of duty, serious dishonesty, and conduct prejudicial to the best interest of service.
The case arose from a letter-complaint dated October 14, 2005 by a certain Aurelio Cadavedo pertaining to the alleged anomalous purchase of guardrails and guardrail posts worth P5.5 million sometime in 2004.
A team of the Commission on Audit Regional Office No. IX (COA-IX), which was duly constituted to investigate the letter-complaint of Cadavedo, submitted an audit investigation report (AIR) on October 5, 2006 which stated that the said engineering district committed splitting of contracts in procuring the said materials under the Special Allotment Release Order (SARO) issued by the Department of Budget and Management (DBM) for the Dipolog-Oroquieta and Dipolog- Sindangan national roads (National Roads).
In particular, the audit investigation report alleged that the said office resorted to splitting of contracts by awarding 11 purchase orders worth P500,000 each to AUF Enterprises without public bidding; purchased overpriced guardrails and guardrail posts from AUF Enterprises; and left guardrails and guardrail posts at the project site resulting in wastage of government resources.
The petitioner denied the allegations and insisted that under the SARO, the main project was split into 11 projects, and that said projects, with an aggregate amount of P5.5 million were already divided in the amount of P500,000 per project under the SARO.
He also asserted that they could not have violated Republic Act No. (RA) 9184 or the Government Procurement Reform Act and its Implementing Rules and Regulation (IRR) in the procurement of the materials for the project, considering that RA 9184 took effect on October 8, 2003, whereas the SARO was issued only on December 16, 2003.
Since RA 9184 took effect shortly before the issuance of the SARO, they insisted that the procurement of materials for the projects should be governed not by RA 9184 but by the old procurement law.
However, the OMB-Mindanao noted that the abstracts of bids and purchase orders show that the guardrails and accessories were all procured from one supplier, AUF Enterprises.
In this regard, the OMB- Mindanao found it absurd for petitioner and his co-respondents to purchase in 11 installments the same materials from the same supplier when the budget for the procurement of the materials for the whole project was readily made available under the SARO.
Since the materials to be procured for the 11 projects are identical and can be supplied by a single supplier, the OMB-Mindanao also concluded that there could only be one procurement contract/project.
Consequently, it held that the petitioner along with his co-respondents in the case resorted to the prohibited act of splitting government contracts as defined in RA 9184.
The OMB-Mindanao also found that there was also failure to conduct public bidding under both the old and new procurement law.
In upholding the ruling of the CA and the OMB-Mindanao, the SC held that RA 9184, including its implementing rules and regulations, does not prohibit or penalize the splitting of projects into sub-sections.
The SC noted that what the law penalizes is the splitting of contracts.
It explained that the government may enter into contracts with private individuals or entities for the implementation of several projects but our laws prohibit the splitting of contracts in order that the requirements of the law may not be evaded or circumvented to suit personal interests in government procurements.
“It was highly erroneous for petitioner to conclude that the implementation of the SARO necessitated the execution of 11 government contracts,” the high court said in denying the petition.
“We find no reason to deviate from the findings of the OMB-Mindanao and the CA. Taken all the matters discussed above, it is apparent that petitioner’s intent in entering into 11 identical contracts with AUF Enterprises was all too obvious – to avoid the requirements of public bidding as required under RA 9184 and its IRR,” the SC stressed.