Verzosa v. Caraque (G.R. No. 157388; March 8, 2011)


FACTS: In December 1992, the Cooperative Development Authority (CDA) purchased from Tetra Corporation (Tetra) a total of forty-six (46) units of computer equipment and peripherals in the total amount ofP2,285,279.00.Tetra was chosen from among three qualified bidders (Tetra, Microcircuits and Columbia).The bidding was conducted in accordance with the approved guidelines for bidding and a memo issued by the Office of the President.Petitioner who was then the Executive Director of the CDA approved the purchase.The Resident Auditor sought the assistance of the Technical Services Office (TSO), COA in the determination of the reasonableness of the prices of the purchased computers. The TSO found that the purchased computers were overpriced/excessive by a total ofP 881,819.00.It was noted that (1) no volume discount was given by the supplier, (2) as early as 1992, there were so much supply of computers in the market so that the prices of computers were relatively low already; and (3) when CDA first offered to buy computers, of the three qualified bidders, Microcircuits offered the lowest bid. The Resident Auditor issued a Notice of Disallowance.

The Notice was appealed by the CDA to the COA Chairman, which upheld the disallowance. It held, among others, that the CDA should not have awarded the contract to Tetra but to the other competing bidders, whose bid is more advantageous to the government.

ISSUE: Did the COA err in disallowing the purchase?

HELD: Preliminarily, petitioner availed of the wrong remedy in filing a petition for review under Rule 45. Article IX-A, Section 7 of the Constitution provides that decisions, orders or rulings of the COA may be brought to the SC on certiorari by the aggrieved party. Moreover, under Sec. 2, Rule 64, of the Revised Rules of Civil Procedure, a judgment or final order or resolution of the COA may be brought by the aggrieved party to the Supreme Court on certiorari under Rule 65.

Pursuant to its constitutional mandate to "promulgate accounting and auditing rules, and regulations including those for the prevention and disallowance of irregular, unnecessary, excessive, extravagant or unconscionable expenditures, or uses of government funds and properties," the COA promulgated the amended Rules under COA Circular No. 85-55-A. With respect to excessive expenditures, priceis considered "excessive" if it is more than the 10% allowable price variance between the price paid for the item bought and the price of the same item per canvass of the auditor.In determining whether or not the price is excessive, factors such as supply and demand, government quotations, may be considered.

Records showed that while the respondents found nothing wrong with the CDA criteria used to evaluate the bids, the final technical evaluation report was apparently manipulated to favor Tetra, which offered a Korean-made brand as against Microcircuits which offered a US-made brand said to be more durable, at a lower price.The conduct of public bidding in this case was not made objectively to purchase quality equipment at the least cost to the government.The price difference far exceeded the 10% allowable variance in the unit bought and the same items price.

Findings of quasi-judicial agencies, such as the COA, which have acquired expertise because their jurisdiction is confined to specific matters are generally accorded not only respect, but at times even finality, if such findings are supported by substantial evidence. It is only upon a clear showing that the COA acted without or in excess of jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction that this Court will set aside its decisions or final orders. We find no such arbitrariness or grave abuse on the part of the COA when it disallowed in audit the amount representing the overprice in the payment by CDA for the purchased computer units and peripherals, since its findings are well-supported by the evidence on record. DENIED.