Monday, December 05, 2011

Candelario L. Verzosa, Jr. v. Guillermo N. Carague, et al., G.R. No. 157838, March 8, 2011.

Unlawful Expenditure for being Excessive; Factors. Price is 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, the following factors may be considered: (a) supply and demand forces in the market; (b) government price quotations; (c) warranty of products or special features; (d) brand of products. In this case, the issue was whether the computer units bought by Cooperative Development Authority (CDA) from Tetra were overpriced. The records showed that while the respondents found nothing wrong per se with the criteria adopted by the CDA in the overall evaluation of the bids, the technical aspect was seriously questioned. 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 SC concluded that the price per item of the PC units, laptop and UPS were overpriced by almost 50%. This comparison was based on the initial purchase of 23 PC units with the bid price by Tetra of Php1,269,630.00 (23 PC units, 1 unit 386 Tower and 1 unit 386 Notebook) under Disbursement Voucher No. 01-92-12-2399. There was an additional (repeat) purchase of 21 PC units for Php929,649.00 (same price per item of Php44,269.00) and one unit UPS for Php86,000.00. The total contract price obtained by Tetra was Php2,285,279.00, of which COA disallowed the amount of Php881,819.00 representing the overprice per the auditor’s findings. 

Unlawful Expenditure; Liability of Public Officers. The SC held the petitioner liable personally and solidarily for the disallowed amount of Php881,819.00. The doctrine of separate personality of a corporation finds no application because the Cooperative Development Authority is not a private entity but a government agency created by virtue of Republic Act No. 6939 in compliance with the provisions of Section 15, Article XII of the 1987 Constitution. Moreover, respondents satisfactorily established that petitioner acted in bad faith when he prevailed upon the Development Academy of the Philippines-Technical Evaluation Committee (DAP-TEC) to modify the initial result of the technical evaluation of the computers by imposing an irrelevant grading system that was intended to favor one of the bidders, after the bids had been opened. Candelario L. Verzosa, Jr. v. Guillermo N. Carague, et al., G.R. No. 157838, March 8, 2011.

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