SC affirms disallowance of Talisay, Cebu gov’t expenses on fertilizer, computerization project

SC affirms disallowance of Talisay, Cebu gov’t expenses on fertilizer, computerization project

The Supreme Court (SC) has upheld the disallowance of the P29.36 million anomalously spent by the Talisay City, Cebu, government on a computerization project from 2002 to 2003 and the purchase of liquid fertilizers from 2005 to 2006.

In a recent 26-page en banc decision, the SC dismissed Mayor Socrates Fernandez’s petition questioning the Commission on Audit’s (COA) April 23, 2012 decision that found the projects irregular.

However, the SC directed the COA to compute the compensation due to PowerDev Corporation for the software and equipment that redounded to the benefit of the city government, in order to avoid unjust enrichment by the latter.

Based on this determination, the SC directed the computerization contractor to return the difference between the total amount it received from the city and the price due on a quantum meruit basis.

The SC acted in the interest of substantial justice and equity when it reduced the liability of PowerDev, Fernandez and the members of the city’s bids and awards committee (BAC) this way.

It noted that almost all the systems installed by PowerDev were fully operational and were being used by the city. But some were discontinued after the COA issued a suspension notice, resulting the breakdown of the software programs.

“PowerDev should be compensated for the use of its resources up to the extent of the actual work it performed and services it rendered. Otherwise, the government would be unjustly enriched at the expense of PowerDev,” read the decision penned by Associate Justice Henri Jean Paul Inting.

This was not to say the computerization project was aboveboard. The SC sustained the COA’s finding that public biddings were not conducted for the project.

It noted that the software development agreements and the project proposals were executed prior to the dates of the alleged bidding.

Fernandez admitted that the city directly contracted with PowerDev, but insisted it was valid.

But, the SC noted that the conditions for direct contracting were not shown. If a valid direct contracting really took place, there would have no reason to attach bidding documents.

The SC agreed with the COA’s observation that there was no appropriation ordinance authorizing the realignment of funds, in violation of Section 336 of the Local Government Code (LGC).

Meanwhile, the SC also upheld the COA’s finding that the bidding for the supply of liquid fertilizers was questionable.

The COA found that there were two different sets of minutes for the same BAC meeting allegedly hold on December 16, 2005. This cast doubt on the authenticity of the bidding itself and the supporting documents.

The SC frowned upon the city government’s “irresponsibility and lack of prudence” in determining the prevailing price of the liquid fertilizer, causing an overprice of P711.90 per liter.

The city ended up purchasing the fertilizer for the price of P900 per liter as offered in the alleged bidding, despite a canvass showing the prevailing price to be P188.10.

The SC rejected Fernandez’s invocation of the presumption of good faith, in light of the violations of the LGC and the Government Procurement Reform Act.

Fernandez was recently elected as city councilor. But, the Sandiganbayan on October 25, 2019 perpetually disqualified him from public office and ordered him to pay a P6,000 fine for the crime of obstruction of justice.

This was because Fernandez retrieved a red lady’s bag from the sports utility vehicle of his son Joavan on June 4, 2010. At the time, the car was under police custody following Joavan’s warrantless arrest for poking a gun at a driver after a near-collision. When the policemen confronted Fernandez, he pulled rank.

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