G.R. Nos. 229026-31. April 27, 2022
TASK FORCE ABONO-FIELD INVESTIGATION OFFICE, OFFICE OF THE OMBUDSMAN, PETITIONER, VS. EUGENE P. DURUSAN, EDUARDO L. TORRES, CECILIA C. ALMAJOSE, ROMULO P. ARCILLA, JR., VICTORINA OLEA, VIRGILIO R. ESGUERRA, AND DANILO R. RUMBAWA, RESPONDENTS.

FACTS

The Province of Rizal received a ₱5,000,000.00 grant from the Department of Agriculture. It implemented two projects: (1) procurement of 15 irrigation pumps, and (2) procurement of liquid fertilizers. For the irrigation pumps, a public bidding was conducted on November 5, 2004, and the contract was awarded to P.I. Farm Products as the lowest bidder. The delivery was accepted, and payment was made.
For the liquid fertilizers, Provincial Agriculturist Danilo Rumbawa prepared purchase requests for 1,266 bottles (September 2004) and 1,189 bottles (February 2005) of Bio Nature liquid organic fertilizer at ₱1,500.00 per bottle. The Bids and Awards Committee (BAC), based on a survey by its Technical Working Group headed by Romulo Arcilla, found that only Bio Nature contained the specified ingredients. The BAC recommended, and the Governor approved, the procurement of Bio Nature from Feshan Philippines, Inc. via direct contracting, stating Feshan was the exclusive importer and distributor. The deliveries were accepted by Provincial Accountant Cecilia Almajose, and payments were made to Feshan.
In 2011, Task Force Abono filed a complaint against the local officials (the BAC members and Almajose) for graft and administrative violations. It alleged the liquid fertilizer procurement violated the Government Procurement Reform Act (RA 9184) by improperly resorting to direct contracting without canvassing for suitable, lower-priced substitutes, and that Feshan’s license to operate had expired. It also alleged irregularities in the pump procurement.
The Ombudsman found substantial evidence against the officials for the fertilizer procurement, ruling that their failure to conduct public bidding when other suitable suppliers existed caused the government to lose approximately ₱3,237,341.00. It found them guilty of Dishonesty, Grave Misconduct, and Conduct Prejudicial to the Best Interest of the Service and ordered their dismissal. It found no irregularities in the pump procurement.
The Court of Appeals reversed the Ombudsman’s ruling on administrative liability. It found that the BAC exercised due diligence in determining that only Bio Nature met the specifications and that Feshan was its exclusive distributor, justifying direct contracting. It held that the officials acted in good faith and that Task Force Abono failed to prove the elements of the administrative charges.

ISSUE

Whether the Court of Appeals erred in reversing the Ombudsman’s finding that there was substantial evidence to hold the respondents administratively liable for Dishonesty, Grave Misconduct, and Conduct Prejudicial to the Best Interest of the Service in connection with the procurement of Bio Nature liquid fertilizer.

RULING

Yes, the Court of Appeals erred. The Supreme Court reinstated the Ombudsman’s Decision finding the respondents administratively liable.
The Court held that direct contracting under RA 9184 is an exception to competitive bidding and is permissible only if the goods are sold by an exclusive dealer or manufacturer with no suitable substitute. The procuring entity bears the burden of proving the propriety of this exemption. In this case, the respondents failed to discharge this burden. The survey conducted by the Technical Working Group was insufficient to prove that Bio Nature was the only suitable fertilizer or that Feshan was its exclusive distributor. The respondents did not present any documentary evidence, such as a certification from the manufacturer, to prove Feshan’s exclusive distributorship. Furthermore, Task Force Abono presented evidence of other suppliers offering liquid organic fertilizers at lower prices, which the BAC did not properly evaluate. The haste in recommending direct contracting without exploring these alternatives constituted gross neglect of duty.
The Court found that the respondents’ actions—failing to conduct a proper market survey, not verifying Feshan’s exclusive distributorship and expired license, and not considering cheaper alternatives—amounted to gross negligence. This gross negligence constituted Grave Misconduct and Conduct Prejudicial to the Best Interest of the Service. Dishonesty was not proven as there was no clear evidence of deliberate intent to deceive. However, the presence of Grave Misconduct, which requires a corrupt motive or willful intent to violate the law, was established by the respondents’ conscious indifference to their duties under procurement laws, which led to overpricing and damage to the government.
The Supreme Court emphasized that the Ombudsman’s factual findings are generally accorded respect and finality. The Court of Appeals overstepped by re-evaluating the evidence and substituting its own judgment. The Ombudsman’s finding of substantial evidence for administrative liability was thus reinstated. The penalty of dismissal from service, along with its accessory penalties, was imposed on respondents Danilo R. Rumbawa, Cecilia C. Almajose, Romulo P. Arcilla, Jr., Eugene P. Durusan, Victorina A. Olea, Eduardo L. Torres, and Virgilio R. Esguerra.