GR L 107016; (March, 1994) (Digest)
G.R. No. L-107016 March 11, 1994
DEVELOPMENT BANK OF THE PHILIPPINES, VIVENCIO MACAPAGAL, ALFREDO CASAL, EDUARDO MENDOZA, ADORACION GARCIA, RODEL MAGNAYON, ROSARIO ELEP, MA. ANTONIO REBUENO, JOSE RIVERA, M. SAPALICIO and G. ROJAS, petitioners, vs. COMMISSION ON AUDIT, respondent.
FACTS
The Development Bank of the Philippines (DBP) conducted a public bidding for one unit of Uninterruptible Power Supply (UPS). After evaluation, Voltronics Industrial Corporation (Voltronics) was recommended for award. Its bid was P1,190,000.00, exclusive of customs duties and taxes amounting to P246,539.25. The DBP Corporate Auditor, under the pre-audit system of COA Circular No. 86-257, found the proposed purchase order “in order” but suggested that future bid forms clarify that the quoted price should be the total price inclusive of duties and taxes. DBP subsequently issued a purchase order to Voltronics for P1,436,539.25, inclusive of the duties and taxes. After COA Circular No. 89-299 lifted pre-audit and instituted a post-audit system, a new Corporate Auditor post-audited the transaction and disallowed the P246,539.25 payment for customs duties and taxes, holding the DBP officials jointly and severally liable. The COA Commission en banc affirmed the disallowance.
ISSUE
Whether the Commission on Audit validly disallowed, in its post-audit, the payment of customs duties and taxes for the UPS purchased by DBP from Voltronics.
RULING
No, the disallowance was not valid. The Supreme Court reversed the COA decision.
The Court held that the COA has the constitutional power to conduct a post-audit of the transaction, notwithstanding the prior pre-audit. However, on the merits of the disallowance, the Court found it improper. The evidence showed that DBP was aware Voltronics’s bid excluded duties and taxes, as indicated on its bid form and referenced in subsequent communications. The former Corporate Auditor’s observation about the lack of clarity in the bid form confirmed there was no prior settled understanding that a bid price automatically included all charges. Allowing the addition of duties and taxes to Voltronics’s bid did not grant it an unfair privilege, as its total price (P1,436,539.25) was still over a million pesos lower than the only other qualified bidder’s offer (P2,493,000.00). The outcome of the bidding would not have changed even if the other qualified bidder had been given a similar opportunity. Therefore, the payment of P246,539.25 for customs duties and taxes was valid and should be allowed in post-audit.