G.R. No. 192591 , June 29, 2011
EFREN L. ALVAREZ, Petitioner, vs. PEOPLE OF THE PHILIPPINES, Respondent.

FACTS

Petitioner Efren L. Alvarez was the Mayor of Muñoz, Nueva Ecija. In 1995, the Sangguniang Bayan (SB) invited Mr. Jess Garcia of Australian-Professional, Inc. (API) regarding a plan to construct a four-storey shopping mall (Wag-wag Shopping Mall) under a Build-Operate-Transfer (BOT) arrangement worth ₱240 million. An invitation for proposals was published. The Pre-qualification, Bids and Awards Committee (PBAC) recommended the proposal of the lone bidder, API. The SB authorized the Mayor to enter into a Memorandum of Agreement (MOA) with API, which he signed on September 12, 1996. A groundbreaking ceremony was held, and existing government structures were demolished. API excavated the site but stopped work within a few months, and no mall was constructed.
On August 10, 2006, petitioner was charged before the Sandiganbayan with violating Section 3(e) of R.A. No. 3019 (Anti-Graft and Corrupt Practices Act). The Information alleged he gave API unwarranted benefits by awarding the contract despite API not being a duly-licensed construction company per the Philippine Construction Accreditation Board (PCAB) records and lacking the experience and financial qualifications, to the damage and prejudice of public service.
At trial, petitioner testified the project was an unsolicited proposal under the BOT law, would entail no government funds, and was an alternative to a GSIS loan. He claimed the SB studied API’s proposal, a public hearing was conducted, and an invitation to bid was published. He asserted API paid a disturbance fee and that no government money was spent. He admitted on cross-examination that he did not verify if API was a licensed contractor or if it and an associated entity (APRI) were the same from the SEC, that he was not familiar with the BOT law, and that the published invitation specified a shorter submission period than required by law.
The Sandiganbayan convicted petitioner, finding he railroaded the project, there was no competitive bidding, the contractor was unqualified, and BOT law provisions were disregarded.

ISSUE

Whether the Sandiganbayan erred in finding petitioner guilty beyond reasonable doubt of violating Section 3(e) of R.A. No. 3019 .

RULING

The Supreme Court DENIED the petition and AFFIRMED the Sandiganbayan’s Decision with MODIFICATION regarding the penalty.
The Court held that all elements of violation of Section 3(e) of R.A. No. 3019 were present:
1. The accused is a public officer discharging administrative, judicial, or official functions. Petitioner was the Municipal Mayor.
2. The accused acted with manifest partiality, evident bad faith, or gross inexcusable negligence. Petitioner acted with gross inexcusable negligence. His duty required him to exercise due diligence in ensuring the contractor was qualified. His failure to verify API’s PCAB license—a basic and crucial requirement for a construction contractor—despite the project’s massive cost, constituted gross negligence. His claim of relying on the SB and PBAC did not absolve him, as the head of the procuring entity, he had the responsibility to ensure compliance with laws and rules. His admissions of not verifying the license, not being familiar with the BOT law, and publishing an invitation with a non-compliant period demonstrated a blatant disregard of his duties.
3. Such action caused any undue injury to any party, including the government, or gave any private party any unwarranted benefit, advantage, or preference. The award to an unqualified contractor gave API an unwarranted benefit/advantage. Furthermore, the government suffered undue injury. The demolition of existing, functional government buildings (Motor Pool, Health Center, etc.) to clear the project site, which was then left as an excavated pit, constituted actual damage. The loss of the use of these properties and the cost of relocating offices were tangible injuries to public service.
The Court rejected petitioner’s arguments. The project being a BOT arrangement did not excuse compliance with legal requirements, including the contractor’s license. The “unsolicited proposal” process under the BOT law still requires public bidding if there are other interested proponents, which was not properly conducted here. Petitioner’s negligence was the proximate cause of the government’s injury.
PENALTY: The indeterminate penalty imposed by the Sandiganbayan was modified. For violation of Section 3(e) of R.A. No. 3019 , the prescribed penalty is imprisonment for not less than six years and one month nor more than fifteen years, with perpetual disqualification from public office. Applying the Indeterminate Sentence Law, the Supreme Court imposed an indeterminate penalty of six (6) years and one (1) month, as minimum, to ten (10) years, as maximum, with perpetual disqualification from holding public office.