G.R. No. 209219, December 2, 2014.
BASES CONVERSION AND DEVELOPMENT AUTHORITY (BCDA), Petitioner, vs. COMMISSION ON AUDIT CHAIRPERSON MA. GRACIA M. PULIDO-TAN, COMMISSIONER HEIDI L. MENDOZA and COMMISSIONER ROWENA V. GUANZON, THE COMMISSIONERS, COMMISSION ON AUDIT, Respondents.

FACTS

On July 9, 2001, the Bases Conversion and Development Authority (BCDA) entered into a Contract for Construction Management Services (CMS) with Design Science, Inc. (DSI) for a building project at Fort Bonifacio. The contract period was seven months (five-month construction and two-month post-construction), with a service fee of ₱2,350,500.00. Due to a 30-day extension granted to the main contractor, BCDA and DSI executed Supplemental Agreement No. 1, extending DSI’s services by one month for an additional ₱560,320.00. A COA Technical Services Office (TSO) review found the extension cost excessive by ₱101,200.00. After a revision by the Project Manager reduced the amount to ₱456,720.00, a TSO re-evaluation still found it excessive by ₱117,760.00. This was due to DSI’s revised manning schedule extending the services of five personnel (Resident Sanitary Engineer, Resident Electrical Engineer, Administrative Assistant/Accountant, Utility Man, and Driver) by two man-months each, despite the supplemental agreement providing for only a one-month extension overall. The COA Audit Team Leader issued a Notice of Disallowance for ₱117,760.00. BCDA’s appeals were denied by the COA Legal and Adjudication Office, the COA Adjudication and Settlement Board (ASB), and finally the COA Commission Proper (Decision No. 2013-109). BCDA filed this petition for certiorari.

ISSUE

Whether the Commission on Audit gravely abused its discretion in affirming the disallowance of ₱117,760.00 paid for the extension of the Construction Management Services contract.

RULING

The Supreme Court DISMISSED the petition, finding no grave abuse of discretion on the part of the COA. The Court held that the COA correctly disallowed the amount. The original CMS contract covered a seven-month period. The Supplemental Agreement provided for an extension of services for only one month. However, DSI’s revised schedule sought to extend the services of the five specific personnel by two man-months, effectively making them serve for eight months. Since services rendered within the original seven-month contract period were already compensated under the original agreement, the claim for additional payment for one extra man-month for these five personnel was unauthorized and unnecessary. The COA’s findings were accorded respect and finality, as they were not tainted with unfairness or arbitrariness amounting to grave abuse of discretion.