COA orders Makati City to pay maintenance firm that rendered services without contract

Published December 13, 2019, 7:08 PM

by Ellalyn De Vera & Richa Noriega

By Ben Rosario

Despite the absence of a contract and other procurement requisites provided by law, a P17.8 million payment was awarded by the Commission on Audit (COA) to a maintenance firm that rendered its services to Makati City.

Commission on Audit (MANILA BULLETIN)
Commission on Audit (MANILA BULLETIN FILE PHOTO)

In a decision released recently, the COA Commission Proper (COA-CP) granted the Petition for Money Claim filed by Prometheus Property Management and Manpower Inc. (PPMMI) against the local government of Makati City.

In its petition, the firm, represented by its president Arsenio G. Tobiano, said it rendered maintenance service to various public schools run by the city government from July to December 2015.

Tobiano said his firm was the existing maintenance provider of the Makati schools from 2014 to the first quarter of 2015. It then participated in the bidding for a new maintenance contract and was declared the winning bidder.

“However, there was no formal award and written contract executed between the parties, allegedly because of the sudden change in the administration of the city government,” the three-man COA-CP explained.

Notwithstanding the absence of a written contract and other procurement documents connected with the bidding process, and because the issue was a matter of public exigency, PPMMI performed the maintenance jobs required, including carpentry, plumbing, and electrical services.

Billing statements were later sent by the firm to the Makati City government, but no payment was made because new city administrators noted that the PMMMI billings lacked pertinent procurement documents such as purchase request, obligation request, bidding documents, notice of award (NOA), contract, and notice to proceed (NTP).

The city government urged COA to junk the petition, pointing out that the requirements of Republic Act No. 9184 or the Government Procurement Act were not complied with.

The supervising auditor of Makati City backed the city government’s contention, saying that the procurement “was not in order.” However, the audit officer recommended compensation as she noted that services were actually rendered by PPMMI.

“The Commission finds the Petition for Money Claim meritorious,” ruled the COA-CP headed by Chairman Michael Aguinaldo.

The COA panel explained that the invitation to bid was published in the Philippine Government Electronic Procurement System and has not been withdrawn.

According to the ruling, non-payment of the services rendered will result “in undue enrichment on the part of the city.”

“The requirement of proof of actual services rendered was likewise complied [with],” the audit body added.

“However, the maintenance services were rendered without a written contract, NOA, NTP, and other bidding documents, for the reason that there was a change of administration of the city when its mayor was suspended,” the COA-CP said, referring to the Ombudsman suspension of then-mayor Junjun Binay.

Citing Supreme Court jurisprudence and its own previous decisions, the COA-CP said that while contracts were void for failing to meet requirements of the law, “public interest and equity dictate that the contractor should be compensated for services rendered and work done.”

The doctrine of quantum meruit, whereby compensation will be measured by work already accomplished, should be applied in the case, the COA-CP said.

However, the COA-CP said it cannot grant the claim for interest made by PPMMMI because it does not have the authority to do so.

 
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COA orders Makati City to pay maintenance firm that rendered services without contract

Published December 13, 2019, 12:00 AM

by manilabulletin_admin

By Ben Rosario

Despite the absence of a contract and other procurement requisites provided by law, a P17.8 million payment was awarded by the Commission on Audit (COA) to a maintenance firm that rendered its services to Makati City.

Commission on Audit (MANILA BULLETIN)
Commission on Audit (MANILA BULLETIN FILE PHOTO)

In a decision released recently, the COA Commission Proper (COA-CP) granted the Petition for Money Claim filed by Prometheus Property Management and Manpower Inc. (PPMMI) against the local government of Makati City.

In its petition, the firm, represented by its president Arsenio G. Tobiano, said it rendered maintenance service to various public schools run by the city government from July to December 2015.

Tobiano said his firm was the existing maintenance provider of the Makati schools from 2014 to the first quarter of 2015. It then participated in the bidding for a new maintenance contract and was declared the winning bidder.

“However, there was no formal award and written contract executed between the parties, allegedly because of the sudden change in the administration of the city government,” the three-man COA-CP explained.

Notwithstanding the absence of a written contract and other procurement documents connected with the bidding process, and because the issue was a matter of public exigency, PPMMI performed the maintenance jobs required, including carpentry, plumbing, and electrical services.

Billing statements were later sent by the firm to the Makati City government, but no payment was made because new city administrators noted that the PMMMI billings lacked pertinent procurement documents such as purchase request, obligation request, bidding documents, notice of award (NOA), contract, and notice to proceed (NTP).

The city government urged COA to junk the petition, pointing out that the requirements of Republic Act No. 9184 or the Government Procurement Act were not complied with.

The supervising auditor of Makati City backed the city government’s contention, saying that the procurement “was not in order.” However, the audit officer recommended compensation as she noted that services were actually rendered by PPMMI.

“The Commission finds the Petition for Money Claim meritorious,” ruled the COA-CP headed by Chairman Michael Aguinaldo.

The COA panel explained that the invitation to bid was published in the Philippine Government Electronic Procurement System and has not been withdrawn.

According to the ruling, non-payment of the services rendered will result “in undue enrichment on the part of the city.”

“The requirement of proof of actual services rendered was likewise complied [with],” the audit body added.

“However, the maintenance services were rendered without a written contract, NOA, NTP, and other bidding documents, for the reason that there was a change of administration of the city when its mayor was suspended,” the COA-CP said, referring to the Ombudsman suspension of then-mayor Junjun Binay.

Citing Supreme Court jurisprudence and its own previous decisions, the COA-CP said that while contracts were void for failing to meet requirements of the law, “public interest and equity dictate that the contractor should be compensated for services rendered and work done.”

The doctrine of quantum meruit, whereby compensation will be measured by work already accomplished, should be applied in the case, the COA-CP said.

However, the COA-CP said it cannot grant the claim for interest made by PPMMMI because it does not have the authority to do so.

 
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