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,
Complainants,
OMB-L-A-12-0332-G
- vs
Grave Misconduct
POSITION PAPER
FOR COMPLAINANTS
COMPLAINANTS, by counsel, most respectfully state that:
I
PARTIES
Complainant FROILAN T. GRUEZO is of legal age, Filipino,
and with residence at A. Luna St., Brgy. San Francisco, Majayjay,
Laguna, while PILIPINAS PARA SA PINOY (PPP)1 a non-stock
non-profit organization duly organized and existing under Philippine
laws and with principal place of business at 640 Morales Avenue,
Brgy. Gen. Paulino Santos, Koronadal City and with members in the
Municipality of Majayjay, Laguna, hereto represented by its Secretary
General, Atty. Paterno L. Esmaquel, also of legal age and with office
1
The original and amended Articles of Incorporation of PPP and the necessary Secretary Certificate are
attached as Annexes A and B, respectively in the Affidavit-Complaint dated June 14, 2012.
address at Unit 1706 17th Floor, Prestige Tower, F. Ortigas Jr. Rd.,
Ortigas Center, Pasig City.
The complainant Froilan T. Gruezo is a concerned citizen and
resident of Majayjay, Laguna (Majayjay for short), while PPP has
members in Majayjay who will be directly affected by the manifestly
and grossly disadvantageous water contracts subject matter of the
instant criminal complaint. It is part of the advocacies of PPP to
promote good governance, transparency and accountability in our
Government as well as in our public officers/employees. The PPP is
duly represented hereto by its Secretary General, Atty. Paterno L.
Esmaquel, who is likewise from Majayjay, Laguna.
Respondent Teofilo B. Guera (respondent Guera for short) is the
incumbent Municipal Mayor of the Majayjay, while Ana Linda C.
Rosas (respondent Rosas for short) is the incumbent Municipal Vice
Mayor and the Presiding Officer of the Sangguniang Bayan (SB) of
Majayjay, while the other respondents, namely: Lauro C. Mentilla,
Mauro C. Aragon, Juancho M. Andaya, Antonio S. Zornosa, Jr., Mario
O. Mercolisa, Jr., Jovanie Ann G. Esquillo and Bernaldo I. de Villa are
incumbent Members of SB of Majayjay. Respondent Rosas and the
other respondents Members of SB are hereinafter collectively referred
to as respondent Members of SB.
II
3
4
Spring
which
is
being
distributed
to
its
and
implement
the
manifestly
and
grossly
Sec. 4 Article II of the Contract for the Supply of Bulk Water dated August 1, 2012.
Sec. 22Article XIV of the Contract for the Supply of Bulk Water dated August 1, 2012
Sec. 7 (g) of Article IV of the Contract for the Supply of Bulk Water dated August 1, 2012.
10
11
inexistent from the beginning and thus demanded from them to pass a
resolution authorizing the stoppage of the implementation of the
BULK WATER CONTRACT, including the subject WATER
SUPPLY CONTRACTS. The complainants pointed out in the same
letter that any inaction/omission on the matter by respondent Members
of SB shall be construed as a tacit or implied approval by them of the
execution and implementation of the BULK WATER CONTRACT,
including the subject 2 WATER SUPPLY CONTRACTS.
By way of compliance to complainants letter dated April 27,
2012, Councilor Victorio Z. Ronabio (Coun. Ronabio for short), a
member of Sangguniang Bayan of Majayjay, filed a resolution in the
Sangguniang
Bayan
of
Majayjay
entitled
Resolusyon
Ng
12
13
14
15
dated
June
26,
2012.
Respondents
received
copy
16
The Resolution Blg. 114 T-2012 and Resolution Blg. 115 T-2012
were both passed and approved on June 25, 2012 by respondent
Members of SB while the aforestated Addendum and Revision to the
Contract for the Supply of Bulk Water was executed and signed by
IBDC and respondent Guera on August 1, 2012.
From the foregoing, it is quite clear that at the time of the
passage by respondents Members of SB of said Resolution Blg. 114 T2012 and Resolution Blg. 115 T-2012 as well as at the time of the
execution by respondent Guera of the said Addendum and Revision,
the respondents have already an actual notice and knowledge of
complainants Affidavit-Complaint dated June 14, 2012.
In other words, respondents have already an actual notice
and knowledge of the defects and legal flaws of the BULK
WATER CONTRACT at the time of the passage of said
Resolution Blg. 114 T-2012 and Resolution Blg. 115 T-2012 and the
execution of the aforestated Addendum and Revision to the
Contract for the Supply of Bulk Water. Such actual notice to
respondents is the best, clear and substantial evidence that
respondents have deliberately and willfully committed grave
misconduct and gross negligence in the discharge of their
functions in flagrant violation of the laws and with the evident
17
18
V
DISCUSSION
A
THE RESPONDENTS ALLOWED AND
AUTHORIZED MAJAYJAY TO ENTER
INTO AND EXECUTE THE BULK
19
Section 3 (g) of the Republic Act No. 3019, otherwise known as the Anti-Graft and Corrupt Practices
Act.
20
1.
2.
3.
19
Section 4, Article II, Contract for the Supply of Bulk Water dated August 1, 2011.
21
of
the
contract
is
absolute
and
5.
It
is
obviously
grossly
and
manifestly
22
especially
considering
the
20
Section 22, Article XIV of the Contract for the Supply of Bulk Water dated August 1, 2011.
Section 16 paragraph 5, Article XI of the Contract for the Supply of Bulk Water dated August 1, 2011.
22
Meralco vs. Public Service Commission, 18 SCRA 651; and Republic vs. Meralco, 391 SCRA 700, 709
21
23
8.
9.
Section 7 (b), Article IV of the Contract for the Supply of Bulk Water dated August 1, 2011.
24
25
26
27
Respondents public
24
Section 7 (b), Article IV of the Contract for the Supply of Bulk Water dated August 1, 2011.
28
29
30
26. The fact that IBDC does not have financial capacity
and technical expertise to undertake and complete the
project contemplated under the BULK WATER
CONTRACT is further shown from the Articles of
Incorporation and the Balance Sheet of the
Financial Statement of IBDC for the years 2009 and
2010 submitted by IBDC to the Securities and
Exchange Commission (SEC). [A copy each of the
original and amended Articles of Incorporation and its
Financial Statement for the year 2009-2010 submitted
to SEC are attached to the Affidavit-Complaint dated
June 14, 2012 as Annexes E, F and G,
respectively.]
27. As provided in its original and amended Articles of
Incorporation, IBDC is not a water utility company
or company engaged in water business but a
company engaged in realty business. The primary
and
secondary
purposes
of
the
Articles
of
31
32
25
26
33
still
respondents
entered
into
and/or
which
is
clear
evidence
that
27
34
WATER
CONTRACT,
the
stipulated
35
28
29
Section 6 (f), Article IV of the Contract for the Supply of Bulk Water dated August 1, 2011.
Section 7 (g), Article IV of the Contract for the Supply of Bulk Water dated August 1, 2011.
36
at
the
foot
of
Mt.
Banahaw. As
complainants have pointed out in their AffidavitComplaint dated June 14, 2012, the real purpose of
the subject BULK WATER CONTRACT is not to
rehabilitate the water system of Majayjay but to
exploit the abundant water resources in favor of
IBDC with practically no cost for IBDC for a period
of 100 years at the sharing arrangement of 90% in
favor IBDC and only 10% in favor of Majayjay.
39.
37
40.
as
or
r to the
38
It
is
obviously
manifestly
and
grossly
39
45.
WATER
CONTRACT
is
not
the
40
46.
47.
41
with
the
Securities
and
Exchange
42
43
importantly,
the
BULK
WATER
44
c.
d.
45
46
47
48
Council, as the case may be, or the project was submitted to the
National Economic Development Authority (NEDA) for its approval.
In the first place, the project could not have been submitted for
confirmation by Municipal Development Council or by the Provincial
Development Council or by the Regional Development Council or the
approval by NEDA because the BULK WATER CONTRACT does
not state the COST of the PROJECT. There is a complete absence
of PROJECT COST in the BULK WATER CONTRACT. Thus, it
is quite clear that the BULK WATER CONTRACT was made in gross
violation of Section 4 of R. A. No. 7718 which renders it manifestly
and grossly disadvantageous to Majayjay.
Moreover, the public bidding of unsolicited proposal is
provided under Sections 5 and 6 of R.A. No. 7718 which further
require for the publication of the unsolicited proposal for three (3)
consecutive weeks, in a newspaper of general circulation,
comparative or competitive proposals and no other proposal is
received for a period of sixty (60) working days. Thereafter and upon
approval of the projects, the head of the infrastructure agency or local
government unit concerned shall forthwith cause to be published,
once every week for three (3) consecutive weeks, in at least two (2)
newspapers of general circulation and in at least one (1) local
newspaper which is circulated in the region, province, city or
49
50
51
52
53
On the other hand, Section 12 of E.O. No. 423 dated April 30,
2005 explicitly provides that Procurement contracts of local
government units, regardless of the source of funds, shall be
subject to the provisions of Republic Act No. 9184 and its
Implementing Rules and Regulations.
The BULK WATER CONTRACT is, without a doubt, in
violation of Republic Act No. 9184 because the said law requires
certain procedures on competitive bidding. Republic Act No. 9184
requires preparation of bidding documents following the standard
forms and manuals prescribed by the GPPB,32 pre-procurement
conference,33 advertising of invitation to bid,34 pre-bid conference,35
eligibility requirements of a prospective bidder shall be made under
oath,36 submission of Bids shall have technical and financial
components,37 all Bids shall be accompanied by Bid security,38
opening of all the Bids publicly at a specified date, time and place, 39
Bid evaluation,40 post qualification,41 notice of Award,42 and
performing security.43
32
54
55
in
the
discharge
of
their official
functions.
56
of the surety bond, as shown in the Non Policy Matter (NPM) No.
017-2012 issued by Government Procurement Policy Board (GPPB)
attached to the complainants Consolidated Reply-Affidavit as Annex
D.
Accordingly, since the alleged surety bond posted by IBDC is
not accompanied by the aforesaid required Certification from the
Insurance Commissioner, then the said bond is not valid and effective.
Necessarily, the BULK WATER CONTRACT is without the required
performance security which renders it manifestly and grossly
disadvantageous to Majayjay. Thus, respondents should not have
allowed and authorized Majayjay to enter into and execute the BULK
WATER CONTRACT. In acting otherwise, respondents are obviously
guilty of grave misconduct.
D
THE RESPONDENTS ALLOWED AND
AUTHORIZED MAJAYJAY TO ENTER
INTO AND EXECUTE THE BULK
WATER CONTRACT IN FLAGRANT
VIOLATION
OF
THE
LOCAL
GOVERNMENT CODE.
The provision of the BULK WATER CONTRACT is
contrary to Local Government Code of 1991 and/or the BULK
WATER CONTRACT authorizes or abets the commission of the
crime of malversation of public funds.
57
58
44
59
45
Meralco vs. Public Service Commission, ibid and republic vs. Meralco,ibid.
Section 16, par. 5, Article XI of the Contract for the Supply of Bulk Water dated August 1, 2011.
46
60
61
62
63
Section 7 (a), Article IV of the Contract for the Supply of Bulk Water dated August 1, 2012.
64
annual contract price and (iii) surety bond equivalent to 30% total
annual contract price. The purpose of this cash bond, bank guarantee
and surety bond is to guarantee the faithful performance by Majayjay
of its obligations under the Water Contracts.
As provided in Section 2 of Article V of the Water ContractLumban53, Majayjay will post for Lumban the performance security
equal to the annual contract price. Under the contract, Majayjay shall
supply potable water to Lumban at the volume of at least 5,000 cubic
meters per day or 150,000 cubic meters per month or 1,825,000 cubic
meters for 365 days or one (1) year at the price of P11.00 per cubic
meter.
At the price of P11.00 per cubic meter, the total annual contract
price of 1,825,000 cubic meters of water per year is P20,075,000.00.
Thus, Majayjay will have to post performance security in favor of
Lumban as follows: (i) cash bond of 5% equivalent to the sum of
P1,003,750.00, (ii) bank guarantee of 10% equivalent to the sum of
P2,007,500.00 and (iii) surety bond of 30% equivalent to the sum of
P6,022,500.00. Simply put, Majayjay will have to post performance
security in favor of Lumban in the total sum of P9,033,750.00.
On the other hand, for Sta. Cruz, Majayjay will have to post
performance security equal to the annual contract price of P5,110,000
53
65
cubic meters of water per annum at the price of P10.00 per cubic
meter. Under the Water Contract-Sta. Cruz 54, Majayjay is obligated to
supply potable water to Sta. Cruz at the price of P10.00 per cubic
meter and at the rate of at least 14,000 cubic meters per day or
420,000 cubic meters per month or 5,110,000 cubic meters per 365
days or per annum.
At the volume of 5,110,000 cubic meters per annum at the price
of P10.00 per cubic meter, the total annual contract price of the
contract of Majayjay with Sta. Cruz for the supply of potable water is
P51,100,000.00. Thus, Majayjay will have to post performance
security in favor of Sta. Cruz consisting of (i) cash bond 5%
equivalent to the sum of P2,555,000.00, (ii) bank guarantee of 10%
equivalent to the sum of P5,110,000.00 and (iii) surety bond of 30%
equivalent to the sum of P15,330,000.00. Simply put, Majayjay will
have to post performance security in favor of Sta. Cruz in the total
sum of P22,995,000.00.
In resume, Majayjay will have to post performance security in
favor of Lumban equivalent to the total sum of P9,033,750.00, while
for Sta. Cruz, Majayjay will post performance security equivalent to
the total sum of P22,995,000.00 or Majayjay will post performance
54
66
67
68
69
H
THERE
EXISTS
CLEAR
AND
SUBSTANTIAL EVIDENCE SHOWING
THAT RESPONDENTS ARE GUILTY OF
GRAVE MISCONDUCT AND GROSS
NEGLIGENCE IN THE DISCHARGE OF
THEIR OFFICIAL FUNCTIONS WHEN
THEY HAVE DELIBERATELY AND
WILLFULLY
ALLOWED
AND
58
70
71
the ground that these contracts are null and void for being violative of
the aforestated laws.
After receiving the instant Affidavit-Complaint and the said
demand letters of complainants, and after apparently knowing and
realizing the legal flaws and defects of the BULK WATER and the
subject 2 WATER SUPPLY CONTRACTS, respondent Members of
SB passed and approved the Resolution Blg. 114 T-2012 and
Resolution Blg. 115 T-2012 on June 25, 2012. On the other hand,
respondent Guera executed and signed the addendum and revision to
the BULK WATER CONTRACT with IBDC on August 1, 2012.
In other words, respondents have already an actual notice
and knowledge of the defects and legal flaws of the BULK
WATER CONTRACT at the time of the passage of said
Resolution Blg. 114 T-2012 and Resolution Blg. 115 T-2012 and the
execution of the aforestated Addendum and Revision BULK
WATER CONTRACT. Such actual notice to respondents is the
best, clear and substantial evidence that respondents have
deliberately and willfully committed grave misconduct and gross
negligence in the discharge of their functions in flagrant violation
of the laws and with the evident willful intention to disregard
established rules, morals and public policy.
72
61
73
74
62
75
Office of the Court Administrator vs. Lopez, A.M. No. P-10-2788, January 18, 2011.
G.R. No. 189479, April 12, 2011.
76
public office is a public trust and public officers must at all times be
accountable to the people, serve them with utmost responsibility,
integrity, loyalty, and efficiency, act with patriotism and justice, and
lead modest lives. These constitutionally-enshrined principles, oftrepeated in our case law, are not mere rhetorical flourishes or idealistic
sentiments. They should be taken as working standards by all in the
public service.68
WHEREFORE, complainants most respectfully pray to this
Honorable Office to issue an order placing the respondents under
preventive suspension pending final adjudication of this case and that,
thereafter, to render judgment holding respondents guilty of grave
misconduct and ordering the permanent dismissal of respondents from
67
Civil Service Commission v. Cortez, G.R. No. 155732, June 3, 2004, 430 SCRA 593, citing Bautista v.
Negado, etc., and NWSA, 108 Phil. 283, 289 [1960]. (emphasis ours)
68
Id.
77
the service, forfeiture of the benefits due to them and their perpetual
disqualification from holding any public office.
Other reliefs just and equitable in the premises are likewise
prayed for.
78
79