COMMISSION ON AUDIT DECISION NO. 2011-015 - January 31 ...

Republic of the Philippines
COMMISSION ON AUDIT
Commonwealth Avenue, Quezon City, Philippines
Subject: Claim of Mr. Wilfredo E. Castor,
President arid General Manager, Wilper
Construction, Inc., for payment of work
accomplished relative to the
Construction/Rehabilitation/Improvement
of Baran gay Road 231, Zone 21, and of
the Multi-Purpose Hall, Barangay 259,
Zone 23, both in Tondo, Manila, in the
total amount ofP1,562,402.38
FACTS OF THE CASE
DECISION
DECISION NO. 2.011-015
JAM 3 1 2011
Before this Commission is the claim of Mr. Wilfredo E. Castor, President
and General Manager, Wilper Construction, Inc. (WILPER, for brevity) against
the Department of Public Works and Highways, National Capital Region
(DPWH-NCR), Manila, for payment of work accomplished for the
Construction/Rehabilitation/Improvement of Barangay Road 231, Zone 21 and
of the Multi-Purpose Hall, Barangay 259, Zone 23, both in Tondo, Manila, in
the total amount ofP1,562,402.38.
Records reveal that on December 18, 2001, the DPWH-NCR, Manila,
received Special Allotment Release Order (SARO) No. A-01-5953 dated
December 3, 2001 in the total amount ofP5,150,000.00 to fund the following
infrastructure projects:
a. Construction/Rehabilitation/Improvement of Barangay
Road, Barangay 231, Zone 21, Tondo, Manila;

. Construction/Rehabilitation/Improvement of J. Planas
Street and vicinity, Tondo, Manila (Phase III);
c. Construction/Rehabilitation/Improvement of Barangay
Road, Barangay 160, Zone 14, Tondo, Manila (Phase II);
d. Construction/Rehabilitation/Improvement of Multi-Purpose
Hall, Barangay 259, Zone 23, Tondo, Manila (Phase II);
and
e. Construction of Luzon Bridge, Luzon Street, Tondo,
Manila (Phase II).
On January 8, 2002, the DPWH-NCR conducted a public bidding for the
first four ( 4) projects enumerated above. Claimant WILPER offered the lowest
calculated responsive bid. The Bids and Award Committee (BAC) signed
undated Resolution No. 0014-2002 recommending award of the contract to
WILPER. However, when the Resolution was sent to the Accounting
Department, it was discovered that the corresponding SARO had expired on
December 31, 2001. Consequently, the Resolution was not approved by the
then Regional Director, DPWH-NCR for non-availability of funds. Thus, there
were neither Notice of Award, Notice to Proceed nor Contract issued for these
projects. Nonetheless, WILPER proceeded to implement the projects, including
the Construction/Rehabilitation/Improvement of Barangay Road 231, Zone 21
and of the Multi-Purpose Hall, Barangay 259, Zone 23, both in Tondo, Manila.
The two (2) projects were actually covered under Phase II of the construction,
but they were completed during Phase I of the construction upon the instruction
of then Congressman Nestor C. Ponce, Jr., considering that the completion of
the said projects were urgently needed by his constituents.
Then Undersecretary Mario L. Relampagos, Department of Budget and
Management (DBM), in a letter dated August 9, 2002, opined that SARO No.
A-0 1-5953 could not be used as basis of payment, since the allotment was not
obligated during the validity of the SARO. However, Undersecretary
Relampagos suggested that appropriations to cover the payment of the four ( 4)
completed projects be included in the annual budget proposal of the agency.
Numerous funding requests were also made with the DPWH-Head Office.
Failing to collect payment on the said projects, WILPER filed on
September 1, 2008 the instant money claim in the amount ofP1,562,402.38.
The payment of the claim was favorably recommended by the Director,
DPWH-NCR contending that this may be granted based on quantum meruit.
The Audit Team Leader, DPWH-NCR, however, recommended the denial of
the claim considering that · contract was executed between the
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claimant and DPWH-NCR and there was no Certificate of Availability of
Funds (CAF) covering the claim in violation of Sections 85, 86 and 87 of
Presidential Decree (P.D.) No. 1445. However, the Director of Cluster
D-Economic Services, National Government Sector, this Commission,
recommended that the money claim be given due course in the interest of
justice and equity, noting that no fault could be attributed to the claimant.
ISSUE
Whether or not the instant money claim of WILPER, represented by its
President and General Manager Mr. Wilfredo E. Castor, may be given due course.
DISCUSSION
The request is meritorious.
In the case of Royal Trust Construction vs. COA, G.R. No. 84202,
November 23, 1988, the Supreme Court allowed the contractors to recover for
the work accomplished based on the principle of quantum meruit despite the
absence of a duly approved written contract because the general public
benefited from the accomplished works.
In the instant case, there was already an appropriation for the projects,
and in fact, the SARO was already released. The DPWH-NCR may have
overlooked that the SARO was not obligated when it expired on
December 31, 2001, just before they conducted the public bidding on January
8, 2002. Indeed, no fault could be attributed to the claimant WILPER.
Also, in the case of EPG Construction Co., et a/. vs. Hon. Gregorio
R. Vigilar, G.R. No. 131544, March 16, 2001 , the Supreme Court ruled that "it
would be the apex of injustice and highly inequitable for us to defeat
petitioners-contractors' right to be duly compensated for actual work
performed and services rendered, where both the government and public have,
for years, received and accepted benefits from said housing project and reaped
the fruits of petitioners-contractors' honest toil and labor."
Justice and equity demand payment of the instant claim based on
quantum meruit inasmuch as the projects are considered necessary for the use
and enjoyment of the subject residents. The projects were completed and
accepted by DPWH-NCR and the beneficiary barangays; these are testaments
to the fact that works were accomplished and that the projects conform to the
needs of the barangays and their residents. In her recommendation letter to the

Mr. Edilberto D. Tayao
Regional Director, NCR
Department of Public Works and Highw&ys
2nd Street, Port Area, Manila
The Audit Team Leader
DPWH-NCR
2nd Street, Port Area, Manila
The Director
Cluster D-Economic Services
National Government Sector
Assistant Commissioner
National Government Sector
Assistant Commissioner and General Counsel
Legal Services Sector
All of this Commission
ALSO 1789
ESZJSUV/ AAEIDHT/JDGD
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