VERSOZA VS.

CARAGUE  
665 SCRA 124 (2012)
G.R. No. 157838 : February 07, 2012
Digested by : Imee Callao

Commission on Audit

CANDELARIO L. VERZOSA, JR. (IN HIS FORMER CAPACITY AS

EXECUTIVE DIRECTOR OF THE COOPERATIVE DEVELOPMENT
AUTHORITY), PETITIONER, 
VS. 
GUILLERMO N. CARAGUE (IN HIS OFFICIAL CAPACITY AS CHAIRMAN
OF THE COMMISSION ON AUDIT), RAUL C. FLORES, CELSO D. GANGAN,
SOFRONIO B. URSAL AND COMMISSION ON AUDIT, RESPONDENTS.

FACTS
In December 1992, the Cooperative Development Authority (CDA) purchased
from Tetra Corporation (Tetra) a total of forty-six (46) units of computer
equipment and peripherals in the total amount ofP2,285,279.00.Tetra was
chosen from among three qualified bidders (Tetra, Microcircuits and
Columbia).The bidding was conducted in accordance with the approved
guidelines for bidding and a memo issued by the Office of the President.

Petitioner Candelario L. Versoza, Jr. (Versoza for short) who was then the
Executive Director of the CDA approved the purchase.

To determine the reasonableness of the prices of the purchased computers, the

Resident Auditor sought the assistance of the Technical Services Office (TSO),
COA.  The TSO found that the purchased computers were overpriced or excessive
by a total of P 881,819.00. The following were noted :

 (1) no volume discount was given by the supplier;

 (2) there were so much supply of computers in the market as early as 1992,  so
the prices of computers were relatively low already; and
 (3) when CDA first offered to buy computers, of the three qualified bidders,
Microcircuits offered the lowest bid. The Resident Auditor issued a Notice of
Disallowance.

The Notice was appealed by the CDA to the COA Chairman, which upheld the
disallowance. It held, among others, that the CDA should not have awarded the
contract to Tetra but to the other competing bidders, whose bid is more
advantageous to the government.

ISSUE
WHETHER OR NOT  COA erred in disallowing the purchase.

RULING 
Preliminarily, Versoza  availed of the wrong remedy in filing a petition for review
under Rule 45. Article IX-A, Section 7 of the Constitution provides that decisions,
orders or rulings of the COA may be brought to the SC on certiorari by the
aggrieved party. Moreover, under Sec. 2, Rule 64, of the Revised Rules of Civil
Procedure, a judgment or final order or resolution of the COA may be brought by
the aggrieved party to the Supreme Court on certiorari under Rule 65.

Pursuant to its constitutional mandate to "promulgate accounting and auditing

rules, and regulations including those for the prevention and disallowance of
irregular, unnecessary, excessive, extravagant or unconscionable expenditures, or
uses of government funds and properties," the COA promulgated the amended
Rules under COA Circular No. 85-55-A. With respect to excessive expenditures,
price is considered "excessive" if it is more than the 10% allowable price variance
between the price paid for the item bought and the price of the same item per
canvass of the auditor. In determining whether or not the price is excessive,
factors such as supply and demand, government quotations, may be considered.

According to records, the respondents Carague, et. al  found nothing wrong with
the CDA criteria that were used to evaluate the bids, but it appears that Tetra,
which offered a Korean-made brand, was given a boost in the final technical
evaluation report at the expense of Microcircuits, which offered a US-made brand
that was allegedly more durable and cost less. In this situation, the public bidding
process was not conducted with the purpose of saving the government money
while buying high-quality equipment. The 10% permitted price difference
between the unit purchased and the same item's pricing was greatly surpassed.

 Findings of quasi-judicial authorities, like  COA, that have gained knowledge

because their jurisdiction is confined to specific matters  are generally  given
respect and at times,  even finality if they are backed by strong evidence. It is only
upon a clear showing that the COA acted without or in excess of jurisdiction or
with grave abuse of discretion amounting to lack or excess of jurisdiction that this
Court will set aside its decisions or final orders. We find no such arbitrariness or
grave abuse on the part of the COA when it disallowed in audit the amount
representing the overprice in the payment by CDA for the purchased computer
units and peripherals, since its findings are well-supported by the evidence on
record. 

The Court sustain…. “the decisions of administrative authorities, especially one

which is constitutionally-created, not only on the basis of the doctrine of
separation of powers but also for their presumed expertise in the laws they are
entrusted to enforce.  Findings of quasi-judicial agencies, such as the COA, which
have acquired expertise because their jurisdiction is confined to specific matters
are generally accorded not only respect but at times even finality if such findings
are supported by substantial evidence, and the decision and order are not tainted
with unfairness or arbitrariness that would amount to grave abuse of discretion.”

There being no grave abuse of discretion in the findings and conclusions of the
COA in this case, the Court finds no cogent reason to deviate from these long-
settled rules.

WHEREFORE, the motion for reconsideration is DENIED WITH

FINALITY.

No further pleadings shall be entertained.