E.L. Saniel Construction v. Commission on Audit
REITERATIONFacts
1. The Antecedents: E.L. Saniel Construction (E.L. Saniel) was awarded two projects by PNOC Shipping and Transport Corporation (PSTC): the rehabilitation of PSTC's Limay Office for PHP 4,980,000.00 and the design and construction of slope protection/riprap for PHP 1,350,000.00. Both projects were fully paid. During construction, E.L. Saniel claimed the terrain required additional works, leading to billings for riprap and additional works (PHP 2,412,736.42), construction of a sewer and drain canal (PHP 69,608.97), revise trusses and roofing (PHP 257,829.00), and backfilling and compaction (PHP 222,768.00), totaling PHP 2,962,942.39. These additional billings remained unpaid. PSTC was dissolved in 2013 due to financial difficulties, and a Disposal Committee was formed to handle its assets and obligations. 2. Procedural History: Following a directive from the PSTC Disposal Committee to file money claims with the Commission on Audit (COA), E.L. Saniel filed a claim for PHP 2,962,942.39 plus interest and attorney's fees on November 5, 2014. The COA, in Decision No. 2016-397 dated December 27, 2016, dismissed E.L. Saniel's claim, along with other similar claims, reasoning that such matters should be handled by the Disposal Committee and that only unbooked or contested obligations fall under COA's jurisdiction. E.L. Saniel's Motion for Reconsideration was denied by the COA in Resolution No. 2020-294 dated January 31, 2020, which found the claim lacked merit due to E.L. Saniel's failure to justify the delay in requesting additional work and to comply with notice requirements under Republic Act No. 9184. A Notice of Finality of Decision was issued on May 19, 2021. 3. The Petition: E.L. Saniel filed a Petition for Certiorari under Rule 64 in relation to Rule 65 of the Rules of Court, assailing the COA's decisions. E.L. Saniel argues that the COA committed grave abuse of discretion by disregarding the Certification of Non-Payment and the necessity of the additional constructions, and that the principle of quantum meruit should apply for services rendered. The COA, through the Office of the Solicitor General, contends that the petition was filed out of time, as E.L. Saniel's counsel received notice of the denial of the motion for reconsideration on September 8, 2020, making the September 20, 2021 petition untimely. The COA also argues that quantum meruit is inapplicable due to E.L. Saniel's failure to obtain prior approval for the additional works and to comply with the notice requirements under Republic Act No. 9184.
Issue(s)
Whether the Petition for Certiorari was filed within the reglementary period under Rule 64. Whether the Commission on Audit (COA) committed grave abuse of discretion in denying the money claim for additional works performed without prior approval.
Ruling
The Petition is DISMISSED. The Decision and Resolution of the Commission on Audit (COA) are AFFIRMED.
Ratio Decidendi
On Issue 1: The Petition was filed out of time. Under Rule 64, Section 3 of the Rules of Court, a party has 30 days from notice of judgment to file a petition for certiorari, and while a motion for reconsideration interrupts this period, the party only has the remaining days (minimum of five) to file upon notice of denial. The Philippine Postal Corporation Registry Return Receipt confirmed that petitioner's counsel received the COA's denial on September 8, 2020, yet the petition was only filed on September 20, 2021. The Court emphasized that notice to counsel is notice to the client, and the receipt by the counsel of record is the reckoning point for the reglementary period. Consequently, the assailed COA issuances had already attained finality, divesting the Court of jurisdiction to review the judgment. On Issue 2: The COA did not act with grave abuse of discretion in denying the money claim. Annex 'E' of the Implementing Rules and Regulations Part A (IRR-A) of Republic Act No. 9184 (RA 9184) mandates that Variation Orders require prior approval from the Head of the Procuring Entity (HOPE) and notice within specific timeframes, which petitioner failed to observe. The Court distinguished this case from jurisprudence applying quantum meruit, noting that such relief requires established knowledge and consent of the contracting agency, which were absent here as petitioner acted unilaterally. Furthermore, under Section 17.7.2 of the IRR-A, bidders are deemed to have inspected the site and assumed the risk of terrain conditions, meaning petitioner cannot claim ignorance of the terrain to justify unauthorized costs. The Court concluded that quantum meruit is a mere exception to the general rule of strict compliance with procurement documentation and was unwarranted in this instance.
Main Doctrine
In government infrastructure projects, the principle of quantum meruit applies only when the procuring entity's knowledge and consent for additional works are clearly established. Under Republic Act No. 9184 (RA 9184), bidders are deemed to have inspected the site and determined the general characteristics of the contract works; thus, they cannot claim ignorance of terrain conditions to justify unauthorized Variation Orders. Procedurally, under Rule 64, notice to counsel is notice to the client, and the 30-day period to file a petition for certiorari is only interrupted by a motion for reconsideration, leaving only the remaining period to file upon denial.