Republic of the Philippines

Court of Appeals
Cagayan de Oro City

SPECIAL FORMER SPECIAL DIVISION OF FIVE

LIBRADO C. NAVARRO, CA-G.R. SP NO. 08326-MIN

Petitioner,
Members:

*
BORJA, J., Ch.,
BADELLES, &
- versus - **
ATAL-PAÑO,
***
ROXAS,
****
PAYOYO-VILLORDON, JJ.,

OFFICE OF THE OMBUDSMAN,

DEPARTMENT OF THE INTERIOR AND Promulgated:
LOCAL GOVERNMENT, DILG
REGIONAL OFFICE XIII AND
April 20, 2018
CHRISTOPHER E. LOZADA,
Respondents.

DECISION

BADELLES, J.:

Before Us is a Petition for Certiorari 1 under Rule 65 of the Rules

of Court assailing the Decision 2 dated March 20, 2017 of the Office of
the Ombudsman, finding petitioner Librado C. Navarro guilty of Grave
Misconduct and imposing upon him the penalty of dismissal from
service.
*
Special Division of Five per raffle dated October 25, 2017, pursuant to Rule VI, Sec. 10 of the 2009
IRCA.
**
Vice J. Camello per Office Order No. 020-2017-RVB dated September 26, 2017.
***
Special Division of Five per raffle dated October 25, 2017, pursuant to Rule VI, Sec. 10 of the
2009 IRCA.
****
Vice J. Martin per raffle dated December 27, 2017.
1
Petition for Certiorari; Rollo, pp. 2-17.
2
Assailed Decision; Rollo, pp. 23-36.
CA-G.R. SP NO. 08326-MIN Page 2 of 13
DECISION

The facts, as summarized by the Ombudsman, are as follows:

“Complainant is a radio anchorman and resident of

Bislig City. He alleges that:

1. On 27 September 2012, the City Government

appropriated PhP1,024,422.56 for the Rehabilitation of
Sikahoy-Pamaypayan Road, Bislig City. Relative thereto,
respondent Mayor approved in December 2012, the
Purchase Order for PhP581,068.00 worth of fuel and oils in
favor of Bislig City Phoenix Fuel Gasoline Servicing
Station. When complainant went to the project site,
however, he found no trace of any construction equipment
or material.

2. During the 2010 elections, respondent Mayor

leased a commercial building in Caramcam District,
Mangagoy, Bislig City. He kept it as his headquarters even
after he won the mayoralty post. Beginning in August
2012, without the approval of the City Council, he
transferred the lease contract in the name of the City
government, which paid for the monthly rental fee of
PhP15,000.00.

3. Respondent Mayor has ghost employees under his

office. While there are 1,600 job order (JO) and contract
service (COS) employees on record, only a handful can be
seen in the Office of the City Mayor.

4. The PhP2,200,000.00 alloted for the construction

of Poblacion Boulevard in Poblacion, Bislig City, which
was initiated in 2009 and continued by respondent Mayor
upon his assumption of office, remains unaccounted for.

5. Respondent Mayor hosts radio and cable television

programs, two of which are Lihok Igsoon Bisliganon-
Isalbar ta ang Bislig and Lib sa Barangay. These were
used by respondent Mayor to build his name, threaten those
who oppose him and cover up his questionable dealings,
thereby using public funds to advance his personal
interests.

In connection thereto, the Sangguniang Panlungsod

(SP) adopted on 12 February 2013, Resolution No. 2013-66
directing the City Information, City Accounting, and other
concerned department to provide it with a copy of the
CA-G.R. SP NO. 08326-MIN Page 3 of 13
DECISION

Training Designs of the City's radio and cable TV program,

in aid of legislation. Earlier, on 25 January 2013, the SP
requested respondent Mayor to allow certain employees in
his office to attend a committee meeting regarding the
radio programs. Respondent Mayor, however, denied the
request.

6. In the City Social Welfare Development's feeding

program, two out of five sacks of rice delivered to each
barangay were of substandard quality and not suitable for
the day care pupils. The supplier, Rose Angeli Marketing,
is a townmate of respondents Mayor and Lerog.

7. The City government alloted PhP400,000.00 for a

poultry house livelihood project in the Provincial Agri-
Industrial Center (PAIC), San Vicentem Bislig City. The
budget was released but there is no sign of construction on
the proposed site.

8. When respondent Mayor was still Vice Governor,

two units (the properties) at the Provincial government's
housing project were allocated to provincial officials for
their temporary lodging, which respondent actually
occupies. In a letter to Governor Johnny T. Pimentel, dated
12 April 2011, respondent Mayor expressed his intent to
acquire the properties but the SP denied his request.
Respondent Mayor still occupies the properties to date.

9. On 18 July 2012, the City government purchased

from RDAK a Komatsu crawler-type hydraulic excavator
worth PhP14,750,000.00. The purchase, however, was
disadvantageous to the government since the Kobelco unit
offered by the other bidder, JVF Commercial Equipment
(JVF), costs lower by PhP4,214,000.00. The Commission
on Audit (COA) issued a Notice of Suspension of the
questionable transaction.

In an Order dated 23 November 2015, respondents

were directed to submit their respective counter-affidavits,
which was complied with.

Respondents aver that complainant's allegations are

brazen lies designed to mislead the public.

On the procurement of the Komatsu hydraulic

excavator, respondents aver that the City government
requested COA State Auditor III Cipriano C. Sumabat
(State Auditor Sumabat) on 10 February 2012 for an
CA-G.R. SP NO. 08326-MIN Page 4 of 13
DECISION

inspection of the unit; State Auditors Santiago O. Burdeos

(Burdeos) and Celso U. Reyes (Reyes) as well as Chief
TAS Junrey E. Labatos (Labatos), stated in their 07 March
2012 Inspection Report for Equipment and Facilities that
the unit conformed with the specifications provided in the
approved purchase order; respondents were surprised that
the COA made a conflicting report dated 28 June 2012,
which was the basis of State Auditor Sumabat's Notice of
Disallowance; and, as the conflicting audit reports are the
subject of their Petition for Review now pending before the
COA Proper, it is premature for the Office to rule on their
liability.”

In its 20 March 2017 Decision, the Ombudsman found petitioner

administratively liable for grave misconduct for failure to protect the
public interest and flagrant disregard of the provisions of the
Government Procurement Reform Act in connection with the
procurement of the hydraulic excavator. 3

Disgruntled, petitioner moved to reconsider 4 the findings of the

Ombudsman but the Ombudsman is yet to resolve his motion.

Undaunted, petitioner Librado Navarro filed the present petition

raising the following issues, to wit:

I. Whether or not petitioner can be held liable for

grave misconduct due to alleged irregularities despite
the absence of his participation in the bidding process.

II. Whether or not the bidding was regular.

III. Whether or not the charge against petitioner is

premature in view of the pendency of proceedings
before the Commission Proper of COA involving the
N/D.

IV. Whether or not the doctrines laid down in Arias v.

Sandiganbayan and Aguinaldo v. Santos finds
application.

The issues, rephrased, boil down to whether petitioner can be

administratively held liable for grave misconduct.

3
Note 1, supra.
4
Motion; Rollo, pp. 39-62.
CA-G.R. SP NO. 08326-MIN Page 5 of 13
DECISION

The Court thinks otherwise.

It is settled that "[f]indings of fact by the Office of the

Ombudsman when supported by substantial evidence are conclusive." 5
Section 5, Rule 133 of the Rules of Court provides:

Sec. 5. Substantial evidence. – In cases filed before

administrative or quasi-judicial bodies, a fact may be
deemed established if it is supported by substantial
evidence, or that amount of relevant evidence which a
reasonable mind might accept as adequate to justify a
conclusion.

Substantial evidence does not necessarily mean preponderant

proof as required in ordinary civil cases, but such kind of relevant
evidence as a reasonable mind might accept as adequate to support a
conclusion or evidence commonly accepted by reasonably prudent men
in the conduct of their affairs.

In its assailed decision, the Ombudsman focused on the post

qualification stage of the procurement process in concluding that
petitioner is guilty of the offense charged. It gave emphasis on the
failure of the Technical Working Group (TWG) to consider the bucket
capacity, engine power and other technical details of the backhoe
procured from RDAK. It held:

“It is worthy to note that respondent Ner of RDAK

did not indicate in his bid the specifications unique to the
Komatsu unit he was offering. He merely copied the
procuring entity's product specifications as reflected in its
Purchase Request (PR) and Request for Quotation (RFQ).
For example, instead of stating the unit's exact operating
weight of 19,500 kgs., RDAK merely stated “with an
operating weight of no less than 19,000 kg.” RDAK thus
did not comply with Section 25 of the Revised
Implementing Rules and Regulations of R.A. No. 9184
which clearly requires bidders to submit, among others, the
technical specifications of the product they are offering.
Despite this non-compliance, however, the BAC passed
RDAK's bid and included it in the post-qualification.

The Office also notes the observation of COA

Supervising TAS Dante M. Jabutay (Jabutay) and State
5
Rep. Act No. 6770 (1989), otherwise known as "An Act Providing for the Functional and Structural
Organization of the Office of the Ombudsman, and for Other Purposes," sec. 27; See Tolentino v.
Loyola,G.R. No. 153809, July 27, 2011, 654 SCRA 420, 432–434 [Per J. Leonardo-De Castro, First
Division].
CA-G.R. SP NO. 08326-MIN Page 6 of 13
DECISION

Auditor Joey Z. Atazan (Atazan) as contained in their 28

June 2012 Evaluation Report and confirmed in their
December 2015 Joint Affidavit, that had a thorough
evaluation during post qualification been made, the
proposals of both RDAK and JVF would have been
declared non-responsive. It was found that the unit of
RDAK did not meet the City government's specification
with respect to bucket capacity. It was also inferior to that
of JVF in terms of engine power, bucket capacity and
operating weight. JVF'S unit, on the other hand, failed to
meet the City government's required number of cylinders
and bucket digging force, per the TWG's Post-Qualification
and Evaluation Report (Report).

There was also an apparent manipulation of the

Report to make it appear that RDAK had a responsive bid.
The Report indicates that the unit of RDAK had a bucket
capacity of 1.0 cubic meter, but based on the Specifications
(brochure) of the delivered unit, it had only a capacity of
0.8 cubic meter. In fact, this was lower than the City
government's requirement of 1.0 to 1.5 cubic meter. The
BAC, instead of declaring the bidding a failure, went ahead
with the procurement and awarded the contract to RDAK.

Notably, the price of the unit offered by JVF was

39.996% less than the unit of RDAK. The price variance of
PhP4,214,000.00 was thus disallowed in audit. The COA
Annual Audit Report in 2012 likewise contained the same
findings.”

Notwithstanding such findings, the Court found no substantial

evidence to support the conclusion that the petitioner is guilty of the
administrative charges against him. Mere allegation and speculation is
not evidence, and is not equivalent to proof. 6

Upon close scrutiny of the records of the case, the Court notes
that all the rules and procedures laid down in Republic Act No. (RA)
9184, otherwise known as the "Government Procurement Act," in the
procurement of the hydraulic excavator were duly complied with. In
Commission On Audit v. Link Worth International, 7 the Supreme Court
outlined the procedure in the procurement process, viz:

Except only in cases in which alternative methods of

procurement are allowed, all government procurement shall
be done by competitive bidding. This is initiated by the
6
Navarro v. Clerk of Court Cerezo 492 Phil. 19, 22 (2002).
7
G.R. No. 182559, March 13, 2009.
CA-G.R. SP NO. 08326-MIN Page 7 of 13
DECISION

BAC, which advertises the Invitation to Bid for contracts

under competitive bidding in order to ensure the widest
possible dissemination thereof. The BAC then sets out to
determine the eligibility of the prospective bidders based
on their compliance with the eligibility requirements set
forth in the Invitation to Bid and their submission of the
legal, technical and financial documents required under
Sec. 23.6, Rule VIII of the Implementing Rules and
Regulations of R.A. No. 9184 (IRR-A).

It is well to note at this point that among the technical

documents required of prospective bidders to aid the BAC
in determining their eligibility to bid is a statement of the
prospective bidder of all its ongoing and completed
government and private contracts within the relevant
period, including contracts awarded but not yet started. In
relation to contracts which are ongoing, completed, or
awarded but not yet started, the prospective bidder shall
include in the statement the name of the contract, date of
the contract, kinds of goods sold, amount of contract and
value of outstanding contracts, date of delivery, end users
acceptance, if completed, and specification whether the
prospective bidder is a manufacturer, supplier or
distributor. The technical specifications of the particular
contract specified in the Invitation to Bid is not among the
documents required to determine the prospective bidders
eligibility to bid.

The BAC then informs the eligible prospective

bidders that they have been found eligible to participate in
the bidding and prepares a short list of bidders who shall be
allowed to submit their respective bids.

Sec. 25, Art. VIII of R.A. No. 9184 provides that, A

bid shall have two (2) components, namely, technical and
financial components which should be in separate sealed
envelopes and which shall be submitted simultaneously.
xxx

The BAC shall first open and examine the technical

proposal and, using pass/fail criteria, determine whether all
required documents are present. xxx

During the preliminary examination stage, the BAC

checks whether all the required documents were submitted
by the eligible bidders. Note should be taken of the fact that
the technical specifications of the product bidded out is
among the documentary requirements evaluated by the
CA-G.R. SP NO. 08326-MIN Page 8 of 13
DECISION

BAC during the preliminary examination stage. At this

point, therefore, the BAC should have already discovered
that the technical specifications of Audio Visuals document
camera differed from the bid specifications in at least three
(3) respects, namely: the 15 frames/second frame rate, the
weight specification, and the power supply requirement.
Using the non-discretionary criteria laid out in R.A. No.
9184 and IRR-A, therefore, the BAC should have rated
Audio Visuals bid as failed instead of passed.

After the preliminary examination stage, the BAC

opens, examines, evaluates and ranks all bids and prepares
the Abstract of Bids which contains, among others, the
names of the bidders and their corresponding calculated bid
prices arranged from lowest to highest. The objective of the
bid evaluation is to identify the bid with the lowest
calculated price or the Lowest Calculated Bid. The Lowest
Calculated Bid shall then be subject to post-qualification to
determine its responsiveness to the eligibility and bid
requirements. If, after post-qualification, the Lowest
Calculated Bid is determined to be post-qualified, it shall
be considered the Lowest Calculated Responsive Bid and
the contract shall be awarded to the bidder.

In this case, three bidders, namely: International Heavy

Equipment Corp. (IHEC), RDAK and JVF Commercial signified their
intention to participate in the bidding process. All bidders passed the
initial evaluation.

After evaluating the technical specifications of each unit offered

by the bidder, the TWG of the Bids and Awards Committee (BAC)
recommended to award the contract to IHEC. However, before the
award could be made, the BAC sought the legal opinion of the
Government Procurement Policy Board (GPPB) on whether IHEC's
submission of two currencies is in order. The GPPB made an adverse
reply which constrained the BAC to declare the bid of IHEC post-
disqualified. 8

With the necessity to procure a hydraulic excavator, the BAC

proceeded with the bidding process with the other two qualified
bidders, JVF Commercial and RDAK. After conducting the post
qualification of the qualified bidders, the BAC noted that JVF
Commercial failed to meet the required unit specification for the
project. The bid of RDAK, on the other hand, was in accordance with
the specifications required by the LGU and passed the post
8
Resolution No. 2011-07; Rollo, pp. 99-100.
CA-G.R. SP NO. 08326-MIN Page 9 of 13
DECISION

qualification by the TWG. Thus, the BAC resolved to award the

contract to RDAK being the lowest calculated responsive bid. 9

At first glance, it may appear that the bid of JVF Commercial is

more advantageous to the government than that of RDAK considering
the price of the hydraulic excavator of JVF Commercial was way lower
than that of RDAK. However, it must be pointed out that only the bid
of RDAK met the required specification. In its Invitation to Bid, 10 the
Local Government of Bislig City categorically indicated the following
specifications of the crawler type hydraulic excavator:

“With engine power of no less than 148hp at 2,000

rpm; six cylinder turbo charged diesel engine complying
with Euro stage II or III; with an operating weight of no
less than 19,000 kg; bucket capacity of of 1 or 1.5 cu.m;
with hydraulic piping arrangement and compatible
hydraulic breaker attachment; 600m to 800mm triple
grouser shoes; bucket digging force of no less than 17,500
kg at boosted power; with swing speed of no less than 12.4
rpm, all weather steel cab fully air-conditioned with all
around visibility, safety glass window, wide screen wiper,
lockable doors, fully adjustable reclining seat. Unit are
provided with computer back-up system which will allow
continues operation even when computer breakdown.
Complete with standard tool kits and accessories. xxx”

In awarding the contract to RDAK, the BAC explained:

“COA concluded that since the Kobelco unit offered

by JVF has 152 HP at 2200 RPM while the Komatsu unit
offered by RDAK has only 148 HP at 2000 RPM, the
Kobelco unit is more superior due to the variance of 5 HP.
This conclusion is misplaced since it is only based on the
literal interpretation of the engine specification and a
simple arithmetical computation, with due respect.

It has to be noted that the specifications are not

immediately comparable. The Kobelco unit is rated 153 HP
at 2200 RPM while the Komatsu is 148 HP at 2000 RPM.
The two horsepower ratings cannot be compared directly
due to the difference in the rated RPMs. The proper
technical appreciation of the rated horsepower is by
computing its torque to arrive at the same comparable
measurements of engine power.

9
Resolution No. 2011-44; Rollo, pp. 100-101.
10
Invitation to Bid; Rollo, pp. 123.
CA-G.R. SP NO. 08326-MIN Page 10 of 13
DECISION

Torque is a good indicator of an engine's ability to do

work. It is defined as force acting at a moment distance and
has units of N-m or lbf-ft.

Using the HP and RPM values as parameters, the

computed torque values are 526.9 N-m for the Komatsu
unit and 495.2 N-m for the Kobelco unit. There is actually
a disparity of 31.7 N-m between the two excavator units
which suggests that the Komatsu can do more work than
the Kobelco.”

Notably, a Purchase Order was approved and signed by the City

Administrator and was issued to the LGU of Bislig City. 11 After
delivery of the unit, the General Services Officer invited the
Commission on Audit to inspect the unit and review the proceedings in
the procurement of the hydraulic excavator 12 Upon inspection, Junrey
Labatos, Chief, TAS, Santiago Budeos, State Auditor I and Celso
Reyes, State Auditor V, concluded that the procurement of the
hydraulic excavator conformed to the specifications in the approved
Purchase Order. 13 Thus:

“Ocular inspection of the above mentioned Excavator

was conducted and the same was found to have conformed
with the specifications as provided in the approved
purchase order. Review as to compliance with Section 8 of
Implementing Rules and Regulation of RA 9184 is
recommended.”

Given the painstaking bidding process, the Ombudsman gravely

abused its discretion in finding petitioner administratively guilty of
grave misconduct. Misconduct is a transgression of some established
and definite rule of action, more particularly, unlawful behavior or
gross negligence by a public officer. 14 The misconduct is grave if it
involves any of the additional elements of corruption, willful intent to
violate the law or to disregard established rules, which must be
established by substantial evidence. 15 Here, no substantial evidence
exists to show that petitioner failed to protect the public interest and
flagrantly disregarded the provisions of the RA 9184 in the
procurement of the hydraulic excavator.

The Court cannot rely on the second Evaluation Report made by

the same auditors to pin liability to petitioner. Be it noted that the
11
Purchase Order; Rollo, p. 70.
12
Letter Request; Rollo, p. 106.
13
Inspection Report; Rollo, pp. 107-108.
14
Civil Service Commission v. Ledesma, G.R. No. 154521, September 30, 2005.
15
Id.
CA-G.R. SP NO. 08326-MIN Page 11 of 13
DECISION

second Evaluation Report contradicted the first Inspection Report. It

should have called the attention of the COA to clarify the matter, but it
failed to do so. Accordingly, such contradictory reports affect its
integrity and reliability. Thus, it cannot constitute as a substantial
evidence to hold petitioner guilty of grave misconduct.

Assuming arguendo that the bid of RDAK failed to meet the

required specification, petitioner could still not be held administratively
liable for grave misconduct pursuant to the ruling of the Supreme Court
In Arias v. Sandiganbayan. In said case, the Supreme Court held that
all heads of offices have to rely to a reasonable extent on their
subordinates and on the good faith of those who prepare bids, purchase
supplies or enter negotiations. The Supreme Court went on to state that
“there should be other grounds than mere signature or approval
appearing on the voucher to sustain a conspiracy charge and
conviction” or dismissal in the case. 16

In the instant case, the actions taken by petitioner involved the

very functions he had to discharge in the performance of his official
duties as City Mayor of Bislig City. Owing to his position as political
leader of his city and the corresponding responsibilities attached to it,
petitioner had to rely to a reasonable extent on the BAC to prepare the
bids. In Arias v. Sandiganbayan, the Supreme Court, aware of the dire
consequences that a different rule could bring, has aptly concluded:

"We would be setting a bad precedent if a head of

office plagued by all too common problems—dishonest or
negligent subordinates, overwork, multiple assignments or
positions, or plain incompetence—is suddenly swept into a
conspiracy conviction simply because he did not personally
examine every single detail, painstakingly trace every step
from inception, and investigate the motives of every person
involved in a transaction before affixing his signature as the
final approving authority.

xxx

"xxx. All heads of offices have to rely to a reasonable

extent on their subordinates and on the good faith of those
who prepare bids, purchase supplies, or enter into
negotiations. x x x. There has to be some added reason why
he should examine each voucher in such detail. Any
executive head of even small government agencies or
commissions can attest to the volume of papers that must
be signed. There are hundreds of documents, letters,
16
259 Phil. 794 (1989).
CA-G.R. SP NO. 08326-MIN Page 12 of 13
DECISION

memoranda, vouchers, and supporting papers that routinely

pass through his hands. The number in bigger offices or
department is even more appalling."

Considering the competence and technical expertise of the BAC

to handle the bidding process, there is no reason for petitioner not to
rely on its recommendations. Thus, petitioner only acted well within
the bounds of propriety when he approved the purchase of the
hydraulic excavator from RDAK.

Taken all together, petitioner has sufficiently shown that the

Ombudsman capriciously and whimsically exercised its discretion or
grossly misapprehended the facts in finding him administratively liable
for grave misconduct. Grave abuse of discretion implies such
capricious and whimsical exercise of judgment as is equivalent to lack
of jurisdiction.17 It is a patent and gross abuse of discretion amounting
to an evasion of positive duty or a virtual refusal to perform a duty
enjoined by law, or to act at all in contemplation of law as where the
power is exercised in an arbitrary and despotic manner by reason of
passion and hostility.18

WHEREFORE, the petition is GRANTED. The Decision

dated March 20, 2017 of the Office of the Ombudsman, finding
petitioner Librado C. Navarro guilty of Grave Misconduct and
imposing upon him the penalty of dismissal from service is
REVERSED and SET ASIDE, having been issued with grave abuse
of discretion. Let a new Decision be entered DISMISSING the
Complaint.

SO ORDERED.

ORIGINAL SIGNED
OSCAR V. BADELLES
Associate Justice

17
Deutsche Bank Manila v. Spouses Chua Yok See, et al., G.R. No. 165606 February 6, 2006.

18
Ibid.
CA-G.R. SP NO. 08326-MIN Page 13 of 13
DECISION

WE CONCUR:

ORIGINAL SIGNED ORIGINAL SIGNED

ROMULO V. BORJA PERPETUA T. ATAL-PAÑO
Associate Justice Associate Justice

ORIGINAL SIGNED ORIGINAL SIGNED

RUBEN REYNALDO G. ROXAS TITA MARILYN PAYOYO-VILLORDON
Associate Justice Associate Justice

CERTIFICATION

Pursuant to Article VIII, Section 13 of the Constitution, it is hereby

certified that the conclusions in the above decision were reached in
consultation before the case was assigned to the writer of the opinion
of the Court.

ORIGINAL SIGNED
ROMULO V. BORJA
Associate Justice
Chairperson, Special Former Special Division of Five