G.R. No.

192591 June 29, 2011

EFREN L. ALVAREZ, Petitioner,

DECISION

VILLARAMA, JR., J.:

Before us is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as
amended, seeking to reverse and set aside the Decision1 dated November 16, 2009 and Resolution2 dated
June 9, 2010 of the Sandiganbayan’s Fourth Division finding the petitioner guilty beyond reasonable doubt
of violation of Section 3(e) of Republic Act (R.A.) No. 3019, otherwise known as the Anti-Graft and Corrupt
Practices Act.

Petitioner Efren L. Alvarez, at the time of the subject transaction, was the Mayor of the Municipality (now
Science City) of Muñoz, Nueva Ecija. In July 1995, the Sangguniang Bayan (SB) of Muñoz under Resolution
No. 136, S-95 invited Mr. Jess Garcia, President of the Australian-Professional, Inc. (API) in connection with
the municipal government’s plan to construct a four-storey shopping mall ("Wag-wag Shopping Mall"), a
project included in its Multi-Development Plan. Subsequently, it approved the adoption of the project under
the Build-Operate-Transfer (BOT) arrangement in the amount of ₱240 million, to be constructed on a 4,000-
square-meter property of the municipal government which is located at the back of the Municipal Hall. API
submitted its proposal on November 7, 1995.3

On February 9, 1996, an Invitation for proposals to be submitted within thirty (30) days, was published in
Pinoy tabloid. On April 12, 1996, the Pre-qualification, Bids and Awards Committee (PBAC) recommended
the approval of the proposal submitted by the lone bidder, API. On April 15, 1996, the SB passed a
resolution authorizing petitioner to enter into a Memorandum of Agreement (MOA) with API for the project.
Consequently, on September 12, 1996, petitioner signed the MOA with API, represented by its President
Jesus V. Garcia, for the construction of the Wag-Wag Shopping Mall under the BOT scheme whereby API
undertook to finish the construction within 730 calendar days.4

On February 14, 1997, the groundbreaking ceremony was held at the site once occupied by government
structures which included the old Motor Pool, the old Health Center and a semi-concrete one-storey building
that housed the Department of Agriculture, BIR Assessor, old Post Office, Commission on Elections and
Department of Social Welfare and Development. These structures were demolished at the instance of
petitioner to give way to the construction project. Thereafter, API proceeded with excavation on the area (3-
meter deep) and a billboard was put up informing the public about the project and its contractor. However,
no mall was constructed as API stopped work within just a few months.
On August 10, 2006, petitioner was charged before the Sandiganbayan for violation of Section 3(e) of R.A.
No. 3019 (SB-06-CRM-0389), under the following Information:

That on or about 12 September 1996, and sometime prior or subsequent thereto, in the then Municipality
(now Science City) of Muñoz, Nueva Ecija, and within the jurisdiction of this Honorable Court, the above-
named accused EFREN L. ALVAREZ, a high ranking public official, being then the Mayor of Muñoz, Nueva
Ecija, taking advantage of his official position and while in the discharge of his official or administrative
functions, and committing the offense in relation to his office, acting with evident bad faith or gross
inexcusable negligence or manifest partiality did then and there willfully, unlawfully and criminally give the
Australian-Professional Incorporated (API) unwarranted benefits, advantage or preference, by awarding to
the latter the contract for the construction of Wag-Wag Shopping Mall in the amount of Two Hundred Forty
Million Pesos (Php 240,000,000.00) under a Buil[d]-Operate-Transfer Agreement, notwithstanding the fact
that API was and is not a duly-licensed construction company as per records of the Philippine Construction
Accreditation Board (PCAB), which construction license is a pre-requisite for API to engage in construction
of works for the said municipal government and that API does not have the experience and financial
qualifications to undertake such costly project among others, to the damage and prejudice of the public
service.

At the trial, petitioner testified that during his term as Mayor of Muñoz, the municipal government planned to
borrow money from GSIS to finance the proposed Wag-Wag Shopping Mall project. He learned about API
when then Vice-Mayor Romeo Ruiz and other SB members showed him a copy of publication/advertisement
in the Manila Bulletin and Business Bulletin showing that API was then building similar BOT projects for
construction of shopping malls in Lemery, Batangas (₱150 million) and in Calamba, Laguna (₱300 million).
Because it will not entail government funds and is an alternative to availment of GSIS loan, petitioner
appointed Vice-Mayor Ruiz and other SB members to study the matter.

Petitioner emphasized that not a single centavo was spent by the municipal government for the Wag-Wag
Shopping Mall project. It was an unsolicited proposal under the BOT law. API was required to submit pre-
qualification statements containing, among others, their accomplished projects. Eventually the SB passed a
resolution authorizing him to enter into the MOA with API. The municipal government issued the notice of
award to API on September 16, 1996 in which it required the contractor to post notices prior to the start of
the project and to submit other requirements such as performance bond. However, API did not comply as its
counsel, Atty. Lydia Y. Marciano said these are not required under the BOT law (R.A. No. 7718) since there
will be no government undertaking, equity or subsidy in the project.

Petitioner asserted that it was the Vice-Mayor who is accountable for this project as he headed the working
panel. As to whether API was a licensed contractor, he admitted that he did not verify this before awarding
the BOT contract involving an infrastructure project. He insisted that the Wag-Wag Shopping Mall Project,
being an unsolicited proposal under BOT law, is exempt from the pre-qualification requirement although they
still conducted it. As far as he knows, the project proponent in this case is the Municipality of Muñoz.
However, petitioner admitted that he is not familiar with the BOT law. He also admitted that the Invitation
published stated a shorter period of submission of proposal (30 days instead of 60 days provided under the
BOT law) and that he just signed the said notice without consulting their legal counsel.9

On November 16, 2009, the Sandiganbayan rendered judgment convicting the petitioner after finding that:
(1) petitioner railroaded the project; (2) there was no competitive bidding; (3) the contractor was totally
unqualified to undertake the project; and (4) the provisions of the BOT law and relevant rules and
regulations were disregarded and not followed. The said court also found that the municipal government
suffered damage and prejudice with the resulting loss of several of its buildings and offices, and having
deployed its resources including equipment, personnel and financial outlay for fuel and repairs in the
demolition of the said structures. Damage suffered by the municipal government was quantified at ₱4.8
million, or 2% of the total project cost of ₱240 million, representing the amount of liquidated damages due
under the performance security had the same been posted by the contractor as required by law. As to the
allegation of conspiracy, the Sandiganbayan held that such was adequately shown by the evidence, noting
that this is one case where the Ombudsman should have included the entire Municipal Council in the
information for the latter had conspired if not abetted all the actions of the petitioner in his dealings with API
to the damage and prejudice of the municipality.

The Sandiganbayan likewise denied petitioner’s motion for reconsideration. It ruled that upon examination of
Section 4-A of R.A. No. 6957 as amended by R.A. No. 7718, it was clear that petitioner, with manifest
partiality and gross inexcusable negligence, failed to comply with the requirements and procedures for
competitive bidding in unsolicited proposals. It also reiterated that API was a contractor and not a mere
project proponent; hence, the license requirement applies to it.

Issue: Whether or not the Honorable Sandiganbayan utterly failed to appreciate that there was no
damage on the then Municipality of Muñoz as contemplated by law, to warrant the conviction of the
Accused-Petitioner.11

We deny the petition.

1. The accused must be a public officer discharging administrative, judicial or official functions;

2. He must have acted with manifest partiality, evident bad faith or inexcusable negligence; and

3. That his action caused any undue injury to any party, including the government, or giving any
private party unwarranted benefits, advantage or preference in the discharge of his functions.12

In this case, the information alleged that while being a public official and in the discharge of his official
functions and taking advantage of such position, petitioner "acting with evident bad faith or gross
inexcusable negligence or manifest partiality" unlawfully gave API "unwarranted benefits, advantage or
preference" by awarding to it the contract for the construction of the Wag-Wag Shopping Mall under the BOT
scheme despite the fact that it was not a licensed contractor and "does not have the experience and
financial qualifications to undertake such costly project, among others, to the damage and prejudice of the
public service."

This Court has clarified that the use of the disjunctive word "or" connotes that either act of (a) "causing any
undue injury to any party, including the Government"; and (b) "giving any private party any unwarranted
benefits, advantage or preference," qualifies as a violation of Section 3(e) of R.A. No. 3019, as
amended.13 The use of the disjunctive "or" connotes that the two modes need not be present at the same
time. In other words, the presence of one would suffice for conviction.14
.19

The third element of Section 3(e) of R.A. No. 3019 may be committed in three ways, i.e., through manifest
partiality, evident bad faith or gross inexcusable negligence. Proof of any of these three in connection with
the prohibited acts mentioned in Section 3(e) of R.A. No. 3019 is enough to convict.20 Damage or injury
caused by petitioner’s acts though alleged in the information, thus need not be proven for as long as the act
of giving any private party unwarranted benefits, advantage or preference either through manifest partiality,
evident bad faith or gross inexcusable negligence was satisfactorily established. Contrary to petitioner’s
assertion, the prosecution was able to successfully demonstrate that he acted with manifest partiality and
gross inexcusable negligence in awarding the BOT contract to an unlicensed and financially unqualified
private entity.

R.A. No. 6957 as amended by R.A. No. 7718, requires that a BOT project be awarded to the bidder who has
satisfied the minimum requirements, and met the technical, financial, organizational and legal standards
provided in the BOT Law. Section 5 of said law provides:

SEC. 5. Public Bidding of Projects. - x x x

In the case of a build-operate-and-transfer arrangement, the contract shall be awarded to the bidder who,
having satisfied the minimum financial, technical, organizational and legal standards required by this Act,
has submitted the lowest bid and most favorable terms for the project, based on the present value of its
proposed tolls, fees, rentals and charges over a fixed term for the facility to be constructed, rehabilitated,
operated and maintained according to the prescribed minimum design and performance standards, plans
and specifications. x x x (Emphasis supplied.)

Foremost of these minimum legal standards is the license accreditation of a contractor required under R.A.
No. 4566 otherwise known as the Contractors’ License Law. The Philippine Licensing Board for Contractors
created under said law is mandated to ensure that prospective contractors possess "at least two years of
experience in the construction industry, and knowledge of the building, safety, health and lien laws of the
Republic of the Philippines and the rudimentary administrative principles of the contracting business" which
it deems necessary "for the safety of the contracting business of the public."21 In fact, a contractor must
show that he is licensed by the board before his bid will be considered.22 As a general rule therefore, the
prospective contractor for government infrastructure projects must have been duly licensed as such
pursuant to R.A. No. 4566. API not being a licensed contractor as per the Certification23 issued by Philippine
Contractors Accreditation Board (PCAB) board secretary Aaron C. Tablazon, is thus not qualified to
participate in the bidding and much less be awarded the BOT project for the construction of Wag-Wag
Shopping Mall.

Issue: WON on the principle of res judicata the Ombudsman is precluded from reinvestigating the case

Petitioner claimed that there was compliance with the law saying that API was not a contractor but a mere
project proponent, for which a license is not a requisite to undertake BOT projects. But the Sandiganbayan
correctly rejected this theory as the clear terms of the MOA itself confirm that API itself undertook to
construct the Wag-Wag Shopping Mall, thus:
We find nothing illegal in the reversal by the Ombudsman upon review of the September 9, 2002 resolution
of the Office of the Deputy Ombudsman for Luzon which recommended the dismissal of the complaint-
affidavit filed by Domiciano R. Laurena IV upon the ground that a similar criminal complaint filed by
Castañeda had been dismissed in OMB-1-97-1885. The Office of the Ombudsman Chief Legal Counsel
granted the petition for review filed by complainant Laurena IV and recommended that petitioner be indicted
before the Sandiganbayan for violation of Section 3(e) of R.A. No. 3019. It pointed out that the dismissal of
OMB-1-97-1885 was premised on the authority of a local legislature to accept unsolicited proposals and
enter into a BOT project under R.A. No. 6957 as amended by R.A. No. 7718, and the lack of any showing of
undue injury to the Municipality of Muñoz as a result of the temporary work stoppage. However, the issue of
lack of API’s construction license was never brought out in the earlier case while in the present case, the
PCAB attested to the fact that API is not a licensed contractor and petitioner’s approval of API’s proposal is
a clear badge of giving unwarranted benefit, preference or advantage through manifest partiality, evident
bad faith, or at the very least, gross inexcusable negligence. The OMB found that petitioner could have
easily discovered such fact with basic prudence considering that a ₱240-million infrastructure was involved,
but apparently he threw all caution to the wind and relied solely on the self-serving representation of API that
it possesses the requisite contractor’s license.38 This ruling of the OMB Chief Legal Counsel was affirmed
upon review by the Special Prosecutor and approved by Ombudsman Merceditas N. Gutierrez on August 4,
2006.39

It may be recalled that on motion of petitioner, the Ombudsman even conducted a reinvestigation of the
case pursuant to the January 15, 2007 directive of the Sandiganbayan. In a memorandum40 dated March 5,
2007, then Special Prosecutor Dennis M. Villa-Ignacio approved the finding of probable cause against the
petitioner and the recommendation that the information already filed in this case, for which petitioner had
already been arraigned, be maintained. Petitioner cannot claim denial of his right to due process, as he had
been given ample opportunity to present evidence on his defense in the proceedings before the
Ombudsman and Sandiganbayan.

No grave abuse of discretion was committed by the Ombudsman in reversing the previous dismissal of a
similar criminal complaint against the petitioner involving the anomalous award of the BOT contract to API.
Indeed, the Ombudsman is not precluded from ordering another review of a complaint, for he or she may
revoke, repeal or abrogate the acts or previous rulings of a predecessor in office. Thus we held in Trinidad v.
Office of the Ombudsman41:

Petitioner’s arguments – that res judicata applies since the Office of the Ombudsman twice found no
sufficient basis to indict him in similar cases earlier filed against him, and that the Agan cases cannot be a
supervening event or evidence per se to warrant a reinvestigation on the same set of facts and
circumstances – do not lie.

Res judicata is a doctrine of civil law and thus has no bearing on criminal proceedings.

But even if petitioner’s argument were to be expanded to contemplate "res judicata in prison grey" or the
criminal law concept of double jeopardy, this Court still finds it inapplicable to bar the reinvestigation
conducted by the Office of the Ombudsman. For the dismissal of a case during preliminary investigation
does not constitute double jeopardy, preliminary investigation not being part of the trial.