PRC chief ordered sacked over deal with Ochoa in-law

Aries C. Rufo

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The Ombudsman says PRC chief Teresita Manzala entered into a rigged contract with New San Jose Builders Inc, which is owned by a brother-in-law of Executive Secretary Paquito Ochoa Jr

MANILA, Philippines – The Ombudsman has ordered the dismissal of Professional Regulation Commission (PRC) chair Teresita Manzala after it found prima facie evidence that she conspired with a developer closely identified with Executive Secretary Paquito Ochoa Jr to execute an alleged rigged contract. 

Ombudsman Conchita Carpio-Morales approved the recommendation and findings of the Ombudsman Field Investigation Office (FIO) that Manzala and another former commissioner, Alfredo Po, are liable for graft when they entered into a sweetheart deal with New San Jose Builders Inc (NSJBI) in 2012.

The contract involved the planned transfer of the PRC office to the Victoria Towers Commercial Center in Quezon City owned by NSJBI. The company is owned and headed by businessman Jose “Jerry” Acuzar, brother-in-law of Ochoa. (Ochoa’s sister is married to Acuzar.)

Apart from the dismissal, Carpio Morales also ordered the filing of graft charges before the Sandiganbayan against Manzala, Po, NSBJI president Cesar Sanqui and former NSBJI first vice president Mary Grace Villacorta.

Carpio-Morales signed the recommendation to file charges and the dismissal of the PRC executives on August 18, 2014, 3 months after the FIO report was submitted to her on May 2, 2014. 

As a government agency under the Office of the President, the dismissal is supposed to be implemented by Malacañang. But Malacañang has so far not announced an implementation of this order.

Ombudsman orders may be appealed before the Court of Appeals, although the CA does not issue temporary restraining orders on these cases.

Anonymous complaint

The complaint stemmed from an anonymous letter sent to the Ombudsman about an alleged anomalous 3-year lease of a contract that favored the Acuzar firm. The amount involved a P12.2-million (*$270,000*) basic yearly rental of the Victoria Towers and a separate P13.954 million ($318,000) for the purchase of equipment. 

Records showed that in the first quarter of 2012, the PRC en banc agreed to transfer the PRC executive office to a better location. This would involve leasing a property for 3 years – starting in January 2013 – in the meantime that the permanent building for the PRC will be constructed.

In April 2012, the PRC chief sent a Letter of Intent (LOI) to the NSJBI for a 3-year lease of the Victoria Tower property.

In July 2012, Po informed the chair of the Board of Design to submit the list of personnel who will be affected by the transfer “in preparation of the layout of the executive offices at Victoria Towers.”

By November, the PRC issued a resolution authorizing the budget division to allocate the money for the basic yearly rental as well as for the purchase of new equipment to the new office.

But it was only on November 27, 2012 that a pre-bid conference was held for the lease of the property. Four parties were invited to participate, but only NSJBI attended. Consequently, NSJBI’s bid won by default, considered as the lowest calculated bid being the lone bidder. 

But unknown to the PRC, Ombudsman field investigator Rachel Cariaga-Favila, acting on the anonymous complaint, conducted an ocular visit of the Victoria Towers, first on November 23, 2012, before the pre-bid conference was held. 

At the time, she observed there was already an ongoing renovation in the property. In her subsequent visits on November 28 and December 12, she was able to confirm that the renovation was in preparation for the PRC transfer by January 2013.

“This shows that the bidding was rigged and simulated. The bidding conducted by the BAC [Bids and Awards Committee] was undertaken only to make it appear that the transaction with NSJBI is valid and legal as the lease agreement was already perfected even before the bidding was held,” Favila concluded.

No perfected contract

In her defense, Manzala said the LOI submitted to NSJBI was not yet a perfected contract and, because of this, there was no intention to defraud the government with a negotiated deal.  

She explained the contract was not perfected since the two parties failed to arrive at a deal to proceed with the project. She also argued that the LOI did not authorize NSJBI to start with the renovation. 

For his part, Po, who was earlier fired after he was caught extorting money from the owner of the building in Baguio where the PRC was also leasing office, washed his hands off the alleged anomaly, saying it was Manzala who had the sole power to award a contract.

The members of the BAC also denied they colluded with NSJBI to corner the contract, arguing they only performed their duties as BAC members. In fact, they said, they even recommended to Manzala to put on hold the procurement of equipment for the planned transfer following Po’s arrest on December 5, 2012, and pending the legal opinion of the Government Procurement Policy Board on whether they should proceed or not.

They also said they only belatedly found out that the renovation of Victoria Towers for the PRC office was already ongoing even before NSBJI was declared the lowest bidder.

NSBJI’s defense

NSJBI’s Sanqui said they followed the bidding process. He stressed it’s the company that continues “to suffer losses and undue prejudice” since it has reserved the space for some time now, in anticipation of the award of the contract.

As for the renovation ahead of the award of the contract, Sanqui explained this “was customary business practice…to ensure that the offered space is ready and available when the anticipated need for it arises.”

But Ombudsman investigator Favila, in her reply, insisted that the bidding was a “sham, as the transaction between the PRC and NSJBI was already perfected in the first semester of 2012.” The BAC resolution recommending the declaration of failure of negotiation “was an afterthought,” as it was issued after the complaint was filed against the company and PRC.

Favila said that as early as 2011, a comparative matrix of proposed venues was submitted to Manzala and the options at the time did not even include Victoria Towers. Manzala supposedly only ordered the bidding after she was informed that the Ombudsman FIO was already looking into the matter.

Favila also said that based on the examination of the Terms of Reference, the required space was 2,100 square meters. However, based on the contract of lease, the space requirement was lowered to 2,065 square meters, obviously to accommodate Victoria Towers, which has an office space of 2,004.63 square meters.

“Realizing that NSJBI will not pass the negotiated procurement if the space requirement is pegged at 2,100 square meters, the respondents changed the space specifications to 2,065 square meters,” the FIO report said.

Favila also questioned why no other LOIs were sent to other interested parties to determine the best deal for the government. As it is, Victoria Towers was already the preferred choice of Manzala, he asserted.

He added that the letters between NSJBI and PRC prior to the bidding and following the issuance of the LOI indicate “that they have inked an understanding” regarding the lease of Victoria Towers. 

Finally, the recommendation of the BAC to declare a failure of negotiation “confirms the badges of irregularities” that existed before bidding was conducted. In its recommendations, the BAC observed, among others, that “the design/plan layout of the proposed site…were tailored fit to Victoria Towers.” There was also a clear indication that “Victoria Towers was favorably considered beforehand.”

Based on the evidence gathered, the Ombudsman FIO concluded that Po was on top of the scheme, with the knowledge and participation of Manzala.

In finding NSJBI liable, the FIO said the company “entered into an agreement with PRC in the absence of a public bidding – a requirement which private respondents ought to know when dealing with public transactions.” –

*$1 = P44

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