The Office of the Ombudsman found probable cause to indict Raymundo Java, Chairman of the Board of Directors (BOD) of the Cagayan de Oro City Water District (COWD) for two counts of violation of Section 3(e) of the Anti-Graft and Corrupt Practices Act (Republic Act No. 3019) in connection with the city’s water supply contracts.
Also charged with Java are BOD Vice-Chairman Sandy Bass Sr. (two counts); members Sarah Borja and Francisco Mendez (one count each); Treasurer Bibiana Sarmiento (one count); BOD Secretary Joel Baldelovar (one count); former Local Water Utilities Administrator Lorenzo Jamora (one count), and General Manager Gaspar Gonzales Jr. (two counts). Private respondents Edward Chona, President and General Manager of Geo-Transport and Construction Inc. (GTCI), and Jose Alvarez of Rio Verde Water Consortium, Inc. (RVWCI) were also charged in conspiracy with the COWD executives.
Java, Bass, Sarmiento, and Baldelovar were also indicted for violation of Section 7(d) of the Code of Conduct and Ethical Standards for Public Officials and Employees (Republic Act No. 6713) for accepting two water tankers and a brand new Toyota Revo vehicle in connection with the illegal negotiated contract.
Investigation found that on 23 December 2005, a Supplemental Agreement for the Cagayan De Oro City Water Supply System Improvement Project (Main Service Area) was entered into between COWD and GTCI with a contract price of P193,185,536.94. Records show that respondents did not conduct any public bidding and instead awarded the project through a negotiated contract
Investigation also found that in 23 December 2004, COWD entered into a Bulk Water Supply Agreement with RVWCI for the supply of treated bulk water. Procurement documents also revealed that even before the submission and opening of the bids on 18 November 2004, the BOD already declared RVWCI as qualified to participate in the bidding despite the consortium’s failure to submit its eligibility documents such as its income tax returns and audited financial statements.
The Ombudsman also found that the contract was prepared solely by RVWCI with no opportunity for the signatories to read and review the provisions. For this reason, it took the BOD two years and two months to notice the difference between the model contract and the signed contracts specifically on items concerning the billing rates. Consequently, the consortium billed COWD P11.52 per cubic meter instead of P10.45 per cubic meter as previously agreed upon by the parties.
“In so doing, not only did respondent Board members contravene the procurement law and blatantly demonstrate impropriety and partiality, they also belie their averment that they did not receive the BAC Resolution disqualifying the RVW consortium,” stated the Ombudsman Resolution.
“The Resolution added that “respondents acted with evident bad faith, manifest partiality and gross inexecusable negligence when they signed the contract without first reading it, to the prejudice of the COWD.”
Section 3(e) of R.A. No. 3019 punishes a public officer who, in the discharge of his official functions, acted with manifest partiality, evident bad faith, or inexcusable negligence causing undue injury to any party, including the government, or giving any private party unwarranted benefits, advantage, or preference. On the other hand, Section 7(d) of R.A. No. 6713 provides that public officials and employees shall not solicit or accept, directly or indirectly, any gift, gratuity, favor, entertainment, loan or anything of monetary value from any person in the course of their official duties or in connection with any operation being regulated by, or any transaction which may be affected by the functions of their office.” ###