Builders v. Commission On Audit

INTING, J.:

Before the Court is a Petition for Review on Certiorari1 (Petition) filed by Sunway Builders (Sunway) assailing the Commission on Audit (COA) Commission Proper (COA Proper) Decision No. 2019-0822 dated March 27, 2019 and Resolution3 dated November 25, 2019. In the assailed issuances, the COA Proper denied Sunway's money claim against the Municipality of Carranglan, Nueva Ecija (Carranglan) for the payment of P10,166,654.90 representing actual work performed for the Design-Build-Lease Contract relative to Carranglan's water supply system.4 Antecedents In 2004, during the term of then-incumbent municipal mayor Luvimindo C. Otic (Mayor Otic), Carranglan, and Sunway, executed a Design-Build-Lease Contract for the construction of the municipality's water supply system.5 The project was financed through a loan obtained by Carranglan, represented by Mayor Otic, from the Development Bank of the Philippines (DBP).6 Sunway commenced project works on August 8, 2005.

The original project completion date was extended from August 4, 2008 to September 2008. However, the project was not completed in full despite the extension.7 In 2011, Carranglan's Sangguniang Bayan passed a resolution terminating the contract unilaterally. While the project remained unfinished, Sunway insisted that it had accomplished 59% of the project works.

Thus, it demanded payment for the work done.8 However, Carranglan, which was then under the mayorship of Restituto A. Abad,9 did not heed the demands.10 Carranglan's non-payment prompted Sunway to file a complaint before the Construction Industry Arbitration Commission (CIAC),11 docketed as CIAC Case No. 02-2015, demanding the payment of the aggregate amount of P19,819,589.00,12 broken down as follows:13 Unpaid accomplishment ₱18,169,589.00 Attorney's fees 1,650,000.00