Dionisio v. Paterno

BARREDO, J.:

Petition for mandamus against then Commissioner of Highways Baltazar Aquino and the Mayor of Makati, Metro Manila, praying final reliefs for the issuance of the following mandates separately to each of them respectively: a) Commanding the respondent Hon. Baltazar Aquino or his successor in office as the case may be, to implement and comply with the directive of the NEDA as contained in its lot Indorsement, dated May 24, 1978 to said respondent by effecting the payment to herein petitioner of the unpaid of the adjusted contract cost of the Buendia overpass in the amount of P1,955,060.99 and, for this purpose, the said amount be deposited with this Honorable Court within a period for its proper disposition to the herein petitioner. b) Commanding the respondent Hon. Nemesis Yabut or his success in office as the case may be, to implement and comply with the directive of the Office of the President as contained in its 1st In.

endorsement, dated March 29, 1978 by effecting the payment to herein petitioner, the amount of P775,263.94 as fee for the proportion of the construction plans of the Buendia overpass and for its purpose, the said amount be deposited with this Honorable Court within a period for its proper disposition to the herein petitioner. (Page 13, Record.) The NEDA directive referred to in (a) above reads as follows: "1st Indorsement May 24, 1478 Respectfully referred to the Honorable The Secretary of Public Highways, Manila. as Co-Chairman Contract Price Adjustment Committee CPAC the within letter dated May 13, 1978 of Mr. Virgilio V. Dionisio in connection with the contract price adjust for the Buendia-MSDR Overpass Project.

This office concurs with the position of the CPAC that the contract price adjustment already granted for the project is fair and reasonable Attention is however invited to the claim of the doctor for payment of the unpaid balance of the adjustment in the amount of P1,955,060.00. It is requested that this amount, if still not paid, be settled at once in fairness to the contractor. (Sgd.) Gerardo P. Sicat GERARDO P. SICAT Secretary of Economic-Planning (Director-General) (Page 6, Record.) whereas the one to respondent mayor is worded thus: "OFFICE OF THE, PRESIDENT OF THE PHILIPPINES Malacañang 1st Indorsement Manila, March 29, 1978 Respectfully referred to His Honor the M Mayor of Makati, Metro Manila.

"In view of the within representations herein made and it appearing the construction of the Buendia-MSDR complex has already been completed, the office hereby approves the negotiated contract dated April 18, 1972, entered into by and between the Municipality of Makati and K and D Engineering Management Inc., and for V.V. Dionisio General Construction for completing the undertaking of plans, specifications and quantity estimates for professional services in connection with the Buendia-MSDR complex including subsurface expectation work as an exception to Executive Order No. 298, miss of 1%6, as amended and Memo Circular No. 593, series of 1972 and authorizes the payment to the contractor the amount of P775,263.94, subject to availability of funds and the will account and auditing requirements. By authority of the President (Sgd.) Cesar A. Dumlao CESAR A. DUMLAO Presidential Finance Adviser (Page 11, Record.) Both of these two directives refer to the contract for the construction of the Buendia-MSDR Overpass Project executed between petitioner and respondent Commissioner and dated January 28, 1976, which in part pertinently stipulated that: "WHEREAS, there exist an urgent need for an overpass structure at the in n of Buendia Avenue and the Manila South Diversion Road Rizal in Makati Rizal to ease up the motor traffic congestions at the "M in on and its immediate environs.

"WHEREAS, both the MSDR and Buendia Avenue an major vital to local regional and national socio-economic growth; "WHEREAS, a contract for professional for the B MSDR . including among others the preparation of plans and specifications and preliminary estimates for its constructions was entered into by and between the Municipal Government of Makati, and K & D Engineering Management, Inc., and duly by a Notary Public on April 18, 1972; "WHEREAS the SECOND PARTY agreed to complete the undertaking of the plans specifications and quantity estates for the construction of the Project under the supervision of the FIRST PARTY without any addition al compensation therefor other than what may be due, if any, under the contract for professional services of K & D Engineering Management, Inc. with the Municipal government of Makati; "WHEREAS, the plans, specification and quantity estimates of the work items in volved, submitted by the SECON D PARTY, were approved by the secretary; "WHEREAS, the President of the Philipppines has instructed the Commissioner of the Budget to advance to the cost of the prject, of whiuch one half will be repaid by the Municipal Government of Makati, so that work can start; (Annex A, pp. 15-16, Record).

Now, how the above NEDA directive came about is quite accurately statedn the comment filed by the respondent themselves to the petition yerein wherein it is stated that: "On January 6, 1978, respondent Aquino of the then Department of Public Highways (DPH) prepared a government estimate of the Buendia Overpass. The estimate based on prices prevailing as of January 6, 1976 aggregated to P17,741,755.80 (bottom, p. 2 of CPAC Resolution No. 215 dated January 6, 1976, Annex 1 of this comment).

"On January 28, 1976, petitioner Dioniso signed the contract with respondent Aquino to construct the Buendia Overpass at Makati (Annex A of petition). Petitioner Dionisio signed the contract allegedly upon respondent Aquino's verbal assurance that correction of the price to conform to what was current on January 28, 1976 would be made. "The prices of petroleum products increased on January 15, 1976, resulting in the increase of cost of labor and materials.

It is claimed that the government estimate for the Buendia Overpass, made as of January 6, 1976, did not reflect the oil price increase on January 15, 1976, as well as for labor and materials. "Petitioner sent letters to respondent Aquino, seeking the adjustment of the contract price. One such letter (Annex B of petition) was dated January 29, 1976, a day after the contract.

But petitioner received no reply. In another follow-up letter to respondent Aquino dated February 28, 1976 (Annex C of petition), petitioner Dionisio requested for - "immediate consideration on the adjustment of the unit cost based on the increase in price as a result of the fuel adjustment' and furnished President Marcos with a copy thereof. The President then made the following notation thereon 'Sec. Aquino, work on this'.

"On March 4, 1976, respondent Aquino wrote petitioner Dionisio (Annex D of petition) a letter stating that his request for price adjustment had been forwarded to the Contract Price Adjustment Committee CPAC for appropriate action and - "... that the government estimate and the contract cost and unit prices were based on the prevailing prices of petroleum products and construction materials prior to the last increase in prices of petroleum products. "In September 1976, the Buendia Overpass was finished, some 3 months (actually less than two months) ahead of schedule.

"On June 6, 1977, CPAC issued Resolution No.

215 (Annex I of this comment), granting petitioner Dionisio the adjusted contract price of P18,797,198.68 for the Buendia Overpass Project, which represented a 2.86% increase in the original contract price of P17,741,755.80. What petitioner Dionisio had sought is a 15% increase. Accordingly, he elevated the matter of contract price adjustment for review by the NEDA pursuant to Lot 218.

Petitioner wrote letters to Mr. Sicat of NEDA on April 12 and May 1, 1978 (Annexes F and G of petition) wherein he cited some already granted contract price adjustments in government projects, varying in percentages from 15% for Consortium of Cebu Contractors) up to 270.5% (for Samar project) and other percentages of price increases between these two extremes (18% to Hanil Dev. Corp. [Annex F of petition 84.8% (Calbayog), 78.2% (Agoo-Baguio), 132.4% Lamut-Banawe 78.2% (Marikina-Infanta) and 55.3% (Davao-Bukidnon) as escalated contract cost & percentage of escalation, Annex G of petition). Then, in his letter to NEDA of May 13, 1978 (Annex I of petition), petitioner Dionisio stated that he was to settle for 13.87% instead of 15% increase in the contract price for the Buendia Overpass Project.

He thus stated his position, to wit: Contract price updated as of Feb. 7, 1976 by DPH Technical Committee P20.203,340.90 Less: Original contract price based on government estimate prior to increase in oil last Jan. 15, 1976 P17,741,755.80 Increase in contract price 13.87% P 2,461,585.10 (to conform with pre- vailing price at time Of contract) Less: Adjustment already paid July 1977 - P367,351.44 Apr.

1978 - 139,166.67 (2.86%) 506,524.11 Balance still unpaid