THE Commission on Audit has granted the petition of a security agency seeking payment of P7.91 million for services rendered to the Department of Budget and Management (DBM) from January 23 to July 16, 2020.
In its four-page decision, the COA Commission Proper held that 168 Security Inc. is entitled to the payment despite the absence of a formal extension of its contract as the DBM did not contest its assertion that it continued to provide security services even after its original contract expired on January 11, 2020.
“Wherefore, the Petition for Money Claim of 168 Security, Inc. against the Department of Budget and Management for payment of security services rendered from January 23, 2020 to July 16, 2020, is hereby partly granted in the amount of P7,914,893.21, less mandatory deductions, and subject to the availability of funds and the usual accounting and auditing rules and regulations,” the Commission said.
The ruling was signed by COA chairperson Gamaliel A. Cordoba and commissioners Roland Café Pondoc and Mario G. Lipana.
Records showed 168 Security was engaged by the DBM from July 11, 2018 to January 10, 2020 after winning the public bidding held in the second quarter of 2018.
The DBM admitted that it made efforts to initiate the procurement process for a new security services contract but was hampered by the impact of the global health crisis and had to suspend all procurement activities.
In a letter dated May 27, 2020, the DBM reminded the security agency about the expiration of the contract in January of that year with a notification that the settlement of its billings was being held in abeyance.
However, a new security company was awarded the new contract and started providing services to the DBM on July 17, 2020.
In its answer to 168 Security’s petition, the DBM invoked honest mistake and oversight on its part which caused confusion on the determination of the expiration of its contract.
Likewise, the DBM Finance Service issued a Certification of Non-Payment in support of the claim.
In its decision, the COA noted that the DBM admitted the service contractor’s claim that it continued to provide security services over the unbilled period and that it is entitled to payment.
The audit team leader recommended the grant of the claim based on quantum meruit which is compensation commensurate to the service rendered or goods delivered.
The COA CP said that despite the confusion in the computation of the contract and the non-renewal of the contract, the obligation exists hence the claim must be given consideration.
It noted that in numerous cases, the Supreme Court had consistently upheld the right of contractors for compensation even in situations where the contracts were void, citing public interest and equity.
“In quantum meruit, the measure of recovery should relate to the reasonable value of the services performed because the principle aims to prevent undue enrichment based on the equitable postulate that it is unjust for a person to retain any benefit without paying for it,” the COA added.
