FOR the first two months of 2019, SCSC General Merchandise continued to provide service to the Makati City government despite the absence of a signed contract — it installed and refilled toilet sanitizers for various structures owned by the city.
And then it was notified that no contract was forthcoming and had to stop even if it had previously won the same service contract for 2018 and prior years.
However, its billing for services rendered in January and February 2019 amounting to P1.043 million was not paid despite reiteration of the demand as the city government declined to pay, citing the absence of a contract.
Based on documents submitted to the Commission on Audit in support of its claim, SCSC serviced the Makati City Hall Buildings I and II, Makati Central Police Station, Ospital ng Makati, and University of Makati.
Makati City said SCSC was not fully compliant with the bidding rules under RA 9184 or the Government Procurement Reform Act and had continued providing the service of its own volition despite having been made aware earlier that there will be no contract extension.
The COA disagreed and ruled that SCSC is entitled to compensation in the interest of equity and substantial justice.
Regardless if the first two months of 2019 was not covered by any contract, it held that the city government has to pay the billing since the city government does not contest that services were rendered.
“The requirement of proof of actual services rendered may not be an issue in this case, because the City, while not necessarily admitting, did not deny …that SCSC actually rendered the services,” the commission noted.
In addition, certifications of completion of service were issued to the SCSC by the General Services Department and the Supply Property Management validating the claim.
On the issue of prior notice, the COA pointed out that the notification that there would be no contract extension was sent to the City GSD and not to SCSC while there was also no directive to the contractor to cease its services.
On the contrary, it held that there was an implied agreement between the City and SCSC that the latter can continue providing the service considering the health and safety needs of city employees and the general public.
“In a long line of jurisprudence, the Supreme Court applied the principle of quantum meruit to compensate services already rendered notwithstanding the absence or the defect of contract or violation of relevant laws …based on the equitable postulate that it is unjust for a person to retain benefit without paying for it,” the COA added.
