MELGENE Aircon Marketing and Services (MAMS) may finally collect payment for its services more than four years after completing the delivery, installation, and turnover of the air conditioning system for the Cabadbaran City gymnasium in Agusan del Norte.
In a decision released last week, the Commission on Audit (COA) granted the claimant’s P5.94 million petition for compensation against the city government.
The COA Commission Proper held that the city has no basis to refuse payment since all the requirements for the claim including the existence of a contract and proof of delivery and services rendered were fully satisfied.
COA chairperson Gamaliel Cordoba and Commissioners Roland Café Pondoc and Mario G. Lipana noted that the Supreme Court, in various cases, has applied the principle of unjust enrichment to rule out non-payment to contractors and suppliers despite the absence of a contract.
Records showed the Bids and Awards Committee (BAC) of the City of Cabadbaran on January 24, 2019 declared MAMS the winner of the public bidding for the delivery, installation, and commissioning of the air conditioning system for the city’s gymnasium.
The project was deemed completed when the Inspection and Acceptance Report was issued on September 16, 2019 by the team of city inspectorate.
However, in a letter dated December 12, 2019, Mayor Judy C. Amante informed MAMS that its request for payment was denied because the budget appropriation of Cabadbaran City for the years 2017 and 2018, from which the procurement was sourced, have been declared invalid by the Sangguniang Panlalawigan (SP) of Agusan del Norte.
This prompted the contractor to file its petition before the COA.
The city government did not contest the claim but said that in the absence of an approved appropriation, it was left with no recourse but to deny payment for the project.
The COA however noted that the city already accepted the air conditioning system and its residents have been enjoying the project over the last four years even as the contractor remained unpaid.
“While the absence of a valid appropriation may show that the procurement was irregular, equity dictates that MAMS should be compensated for what it had delivered. Otherwise, it would result to unjust enrichment on the part of the city,” the Commission pointed out.
