A SUPPLIER of the Department of Agriculture-Regional Field Office 6 will not receive a centavo despite delivering 235,000 cacao seedlings worth P11.7 million for failure to faithfully comply with the terms of the contract.
The Commission on Audit denied the petition of Renel’s Fruit Nursery on the grounds that it failed to satisfy the requirement of the contract that each cacao seedling should be certified by the Bureau of Plant Industry (BPI).
Although the claimant invoked the principle of “quantum meruit” which allows reasonable payment commensurate to services rendered, the commission held that there is no obligation on the part of the DA-Region 6 since the seedings cannot be used by the government agency.
“The delivered seedlings have not benefitted the government and the public because they were not accepted by the DA RFO No. 6 for being non-compliant with the stipulated specifications,” the COA said.
According to records, Renel’s Fruit Nursery won public bidding in 2015 for the supply of UF18 or BR25 cacao seedlings worth P11,686,550.
The seedlings were supposed to be delivered to all six provinces of Western Visayas with 110,000 going to Iloilo, 37,500 to Antique, 35,000 to Aklan, 20,000 to Negros Occidental, 17,500 to Guimaras, and 15,000 to Capiz.
Noting the absence of BPI certification although the nursery was accredited, DA-RO 6 refused to accept the seedlings and requested the supplier to submit the certification in a letter dated March 9, 2016.
A supervising agriculturist of the BPI then informed the regional director that the nursery was unable to comply with the plant material certification because all 235,000 plants were grafted without the knowledge of plant nursery inspectors although the plants were authentic UF18 cacao.
On January 23, 2017, the DA-Region 6 gave the supplier a five-day deadline to submit an explanation why the contract should not be terminated due to its failure to comply with the terms and conditions.
On October 14, 2020 Tranquilina Haspe, representing Renel’s Fruit Nursery, demanded payment from the DA Region 6. The agency replied that the seedlings remain unpaid because they were not compliant with specifications in the contract.
On November 13, 2020, the supplier filed its petition before the COA asking that the DA-Region 6 be ordered to release payment. She also asked that her cash bond of P586,000 be refunded.
In denying the claim, the COA en banc held that the supplier took the risk of loss when it failed to take back the seedlings despite the refusal of DA Region 6 to accept them without BPI certification.
“In this case, good faith cannot be considered in favor of Ms. Haspe because it appears that she intentionally disregarded the contract as to the specifications of the seedlings,” the commission added.
Likewise, it pointed out that DA Region 6 had the right to forfeit the claimant’s cash bond due to the termination of the contract attributable to the supplier’s fault.
“In view of the foregoing discussions, the performance security should not be returned to claimant, and instead, it should be forfeited,” the COA said.
