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OFFICE OF THE OMBUDSMAN

Ombudsman Building, Agham Road

North Triangle, Diliman, Quezon City 1101

MANIIEL P. MEJORADA,
Complainant,
-versus-

rroN. FRANKLIN M. DRTLON,


Senate President, Republic of the Philippines,

EDILBERTO D. TAYAO, Regional Director, Department of Public Works and Highways @PWH) Region 6, LEA N. DELFINADO, Chairman, Bids and Awards Committee DPWH Region 6 MARILOU G. ZAMORA, MARILYN H. CELTL, DANILO M. PENOY, JOSE AL V. FRUTO, LUVISMINDA H. NARCISO,
Members, Bids and Awards Committee, DPWH, Region 6

x---HON. CONCHITA CARPIO-MORALES


Ombudsman

----x

Office of the Ombudsman Ombudsman Bldg., Agham Road Diliman, Quezon City
Madam:

COMPI-AINT
The undersigned respectfi;lly files this COMPLAINT against the above-captioned public officials in connection with the anomalous implementation of the "Improvement/completion of the E. Trenas Boulevard Along Iloilo River (From Benigrro Aquino Jr. Avenue to
Carpenters Bridge)

Iloilo City" project which was funded from the Priority Development

Assistance Fund (PDAF) of Senator Franklin M. Drilon in September 2012 in the amount Thirteen Million Five Hundred Thousand Pesos (P13,500,000.00).

of

The acts of respondents in the procurement and implementation of this contract show there was conspiracy to defraud the government and causing the misappropriation of millions of

tr'
pesos from this PDAF release in violation of the following laws and commission of specific offenses:

A. Republic Act No. 3019, or the Anti-Graft and Comrpt Practices Act, particularly Section 3,pangraphs (a), (e) and (g) in relation to; B. Republic Act No. 9184, or the Government Procurement Reform Act and its Revised Implementing Rules and Regulations;

C. Dishonesty; D. Grave Misconduct;

E. Falsification of public documents; F. Malversation of public funds.


Complainant is a Filipino crtizen, married, of legal age, and a resident of No. 2 Kasoy St., Block 11, Villa San Lorenzo Subdivision,Lapaz,Iloilo City where he can be served with sunmonses and orders of this Honorable Office.
Respondent Franklin M. Drilon can be served with summonses and orders at his office in the Senate of the Philippines, GSIS Bldg., Financial Center, Roxas Boulevard, Pasay City, Philippines. The other respondents are officials and employees of DPWH Region 6, andmay be served with summonses and orders at DPWH Region 6, Fort San Pedro, Iloilo city.

In support of this Complaint, I have attached my affidavit and its annexes. Also attached is a Certificate of Non-Forum Shopping.

Iloilo City for Manila, Philippines, September 10,2013.

MANUhr, r.[dr"loRADA

!--f

Republic of the

Philippines )
) S.S.

City of X----

Iloilo
------X

AFFIDAVIT
I, MANUEL P. MEJORADA, of legal age, Filipino, married and a resident of No. 2 Kasoy St., Block 11, Villa San Lorenzo Subd., Lapaz,Iloilo City, after having been duly sworn in accordance with law, do hereby depose and say: 1. I am the Executive Editor of The News Today (TNT) Libre, a daily newspaper published in Iloilo City, and a blogger for a blog "Mejorada's Point of View" on WordPress.com, and it was in this capacity as an investigative journalist that I came to
know the facts and circumstances about the anomalous procurement and implementation of a "pork barrel" project involving P13,500,000.00 in public funds in Iloilo City. I am executing this affidavit in support of a CRIMINAL and ADMINISTRATIVE COMPLAINT based on my personal knowledge relative to this anomaly against: a. Senate President Franklin M. Drilon; b. DPWH Regional Office No. 6 Regional Director Edilberlo Tayao; c. DPWH Regional Office No. 6 Bids and Awards Committee which underlook the procurement of a contract known as "Improvement/completion of E. Trenas Boulevard Along Iloilo River (From Benigno Aquino Jr. Ave. to Carpenters Bridge) commencing on September 27,2012, namely: i. Lea Delfinado, Chairman ii. Marilou G. Zamora iii. Marilyn H. Celiz iv. Danilo M. Penoy v. Jose Al V. Fruto vi. Luvisminda H. Narciso prosecution In the of the funding, procurement and implementation of the above-cited projects, respondents, conspiring with one another, feloniously and criminally committed acts in violation of and constitute criminal/administrative offenses: a. Republic Act No. 3019, or the Anti-Graft and Corrupt Practices Act, particularly Section 3, paragraphs (a), (e) and (g) in relation to; b. Republic Act No. 9184, or the Government Procurement Reform Act and its Revised Implementing Rules and Regulations; c. Dishonesty; d. Grave Misconduct; e. Falsification of public documents; f. Malversation of public funds.

2.

3.

FACTS AND CIRCUMSTAI{CES


1

On Septemb er 17 ,20l2,the Department of Budget and Management issued Special Allotment Release Order (SARO) No. BMB-A-12-T000004324 authorizing the release of fundS iN thE AMOUNT Of THIRTEEN MILLION FIVE HI.INDRED THOUSAND PESOS (P13,500,000.00) to the Department of Public Works and Highways (DPWH), Region VI "to cover the implementation of a priority to this affidavit infrastructure listed in Annex 'A"' thereof (Copy of SARO is attached
as

Annex "A"). a. On the face of this document could be found markings, of which states that it was received in the Office of Director, CFMS (which stands for Comptroller and Financial Management Section) of the DPWH Central Office through which it was released, with the date "september 27,2A12" appearing thereon. b. There is also a handwritten annotation on the lower left bottom of the page

2.

3.

showing the name, "Sen. Franklin M' Drilon"' On September 28, 20L2,CFMS Director III Aristeo O. Reyes dispatched a Memorandum to "The Regional Director, DPWH, Regional Office No. VI, Iloilo City" fumishing the latter the original SARO aforecited (Copy of which is attached as o'B" of this comPlaint). Annex DpWH Regional Office No. VI issued an "Invitation to Bid" for three (3) projects, one of which was entitled "Improvement/completion of the E. Trenas Boulevard Along the Iloilo River (From Benigno Aquino Jr. Avenue to Carpenters Bridge)" and was given Contract I.D. No. 12GO0049 with an approved budget for the contract (ABC) in the amount of P10,1 l0,640.l4with the posting period indicated therein as'oSeptembet2l to 28,2012- (Annex "C" of this affodavit). a. This "Invitation to Bid" was posted on the website of the Philippine Government Electronic Procurements System (PhilGEPS) for a period of seven (7) days as required by RA 9184 and its Revised Implementing Rules and

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4.

5.

Regulations (Annex "D" of this affidavit). The Bids and Awards Committee (BAC) composed of respondent Lea Delfinado as Chairman, and Marilolu G. Zamora, Marilyn H. Celiz, Danilo M. Penoy, Jose Al V. Fruto, and Luvisminda H. Narciso as Members, held the pre-bidding conference on October 4,2012 as per schedule indicated in the "Invitation to Bid". Subsequent to the pre-bid conference, the BAC issued two bid bulletins: one dated October 5,2012 (Annex "E") and another dated October 9,2012 (Annex "F"). a. In the Bid Bulletin dated October S,z}l2,respondent Delfinado issued an amendment to the Approved Budget for the Contract and set the amount to P13,092,802.58.

6.

In the Bid Bulletin dated October 9,2012, respondent Delfinado changed the Approved Budget for the Contract to P13,092,238.67. c. Respondent Delfinado did not cite any resolution or document as basis for the issuance of the Bid Supplement/Bulletin. The dropping and opening of bids took place on October 16,2072, and on October 19, 20l2,the BAC adopted a Resolution recommending the award of the contract to the winning bidder, Roprim Construction, for the contract price of P12,354,554.60 (Annex

b.

"G" of this affidavit).


7

On October 22,2012, respondent Tayao, in his capacity as HOPE (Head of Procuring Entity), issued a NOTICE OF AWARD to Mr. Ronnie Primaylon, Proprietor of

signified his the contract, to which the contractor Roprim construction, to undertake (Annex'oH" below the name of respondent Tayao acceptance by affixing his signature

8.

of this affidavit). the project' described as the The Contract Agreement covering River (Between ..Improvement/compl"tion of the E. Trenas Boulevard Along Iloilo Office Bridge), was signed by DPWH Regional Benigno Aquino Ave. to carpenters v and Luvisminda H. Narciso, Engineer No. 6 as the procuring entrty, representediy (Annex "I")' contractor Ronnie Primaylon

g.RespondentTayaoissuedonoctoberzg,I}lzaNoTICEToPROCEED(attachedas

the contract P. Primaylon, informing him that Annex..J") to the contractor, Ronnie 5'2072' work for the project is effective November Office No' 6 for the contract, the DPWH Regional 10. As part of the uiaaing documents alsopreparedandapproveddocumentsknownasthelNDlVlDUALPROGRAMoF woRKandAPPRoVEDBUDGETFORTHECONTRACTshowingthebreakdown of for the ABC (Annexes "K" and "L" respectively basis the and estimates cost the of this ComPlaint)' ----i^+^ ^r ll.Annexes'oK"and"L"above-mentionedshowthatthiscontractconsistsoftwomarn components: a. ComPletion Works; b. Manual Irrigation SYstem;

12.TheDBMwebsiteonthePriorityDevelopmentAssistanceFund(PDAF)releasesfor M' Drilon shows that he earmarked the amount respondent Senate President Franklin to the of Pl3,500,000 from his 2012 allocation .'ConstructiorVlmprovement/Completion of the E' Trenas Boulevard Along Iloilo
River".

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13.

contract are drawn from My knowledge and conclusions about this anomalous documentslobtainedfrombothofficialandunofficialsources,thelnternetand DPWH, including respondent Tayao and interviews with officials and employees of of Iloilo Province, I am familiar with Delfinado. As former Provincial Administrator its Revised Implementing Rules and the provisions of Republic Act No. 9184 and Bids and Awards committee of the Regulations, having served as member of the Province of Iloilo for several years' of the E. Trenas Boulevard Along Iloilo 14. I also know for a fact that the development Bridge) is the pet project of River (From Benigno Aquino Jr. Ave. - carpenters respondent DRILON in Iloilo CitY' Bureau a. ln a press releasel issued by the Public Relations and Information respondent (PRIB) of the senate of the Philippines dated August 17,2012, fund of P70 million for the DRILON was credited as having "put together" the constructiorr/development/implementationoftheproject. provided by a goverlrment source who mentioned 15. The first lead into this anomaly was to DPWH Regional office No' 6 on that respondent DRILON released P13.5 million

September:rT,20l2.ItwasthedateofthePDAFreleasethatdrewnoticeandaroused
,
17' the Press Release from www'senate'gov'ph dated August Annex,,M,,of the affidavit, which is a print out of

2072

suspicion. Why would respondent DRILON release such a big amount of money for a project that had been completed and inaugurated? 16. I tried to obtain a copy of the Special Allotment Release Order (SARO) for the Pl3.5 million from the DBM Regional Office No. 6. I was informed that no copy was available in the files of the DBM Regional Office No. 6 because the document was

directly transmitted to the DPWH Central Office in Manila' 17. After making a few inquiries, I came to talk with a DPWH engineer with knowledge about the project. He agreed to talk to me on condition that his name be kept confidential. He disclosed that the contract involved the construction of two (2) cistern tanks and a network of PVC pipes for the watering of the plants in the Esplanade. This conversation took place in the morning of August 27 ,2013 ' 18. In a Google search on the Internet, I came across a document purporting to be an "Invitation to Bid" for this project, with the publication dates stated as "September 2l' 28,2012-. The approved budget for the contract (gA.BC) appearing on the same was
P1 0.1 10.640.

14. (Underscoring for emphasis)


a phone call

19.

M N
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to the office of respondent Tayao but was informed by his secretary that he was in Manila. She said I could direct my inquiries to respondent Delfinado, who is the Assistant Regional Director. Respondent Delfinado took my call. She told me the information I needed could be obtained from Kathy Nomananap in the secretariat of the Bids and Awards Committee. I made a phone call to Ms. Nomananap. She said she was in a pre-bid conference and could not act on my request for information. She promised to get back to me later in the afternoon. At about 4:30 p.m. on August 27,2013,I spoke to Ms. Nomananap again, and she gave me information on the contract amount and the name

At around 2 o' clock p.m., AugustZ7,2013, I made

of the contractor. 20. I knew something was amiss at once. The approved budget for the contract appearing in the Invitation to Bid was P10,110,640.14. The contract amount disclosed by Ms. Nomananap was P12,35 4,554.60. Having occupied the position as Provincial Administrator of Iloilo Province, I was familiar with Republic Act No. 9184, and I knew a winning bid cannot be above the ABC. 21. So I decided to investigate deeper. The next day, August28,2013, at around 10 o' clock a.m.,I went to the DPWH Regional Office No. 6 offices in Fort San Pedro, Iloilo City to ask for documents pertaining to the project. Specifically, I went to the Bids and Awards Committee (BAC) secretariat. I was told that the secretariat head, Kathy Nomananap, was in a meeting. I had to wait for about an hour. When Ms. Nomananap retumed to her desk, I told her the purpose of my visit. She said that I should see Assistant Regional Director Lea Delfinado, one of the respondents. Prior to that, as I was waiting for Ms. Nomananap, I went to the Office of the Regional Director to file my official request for these documents. The secretary received my letter request, a photocopy of which is attached as Annex "N". 22.Itwas around l1 o' clock a.m. when I got to the office of respondent Delfinado. Her secretary told me she was still on the phone. I waited for about 30 minutes. As I had another appointment, I left. I called respondent Delfinado at around 2:30 o' clock p.m. that same day. She told me that respondent Tayao was scheduled to arrive the next day, August 29,2013.It would be better, she said, if I just wait for the next day and see respondent Tayao personally "so that you can talk and get more information." 23.1 am narrating these circumstances to show that contrary to the governrnent's policy of transparency, these offrcials were giving me the round-around. It was the second day

of of my efforts to obtain the documents. I had no choice but to agree to the suggestion respondent Delfinado. 24.Imetwith respondent Tayao at about 1l o' clock a.m. of Augtst29,2013 athis office. I saw that my request the day before was on his desk. So I told him that I was there to follow up on the request for documents. Respondent Tayao suggested that he might reminded need approval from DPWH central office for the release of the records. I him that there is a policy of transparency, and all I was requesting for were documents was in a completed project. He asked me if this was related to politics. I said "no", as I doing this as an investigative journalist. He tried to stall for time, saying the request will be granted, but said I will just have to wait. I insisted that the files have already of been retrieved two days previously by the BAC secretariat. After a few minutes hesitation, respondent Tayao asked me to come back in the afternoon. As I was stood (please up to leave, respondent Tayao said in a soft voice, "tulungan mo naman kami
help us).,' I replied that it's just the records I was interested about. 25.Therecords of the public bidding which I have identified and marked as annexos wore released that afternoon, August 29,2013. These documents constitute the bulk of the annexes submitted in support of this affidavit. All are duly certified by Atty' Mary Grace Bulaquina, Attorney IV, Chief, Legal Staff, DPWH Regional Office No. 6, as authentic reproductions of the originals. The annexes are photocopies of these certified true reproductions.

ANATOMY OF GRAFT
26. Anexamination of the documents from the Bids and Awards Committee quickly unravels the well-disguised plot to defraud the government. 27.The sequence of events show there was a "big hand", so to speak, that guided the implementation of the contract. a. The SARO was issued September 17,2012.It was received in the Comptroller and Finance Section of the DPWH Central Office on September2J,2012.The memorandum endorsing the SARO to the DPWH Regional Office No. 6 was dated September 28, 2012. b. While the SARO was still in transit, the DPWH Regional Office No. 6 already undertook the advertisement of the contract through an Invitation to Bid on September 21-28,2012. Technically, the fund for the project was not yet available in the procuring entity, which is DPWH Regional Office No. 6. This could only have happened because somebody powerful and influential is pushing the contract to run faster than the paperwork. i. That powerful and influential public official is no other than respondent DRILON. ii. The entire procurement and implementation of this project was undertaken with respondent DRILON wielding the baton. c. The entire procurement process was done with clockwork precision. It was as easy as counting 1,2,3,4 and so on. In just over one month from the commencement of the process, the Notice to Proceed was issued to the

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d.

winning bidder. The winning bidder is the same contractor who carried out the implementation of two contracts for the same project with a total of P70,000,000.00.

This same contractor appears to be the favorite contractor of DPWH when it comes to projects initiated by respondent Drilon' ii. The contract is clearly the outcome of a "rigged" bidding' 28. The procuring entity represented by respondent DPWH offrcials named herein bent the rules, even violated the provisions of Republic Act No. 9184 and Revised Implementing Rules and Regulations in prosecuting the procurement process. a. The Invitation to Bid was NOT published in a national newspaper during the period September 21-28,2012 as the contract involved an amount above P5,000,000.00. i. The Manila Standard Today has been designated as the official newspaper for DPWH legal notices and verification made through its digital archives showed there was no publication' ii. Respondent Tayao did not include a clipping of the publication along with a certification from the publisher among the documents released to
me.

i.

=PO{
\

This failure the Invitation to Bid in a national newspaper at least once violated Section 21.2.1(a) of the Revised IRR of RA 9184. Respondent Delfinado violated Resolution No. 07-2005 of the Govemment Procurement Policy Board (GPPB) which provides the rules for adjusting the approved budget for the contract when she issued bid bulletins on October 5 and Octobe r 9,2}l}raising the ABC from P10,1 10,640.14 to P13,092.802.582 and then to P13,092 ,238.673 respectively. d. Respondent Delfinado and other members of the BAC violated the Revised IRR of RA 9184 when it failed to post the Notice of Awarda and Notice to Proceed5 to the winning bidder in the PhilGEPS website within three (3) days
b.

ofits

issuance.

i. ii.

Print-outs of the records from the PhiIGEPS website would show that in the section with the heading, "Award Notice List"6, there is an annotation that "No award notices found"; This fact is validated by a "Certification of Compliance"T duly signed by respondents CELIZ and TAYAO dated June 7, 2013, the columns for date of posting of the NOTICE OF AWARD, APPROVED CONTRACT and NOTICE TO PROCEED were left blank, and there appears an annotation in the column titled "Status of Projects" that "Award cannot be posted yet due to change in ABC as posted in the bid

bulletin". 1. This parlicular contract is number 21 inthe list above cited. The Revised IRR of RA 9184 requires that before a contract is advertised through an Invitation to Bid, the scopes of work should have been determined through an Individual Program of Works and establish the approved budget for the contract (ABC).

dated octobe r 5,2012,listed as Annex "D" dated octobe r 9,2o1?,listed as Annex "E" Section 37.1.6 of the Revised lmplementing Rules and Regulations s Section 37.4.2 of the Revised lmplementing Rules and Regulations t Anne* "D" of the complaint "o" of the complaint Annex '

' Bid Bulletin 'a Bid Bulletin

i. ii.

The procuring entity did this through an Individual Program of WorC and a breakdown of the Approved Budget for the Contracte previously cited herein. The question comes to mind: why did respondent Tayao give a diflerent figure for the ABC in the Invitation to Bid? 1. The only logical conclusion is that respondent Tayao, in conspiracy with the BAC, deliberately lowered the ABC to make it less attractive to potential bidders who may have seen the ITB on the PhiIGEPS website. a. The Invitation to Bid also lumped this particular contract along with two (2) other contracts. b. This is irregular considering that the amount involved in all three projects exceed Pl0 million, and each contract

2.

must be advertised individuallY. Note that the respondent BAC feloniously increased the ABC after the conduct of the pre-bid conference on October 4,2012 when it has ascertained that only a "manageable" number of bidders would take part in the bidding. It must be reiterated that the BAC has no power to increase the

3.

+
-<
\

iii.

ABC of a contract. That respondent DPWH officials employed subterfuge is evidence of their dishonesty and grave misconduct for the sole purpose of concealing and deceiving the general public about the true nature of the

contract. iv. That respondent DRILON was fully aware of these deceptive methods and dishonesty and grave misconduct is made manifest by the fact that he authorized an amount that coincided with the budget estimates for the contract as detailed in the Individual Program of Work. 29. The scopes of work as indicated in the Individual Program of Works and Approved Budget for the Contract ooze with ample evidence of simulated work items for the purpose of misappropriating public funds into personal pockets.

a.

The major work items under the Individual Program of Works are the following, with the corresponding budget earmarked for the purpose: P 2,430,354.53 Sprigging Concrete Pavers (Wavy Type) 2,329,421.64 735,6A331
1,532,666.64

Electrical Works Reinforced cistern tanks Water Supply System (Manual Irrigation)

4,382,728.26

b. There is an abundance of photographs and videos showing that before the

Iloilo Esplanade was inaugurated on August 18,2012, the landscaping for the entire l.2-kiometer stretch, complete with grass and plants, had already been
completed.

"sprigging" is a term for planting ornamental plants in rows part of landscaping.


8 e

and plant boxes as

See See

Annex "K" of the complaint Annex "1" of the complaint

d. Photographs and videos of the Iloilo Esplanade e.

that are available on the Internet show that the landscaping, with ornamental plants, for the project was complete when it was inaugurated. Photographs and videos that are posted on the Internet as of July 2012 would also show that the surface of the entire 1.2-kilometer stretch had already been covered with concrete pavers (wavy type) from end to end. In short, the work items "sprigging" and "concrete pavers" listed in the Individual Program of Works were simulated work items, a convenient cover for the misappropriation of public funds, as the supposed scopes of work were

f.

g. h.

in fact already finished and completed. The same thing can be said for "electrical works" for which the sum of P735,603.31 was appropriated --- everything, including lights, was done and finished, and the expenditure is a fiction; The two (2) units reinforced cistern tanks are grossly overpriced even if indeed
these were undertaken;

i.

This is nothing but a concrete water tank with minimal structural strength, a rectangular box buried underground to collect and store water for irrigation Purposes; ii. That having been said, it is public knowledge that there was no more construction activity of this nature after the inauguration, no diggings that would point to its prosecution; And finally, the o'crowning glory" of this anomaly is the water supply system

i.

with

a budget

\a G{
j.
\

i.

of P4,382,728.26; Photographsl0 taken on this irrigation system show blue-colored PVC pipes sticking out of the ground and connected to a lenglh of rubber black-colored pipe that is supposed to deliver water to spaced-out
outlets; The entire Iloilo Esplanade is only 1.2 kilometers in length; There is no justification for such a pipeline system for the Iloilo Esplanade to cost that much, considering that the size of the plastic/rubber pipes is about 314", and the cost could not possibly exceed P200,000.00 to put that in place, including labor.

ii. iii.

That this contract is largely a "ghost project" is shown by the fact that there was hardly any mention of additional works for improvement/completion, and
even the development of a water supply system for the

Iloilo Esplanade in it cost

post-inauguration media releases.

i. ii.

All

references by the DPWH and the media to the project is that

P70 million to develop.

Not a word was disseminated to the public that there was extra money for it to raise its total development cost to P83.5 million.

CONCLUSION
30. It is clear from the facts and circumstances that the entire procurement and implementation of the contract was done in close coordination by and between all the

to

Annex "P" of this affidavit

respondents, undeniably a conspiracy against the public treasury of the Republic of the Philippines and the Filipino taxpayers. a. The procurement and implementation of this contract resulted in undue injury

b.

to the Republic of the Philippines with the misappropriation of millions of pesos from the PDAF of respondent DRILON to personal pockets, or giving unwarranted benefits to a private party (the contractor), through manifest partiality, evident bad faith or gross inexcusable negligence. The anomalous acts in the procurement for this contract resulted in the Government entering into a contract grossly disadvantageous to the same. The swift prosecution of the procurement is evidence that it was being guided on its path by respondent DRILON, the project proponent, who at the time was Chairman of the Senate Finance Committee, possessing huge clout and influence over the respondent officials and personnel of the DPWH Regional

c.

Office No. 6, which coerced or intimidated them to violate the law; d. These offenses were committed in relation to the procurement of the aforecited contract in violation of Republic Act No. 9184 and its Revised Implementing Rules and Regulations, and constituted DISHONESTY, GRAVE MISCONDUCT, MALVERSATION OF PUBLIC FUNDS, ANd FALSIFICATION OF PUBLIC DOCUMENTS. 31. I am executing this affidavit to attest to the truthfulness of the foregoing facts and circurnstances and to support the criminal and administrative complaints I am filing
against the respondents
.

Iloilo City for Manila, Philippines,

Septemb

", JQ-,2013.

ORADA

Subscribed and sworn to before *r llrirTEP ,1r 0#0Jfteptember 2013.I hereby certify that I have personally examined the affiant and that I am fully satisf,red that he voluntarily
executed and understood his affrdavit/complaint.

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OFFICER]

0FFICE 0F Ti-tf

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IVISAYAS

REGIOjTAL OFFICE fiIO VI