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DECISION NO. 2014-136

July 18, 2014

Subject: Request for reconsideration of Atty. Cecilio

B. Gellada, Jr., Officer-in-Charge, Office of

the Vice President and General Counsel,

Power Sector Assets and Liabilities

Management Corporation, of Legal Retainer

Review No. 2011-004 dated January 12,

2011 denying concurrence to renew the

contracts of Atty. Michael B. Tantoco, Atty.

Angelito C. Imperio, Atty. Angelo C.Anastacio, Atty. Maria Belen M. Nera and

Mr. John TK Yeap

DECISION

FACTS OF THE CASE

Before this Commission is the request for reconsideration of Atty. Cecilio B.

Gellada, Jr., Officer-in-Charge (OIC), Office of the Vice President and General Counsel,

Power Sector Assets and Liabilities Management Corporation (PSALM), of Legal

Retainer Review (LRR) No. 2011-004 dated January 12, 2011 denying concurrence torenew the contracts of Atty. Michael B. Tantoco, Atty. Angelito C. Imperio, Atty. Angelo

C. Anastacio, Atty. Maria Belen M. Nera and Mr. John TK Yeap.

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In LRR No. 2011-004 dated January 12, 2011, the COA General Counsel denied

the request for concurrence to the legal retainership contracts of these five legal advisors.

One reason for the denial was the overlapping in the periods covered in theprevious and renewal contracts of Atty. Imperio and Atty. Nera, which were from

December 9, 2009 to June 1, 2010 and January 1, 2010 to June 30, 2010, respectively.

However, their renewal contracts were from April 5, 2010 to October 5, 2010.

The main reason for the denial, however, was that the contracts were already

signed, executed and paid before they were submitted to the COA for concurrence in

violation of Memorandum Circular (MC) No. 9 of the Office of the President (OP) dated

August 27, 1998,1

COA Circular No. 95-011 dated December 4, 1995,2

and the SupremeCourt rulings in Polloso vs. Gangan , et al. (G.R. No. 140563, July 14,

2000), Salalima, et al. vs. Guingona, Jr ., et al. (G.R. No. 117589-92, May 22, 1996),

and Santayana vs. Alampaya (A.C. No. 587, March 21, 2005).

It was also noted in the said LRR No. 2011-004 that, while the contracts of Atty.

Anastacio and Atty. Tantoco started in January and February, 2010, respectively, and

those of Mr. Yeap, Atty. Nera and Atty. Imperio started on April 5, 2010, the PSALM

submitted their contracts to the Office of the Government Corporate Counsel (OGCC)

only on April 22, 2010, which the OGCC approved on May 6, 2010.

In this request for reconsideration dated March 17, 2011, the PSALM, through its

OIC, Office of the Vice President and General Counsel, Atty. Gellada, Jr., submitted the

same arguments and discussions contained in their request for reconsideration dated

January 27, 2011 of LRR No. 2010-138 dated November 4, 2010. In addition, PSALM

explained that the previous contracts of Atty. Imperio and Atty. Nera were automatically

terminated on March 25, 2010 upon the appointment of PSALM President Jose C.

Ibazeta (the appointing head) as Acting Secretary of the Department of Energy. The

termination was purportedly in line with Section 53.7 of the Revised Implementing Rulesand Regulations of Republic Act (RA) No. 9184, which provides that the services of

highly technical consultants shall in no case exceed the term of the appointing Head of

the Procuring Entity. Their new contracts were executed under the new appointing head,

PSALM Acting President Maria Luz L. Caminero. The same rationale was given for the

automatic termination and renewal of the contracts of Atty. Tantoco and Mr. Yeap.

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3. The OGCC, as the Legal Counsel of PSALM, was fully aware of

the urgency and priority given by the PSALM to implement the

privatization of generation assets, transmission business and IPP

contracts of NPC since the enactment of EPIRA in 2001;

4. Given the six-month term limitation of consultancy contracts under

R.A. No. 9184, the continuity and progress of legal advisory

services cannot be unduly stopped or suspended on the ground that

no prior OGCC conformity and acquiescence and written COA

concurrence were obtained by PSALM prior to renewal of said

contracts; and

5. The period within which to request OGCCs conformity and

acquiescence and COAs concurrence, being procedural, are to be

construed liberally in favor of PSALM if the objectives sought to

be attained are achieved.

On the first ground, PSALM avers that the rulings in Polloso,

Salalima and Santayana cases are applicable only to cases where the private lawyers

are hired to represent the government agency in juridical or quasi-judicial proceedings.

The averment is erroneous. Interpreting the applicability of COA Circular No. 95-

011, the Supreme Court, in the Polloso case, held:

Contrary to the view espoused by petitioner, the prohibition covers thehiring of private lawyers to render any form of legal service. [COA

Circular No. 86-255 dated April 22, 1986] makes no distinction as to

whether or not the legal services to be performed involve an actual

legal controversy or court litigation. Petitioner insists that the

prohibition pertains only to handling of legal cases, perhaps because

this is what is stated in the title of the Circular. To rely on the title of

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the circular would go against a basic rule in statutory construction that

a particular clause should not be studied as a detached and isolated

expression, but the whole and every part of the statute must be

considered in fixing the meaning of any of its part. (underscoring

supplied)

The requirements of prior acquiescence of the Solicitor General or the GCC, and

the written concurrence of COA before the hiring of a private lawyer, was provided under

COA Circular No. 86-2554 dated April 22, 1986. The same requirements were reiterated

in COA Circular No. 95-011 dated December 4, 1995.

The second ground is a vain attempt at misdirection. Records clearly show that thePSALM submitted the contracts to the OGCC only on April 22, 2010, after these

contracts were executed and signed by the parties on April 5, 2010. Plainly, the real cause

of the belated submission of the contracts to the COA was the belated submission by the

PSALM of the contracts to the OGCC.

The third and fourth grounds should be dismissed since urgency and priority of

privatization of generation and transmission business, or the necessity of continuing the

legal advisory services, are all within the control of the PSALM management. If only

they gave more than lip service to the requirements of OP MC No. 9 and COA Circular

No. 95-011, the belated submission of the contracts to the OGCC and COA would have

been avoided. PSALM could not be excused from complying with these issuances as they

have been in force in the 1990s.

The last argument is obviously contrary to the treatment by the SC of the

requirements under OP MC No. 9 and COA Circular No. 95-011. As can be gleaned from

the rulings in the Polloso, Salalima and Santayana cases, these are not merely

procedural but substantial requirements of law. Their unjustified violation rightly calls fordenial of COAs concurrence and payment based thereon appropriately assailed as

irregular and disallowable in audit.

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RULING

WHEREFORE , the instant request of Atty. Cecilio B. Gellada, Jr. is

hereby DENIED and Legal Retainer Review No. 2011-004 dated January 12, 2011,denying concurrence to the renewal contracts of Power Sector Assets and Liabilities

Management Corporation legal advisors, is SUSTAINED . Accordingly, the payments

under the Contract for Legal Services shall be disallowed in audit.

(SGD.) MA. GRACIA M. PULIDO TANChairperson

(SGD.) HEIDI L. MENDOZA (SGD.) JOSE A. FABIACommissioner Commissioner

ATTESTED BY:

(SGD.) NILDA B. PLARASDirector IV

Commission Secretariat

Copy furnished:

Mr. Cecilio B. Gellada, Jr.

Officer-in-Charge

Office of the VP General Counsel

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Power Sector Assets and Liabilities Management Corporation

7 th Floor Bankmer Bldg.

6756 Ayala Avenue

Makati City

The Audit Team Leader

Power Sector Assets and Liabilities Management Corporation

7th

Floor Bankmer Bldg.

6756 Ayala Avenue

Makati City

The Director

Information Technology Office

Administration Sector

The Assistant Commissioners

Corporate Government Sector

Legal Services Sector

All of this Commission

ESZ/FED

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ven:coadec-gellada

Footnote:

1 Prohibiting Government-Owned or Controlled Corporations (GOCC) from Referring their Cases and Legal

Matters to the Office of the Solicitor General, Private Legal Counsel or Law Firms and Directing the GOCCs to

Refer their Cases and Legal Matters to the Office of the Government Corporate Counsel, Unless Otherwise

Authorized Under Certain Exceptional Circumstances.

2 SUBJECT: Prohibition Against Employment by government agencies and instrumentalities, including

government-owned or controlled corporations, of private lawyers to handle their legal cases.

3 Should be COA Circular No. 95-011 dated December 4, 1995

4 SUBJECT: Inhibition (sic ) against employment agencies and instrumentalities including government owned or

controlled corporations, of private lawyers to handle their legal cases.

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