9 Gallares execs, construction firm face criminal raps for ‘irregular’ bidding

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9 Gallares execs, construction firm face criminal raps for ‘irregular’ bidding

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Nine top officials of the Governor CelestinoGallares Memorial Hospital (GCGMH) and the winning bidder are facing criminal and administrative complaints before the Office of the Ombudsman (Visayas) for the alleged irregular bidding of the P1.566 billion (phase 1) construction of a Health Care Campus in Barangay Malaya Norte, Cortes, Bohol.

Assisted by their counsel, Atty. Teodoro M. Lagang, the three complainants – Michael Ryan Maluenda, Vice President of CCMaluenda Construction, Inc., Mario Ramir Yu, President of BNYU Development Corporation, and Necifora Yu, President of N.N. Yu Construction, Inc. filed their joint-affidavit complaint before the Ombudsman on January 21, 2021, at 9:35 a.m.

The three local contractors entered into a joint venture (JV) with Dynamic Planners and Construction Corp. and submitted their bid proposal for the P1,492,000,000 Approved Budget for the Contract (ABC). 


The complaint asserts that the acts of the respondents “clearly constitute grave misconduct in office, gross negligence and conduct prejudicial to the best interest of the service.    

The nine GCGMH respondents named in the complaint were Dra. Mutya Tirol-Macuno, Chief of Hospital, Dr. Luciano Sarabosing, Chief Training Officer, Pinky Lumbre, Planning Officer Designate, Dr. Reuel Francis Victor Villaflor, Head, ER Department, Annabelle Ceasar, Nurse IV, Jobert Tan, Supervising Administrative Officer, Head, Medical Records, Donna Vida Baliola, Administrative Officer III, Rosa Secretaria, Nurse V, and Dra. Myra Lynn Melisimo, Medical Officer IV. 


Also included in the complaint is RamirRicohermosoEncabo, President of R.R. Encabo Constructors Corporation, partner of the winning JV with Grundstein Construction & Development Corporation Encabo/Grundstein JV. 

Encabo failed to disclose “the fact that it was declared as blacklisted by the Department of National Defense (DND) and barred from participating in any government projects for a period of one year, according to the complaint-affidavit.

The complaint questioned the submission of the Malabon Hospital and Medical Center as their Single Largest Completed Contract (SLCC) despite non-completion of the project.




The competing bidder brought forward to the Ombudsman the failure of Dra. Mutya Tirol-Macuno as Head of the Procuring Entity (HOPE) to exercise her sound discretion, ignoring warnings of apparent misrepresentation of the winning bidder subsequently awarding the project to Encabo/Grundstein JV.

Macuno was alleged to commit grave abuse of discretion in “hastily proceeding with the award of the project despite the timely filing of the letter of request for reconsideration by the competing bidder.

The letter for reconsideration was submitted to the Bids and Awards Committee (BAC) on January 8, 2021, a day after the competing bidder learned that the BAC recommended awarding the project to Encabo/Grundstein JV.


Bid opening was on December 22, 2020, the contract was awarded to Encabo/Grundstein JV on December 29 and the signing of the contract was completed on January 6, 2021.



However, the BAC, through a resolution denied the Letter of Request of the complainants “by simply saying that the issues raised were mere allegations.”

There was no evidence that the BAC through its Technical Working Group (TWG) conducted a thorough investigation on the allegations as part of the post-qualification process.

A request by the competing bidder for certified true copies of the BAC resolution recommending the award of the project to Encabo/Grundstein JV and the SLCC submitted by R.R. EncaboConstractors Corporation was denied citing provisions of Republic Act (RA) 10173 known as the Data Privacy Act.

According to the counsel of the competing bidders, RA 10173 covers only the personal information of a person and does not include juridical persons such as corporations while documents submitted during the opening of bids in government projects are considered public records accessible to all participating bidders.

Thwarted by the denial of the BAC for documents related to the bidding, the complainants could not file a protest before Macuno pursuant to section 55, Rule XVll of the Implementing Rules and Regulations (IRRs) of Republic Act (RA) 9184 known as the Government Procurement Reform Act.


According to the complaint-affidavit, Encabo/Grundstein JV submitted a statement for the construction of an 8-story Malabon Hospital and Medical Center (phase 1) in the amount of P758,000,000.

However, upon verification by the complainants, the SLCC submitted by the winning bidder is still under construction while “there is a high possibility that the Certificate of Final Acceptance submitted by the winning bidder may have been falsified.”

The project cost of the Malabon Hospital, upon verification, is only P500,000,000 more or less, which is far below the required project cost representing 50% of the ABC, according to the complaint.


The competing bidder also discovered that R.R. Encabo Contractors Corporation was blacklisted and barred to participate in all government biddings/projects within a period of one year since June 30, 2020.

A resolution (Declaration of Failure of Bidding) obtained by the competing bidder and issued by the BAC for Infrastructure of the Bases Conversion and Development, Authority (BCDA) showed that R.R. Encabo, as part of a JV incurred an 85.43% slippage as of January 31, 2020.

The JV failed to reply and show cause for its failure to complete the Department of National Defense (DND) facilities project prompting DND Secretary DelfinLorenzana to issue a blacklist order to the JV prohibiting the members from participating in the bidding of all government projects within one year from the issuance of the blacklist order.


For the BAC, the complainants raised before the Ombudsman the failure to validate and verify the allegations of misrepresentation as to the SLCC submitted by the winning bidder and the failure to validate and verify the information regarding the blacklist status of R.R. Encabo Contractors Corp in all government projects.

Complainants also cited the BACs failure before the Ombudsman to inform the competing bidder of the award of the project to Encabo/Grundstein JV and denying access to the records of the bidding process which stymied the competing bidder to avail of legal remedies under RA 9184.


The TWG members were also criticized for their failure to conduct a rigorous post-qualification of Encabo/Grunstein JV and their neglect to submit a report supported with an in-depth evaluation of the documents submitted by the winning bidder.

The invitation to bid for the GCGMH Cortes Health Care Campus (phase 1) required the completion of the project 540 calendar days, seven days from the receipt of the contractor of the Notice to Proceed (NTP). (Chito M. Visarra)

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