The graft conviction of former Pagsanjan, Laguna Mayor Jeorge “ER” Ejercito for illegally awarding a contract to an unlicensed insurance company without public bidding was affirmed by the Supreme Court (SC).

In a decision written by Associate Justice Ricardo R. Rosario dated 5 February 2025 and uploaded 26 March 2025, the SC’s First Division found Ejercito and Marilyn M. Bruel, owner of First Rapids Care Ventures (FRCV), guilty of violating Republic Act (RA) 3019 or the Anti-Graft and Corrupt Practices Act.

They were sentenced to up to eight years in prison and permanently banned from holding public office.

The case stemmed from a complaint filed by the United Boatmen Association of Pagsanjan, which accused Ejercito and other local officials of awarding a contract to FRCV without public bidding.

The contract showed FRCV will provide accident insurance for tourists and boatmen at the Pagsanjan Gorge Tourist Zone, even though the company lacked a license from the Insurance Commission.

Charges has been filed by the Office of the Ombudsman against them before the Sandiganbayan, and while the vice mayor was acquitted, Ejercito and several council members were convicted.

Ejercito defended his actions before the SC, arguing that FRCV was the only qualified service provider and that public bidding was unnecessary.

Bruel, on the other hand, claimed that the contract was for special services, not insurance.

However, the SC disagreed, saying the contract was for insurance and therefore classified as “goods” requiring public bidding under the Government Procurement Reform Act.

Procurement through competitive bidding aims to protect the public interest by offering the best possible advantages through open competition and avoiding any suspicion of favoritism or anomalies in the execution of public contracts.

Rare cases only

Exceptions to bidding are only permitted in rare cases, such as emergencies or multiple failed bidding attempts, which did not apply in this instance.

Ejercito, instead of following the required bidding process, directly awarded the contract to FRCV through “negotiated procurement” without valid justification.

This method allows a government entity to directly negotiate a contract with a qualified contractor instead of holding a competitive bidding process, but it is only permitted in specific situations defined by law.

Under RA 3019 public officers are prohibited from unfairly favoring private parties by granting them special benefits, advantages, or preferences through bias, bad faith, or serious negligence.

The SC found that Ejercito knowingly gave FRCV an unfair advantage, bypassing legal procedures and ignoring clear red flags.

FRCV lacked a Certificate of Authority from the Insurance Commission. It was also registered with the Department of Trade and Industry and the Bureau of Internal Revenue just five days before it offered its services to Ejercito.

These suggest that FRCV was created solely to provide specialized services to the Municipality of Pagsanjan despite having no prior experience.

The SC said by purposely sparing FRCV from the rigors of the processes under the procurement law and consciously turning a blind eye to irregularities, Ejercito gave it unwarranted benefit, advantage, or preference.

On the other hand, Bruel was found guilty of misrepresenting FRCV’s qualifications and conspiring with Ejercito to secure the contract as she falsely claimed that FRCV could provide the required services, even though its BIR registration listed it as a computer business.

The SC acquitted the Sangguniang Bayan members due to a lack of evidence proving they showed favoritism toward FRCV as their ordinance did not prohibit Ejercito from holding public bidding; it only allowed negotiated procurement, although mistakenly.