The prosecution must prove beyond reasonable doubt all elements of Sections 3(e) and 3(g) of Republic Act No. 3019; a mere violation of procurement laws or contractual terms, without establishing the requisite criminal intent (manifest partiality, evident bad faith, or gross inexcusable negligence) or the specific harm (undue injury, unwarranted benefit, or a manifestly and grossly disadvantageous contract), is insufficient for conviction. The accused's constitutional right to be informed of the nature and cause of the accusation prevents conviction based on facts not alleged in the Information.

In preparation for the 12th ASEAN Summit in Cebu in December 2006, the Mactan Cebu International Airport Authority (MCIAA), a government-owned and controlled corporation, sought to upgrade its firefighting capabilities by purchasing one unit of an Aircraft Rescue Fire Fighting Vehicle (ARFFV) through limited source bidding. This procurement process, the subsequent contract, and related payments became the subject of criminal charges against MCIAA officials and the supplier's representative.

• The Mactan Cebu International Airport Authority (MCIAA) initiated the procurement of one Aircraft Rescue Fire Fighting Vehicle (ARFFV) via limited source bidding for the 12th ASEAN Summit in December 2006.
• The MCIAA Bids and Awards Committee (BAC) held a pre-bidding conference on January 12, 2006, attended by bidders including AsiaBorders, Inc. (represented by Marlon E. Barillo) and Pelican Bay Group Inc.
• On January 19, 2006, BAC issued Bid Bulletin No. 2, requiring the manufacturer's representative/agent to have at least five years of experience in airport rescue firefighting truck supply, delivery, and maintenance.
• The MCIAA Board of Directors approved an increased budget for the ARFFV from USD 630,000.00 to USD 785,000.00 on January 25, 2006.
• BAC issued Bid Bulletin No. 4, amending Bid Bulletin No. 2, reducing the required experience for the representative/agent to at least one year.
• On February 2, 2006, during the bidding, Pelican Bay's Envelope A was found lacking several documentary requirements. AsiaBorders' Envelope A was found complete, and its bid of USD 732,000.00 was opened.
• On February 8, 2006, BAC Resolution No. 118-2006 declared AsiaBorders as the bidder with the lowest calculated and responsive bid, recommending contract award. MCIAA General Manager Adelberto Federico Yap approved the award.
• On February 22, 2006, the MCIAA Board authorized management to issue a Notice of Award to AsiaBorders and enter into a supply contract.
• On March 1, 2006, MCIAA (represented by Yap) and AsiaBorders (represented by Barillo) executed a Contract for the Supply and Delivery of one ARFFV.
• Article V of the Contract stipulated that AsiaBorders (SUPPLIER) would open an irrevocable letter of credit. It further stated that 80% of the costs, fees, and charges for opening the letter of credit would be paid by AsiaBorders, and 20% by MCIAA (PURCHASER), with MCIAA's share not exceeding PHP 6 million, deductible from the total contract price after delivery and acceptance, and covered by a surety bond from AsiaBorders.
• Barillo requested Yap for PHP 6 million for the letter of credit opening. Yap approved the request on March 9, 2006.
• On March 10, 2006, Yap and Ma. Venus B. Casas (Manager, Accounting Division) signed Disbursement Voucher No. 101-2006-03118 for PHP 6 million in favor of AsiaBorders for "payment of the cost of the opening of the Letter of Credit...equivalent to 20% of the contract price but not to exceed PHP 6 million as provided in Art. V of the Contract."
• Informations were filed charging Yap, Ordoñez (BAC Chairman), Dublin (BAC Member), Casas, and Barillo with violation of Sec. 3(e) of RA 3019 for causing advance partial payment of Php 6,000,000.00 to AsiaBorders despite it allegedly not being a qualified bidder and the ARFFV not yet delivered, inspected, and accepted. Yap was also charged with Sec. 3(g) of RA 3019 for entering into a contract allegedly manifestly and grossly disadvantageous to the government.
• Yap served as MCIAA General Manager from February 22, 2005, until July 31, 2006. Dublin resigned on July 31, 2006. Ordoñez was relieved as BAC Chairperson and Manager of Finance Department effective July 24, 2006.
• The Application and Agreement for Commercial Letter of Credit was signed on November 28, 2006, by B/Gen. Danilo Augusto B. Francia, then General Manager of MCIAA, not by Yap. The ARFFV was delivered on December 20, 2006.

• Adelberto Federico Yap argued that the Sandiganbayan considered matters not alleged in the Information for Sec. 3(e) (e.g., changing experience requirement), violating his right to due process and to be informed of the accusation. He asserted the PHP 6 million was not an advance payment but MCIAA's share for the letter of credit opening as per the contract, and he acted in good faith implementing a contract reviewed by legal and approved by the Board. He denied participation in the bidding process. For Sec. 3(g), he argued that irregularities concerning the letter of credit and ARFFV undervaluation occurred after his tenure, and the Sandiganbayan failed to show how the contract price itself was disadvantageous.
• Veronica S. Ordoñez and Sigfredo V. Dublin argued they couldn't be liable for the letter of credit opened in November 2006 as they were no longer in their MCIAA positions. They justified reducing the experience requirement as a discretionary BAC function to ensure wider participation, as the five-year rule was too strict. They claimed good faith and regularity in their duties and denied involvement in the PHP 6 million disbursement or any conspiracy. They also raised inordinate delay.
• Marlon E. Barillo argued the prosecution failed to prove the PHP 6 million advance payment by not presenting the original LBP check or proof of its encashment, and photocopies were inadmissible.
• Ma. Venus B. Casas argued the PHP 6 million was MCIAA's contractual share for letter of credit costs, not an advance payment. Her signing of the disbursement voucher was not attended by manifest partiality, bad faith, or gross negligence as the procurement was Board-approved, within budget, and the contract was reviewed. She claimed no active participation in the bidding or contract award.

• The People of the Philippines, through the Office of the Special Prosecutor, argued that all elements of Sec. 3(e) of RA 3019 were proven, asserting accused-appellants acted with manifest partiality, evident bad faith, or gross inexcusable negligence by facilitating the PHP 6 million advance payment to AsiaBorders before ARFFV delivery, despite AsiaBorders' alleged financial incapacity and failure to open a letter of credit or secure a surety bond promptly. This caused undue injury to MCIAA and gave unwarranted benefits to AsiaBorders.
• The prosecution contended that conspiracy existed: Ordoñez and Dublin ensured AsiaBorders qualified by reducing experience requirements and recommended it despite alleged financial incapacity. Yap approved the award and the PHP 6 million payment. Casas certified fund availability, and Barillo requested the payment.
• For Sec. 3(g) against Yap, the prosecution argued the contract was manifestly and grossly disadvantageous because MCIAA shouldered 20% of letter of credit costs, which was supposedly AsiaBorders' sole responsibility, and Yap approved Barillo's request for PHP 6 million despite non-delivery and lack of surety bond. The alleged undervaluation of the ARFFV for customs duties also indicated disadvantage.

• For SB-16-CRM-1076 (Violation of Section 3[e] of Republic Act No. 3019):
  • Whether the Information was anchored on any supposed defective terms in the Contract for the procurement of the ARFFV.
  • Whether AsiaBorders was a qualified bidder.
  • Whether accused-appellants may be held liable for acts not specifically alleged in the Information.
  • Whether the payment of PHP 6 Million representing the costs and charges for opening a letter of credit for AsiaBorders was premature.
  • Whether the elements of manifest partiality, evident bad faith, or gross inexcusable negligence, and undue injury or unwarranted benefit were proven beyond reasonable doubt.
• For SB-16-CRM-1077 (Violation of Section 3[g] of Republic Act No. 3019):
  • Who fixed the purchase price for the procurement of the ARFFV.
  • Whether Yap executed customs documents bearing a lower valuation of the ARFFV.
  • Whether the contract for the ARFFV was manifestly and grossly disadvantageous to the government.

• The Supreme Court GRANTED the Appeal and REVERSED the Sandiganbayan's Decision and Resolution, acquitting all accused-appellants in both criminal cases.
• In SB-16-CRM-1076 (Sec. 3[e], RA 3019):
  • The Court found that the element of manifest partiality, evident bad faith, or gross inexcusable negligence was not present. The Information was not hinged on defective contract terms. The validity of the Contract, including AsiaBorders' qualification, was never assailed and was deemed valid.
  • The Sandiganbayan's conviction based on acts not alleged in the Information (like reducing experience requirement or AsiaBorders' low paid-up capital) violated the accused's constitutional right to be informed of the nature and cause of the accusation.
  • The PHP 6 million payment was MCIAA's 20% share for opening the letter of credit, an obligation under the valid Contract. The timing of this payment, before ARFFV delivery, was necessary as the letter of credit was a pre-requisite for importation. The contractual clause "shall be deducted...after complete delivery and acceptance" referred to when the amount would be deducted from the total purchase price, not when it should be paid.
  • Applying principles of in dubio pro reo and rule of lenity, any ambiguity in the contract regarding payment timing should favor the accused.
  • The application of PD 1445, Sec. 88 (prohibition on advance payment) was misplaced as its violation does not ipso facto establish manifest partiality, evident bad faith, or gross inexcusable negligence.
  • The reduction of the experience requirement by the BAC was a discretionary act, benefiting both AsiaBorders and another bidder (Pelican Bay), and was not shown to be done to purposely favor AsiaBorders or with criminal intent.
  • Consequently, without the requisite mental element, no undue injury to the government or unwarranted benefit to AsiaBorders could be established.
• In SB-16-CRM-1077 (Sec. 3[g], RA 3019) against Yap:
  • The first two elements (public officer, entering into a contract for the government) were undisputed.
  • The third element (contract being manifestly and grossly disadvantageous) was not proven. It was the MCIAA Board of Directors, not Yap alone, that approved the increased budget and authorized the procurement at USD 732,000.00.
  • Yap had no participation in the alleged undervaluation of the ARFFV in customs documents, as these events occurred after he left MCIAA on July 31, 2006.
  • The prosecution failed to establish that Yap committed the act described in the Information for Sec. 3(g).

• Constitutional Right to be Informed of the Nature and Cause of Accusation (Art. III, Sec. 14(2), 1987 Constitution) — An accused cannot be convicted of an offense unless it is clearly charged in the complaint or information; conviction for acts not alleged violates this right. This was applied because the Sandiganbayan considered facts regarding AsiaBorders' qualification (e.g., reduced experience requirement, low paid-up capital) that were not detailed in the Information as the basis for finding manifest partiality or bad faith.
• Elements of Section 3(e) of RA 3019 — (1) public officer/conspiring private individual; (2) acted with manifest partiality, evident bad faith, or gross inexcusable negligence; (3) action caused undue injury to any party (including government) or gave unwarranted benefits, advantage, or preference. The Court found the second and third elements were not proven.
• Elements of Section 3(g) of RA 3019 — (1) offender is a public officer; (2) enters into a contract/transaction on behalf of the government; (3) contract/transaction is grossly and manifestly disadvantageous to the government. The Court found the third element was not proven against Yap.
• Manifest Partiality, Evident Bad Faith, Gross Inexcusable Negligence (Mens Rea for Sec. 3(e)) — Evident bad faith requires a palpably fraudulent and dishonest purpose. Manifest partiality is a clear inclination to favor one side. Gross inexcusable negligence is negligence with want of even slight care, done willfully and intentionally. The Court found none of these were established regarding the PHP 6M payment or the contract terms.
• In Dubio Pro Reo — In criminal cases, all doubts should be resolved in favor of the accused. This was applied to the interpretation of the contract's terms regarding the timing of the PHP 6 million payment, favoring the interpretation that it was not premature.
• Rule of Lenity — When a penal statute (or, by extension, a contract forming the basis of a criminal charge) is ambiguous and admits of two reasonable interpretations, the one more lenient to the accused should be adopted. This supported the interpretation of the payment timing favorable to the accused.
• Equipoise Rule — Where evidence is evenly balanced, the constitutional presumption of innocence tilts the scales in favor of the accused. The Court implicitly applied this by finding the prosecution's evidence insufficient to overcome the presumption of innocence.
• Discretion of Bids and Awards Committee (BAC) — The BAC has discretion in setting eligibility requirements to ensure fair and equal access to prospective bidders (RA 9184, Sec. 23). Courts generally do not interfere with such discretion unless exercised fraudulently. The Court found the BAC's decision to reduce the experience requirement was a policy decision within its discretion and not shown to be fraudulent or to purposely favor AsiaBorders.
• Proof Beyond Reasonable Doubt — Conviction must rest on evidence showing guilt to a moral certainty. The Court found the prosecution failed to meet this standard for both charges.

• "To convict him or her of an offense other than that charged in the complaint or information would be a violation of this constitutional right."
• "In criminal cases, where the Contract upon which the indictment is hinged partakes of varying interpretations, that which is favorable to the accused and consistent with the presumption of innocence should prevail."
• "The exercise of this discretion [of BAC in setting bid requirements] is a policy decision that necessitates prior inquiry, investigation, comparison, evaluation, and deliberation. This task can best be discharged by the government agencies concerned, not by the courts."
• "To successfully prosecute the accused under Section 3(e) of Republic Act No. 3019 based on a violation of procurement laws, the prosecution cannot solely rely on the fact that a violation of procurement laws has been committed. The prosecution must still prove beyond reasonable doubt that: (1) the violation of procurement laws caused undue injury to any party, including the government, or gave any private party unwarranted benefits, advantage or preference, and (2) the accused acted with evident bad faith, manifest partiality, or gross inexcusable negligence."

• Evangelista v. People — Cited to support the principle that an accused cannot be convicted for acts different from those described in the Information, as it violates the constitutional right to be informed of the nature and cause of the accusation.
• Uriarte v. People — Cited for defining the modes of committing Section 3(e) of RA 3019 (dolo through evident bad faith/manifest partiality, or culpa through gross inexcusable negligence) and defining these terms.
• Intestate Estate of Carungcong v. People — Referenced for the principle of in dubio pro reo and the rule of lenity in interpreting criminal laws (and by extension, contracts in criminal cases).
• Limbo v. People — Cited regarding the constitutional right of the accused to be informed of the nature and cause of the accusation, emphasizing that an accused cannot be convicted of an offense not clearly charged.
• Morales v. People — Cited for the definitions of 'manifest' and 'gross' in the context of a manifestly and grossly disadvantageous contract under Section 3(g) of RA 3019.
• Veritas v. Office of the President — Cited for the principle that courts will not interfere with the wide latitude of discretion given to authorities in procurement matters unless it is used as a shield for a fraudulent award.
• Chung v. Office of the Ombudsman (citing Albert v. Sandiganbayan and Sanchez v. People) — Referenced for the definitions of evident bad faith, manifest partiality, and gross inexcusable negligence.
• Ysidoro v. Leonardo-De Castro — Cited to emphasize that bad faith under anti-graft laws implies a dishonest purpose or moral obliquity, not just bad judgment or negligence.
• People v. Martel — Referenced for the elements required to prove a violation of Section 3(e) of RA 3019 when a violation of procurement law is alleged.

• Republic Act No. 3019, Section 3(e) — This is the core provision for Criminal Case No. SB-16-CRM-1076. The Court analyzed whether its elements (public officer, action through manifest partiality, evident bad faith or gross inexcusable negligence, causing undue injury or giving unwarranted benefits) were proven. The Court found they were not.
• Republic Act No. 3019, Section 3(g) — This is the core provision for Criminal Case No. SB-16-CRM-1077. The Court analyzed whether its elements (public officer, entering into a contract for the government, contract being manifestly and grossly disadvantageous) were proven against Yap. The Court found the third element unproven.
• 1987 Constitution, Article III, Section 14(2) — This provision on the right of the accused to be informed of the nature and cause of the accusation was central to the Court's reasoning for acquitting in the Sec. 3(e) charge, as the Sandiganbayan allegedly relied on facts not specified in the Information.
• Presidential Decree No. 1445 (Government Auditing Code), Section 88 — This section prohibits advance payment for services not yet rendered or supplies not yet delivered. The Court ruled that a violation of this section does not ipso facto indicate manifest partiality, evident bad faith, or gross inexcusable negligence.
• Republic Act No. 9184 (Government Procurement Reform Act), Article VIII, Section 23 — This section on eligibility requirements for bidders and the BAC's role in determining them was cited to support the BAC's authority to modify requirements to ensure fair and equal access, deeming the reduction of experience requirement a discretionary act.
• Republic Act No. 6958 (MCIAA Charter) — Mentioned as the law creating MCIAA, establishing its status as a government-owned and controlled corporation and thus making its officials public officers.