CASE 1: Phil. Pharmawealth, Inc. v. Phil.

Childrens Medical Center

BAC, et. al. GR No. 167806 26 June 2006
Nature of the Action: petition for review under Rule 45 by herein
Petitioner Phil Pharmawealth of the decision of the RTC dismissing its
petition for certiorari under Rule 65.
Facts:
The parties:
1. Petitioner Phil Pharmawealth, Inc., (PPI), is a duly organized
corporation licensed to import and distribute medical devices and
finished pharmaceutical products.
2. Respondent Philippine Children's Medical Center Bids and
Awards Committee (PCMC-BAC) was organized pursuant to
Republic Act No. 9184,3 also known as the Government
Procurement Reform Act (GPRA), to manage the procurement of
goods and services by the Philippine Children's Medical Center, a
government hospital created by special charter. The BAC is
composed of 4 members, the other respondents.
3. The Bidding: Respondent PCMC-BAC undertook a public
bidding for the procurement of its supplies for the first semester
of calendar year 2005.
4. Petitioner prepared to participate in the bidding by obtaining
a list of eligibility requirements. However, the respondent
required petitioner's representative to submit additional
documents such as a notarized "Statement of Non-Blacklisted"
which should be printed using the company's letterhead and also
a statement of the company's policy on returned goods.
a. However, when the petitioner resubmitted its
requirements, the respondent refused to give it a copy of
the Instructions to Bidders informing it that petitioner
cannot participate in the bidding because it has been
suspended for one year by PCMC's Therapeutics
Committee pursuant to its finding that one of petitioner's
products was of a substandard quality.
5. Petition for certiorari: The bidding proceeded as scheduled
without its participation, thus petitioner filed a Petition for
Certiorari, Prohibition and Mandamus with Complaint for
Damages and Application for a Temporary Restraining Order
and/or Writ of Preliminary Injunction before the Regional Trial
Court of Quezon City.
a. This was done without filing a protest before the
respondent, or motion of reconsideration.
6. The trial court dismissed the petition on December 20, 2004 for
failure to attach certified true copies of the annexes.

Hence, the present action by the petitioner arguing that:

1. Petitioner maintains that the rule requiring that the assailed
decision must be attached to the petition for certiorari must be
dispensed with where, as in this case, the tribunal, board or
officer refuses to reduce its decision in writing and furnish the
affected party with it.
2. Petitioner likewise argues that the trial court erred in denying its
motion for reconsideration and holding that there exists other
remedies that it could avail of. It claims that in the absence of a
written decision, the aggrieved party cannot appeal the decision
of the PCMC-BAC to the head of the procuring entity pursuant to
Sections 55 and 58 of GPRA.
On the other hand, the respondents argue that:
1. that the absence of a written notice barring petitioner from
participating in the bidding will not render the verbal notifications
made by PCMC-BAC inoperative or defective.
2. They maintain that petitioner had administrative remedies under
the law which it unfortunately failed to avail of.
Issue: Was the RTC correct in dismissing the petition for certiorari of the
petitioner?
Ruling: Yes.
Controlling issue: was the action of the petitioner premature?
Ruling: Yes. the case should be dismissed for having failed to observe
the Principle of Exhaustion of Administrative Remedies by filing a protest
within 7 days from notice of rejection.
1. Section 23.3. of the IRR of GPRA states: The BAC shall inform
an eligible prospective bidder that it has been found eligible to
participate in the bidding. On the other hand, the BAC shall
inform an ineligible prospective bidder that it has been found
ineligible to participate in the bidding, and the grounds for its
ineligibility. Those found ineligible have seven (7) calendar days
upon written notice or, if present at the time of opening of
eligibility requirements, upon verbal notification, within which to
file a request for a reconsideration with the BAC: Provided,
however, That the BAC shall decide on the request for
reconsideration within seven (7) calendar days from receipt
thereof.
2. Following the above procedure, petitioner has until November
24, 2004, or seven days from the time it was verbally notified on
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November 17, 2004 of its ineligibility to participate in the bidding,

within which to file a request for reconsideration. By its failure to
file a motion for reconsideration with the PCMC-BAC, petitioner
was precluded from protesting the decision of the BAC with the
head of the procuring entity in accordance with Section 55.1,
Rule XVII of the Implementing Rules and Regulations of R.A. No.
9184
3. Section 58. Resort to Regular Courts; Certiorari. 58.1. Court
action may be resorted to only after the protests contemplated in
this Rule shall have been completed, i.e. resolved by the head of
the procuring entity with finality. The regional trial court shall have
jurisdiction over final decisions of the head of the procuring entity.
Court actions shall be governed by Rule 65 of the 1997 Rules of
Civil Procedure.
4. The doctrine of exhaustion of administrative remedies calls for
resort first to the appropriate administrative authorities to accord
them the prior opportunity to decide controversies within their
competence before the same may be elevated to the courts of
justice for review. It is presumed that an administrative agency, if
afforded an opportunity to pass upon a matter, will decide the
same correctly, or correct any previous error committed in its
forum.
Does the present case fall under any of the exemptions from the said
doctrine?
No. We are aware of instances when resort to administrative remedies
may be dispensed with and judicial action may be validly resorted to
immediately, among which are:
1) when the question raised is purely legal;
2) when the administrative body is in estoppel;
3) when the act complained of is patently illegal;
4) when there is urgent need for judicial intervention;
5) when the claim involved is small;
6) when irreparable damage will be suffered;
7) when there is no other plain, speedy and adequate remedy;
8) when strong public interest is involved; and
9) in quo warranto proceedings.
However, petitioner failed to satisfactorily show that the instant
case falls among the recognized exceptions to the rule on
exhaustion of administrative remedies.
CASE 2: LRA v. Lanting Security and Watchman Agency GR
No.181735 20 July 2010

Nature of the Case: petition for review on certiorari of the decision

of the CA rendering a decision in favor of the respondents.
Facts:
1. The petitioner LRA and the respondent Lanting Security
previously entered into a 6-month security services contract
whereby the latter provided security in the premises of LRA. The
contract was from July 2002 until December. Extensions were
made until 2004.
2. Invitation to Bid: Then in 2004, LRA issued an invitation to bid
for the services previously provided by the respondent.
3. Of the 16 bidders, six were qualified, including the respondent
and a certain party named Quiambao.
4. Letter of request by the respondent: Through a letter,
respondent requested the LRA- Bids and Awards Committee
Chair for it to be declared the winning bidder.
5. While such letter was not yet acted upon and no awards
were made yet, the respondent filed a complaint against the Bids
and Awards Committee of the LRA before the Philippine
Association of Detective and Protective Agency Operator, Inc.
(PADPAO) for alleged irregularities in the bidding process
6. The previous contract between the petitioner and the respondent
was extended on a day-to-day basis. The respondent then was
informed later on that its security personnel be pulled out
from LRAs premises to give way to the lowest responsive
bidder whose takeover will be on Dec. 16, 2004.
7. The court action: On December 16, 2004, respondent, through
its representative Atty. Thomas Lanting, filed a Petition for
Annulment of Public Bidding and Award with Prayer for the
Issuance of a Temporary Restraining Order (TRO) and/or Writ of
Preliminary Prohibitive Injunction[6] before the Regional Trial
Court (RTC) of Quezon City.
a. Answer of LRA: that the petition for annulment shall be
dismissed for lack of jurisdiction of the RTC because the
respondent failed to comply with the protest mechanism
of the Government Procurement Act.
8. During the pendency of the case, by motion of the respondent,
the petitioner was ordered by the court to pay the compensation
for the actual services of respondent before it was pulled out from
the premises to give way to the new winning bidder on a quantum
meruit basis.
9. The petitioner then assailed the decision of the RTC above
through a petition for certiorari before the Court of Appeals
SESSION 3 GOVERNMENT CONTRACTS-2

maintaining that the case should have been dismissed for failure
to comply with the protest mechanism.
10. The CA then denied the petition and upholding the jurisdiction of
the RTC. An MR was filed by the petitioner but to no avail the CA
disposed of the case ratiocinating that the respondent Lanting did
comply with the requirements of the law:
a. That the letter addressed to the LRA requesting the
award be made to the respondent was sufficient protest
b. That although no protest fee was paid by the respondent,
the LRA in fact, entertained the protest informing the
respondent Lanting tthat the contract was indeed
awarded to another bidder. Hence, there was waiver of
the defect of non-payment of protest fees.
Hence, the present action by the petitioner for Review n Certiorari
arguing that:
1. that the trial court did not have jurisdiction over respondents
Petition for Annulment; and
2. that the appellate court gravely abused its discretion when it
issued the assailed orders on
the basis of quantum meruit.
Issue: Was the RTC correct in taking cognizance of the case?
Ruling: No. Since the protest mechanism required by law was not
complied with and the administrative remedies not having been
exhausted, the case should be dismissed for lack of jurisdiction.
Further, since the court not having jurisdiction over the complaint, the
discussion on the unpaid compensation is unnecessary.
Ratio:
Section 58 of the Government Procurement Act specifically states that:
Resort to Regular Courts: Certiorari. Court action may be
resorted to only after the protests contemplated in this Article
shall have been completed. Cases that are filed in violation of
the process specified in this Article shall be dismissed for
lack of jurisdiction. The Regional Trial Court shall have
jurisdiction over final decisions of the procuring entity. Court
action shall be governed by Rule 65 of the 1997 Rules of
Civil Procedure.
This provision is without prejudice to any law conferring on
the Supreme Court the sole jurisdiction to issue temporary

restraining orders or injunctions relating to Infrastructure

projects of the government.
Hence, non-exhaustion of the remedies under the said law is fatal to
the case.
How then should protest be done?

Section 55 of R.A. No. 9184 sets three requirements that

must be met by a party desiring to protest the decision of
the Bids and Awards Committee (BAC). These are:
(1) the protest must be in writing, in the form of a verified position
paper;
(2) the protest must be submitted to the head of the procuring
entity; and
(3) the payment of a non-refundable protest fee.

Does the letter of request of the respondent to LRA compliant?

No. Respondents letter of November 19, 2004 to the LRA- BAC
cannot be considered as the protest required under Section 55 of
R.A. No. 9184 as it was not verified and the protest fee was not paid.
Respondent thus failed to avail of the correct protest procedure
prescribed under Section 55 of R.A. No. 9184 before it filed its petition for
annulment of the award before the RTC. Section 58 of the said law
explicitly requires that cases filed in violation of the protest process of
Section 55 shall be dismissed for lack of jurisdiction.
And even if the waiver of the non-payment of fees be credited, still, there
is no compliance with the requirements.
Is the respondent precluded from filing an action again?
No. Suffice it to state that respondent can pursue such claim before the
proper forum, within the proper period.
WHEREFORE, the petition is GRANTED. The Court of Appeals
Decision of September 19, 2007 and Resolution of February 15, 2008
are REVERSED and SET ASIDE. The RTCs order of June 28, 2005
and Resolution of August 22, 2005 are declared NULL and VOID for
lack of jurisdiction.
CASE 3: First United Constructors Corp. vs. Poro Point Management
Corp. G.R. No. 178799, 19 January 2009
SESSION 3 GOVERNMENT CONTRACTS-3

NATURE: First United Constructors Corporation (FUCC) filed this special

civil action for certiorari and prohibition with prayer for the issuance of a
temporary restraining order, seeking to annul (i) the re-bidding of the
contract for the Upgrading of the San Fernando Airport Project, Phase I,
held on May 8, 2007; (ii) the Notice of Award dated May 23, 2007 to Satrap
Construction Company, Inc. (SCCI); and (iii) Notice to Proceed dated May
29, 2007 also to SCCI. FUCC also seeks to permanently enjoin the Special
Bids and Awards Committee (SBAC) and Poro Point Management
Corporation (PPMC) from implementing the Contract in favor of SCCI.
FACTS:
1. PPMC approved the Contract for the Upgrading of the San Fernando
Airport Phase I.
2. The SBAC then issued invitations to reputable contractors to pre-qualify
for the project.
3. FUCC and two (2) other contractors - C.M. Pancho Construction, Inc.
(C.M. Pancho) and EEI-New Kanlaon Construction, Inc. Joint Venture (EEINew Kanlaon JV) responded to the invitation and were pre-qualified to bid
for the project. However, upon evaluation, none of the pre-qualified bidders
was chosen.
4. C.M. Pancho was disqualified because it did not possess the required
minimum years of experience in airport projects, while EEI New Kanlaon JV
was disqualified because it did not submit a special license to bid as joint
venture.
5. FUCCs technical proposal, on the other hand, obtained a failing mark
because it failed to submit the automated weather observation system
(AWOS) and its authorized representative did not sign some pages of the
narrative construction method and the tax returns.

REFUNDABLE. It is also ordered FORFEITED in favor of

PPMC.
9. SBAC then scheduled a re-bidding and issued new invitations to bid for
the project. To enjoin the re-bidding, FUCC filed a petition for injunction with
prayer for the issuance of a preliminary injunction or TRO with the RTC of
La Union.
10. The RTC issued a TRO which, however, was lifted because under
Section 3 of Republic Act No. 8975, no court, except the Supreme Court,
shall issue a TRO or injunction or prohibit the bidding or award of a
government infrastructure project.
11. SBAC thus proceeded with the re-bidding of the project and awarded
the project to SCCI as the lowest qualified bidder. The Contract for the
project was signed, and a notice to proceed was served on SCCI.
12. FUCC filed an amended petition with the RTC to enjoin the
implementation of the project. The Office of the Government Corporate
Counsel (OGCC) moved to dismiss the petition for lack of jurisdiction.
13. Pending resolution of OGCCs motion to dismiss, FUCC moved for the
dismissal of its amended petition, which was granted by the RTC.
14. Claiming that there is no appeal, or any speedy and adequate remedy
in the ordinary course of law, FUCC comes to us via this petition. It also
asks for the issuance of a TRO to enjoin the implementation of the project,
asserting that SCCI is not qualified to undertake the project and the award
clearly poses a real threat to the public welfare and safety.
15. Court denied FUCCs application for the issuance of a TRO for lack of
merit.
ISSUE: WON SBAC and PPMC committed grave abuse of discretion in
disqualifying FUCCs bid, in denying its protest, in conducting a re-bidding
and in awarding the project to SCCI.

6. FUCC sought reconsideration of the SBAC decision, but it was denied.

7. FUCC then filed a protest with the PPMC.

HELD: No. We dismiss the petition.

8. Atty. Felix S. Racadio, PPMC Head, resolved FUCCs protest:

RATIO: RA No. 9184, or the Government Procurement Reform

Act, outlines the procedure to assail decisions of the SBAC in this wise:

No reversible error committed by SBAC.

the PROTEST filed by FUCC which is under consideration is

hereby DISMISSED for lack of merit.

The filing fee paid by FUCC, the protestant, in the amount of

P4,721,000.00, which is equivalent to 1% of the ABC is NON-

there exists a PRESUMPTION OF REGULARITY

OFFICIAL ACTION OF A PUBLIC OFFICER.

OF

SEC. 55. Protests on Decisions of the BAC. Decisions of BAC in

all stages of procurement may be protested to the head of the procuring
entity and shall be in writing. Decisions of the BAC may be protested by
filing a verified position paper and paying a nonrefundable protest fee. The
amount of protest fee and the periods during which the protests may be
filed and resolved shall be specified in the IRR.
SESSION 3 GOVERNMENT CONTRACTS-4

SEC. 56. Resolution of Protests. - The protests shall be resolved

strictly on the basis of records of the BAC. Up to a certain amount specified
in the IRR, the decisions of the Head of the Procuring Entity shall be final.
SEC. 57. Non-interruption of the Bidding Process. In no case shall
any protest taken from any decision treated in this Article stay or delay the
bidding process. Protests must first be resolved before any award is made.
SEC. 58. Resort to Regular Courts; Certiorari. Court action may be
resorted only after the protest contemplated in this Article shall have been
completed. Cases that are filed in violation of the process specified in this
Article shall be dismissed for lack of jurisdiction. The regional trial court
shall have jurisdiction over final decisions of the head of the procuring
entity. Court actions shall be governed by Rule 65 of the 1997 Rules of Civil
Procedure.
This provision is without prejudice to any law conferring on the Supreme
Court the sole jurisdiction to issue temporary restraining orders and
injunctions relating to Infrastructure Projects of Government.
FUCC challenged the decision of SBAC in a protest filed with Atty. Racadio
of the PPMC who affirmed the SBAC decision. Instead of filing a petition
for certiorari, as provided in Section 58, FUCC filed a petition for injunction
with prayer for the issuance of a temporary restraining order and/or
preliminary injunction with the RTC. FUCC, however, later moved for its
dismissal theorizing that the RTC had no jurisdiction over petitions for
injunction. Thereafter, it filed this petition for certiorari with this Court.
Section 4, Rule 65 of the 1997 Rules of Civil Procedure provides that a
special civil action for certiorari shall be filed not later than sixty (60) days
from the notice of the judgment, order or resolution. FUCC admitted that it
received the PPMC decision on March 27, 2007. However, it filed this
petition assailing the said decision only on July 30, 2007. It is, therefore, too
late in the day for FUCC, via this petition, to assail the PPMC decision
which rated its bid as failed.
Besides, FUCC violated the doctrine of judicial hierarchy in filing this
petition for certiorari directly with this Court. Section 58 is clear that
petitions for the issuance of a writ of certiorari against the decision of the
head of the procuring agency, like PPMC, should be filed with the Regional
Trial Court. Indeed, the jurisdiction of the RTC over petitions for certiorari is
concurrent with this Court. However, such concurrence does not allow
unrestricted freedom of choice of the court forum. A direct invocation of the
Supreme Courts original jurisdiction to issue this writ should be allowed
only when there are special and important reasons, clearly and specifically
set out in the petition.

In the present case, FUCC adduced no special and important reason why
direct recourse to this Court should be allowed. Thus, we reaffirm the
judicial policy that this Court will not entertain a direct invocation of its
jurisdiction unless the redress desired cannot be obtained in the
appropriate lower courts, and exceptional and compelling circumstances
justify the resort to the extraordinary remedy of a writ of certiorari.
Similarly, the RTC is the proper venue to hear FUCCs prayer for permanent
injunction. Unquestionably, RA No. 8975 enjoins all courts, except the
Supreme Court, from issuing any temporary restraining order, preliminary
injunction, or preliminary mandatory injunction against the government, or
any of its subdivisions, officials or any person or entity to restrain, prohibit
or compel the bidding or awarding of a contract or project of the national
government. The proscription, however, covers only temporary restraining
orders or writs but not decisions on the merits granting permanent
injunction. Therefore, while courts below are prohibited by RA No. 8795
from issuing TROs or preliminary restraining orders pending the
adjudication of the case, said statute, however, does not explicitly proscribe
the issuance of a permanent injunction granted by a court of law arising
from an adjudication of a case on the merits.
Clearly, except for the prayer for the issuance of a TRO or preliminary
injunction, the issues raised by FUCC and the relief it sought are within the
jurisdiction of the RTC. It is a procedural faux pas for FUCC to invoke the
original jurisdiction of this Court over the issuance of a writ of certiorari and
permanent injunction.
In any event, the invitation to bid contains a reservation for PPMC to reject
any bid. It has been held that where the right to reject is so reserved, the
lowest bid, or any bid for that matter, may be rejected on a mere
technicality. The discretion to accept or reject bid and award contracts is
vested in the government agencies entrusted with that function. This
discretion is of such wide latitude that the Courts will not interfere therewith
or direct the committee on bids to do a particular act or to enjoin such act
within its prerogatives unless it is apparent that it is used as a shield to a
fraudulent award; or an unfairness or injustice is shown; or when in the
exercise of its authority, it gravely abuses or exceeds its jurisdiction. Thus,
where PPMC as advertiser, availing itself of that right, opts to reject any or
all bids, the losing bidder has no cause to complain or right to dispute that
choice, unless fraudulent acts, injustice, unfairness or grave abuse of
discretion is shown.
FUCC alleges that SBAC and PPMC, along with the SCCI and five (5) other
bidders, colluded to rig the results of the re-bidding so that SCCI would
emerge as the so-called lowest bidder. The record, however, is bereft of
any proof to substantiate the allegation. Neither is there any evidence
offered to establish unfairness, injustice, caprice or arbitrariness on the part
SESSION 3 GOVERNMENT CONTRACTS-5

of the SBAC or the PPMC in awarding the contract to SCCI, the lowest
bidder. The presumption of regularity of the bidding must thus be upheld.
The discretion to accept or reject a bid and award contracts is vested in the
Government agencies entrusted with that function. The discretion given to
the authorities on this matter is of such wide latitude that the Courts will not
interfere therewith, unless it is apparent that it is used as a shield to a
fraudulent award
It is only upon a clear showing of grave abuse of discretion that the Courts
will set aside the award of a contract made by a government entity.
Accordingly, there being no showing of grave abuse of discretion, FUCC
has no valid ground to demand annulment of the contract between PPMC
and SCCI.
Case 4: Nava vs. Palattao
Doctrine: The law on public bidding is not an empty formality. It aims to
secure the lowest possible price and obtain the best bargain for the
government.
Facts: The complaint involving the herein accused was initiated by the
COA, Region XI, Davao City, which resulted from an audit conducted by
a team which was created by the COA Regional Office per COA Regional
Assignment Order No. 91-74. The objective of the team was to conduct
an audit of the 9.36 million allotment which was released in 1990 by the
DECS, Region XI to its Division Offices.
In the Audit Report, the amount of P603,265.00 was shown to have been
released to the DECS Division of Davao del Sur for distribution to the
newly nationalized high schools located within the region. Through the
initiative of accused Venancio Nava, a meeting was called among his 7
schools division superintendents whom he persuaded to use the money
or allotment for the purchase of Science Laboratory Tools and Devices
(SLTD). In other words, instead of referring the allotment to the 155
heads of the nationalized high schools for the improvement of their
facilities, accused Nava succeeded in persuading his 7 schools division
superintendents to use the allotment for the purchase of science
education facilities for the calendar year 1990. In the purchase of the
school materials, the law provides that the same shall be done through a
public bidding pursuant to Circular No. 85-55, series of 1985. But in the
instant case, evidence shows that accused Nava persuaded his 7 schools
division superintendents to ignore the circular as allegedly time was of the
essence in making the purchases and if not done before the calendar
year 1990, the funds allotted will revert back to the general fund.

In the hurried purchase of SLTDs, the provision on the conduct of a

public bidding was not followed. Instead the purchase was done through
negotiation. Evidence shows that the items were purchased from Jovens
Trading, a business establishment with principal address at Tayug,
Pangasinan; DImplacable Enterprise with principal business address at
115 West Capitol Drive, Pasig, Metro Manila and from Evelyn Miranda of
1242 Oro-queta Street, Sta. Cruz, Manila. As disclosed by the audit
report, the prices of the SLTDs as purchased from the above-named
sellers exceeded the prevailing market price ranging from 56% to 1,175%
based on the mathematical computation done by the COA audit team.
The report concluded that the government lost P380,013.60. That the
injury to the government as quantified was the result of the nonobservance by the accused of the COA rules on public bidding and DECS
Order No. 100 suspending the purchases of SLTDs.
The Commission on Audit (COA) Report recommended the filing of
criminal and administrative charges against the persons liable, including
petitioner, before the Office of the Ombudsman-Mindanao. After due trial,
only petitioner was convicted, while all the other accused were
acquitted.8Petitioner was found guilty of violating Section 3(g) of the AntiGraft and Corrupt Practices Act, or entering on behalf of the government
any contract or transaction manifestly and grossly disadvantageous to the
latter, whether or not the public officer profited or would profit thereby.
The Sandiganbayan (SBN) said that, in the purchase of the Science
Laboratory Tools and Devices (SLTDs), petitioner had not conducted a
public bidding in accordance with COA Circular No. 85-55A. As a result,
the prices of the SLTDs, as purchased, exceeded the prevailing market
price from 56 percent to 1,175 percent, based on the mathematical
computations of the COA team.
Issue: Whether the Sandiganbayan committed reversible errors in finding
petitioner guilty beyond reasonable doubt of violation of Section 3(g),
Republic Act No. 3019?
Held: Petition has no merit
Ratio: Executive Order No. 301 states the general rule that no contract
for public services or for furnishing supplies, materials and equipment to
the government or any of its branches, agencies or instrumentalities may
be renewed or entered into without public bidding. The rule however, is
not without exceptions. Specifically, negotiated contracts may be entered
into under any of the following circumstances:
a. Whenever the supplies are urgently needed to meet an emergency
which may involve the loss of, or danger to, life and/or property;
SESSION 3 GOVERNMENT CONTRACTS-6

b. Whenever the supplies are to be used in connection with a project or

activity which cannot be delayed without causing detriment to the public
service;
c. Whenever the materials are sold by an exclusive distributor or
manufacturer who does not have sub-dealers selling at lower prices and
for which no suitable substitute can be obtained elsewhere at more
advantageous terms to the government;
d. Whenever the supplies under procurement have been unsuccessfully
placed on bid for at least two consecutive times, either due to lack of
bidders or the offers received in each instance were exorbitant or nonconforming to specifications;
e. In cases where it is apparent that the requisition of the needed supplies
through negotiated purchase is most advantageous to the government to
be determined by the Department Head concerned;
f. Whenever the purchase is made from an agency of the government.
As the COA Report aptly states, the law on public bidding is not an empty
formality. It aims to secure the lowest possible price and obtain the best
bargain for the government. It is based on the principle that under
ordinary circumstances, fair competition in the market tends to lower
prices and eliminate favoritism.
Although this Court has previously ruled that all heads of offices have to
rely to a reasonable extent on their subordinates and on the good faith of
those who prepare bids, purchase supplies or enter into negotiations, it is
not unreasonable to expect petitioner to exercise the necessary diligence
in making sure at the very least, that the proper formalities in the
questioned transaction were observed that a public bidding was
conducted. This step does not entail delving into intricate details of
product quality, complete delivery or fair and accurate pricing. Unlike
other minute requirements in government procurement, compliance or
noncompliance with the rules on public bidding is readily apparent; and
the approving authority can easily call the attention of the subordinates
concerned. To rule otherwise would be to render meaningless the
accountability of high-ranking public officials and to reduce their
approving authority to nothing more than a mere rubber stamp. The
process of approval is not a ministerial duty of approving authorities to
sign every document that comes across their desks, and then point to
their subordinates as the parties responsible if something goes awry.

CASE 5: MACALINTAL v. COMELEC (G.R. No. 157013, July 2003)

NATURE: Petition for certiorari and prohibition.

FACTS:
1. Romulo Macalintal (Macalintal), a member of the Philippine Bar
and a taxpayer, seeks to have some provisions of RA 9189 (The
Overseas
Absentee
Voting
Act
of
2003)
declared
unconstitutional.
2. He claims that his actual and material legal interest in the subject
matter is grounded on the fact that he wants public funds to be
properly and lawfully used and appropriated.
a. Sec. 29 of RA 9189 provides that a supplemental budget
on the GAA of the year of its enactment into law shall
provide for the necessary amount to carry out its
provisions.
3. The provisions subject to this petition are the following:
a. Sec. 5(d)
i. It allows the registration of voters who are
immigrants or permanent residents in other
countries by their mere act of executing an
affidavit expressing their intention to return to the
Philippines.
ii. This provision allegedly violates the 1-year
residency requirement at least 6 months
immediately preceding the election as required
by Sec. 1 of Art. V of the Constitution. This
constitutional provision does not allow provisional
registration or a promise by a voter to perform a
condition to be qualified to vote, hence, the
questioned
provision
circumvents
the
constitutional requirement on the right of suffrage
by providing a condition which, in effect, amends
or alters the constitutional requirement on
residency to qualify a Filipino abroad to vote.
b. Sec. 18.5
i. It pertains to the on-site counting and
canvassing. It empowers the COMELEC to
proclaim the winning candidates despite the fact
that the scheduled election has not taken place
in a particular country or countries, if the holding
of elections therein has been rendered
impossible by events, factors and circumstances
peculiar to such country or countries, in which
events, factors and circumstances are beyond
the control or influence of the COMELEC.
ii. This provision allegedly violates the constitutional
mandate under Sec. 4, Art. VII of the Constitution
SESSION 3 GOVERNMENT CONTRACTS-7

that the winning candidates for President and the

Vice-President shall be proclaimed as winners by
Congress.
c. Secs. 19 and 25
i. These provisions create the Joint Congressional
Oversight Committee that allows Congress to
monitor, evaluate, review, revise, amend, and
approve the IRR that the COMELEC shall
promulgate.
ii. It allegedly violates COMELECs independence
under Sec. 1 of Art. 9-A of the Constitution.
4. For the government, the following counter-arguments are raised:
a. As to Sec. 5(d):
i. The absence of clear and unmistakable showing
that this provision is repugnant to the
Constitution would render it constitutional.
ii. The term residence has been understood to be
synonymous with domicile. A person can only
have one domicile but several residences.
Therefore, Filipinos who are immigrants or
permanent residents abroad may have in fact
never abandoned their Philippine domicile.
iii. Through the execution of the requisite affidavits,
the Congress, with the concurrence of the
President of the Republic, had in fact given these
immigrants and permanent residents the
opportunity, pursuant to Sec. 2 of Art. V of the
Constitution, to manifest that they had in fact
never abandoned their Philippine domicile; that
indubitably, they would have formally and
categorically expressed the requisite intentions,
i.e., "animus manendi" and "animus revertendi,"
and that Filipino immigrants and permanent
residents abroad possess the unquestionable
right to exercise the right of suffrage upon
approval of their registration.
b. As to Sec. 18.5:
i. This provision must be harmonized with Sec.
4(4), Art. 7 of the Constitution and should be
taken to mean that COMELEC can only proclaim
the
winning
Senators
and
party-list
representatives but not the President and VicePresident.
c. As to Secs. 19 and 25:
i. COMELEC agrees with Macalintal in arguing that

these provisions are unconstitutional because

the Constituton provides that the COMELEC is
an independent commission with the power to
implement regulations and with the incident
power to formulate its own rules and regulations.
Therefore, COMELEC, in asserting itself as an
independent constitutional body, may not be
subject to interference by any government
instrumentality and that only this Court may
review COMELEC rules and only in cases of
grave abuse of discretion.
ii. For the OSG, these provisions are also
unconstitutional for there is nothing in Art. VI of
the Constitution that would as much as imply that
Congress has concurrent power to enforce and
administer election laws with the COMELEC.
5. The seed of the present controversy is the interpretation that is
given to the phrase, "qualified citizens of the Philippines abroad"
as it appears in R.A. No. 9189, to wit:
SEC. 2. Declaration of Policy. It is the prime duty of the State to
provide a system of honest and orderly overseas absentee voting
that upholds the secrecy and sanctity of the ballot. Towards this
end, the State ensures equal opportunity to all qualified citizens
of the Philippines abroad in the exercise of this fundamental
right.
ISSUES: WON the provisions subject of this petition violate the
Constitution.
HELD: Not all the provisions subject of this petition violate the
Constitution.
RATIO: 1. Sec. 5(d). As to Sec.5(d), to declare a law unconstitutional, the
repugnancy of that law to the Constitution must be clear and unequivocal,
for even if a law is aimed at the attainment of some public good, no
infringement of constitutional rights is allowed. To strike down a law there
must be a clear showing that what the fundamental law condemns or
prohibits, the statute allows it to be done.
As the essence of RA 9189 is to enfranchise overseas qualified Filipinos,
itwas enacted in obeisance to the mandate of Sec. 2(1) of Art. V of the
Constitution that Congress shall provide a system for voting by qualified
Filipinos abroad. At this matter, it is necessary to discuss the significance
of absentee voting. The method of absentee voting has been said to be
completely separable and distinct from the regular system of voting,
SESSION 3 GOVERNMENT CONTRACTS-8

and to be a new and different manner of voting from that previously

known, and an exception to the customary and usual manner of voting.
The right of absentee and disabled voters to cast their ballots at an
election is purely statutory; absentee voting was unknown to, and not
recognized at, the common law. Absentee voting is an outgrowth of
modern social and economic conditions devised to accommodate those
engaged in military or civil life whose duties make it impracticable
for them to attend their polling places on the day of election, and the
privilege of absentee voting may flow from constitutional provisions
or be conferred by statutes.
Such statutes are regarded as conferring a privilege and not a right, or
an absolute right. When the legislature chooses to grant the right by
statute, it must operate with equality among all the class to which it is
granted; but statutes of this nature may be limited in their application to
particular types of elections. The statutes should be construed:
1. In the light of any constitutional provisions affecting registration
and elections,
2. With due regard to their texts prior to amendment and to
predecessor statutes and the decisions thereunder,
3. In the light of the circumstances under which they were enacted,
and
4. Taking into consideration the intent of the entire plan, and
reasons and spirit of their adoption, and try to give effect to every
portion thereof.
Ordinarily, an absentee is not a resident and vice versa; a person cannot
be at the same time, both a resident and an absentee. However, under
our election laws and the countless pronouncements of the Court
pertaining to elections, an absentee remains attached to his residence in
the Philippines as residence is considered synonymous with domicile. For
political purposes the concepts of residence and domicile are dictated by
the peculiar criteria of political laws. As these concepts have evolved in
our election law, what has clearly and unequivocally emerged is the
fact that residence for election purposes is used synonymously with
domicile.
As finally approved into law, Sec. 5(d) of R.A. No. 9189 specifically
disqualifies an immigrant or permanent resident who is "recognized as
such in the host country" because immigration or permanent residence in
another country implies renunciation of ones residence in his country of
origin. However, same Section allows an immigrant and permanent
resident abroad to register as voter for as long as he/she executes an
affidavit to show that he/she has not abandoned his domicile in
pursuance of the constitutional intent expressed in Secs. 1 and 2 of

Article V that "all citizens of the Philippines not otherwise disqualified by

law" must be entitled to exercise the right of suffrage and, that Congress
must establish a system for absentee voting; for otherwise, if actual,
physical residence in the Philippines is required, there is no sense for the
framers of the Constitution to mandate Congress to establish a system for
absentee voting.
Contrary to the claim of petitioner, the execution of the affidavit itself is
not the enabling or enfranchising act. The affidavit required in Sec. 5(d) is
not only proof of the intention of the immigrant or permanent resident to
go back and resume residency in the Philippines, but more significantly, it
serves as an explicit expression that he had not in fact abandoned his
domicile of origin. Thus, it is not correct to say that the execution of the
affidavit under Sec. 5(d) violates the Constitution that proscribes
"provisional registration or a promise by a voter to perform a condition to
be qualified to vote in a political exercise." The affidavit is required of
immigrants and permanent residents abroad because by their status in
their host countries, they are presumed to have relinquished their intent to
return to this country; thus, without the affidavit, the presumption of
abandonment of Philippine domicile shall remain. The intent of the
framers is for the law to be expansive and all-inclusive: as long as he is a
Filipino, regardless of whether he is a green-card holder or not, he will be
authorized to vote. If he is a green-card holder, therefore, a permanent
resident abroad, he must indicate his intention to return. This is what
domicile means.
The votes cast by qualified Filipinos abroad who failed to return within
three years shall not be invalidated because they were qualified to vote
on the date of the elections, but their failure to return shall be cause for
the removal of the names of the immigrants or permanent residents from
the National Registry of Absentee Voters and their permanent
disqualification to vote in absentia.
In fine, considering the underlying intent of the Constitution, the Court
does not find Section 5(d) of R.A. No. 9189 as constitutionally defective.
2. Sec. 18.5. The phrase proclamation of winning candidates, in Section
18.5 is far too sweeping that it necessarily includes the proclamation
of the winning candidates for the presidency and the vice-presidency,
therefore it is repugnant to Sec. 4, Art. VII of the Constitution but only
insofar as this Section disregarded the authority given to Congress by the
Constitution to proclaim the winning candidates for the positions of
president and vice-president.
3. Secs. 19 and 25. The COMELEC is a constitutional body that was
SESSION 3 GOVERNMENT CONTRACTS-9

created to play a distinct and important part in our scheme of

government. In the discharge of its functions, it should not be hampered
with restrictions that would be fully warranted in the case of a less
responsible organization. It should be allowed considerable latitude in
devising means and methods that will insure the accomplishment of
the great objective for which it was created free, orderly and
honest elections. Unless the means used by COMELEC are clearly
illegal or constitute gross abuse of discretion, this court should not
interfere. The Court has no general powers of supervision over
COMELEC which is an independent body "except those specifically
granted by the Constitution," that is, to review its decisions, orders and
rulings.

as to the power to canvass the votes and proclaim the winning

candidates for President and Vice-President which is lodged with
Congress under Section 4, Article VII of the Constitution.
3. The constitutionality of Section 5(d) is UPHELD.
4. Pursuant to Section 30 of R.A. No. 9189, the rest of the provisions of
said law continues to be in full force and effect.

CASE 6: G & S Transport Corporation Vs. Court of Appeals

By vesting itself with the powers to approve, review, amend, and revise
the IRR for the law in question, Congress went beyond the scope of its
constitutional authority. Congress trampled upon the constitutional
mandate of independence of the COMELEC. Under such a situation, the
Court is left with no option but to withdraw from its usual reticence in
declaring a provision of law unconstitutional.
DISPOSITVE PORTION: The petition is PARTLY GRANTED.
1. The following portions of R.A. No. 9189 are declared VOID for being
UNCONSTITUTIONAL:
a) The phrase in the first sentence of the first paragraph of Section 17.1,
to wit: "subject to the approval of the Joint Congressional Oversight
Committee;"
b) The portion of the last paragraph of Section 17.1, to wit: "only upon
review and approval of the Joint Congressional Oversight
Committee;"
c) The second sentence of the first paragraph of Section 19, to wit: "The
Implementing Rules and Regulations shall be submitted to the Joint
Congressional Oversight Committee created by virtue of this Act for
prior approval;" and
d) The second sentence in the second paragraph of Section 25, to wit: "It
shall review, revise, amend and approve the Implementing Rules
and Regulations promulgated by the Commission" of the same law;
for being repugnant to Section 1, Article IX-A of the Constitution
mandating the independence of constitutional commission, such as
COMELEC.
2. The constitutionality of Section 18.5 of R.A. No. 9189 is UPHELD with
respect only to the authority given to the COMELEC to proclaim the
winning candidates for the Senators and party-list representatives but not

Doctrine:
Facts: Petitioner G & S Transport Corporation (G & S), with the name
and style Avis Rent-A-Car was the exclusive operator of coupon taxi
services at the NAIA under a 5-year contract of concession with
respondent Manila International Airport Authority (MIAA). The concession
contract expired on 31 January 1994 but was renewed by the parties on a
monthly basis until such time when a new concessionaire (shall have
been) chosen. Under the arrangement, G & S was able to operate the
coupon taxi service uninterruptedly beyond the period of 5 years originally
awarded by MIAA.
On 12 July 1994 MIAA initiated proceedings for public bidding to choose
two (2) concessionaires of the coupon taxi services at the NAIA. 5 firms
pre-qualified to join the bidding including petitioner G & S and
respondents 2000 Transport Corporation (2000 TRANSPORT) and
Nissan Car Lease Philippines, Inc. (NISSAN), after complying with the
terms of reference, the instructions to bidders and the invitation to bid.3
On 23 September 1994 MIAA announced the ranking of the bidders on
the basis of the fares per kilometer they each tendered.
The highest ranking bidder which offered the lowest rate per kilometer
was Philippine International Transport Service Cooperative but was
however disqualified as the bond it submitted was not a cash bond as
required by the bidding rules. Consequently, on 5 December 1994 MIAA
selected 2000 TRANSPORT and NISSAN as the winning bidders and
issued in their favor the respective notice of awards of the coupon taxi
service concession. On 10 January 1995 petitioner G & S filed a
complaint for injunction and mandamus with preliminary injunction and
temporary restraining order against MIAA and its General Manager
Guillermo G. Cunanan, 2000 TRANSPORT and NISSAN. The complaint
sought to disqualify 2000 TRANSPORT from the award of the concession
SESSION 3 GOVERNMENT CONTRACTS10

contract for submitting its Articles of Incorporation with the signature of

one of its incorporators allegedly falsified and its income tax returns
falsely attested to by its treasurer, and for the existence of allegedly
reasonable grounds to believe that 2000 TRANSPORT was a dummy
corporation for two (2) Korean nationals. It also asserted that the
concession contract should have been executed in favor of G & S since it
was more deserving than both 2000 TRANSPORT and NISSAN in terms
of facilities, financial standing, organizational set-up and capability. G & S
subsequently amended the complaint to state that no new legitimate
concessionaire had been properly chosen as a result of the failure of
MIAA to disqualify 2000 TRANSPORT from the entire process of
selecting two (2) coupon taxi service concessionaires and to allege that G
& S remained to be the only legitimate service provider, and prayed that
the month-to-month renewal of the concession contract with G & S should
instead be enforced until a more deserving concessionaire would have
been selected.
The trial court issued a temporary restraining order enjoining MIAA from
awarding to 2000 TRANSPORT and NISSAN the new concessions to
operate the NAIA coupon taxi service and from removing G & S as such
concessionaire, and thereafter scheduled for hearing the application for
preliminary injunction. Meanwhile respondents 2000 TRANSPORT and
NISSAN each moved to dismiss the complaint for failure to state a cause
of action and for improper venue and to lift the temporary restraining
order. After the parties were heard although the motions were still
pending, the trial court granted the writ of preliminary injunction which
barred MIAA from doing any of the acts earlier restrained.
Respondents 2000 TRANSPORT and NISSAN assailed before the Court
of Appeals the issuance of the writ of preliminary injunction. The appellate
court issued a temporary restraining order prohibiting the enforcement of
the writ of preliminary injunction.
Issue: WON trial court committed grave abuse of discretion?
Held: YES
Ratio: Indeed the determination of the winning bidders should be left to
the sound judgment of the MIAA which is the agency in the best position
to evaluate the proposals and to decide which bid would most
complement the NAIAs services. The Terms of Reference for Coupon
Taxi Service Concession observed, the professional transport service
plays a very important role in enhancing and maintaining a good image of
the country that will speak of trust, honesty, efficiency and modernity. In
this regard only the most advantageous bids would be selected on the
basis of the best bid offer in relation to the bidders existing facilities,

financial standing, organizational set-up, relevant experience, quality,

capability and kind of services offered. The exercise of such discretion is
a policy decision that necessitates such procedures as prior inquiry,
investigation, comparison, evaluation and deliberation. This process
would necessarily entail the technical expertise of MIAA which the courts
do not possess in order to evaluate the standards affecting this matter
courts, as a rule, refuse to interfere with proceedings undertaken by
administrative bodies or officials in the exercise of administrative
functions. This is so because such bodies are generally better equipped
technically to decide administrative questions and that non-legal factors,
such as government policy on the matter, are usually involved in the
decisions.
Nor would the allegations, even if admitted to be true, compel a
permanent restraint on the execution of the respective concession
contracts of respondents 2000 TRANSPORT and NISSAN with MIAA. In
Bureau Veritas v. Office of the President we ruled that the discretion to
accept or reject a bid and award contracts is vested in the Government
agencies entrusted with that function. Furthermore, Sec. 1 of PD 1818
(the governing statute in all the relevant dates alleged in the complaint)
distinctly provides that no court in the Philippines shall have jurisdiction
to issue any restraining order, preliminary injunction in any case, dispute,
or controversy involving any public utility operated by the government,
including among others public utilities for the transport of the goods or
commodities to prohibit any person or persons from proceeding with, or
continuing the execution or implementation of any such project, or the
operation of such public utility, or pursuing any lawful activity necessary
for such execution, implementation or operation. We stress that the
provision expressly deprives courts of jurisdiction to issue injunctive writs
against the implementation or execution of contracts for the operation of a
public utility. Undeniably, both respondent MIAA and the concession
contracts it wanted to bid out involve a public utility which would therefore
enjoy the protective mantle of the decree.
Grave abuse of discretion implies a capricious, arbitrary and whimsical
exercise of power. The abuse of discretion must be patent and gross as
to amount to an evasion of positive duty or to a virtual refusal to perform a
duty enjoined by law, as not to act at all in contemplation of law, or where
the power is exercised in an arbitrary and despotic manner by reason of
passion or hostility. In the case at bar, the allegations of G & S in the civil
case do not call for the assumption that MIAA accepted the bid of 2000
TRANSPORT and NISSAN and declared them winning bidders with
grave abuse of discretion.

SESSION 3 GOVERNMENT CONTRACTS11