BOLINAO SECURITY AND INVESTIGATION SERVICE, INC., REPRESENTED BY ITS PRESIDENT, URBANO S. CAASI, JR., PETITIONER-APPELLANT, VS. SECRETARY & IABAC, DEPARTMENT OF BUDGET AND MANAG…
GALAPATE-LAGUILLES, J:
The rationale behind the requirement of a public bidding, as a mode of awarding government contracts, is to ensure that the people get maximum benefits and quality services from the contracts. More significantly, the strict compliance with the requirements of a public bidding echoes the call for transparency in government transactions and accountability of public officers. Public biddings are intended to minimize occasions for corruption and temptations to abuse of discretion on the part of government authorities in awarding contracts. [1]
This is an appeal from the Decision dated May 23, 2012 of the Regional Trial Court, National Capital Judicial Region, Branch 21 in Civil Case No. 09-121498 for Petition for Certiorari and Prayer of Temporary Restraining Order and Damages[2] dismissing the complaint and the counterclaim of petitioner-appellant Bolinao Security and Investigation Services.
The facts as culled from the records are as follows:
On November 20, 2008, the Land Bank of the Philippines (LBP) entered into a Memorandum of Agreement (MOA) with the Procurement Service (PS), an attached agency of the Department of Budget and Management (DBM), for the procurement of a one-year contract for the former’s security services.[3] On January 21, 2009, the PS received the Agency Procurement Request No. 00295 dated January 13, 2009 from the LBP.[4]
The PS Inter-Agency Bids and Awards Committee (PS-IABAC), advertised an “Invitation to Apply for Eligibility and to Bid” in the Philippine Star, as well as in the Philippine Government Electronic Procurement System (PHILGEPS) website to notify the public and all interested parties of the interest of the bank to procure a one-year security service.[5] Bolinao Security and Investigation Services (Bolinao) submitted its bid for Lots 1 and 2, with an approved budget for the Contract (ABC) amounting to twenty four million four hundred fifty two thousand four hundred seventy two pesos (P24, 252, 472.00) and twenty nine million five hundred thirty nine thousand two hundred ninety six pesos (P29, 539, 296.00), respectively.[6]
A Pre-bid Conference was held on January 27, 2009 at the PS Conference Room under Public Bidding no 09-011.
On January 28, 2009, the PS-IABAC issued a Supplemental/Bid Bulletin No.1 or the “Notice of Implementation of Advance Eligibility Submission and Re-scheduling of the deadline of Submission and Opening of Bids”[7], the relevant portions provide as follows:
As agreed upon during the pre-bid conference held on January 27, 2009 an Advance Eligibility Submission for Class “A” Eligibility documents shall be entertained by the Inter-Agency Bids and Awards Committee on February 3, 2009, 9:00 AM to 12:00 PM. For purposes of the “advance” submission, the following Class “A” Eligibility Documents may be submitted:
1. Department of Trade and Industry (DTI) business name registration for sole proprietorships; OR
Securities and Exchange Commission (SEC) registration certificate for corporations and partnerships;
xxx
In case a bidder who availed of the advance eligibility submission scheme fails to submit any of the requirement and no Certificate is issued in its favor, said bidder may still participate in the bidding but it shall be required to submit all the Eligibility Requirements on the deadline of the submission of bids which is hereby moved to February 17, 2009, 9:30 AM.
xxxx
(signed)
EDUARDO P. OPIDA
Chairman, IABAC
On January 29, 2009, PS-IABAC issued a Supplemental/Bid Bulletin No. 2[8] which states:
Public Bidding No. 09-011
ONE YEAR CONTRACT FOR SECURITY SERVICES OF THE
LAND BANK OF THE PHILIPPINESDETAILED BREAKDOWN OF THE APPROVED BUDGET FOR
THE CONTRACT (ABC) AND DISTRIBUTION OF
GUARDS PER LBP BRANCHAttached herewith are the detailed breakdown of the ABC and the distribution of Guards per LBP Branch.
The Supplemental/Bid Bulletin No. 2 shall be considered an integral part of the Bidding Documents.
(signed)
EDUARDO P. OPIDA
Chairman, IABAC
On February 3, 2009 the First Eligibility Check was conducted. Then on February 9, 2009, PS-IABAC held the Second Eligibility Check wherein the following prospective bidders were given a Certificate of Eligibility: Integrated Safeguard Security Corporation, Odin Security Agency, Inc., Superguard Security Corporation, Nationwide Security and Allied Services, Inc., and ACD Security Services, Inc. for passing the partial eligibility check.
The opening of the bids scheduled last February 17, 2009 did not materialize and a notice of postponement was seasonably issued on even date by DBM Secretary Rolando G. Andaya, Jr. (Sec. Andaya).[9] To maintain the integrity of the bidding process, all the submitted bids were placed in several boxes, sealed and duly initialed by all the concerned parties. On March 3, 2009, Sec. Andaya issued an Office Order designating Asst. Secretary Evelyn V. Guerrero, as Chairperson, IABAC, Exec. Dir. Ruby U. Alvarez, Alternate Chairperson, IABAC and Director Mary Grace R. Chua, OIC, Executive Director, PS.[10]
On March 10, 2009, the PS-IABAC issued a Supplemental/Bid Bullletin No. 6 re: Schedule of Opening of Bids on March 18, 2009, 10:00 AM at the DBM Conference Room, DBM Bldg, IV, (Arcache) General Solano cor. Nepomuceno Streets, San Miguel Manila.[11]
On March 18, 2009, the Opening of the Bids was conducted. Bolinao was found to be ineligible on the ground that it failed to submit its SEC Registration Certificate. On March 27, 2009, the PS-IABAC issued a Notice of Evaluation Results to Lockheed Detective informing also the latter that it found its submitted bid proposals for Lot 1 and Lot 2, to be the lowest calculated and responsive bid.[12]
On March 27, 2009, PS-IABAC received Bolinao’s Motion for Reconsideration dated March 19, 2009. On March 31, 2009, the Motion for Reconsideration of Bolinao was denied by the PS-IABAC thru Atty. Ruby U. Alvarez, Alternate Chairman PS-IABAC in a letter of even date.[13] Pertinent portion of the letter states and We quote:
Dear Atty. Carpio:
This has reference to the request for reconsideration that you filed pertaining to the Notice of Ineligibility issued by the Procurement Service Inter-Agency Bids and Awards Committee (IABAC) on account of Bolinao Security and Investigation Agency’s failure to submit the SEC Registration Certificate as called for in requirements in our Bid Documents for Public Bidding No. 09-011 for the provision of ONE YEAR SECURITY SERVICES FOR THE LAND BANK OF THE PHILIPPINES.
Kindly be informed that under Section 23.2 of the Implementing Rules and Regulations Part A (IRR-A) of Republic Act 9184,14 completeness of eligibility submissions shall be determined using a non-discretionary “pass-fail” criteria wherein bid submissions are simply checked against the requirements stipulated in our Bid Documents or in Supplemental Bid Bulletins issued for the project.
As such, we are constrained to deny your request for reconsideration.
xxxx
Should you wish to further pursue this motion, kindly be advised to abide by Section 55 of the IRR-A by filing a protest, in the form of a verified position paper, before the Secretary of Budget and Management and payment of non-refundable protest fee.
xxxx (emphasis Ours)
Bolinao received the said denial last April 2, 2009 and on April 7, 2009 it filed a protest in a form of verified position letter and paid a non-refundable protest fee of P295,392.00.
On May 8, 2009, Sec. Andaya issued a resolution[15] denying Bolinao’s protest ratiocinating in part:
At the outset, it bears stressing that while Bolinao Security participated in Lots 1 and 2 of the subject public bidding, it paid only a protest fee of P295,392.96, which is exactly 1% of the Approved Budget for the Contract (ABC) of Lot 2. Section 55 of Republic Act (R.A.) No. 9184 clearly provides that Decisions of the Bids and Awards Committee (BAC) may be protested by filing a verified position paper and paying a non-refundable protest fee, which under Section 55.1, Rule XVII of its Implementing Rules and Regulations (IRR) is 1% of the ABC.
xxx
It is settled that a SEC Registration Certificate is among the legal documents required to be submitted for the eligibility of a prospective bidder. Even Bolinao Security admits this, but suggests that its Amended AI constitutes substantial compliance with an eligibility requirement. However, every prospective bidder should be minded that under the IRR, the BAC is constrained to determine their eligibility through a non-discretionary “pass/fail” criteria.
Simply put, the BAC must examine the documents submitted by every prospective bidder and from its face determine compliance with those required under the rules. And when the rules require a SEC Registration Certificate, the same ought to have been submitted, otherwise, any non-complying bidder shall be considered “ineligible”.
On May 21, 2009 a Notice of Award was issued in favor of Lockheed for Lots 1 and 2 for having submitted the lowest calculated and responsive bid under Public Bidding No. 09-01116. On May 26, 2009, Lockheed, thru its Chairman, President and CEO Col. Esteban Uy, signified its conformity to the Notice of Award.[17]
With the advent of the forging of the Security Service Contract between Lockheed and the bank, Bolinao’s extended security service contract with the bank from January 1, 2009 to June 30, 2009 was considered expired pursuant to the 3rd Whereas Clause found in the Extension of Security Service Agreement dated February 24, 2009[18]. The said clause states and We quote:
WHEREAS, the last six (6) months extension of Security Service Agreement of NCR, South of Pasig will expire on December 31, 2008, but in the exigency of the service and in the meantime that the BANK is completing its bidding procedure and processes for security services, the BANK approved the extension of its Security Service Agreement with the AGENCY for a period of six (6) months beginning January 01, 2009 to June 30, 2009 subject to automatic expiration within the said period upon engagement of the winning bidders after the completion of the bidding process for security services. (supplied)
Feeling aggrieved, Bolinao filed a Petition for Certiorari before the court a quo assailing the resolution of Sec. Andaya last May 28, 2009. The court a quo, on May 23, 2012, rendered the assailed Decision dismissing the said Petition ratiocinating in this wise and We quote:
When two (2) parties bind themselves in accordance with law to execute a contract for their purpose and stipulate well on the terms and conditions that both of them would clearly recognize, acknowledge and respect their respective obligations or undertakings to be duly performed and tackled faithfully any act of deviation or breach thereof by anyone of them when what is expected is not satisfied or fulfilled to the detriment or prejudice of either one will mutually emits some kind of bad faith, negligence or default. If and when such bad occurrence shall obtain and a case is instituted such as this, the Court is obliged to determine who of the parties became at fault, negligent or remiss.
Art. 1370 of the Civil Code states that “if the terms of the contract are plain and leaves no room for doubt as to the intention of the contracting parties, the literal meaning must control.” The stipulations therefrom should be given effect by the Court.
Considering that the contract ends and the same was not renewable, petitioner is not entitled to the reliefs prayed for.
WHEREFORE, premises considered, the Court hereby orders the dismissal of the complaint and counterclaim.
SO ORDERED.
Undeterred, Bolinao is here before Us maintaining that its disqualification was patently erroneous and that the protest fee should not be arbitrary and confiscatory. It thus prays that it be reinstated as a qualified bidder and that the 1% protest fee be nullified.
We find the appeal unmeritorious.
Preliminarily, We resolve to address certain matters before delving into the crux of the controversy.
Admittedly, the instant case is already moot and academic considering that the security contract between Lockheed Detective and Watchman Agency and the Landbank of the Philippines was already consummated.[19] However, We are cognizant of the fact that Courts will decide cases, otherwise moot and academic, if: first, there is a grave violation of the Constitution; second, the exceptional character of the situation and the paramount public interest is involved; third, when constitutional issue raised requires formulation of controlling principles to guide the bench, the bar, and the public; and fourth, the case is capable of repetition yet evading review.[20] We observe the existence of the fourth exception, thus it is deemed wise that the merits of the appeal be still resolved as it impacts on the procurement system of the government of goods and services over which every citizen has a stake.
Bolinao insists that the DBM unceremoniously disqualified it as one of the bidders for the security contract of the LBP because it allegedly failed to submit the required documents as provided by IRR-A of RA 9184. Bolinao strongly contends that in submitting the SEC-approved Articles of Incorporation, it already substantially complied with the requirements of the law.
We are not persuaded.
Section 23, Article VIII of RA 9184 is clear:
ARTICLE VIII RECEIPT AND OPENING OF BIDS
SEC. 23. Eligibility Requirements for the Procurement of Goods and Infrastructure Projects. – The BAC or, under special circumstances specified in the IRR, its duly designated organic office shall determine the eligibility of prospective bidders for the procurement of Goods and Infrastructure Projects, based on the bidders’ compliance with the eligibility requirements within the period set forth in the Invitation to Bid. The eligibility requirements shall provide for fair and equal access to all prospective bidders. The documents submitted in satisfaction of the eligibility requirements shall be made under oath by the prospective bidder or by his duly authorized representative certifying to the correctness of the statements made and the completeness and authenticity of the documents submitted.
A prospective bidder may be allowed to submit his eligibility requirements electronically. However, said bidder shall later on certify under oath as to correctness of the statements made and the completeness and authenticity of the documents submitted. (emphasis Ours)
Parenthetically, Section 23.6 of the IRR-A states:
Sec. 23.6. Eligibility Check for Procurement of Goods xxx.
The determination of eligibility shall be based on the submission of the following documents to the BAC, utilizing the forms prepared by the BAC and using the criteria in Section 23.11 of this IRR-A:
- Class “A” Documents –
Legal Documents
a) Department of Trade and Industry (DTI) business name registration or SEC registration certificate, whichever may be appropriate under existing laws of the Philippines; (underscoring Ours)
We find it odd that Bolinao did not bother to procure the necessary SEC Registration Certification which could have been easily obtained from the SEC. Interestingly, Bolinao, which admittedly had been the LBP’s security provider for quite some time, was, no doubt, well aware of the bidding requirements, it not being a first-timer or a stranger to those activities. It could not have escaped its attention that a registration certificate issued by the SEC is one of the requirements for its eligibility for the bidding process.[21] It thus bewilders this Court why a company like Bolinao, which obviously is not a newcomer in its field of business, failed to secure a basic requirement which it knew all along will be required. Bolinao cannot feign ignorance of the non-discretionary “pass/fail” criteria imposed by the law itself which shows that a prospective bidder can only be assessed based on its compliance with the basic requirements. In short, Bolinao was well aware that it will be screened according to its submission or non-submission of the required documents.[22] More importantly, the BAC has no discretion whether or not the submitted document or documents substantially complied with the rules or law. The underscoring or emphasis highlights the fact that the DBM-PS-IABAC will merely determine whether or not the prospective bidder submitted the required documents required by the rules. Unfortunately for Bolinao, it simply submitted the wrong document. As correctly echoed by Sec. Andaya in his May 8, 2009 Resolution[23]:
The DBM-PS-IABAC is correct in declaring Bolinao Security ineligible to bid in the subject bidding.
It is settled that a SEC Registration Certificate is among the legal documents required to be submitted for the eligibility of a prospective bidder. Even Bolinao Security admits this, but suggests that its Amended AI constitutes substantial compliance with an eligibility requirement. However, every prospective bidder should be minded that under the IRR, the BAC is constrained to determine their eligibility through a non-discretionary “pass/fail” criteria.
Simply put, the BAC must examine the documents submitted by every prospective bidder and from its face determine compliance with those required under the rules. And when the rules require a SEC Registration Certificate, the same ought to have been submitted, otherwise, any non-complying bidder shall be considered “ineligible”.
Contrary to Bolinao Security’s supposition, the non-discretionary “pass/fail” criteria for the eligibility requirements is precisely to provide fair and equal access to all prospective bidders thereby ensuring competitive bidding, as espoused under R.A. No. 9184. In the case at hand, the DBM-PS-IABAC has no authority to evaluate the submitted Amended AI since on its face the same is clearly not the SEC Registration Certification prescribed in the IRR. Thus, the DBM-PS-IABAC is constrained to rate Bolinao Security as having failed this requirement.
It may also be pointed out that the use of Bolinao Security’s amended AI as basis of its previous contract with the LBP has no bearing on the issue at hand. The previous transactions of Bolinao Security with LBP cannot be construed as a waiver of the eligibility requirements in a public bidding. Otherwise, the essence of competitive bidding would be for naught. (emphasis Ours)
Besides, as can be gathered further from the records, it is clear that prior to the opening of the bid documents of the prospective bidders, a pre-bid conference was conducted for purposes of clarifying or explaining the requirements, terms and conditions of the bidding process. We note that Bolinao, like all the other participating bidders, received the January 28, 2009, “Notice of Implementation of Advance Eligibility Submission and Re-scheduling of the deadline of Submission and Opening of Bids”[24] wherein it was indicated, among others, that only a DTI business name registration certificate or SEC registration certificates suffices. The amended Articles of Incorporation, as implored by Bolinao, is obviously not included in the said Notice. Bolinao should have been forewarned from that instance that the document it was supposed to submit was the SEC Registration Certificate and not its amended Articles of Incorporation. Yet, for reasons only known to it, Bolinao proceeded still to submit the wrong document.
Accordingly, the disqualification of Bolinao was justified and in accordance with the applicable rules of the subject bidding. We add, too, that Bolinao’s disqualification was merely for that particular bidding on March 18, 2009. Its qualification (or disqualification) from future government biddings, including with the LBP or with other government agencies for that matter, remains conditional depending upon its compliance with the applicable bidding rules and regulations.
As regards to Bolinao’s position that the protest fees are exorbitant and confiscatory, this Court will not pass judgment thereon.
It is a well-settled doctrine that courts will not pass upon a constitutional question unless it is the lis mota of the case, or if the case can be disposed on some other grounds.[25] The petitioner must be able to show that the case cannot be legally resolved unless the constitutional question raised is determined.[26] This requirement is based on the rule that every law has in its favor the presumption of constitutionality;[27] to justify its nullification, there must be a clear and unequivocal breach of the Constitution, and not one that is doubtful, speculative, or argumentative. Moreover, it has been emphasized in a number of cases that the question of constitutionality will not be passed upon by the Court unless it is properly raised and presented in an appropriate case at the first opportunity.[28]
Here, the resolution of the case does not hinge squarely on the question of whether or not the protest fee was indeed exorbitant. The disqualification of Bolinao, as We said earlier, was correct since it submitted the wrong document. The exorbitance of the protest fee is therefore not the lis mota of this case. Besides, the issue of the protest fee was obviously an afterthought considering that Bolinao did not immediately question the same.[29] If at all, Bolinao raised the said issue only after Sec. Andaya denied its protest “for failing to file the necessary protest fee for Lot 1.”[30]
Nevertheless, even if We rule on the matter, We find the contention of Bolinao to be unmeritorious. To Us, the protest fees are relatively higher compared to the appeal fees of the regular courts, for good reason. The implementation of important government projects as a matter of policy should never be delayed by a losing bidder to the prejudice of public service. If the protest fees are relatively low, the concerned BAC will be bombarded with multiple protests that will eventually prevent it from proclaiming the winning bidder, thus effectively delaying the project concerned. More importantly, due deference should be given to the government agencies mandated by law to set the rates of the protest fees.[31]
WHEREFORE, premises considered, the appeal is DENIED.
SO ORDERED.
Punzalan Castillo, M.P., Chairperson and Macalino, F.S., JJ., concur.
[1] Manila International Airport Authority and Antonio P. Gana v. Olongapo Maintenance Services, Inc. and Triple Crown Services, Inc. , G.R. Nos. 146184-85 , January 31, 2008 and consolidated cases
[2] Rollo, pp. 51-53
[3] See Memorandum of Agreement, Original Records Volume II, pp. 428-431
[4] Original Records, Vol. II, pp. 433-434
[5] Id. pp. 435-436
[6] Id. p. 433
[7] Id. pp. 437-439
[8] Id., pp. 440-458
[9] Id., p. 484
[10] Id., p. 485
[11] Id., p. 486
[12] Original Records Vol. II, pp. 489-490
[13] Original Records Vol. 1, p 42
[14] RA 9184 (AN ACT PROVIDING FOR THE MODERNIZATION, STANDARDIZATION AND REGULATION OF THE PROCUREMENT ACTIVITIES OF THE GOVERNMENT AND FOR OTHER PURPOSES) otherwise known as the Government Procurement Reform Act which took effect last January 26, 2003
[15] Original Records Vol. 1, pp. 172-174
[16] Original Records, Vol II, p. 492
[17] Id.
[18] Rollo, p. 68
[19] Original Records Volume I, pp. 176-179
[20] See David, et. al. v. Gloria Macapagal-Arroyo, G.R. No. 171396 , May 3, 2006 and consolidated cases
[21] Original Records, Vol. I, p. 16; par. 2 Statements of Facts of Bolinao’s Verified Position Paper
[22] See Sec. 23.2, Rule VIII IRR-A of RA 9184
23.2 In relation to Section 25 on submission and receipt of bids, and subject to the provisions of Section 21.3 of his IRR-A, the BAC shall determine if each prospective bidder is eligible to participate in the bidding by examining the completeness of each prospective bidder’s eligibility requirements or statements against a checklist of requirements, using a non-discretionary “pass/fail” criteria, as stated in the Invitation to Apply for Eligibility and to Bid, and shall be determined as either “eligible” or “ineligible.” If a prospective bidder submits the specific eligibility document required, it shall be rated “passed” for that particular requirement, In this regard, failure to submit a requirement, or an incomplete or patently insufficient submission, shall be considered “failed” for the particular eligibility requirement concerned. If a prospective bidder is rated “failed” in any of the eligibility requirements, it shall be considered ineligible to participate in bidding, and the BAC shall mark the set of eligibility documents of the prospective bidder concerned as “ineligible”. In either case, the markings shall be countersigned by the BAC chairperson or duly designated authority.”
[23] Supra note 15
[24] Supra note 5
[25] See Mirasol v. Court of Appeals, 351 SCRA 44, 53-54, February 1, 2001, citing numerous cases
[26] See Garcia v. Executive Secretary, G.R. No. 157584, April 2, 2009
[27] See Romualdez v. Sandiganbayan, G.R. No. 152259, July 29, 2004, 435 SCRA 371.
[28] See ABS-CBN Broadcasting Corporation v. Philippine Multi-Media System, Inc., G.R. Nos. 175769-70, January 19, 2009
[29] Supra note 15, par. 1 of Sec. Andaya’s resolution
[30] Supra note 15, par. 2 of Sec. Andaya’s resolution
[31] The Government Procurement Policy Board (GPPB), by virtue of Sec. 63, Article XX of RA 9184, was mandated to promulgate the IRR