REYNALDO M. JACOMILLE, PETITIONER, VS. HON. JOSEPH EMILIO A. ABAYA, IN HIS CAPACITY AS SECRETARY OF TRANSPORTATION AND COMMUNICATIONS (DOTC); ATTY. ALFONSO V. TAN, JR., IN HIS C…

Jacomille versus Abaya

The Case

This is a taxpayer's petition for certiorari and prohibition brought by Reynaldo M. Jacomille against the Secretary of Transportation and Communications, the Bids and Awards Committee officials, and the winning joint venture, assailing the legality of the procurement of the Land Transportation Office Motor Vehicle License Plate Standardization Program. The petitioner, a registered vehicle owner and taxpayer, claims that the project was bidded out and awarded without adequate budgetary appropriation, without the required Multi-Year Obligational Authority from the Department of Budget and Management, and without review by the Investment Coordination Committee of the National Economic Development Authority. The case matters because it is the Court's template on taxpayer standing, on the moot and academic principle and its exceptions, and on how the Government Procurement Reform Act governs the funding and timing of a multi-billion peso government contract.

Procedural History

This was an original action in the Supreme Court. The petitioner went directly to the Court through a petition for certiorari and prohibition under Rule 65 of the 1997 Revised Rules of Civil Procedure, with a prayer for a temporary restraining order, assailing the legality of the procurement. There were no proceedings in a trial court or in the Court of Appeals. The Office of the Solicitor General filed its comment for the public respondents, and the private respondent joint venture filed its own comment. The Court then resolved the procedural objections on mootness and legal standing before passing upon the substantive merits.

Facts

The Department of Transportation and Communications, through its line agency the Land Transportation Office, formulated the Motor Vehicle License Plate Standardization Program to supply new license plates for both old and new vehicle registrants. On the twentieth of February 2013, the Department published an Invitation to Bid stating that it intended to apply the sum of Three Billion Eight Hundred Fifty One Million Six Hundred Thousand One Hundred Pesos, drawn from the General Appropriations Act, as the Approved Budget for the Contract. The bid documents were later amended to split the project into two lots, one for motor vehicle plates and one for motorcycle plates.

After several pre-bid conferences and resettings, the bids were opened in May 2013. Of eight interested groups, only two were found eligible, and the joint venture of J. Knieriem B.V. Goes and Power Plates Development Concepts, Incorporated submitted the lowest offers for both lots. On the twenty-second of July 2013, the Department issued the Notice of Award to that joint venture, which signified its conforme on the eighth of August 2013.

The contract signing was delayed. On the seventeenth of February 2014, the Department issued the Notice to Proceed, and on the twenty-first of February 2014 the contract was finally signed and approved by Secretary Abaya. Meanwhile, the Senate Committee on Public Services conducted an inquiry into the reported delays, and the first batch of plates was delivered in April 2014. The petitioner then filed this suit in May 2014, contending that when the project was bidded out, the General Appropriations Act of 2013 carried only One Hundred Eighty Seven Million Two Hundred Ninety Three Thousand Pesos for the plate-making project, and that the full budget came only with the General Appropriations Act of 2014.

Issues

• Whether or not the petition has been rendered moot and academic by the enactment of the General Appropriations Act of 2014, and if so, whether the Court should still resolve the substantive issues.
• Whether or not the petitioner has legal standing to file the suit as a taxpayer raising an issue of transcendental importance.
• Whether or not the procurement exceeded the mandatory periods prescribed by the Government Procurement Reform Act and its Implementing Rules and Regulations.
• Whether or not the project had adequate budgetary appropriation when the bidding was commenced.
• Whether or not the procuring entity was required to obtain a Multi-Year Obligational Authority from the Department of Budget and Management.
• Whether or not the project had to be referred to the Investment Coordination Committee of the National Economic Development Authority for review and approval.

Applicable Provisions

Section 38 of the Government Procurement Reform Act, on the periods for procurement, provides:

The procurement process for goods and infrastructure projects shall be completed within three (3) months from the date of advertisement of the invitation to bid.

The petitioner invoked this provision to show that the notice of award and the contract signing came far beyond the prescribed periods.

Section 33 of the General Provisions of the General Appropriations Act of 2009, substantially re-enacted in the General Appropriations Act of 2013, provides:

In the implementation of multi-year projects, no agency shall enter into a multi-year contract without a Multi-Year Obligational Authority issued by the Department of Budget and Management for the purpose.

This is the provision on which the petitioner anchored his claim that the five-year supply and delivery of plates required a Multi-Year Obligational Authority.

Ruling

On the first issue, the Court held that the petition had indeed been rendered moot, because the General Appropriations Act of 2014 appropriated Four Billion Eight Hundred Forty Three Million Seven Hundred Fifty Three Thousand Pesos for the project before the contract was signed, and the Court cannot question the wisdom of Congress in appropriating that budget. Nevertheless, the Court resolved the merits, because the moot and academic principle is not a magical formula, and courts will decide otherwise moot cases where there is a grave violation of the Constitution, where the exceptional character of the situation and paramount public interest are involved, where controlling principles must be formulated to guide the bench, the bar, and the public, or where the case is capable of repetition yet evading review. The Court found paramount public interest present, since the project was nationwide and involved billions in taxpayers' money, and found the act complained of capable of repetition because procurement is regularly undertaken by government agencies.

On the second issue, the Court held that the petitioner had standing. Applying the determinants of transcendental importance, namely the character of the funds involved, the presence of a clear case of disregard of a statutory prohibition, and the lack of any other party with a more direct and specific interest, the Court found all three present. It also sustained the taxpayer's suit, holding that the project clearly involved the expenditure of public funds even if registrants ultimately pay for the plates, because the bid documents and the contract show that the government bears the burden of paying for the project.

On the third issue, the Court held that the periods were not strictly mandatory. It noted that the law itself speaks of completion within a reasonable period, and that the delay was caused by the halt in signing while the budget question was being resolved, so that the procurement was concluded within a reasonable time.

On the fourth issue, the Court held that the law does not require the allotment under the General Appropriations Act to be equivalent to the Approved Budget for the Contract at the time the procurement begins, and that the full appropriation under the General Appropriations Act of 2014 cured the deficiency before the contract was perfected.

On the fifth issue, the Court held that no Multi-Year Obligational Authority was required, because only a multi-year contract requires one, and a project whose appropriation is available in full in a single year is not such a contract.

On the sixth issue, the Court held that referral to the Investment Coordination Committee was not required, because the project involved neither a capital investment nor implementation through public-private partnership, as confirmed by the National Economic Development Authority.

Doctrine

First, a taxpayer has standing to sue where the case involves the illegal disbursement of public funds, and the Court adopts a liberal stance where the determinants of transcendental importance are present. Second, the moot and academic principle admits of exceptions, and the Court will resolve an otherwise moot case involving paramount public interest or one capable of repetition yet evading review. Third, the periods in the procurement law are directory in the sense that completion within a reasonable period suffices. Fourth, the Approved Budget for the Contract need not equal the appropriation at the moment the bidding starts, so long as the project is fully funded before the contract is signed. Fifth, a Multi-Year Obligational Authority is required only for a multi-year contract, not for a project fully funded in one fiscal year, under the rule that no agency shall enter into a multi-year contract without a Multi-Year Obligational Authority issued by the Department of Budget and Management for the purpose. Sixth, projects that involve neither capital investment nor public-private partnership are outside the review of the Investment Coordination Committee.

Disposition

The petition was dismissed, and the procurement and award of the Motor Vehicle License Plate Standardization Program were upheld as legal.

Remember This

Memorize the line that the moot and academic principle is not a magical formula that can automatically dissuade the courts from resolving a case, and that a Multi-Year Obligational Authority is required only for a multi-year contract. Examiners use this case for taxpayer standing, the exceptions to mootness, and the funding rules under the procurement law.