REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE AIR TRANSPORTATION OFFICE AND ITS PRE-QUALIFICATION, BIDDING AND AWARD COMMITTEE OF THE DEPARTMENT OF TRANSPORTATION AND COMMUNIC…

This petition for review on certiorari seeks to reverse
the (a) Decision dated April 17, 1990 (pp. 72­-76, Rollo)
of respondent Judge Ignacio C. Capulong, in Civil
Case No. 90-173, directing the Air Transportation Office (ATO) and its
Prequalification, Bidding and Award Committee (PBAC) to immediately convene or
reconvene and to read and consider the Inter Technical Pacific Phil., Inc.’s
bid to furnish the necessary goods and services for works under the Nationwide
Air Navigation Facilities Modernization Project Phase II of the Air
Transportation Office of the Department of Transportation and Communications;
(b) the Order dated May 22, 1990 (p. 77, Rollo) which
denied petitioner’s motion for reconsideration of the said decision; and (c)
Order dated February 12, 1990 (pp. 78-80, Rollo)
which earlier granted Inter Technical Pacific Inc.’s petition for the issuance
of a writ of preliminary injunction.

The facts are as follows:

On July 26, 1989, the Air Transportation Office (ATO for short)
and its Prequalification, Bidding and Award Committee (PBAC for short) publicly
invited prequalified bidders to furnish the necessary
goods and services for works under the Nationwide Air Navigation Facilities
Modernization Project Phase II, a government infrastructure project financed
from proceeds of a loan (PH-P72) from the Overseas Economic Cooperation Fund of
Japan (pp. 81-88, Rollo).  Inter Technical Pacific, Inc. (INTER
TECHNICAL for short), a Filipino contractor, prequalified
as a bidder and submitted its sealed bidding documents contained in a set of
one (1) original and eight (8) copies in bookbound
form in six (6) volumes.

The bidding was conducted by the PBAC on November 10, 1989.  The PBAC informed the public that only four
(4) prequalified bidders had submitted their bids and
then announced that the approved government agency estimate for the project was
Eight Hundred Fifty Nine Million Four Hundred Seventy Two Thousand Seventy Four
Pesos and Fifty Centavos (P859,472,074.50). 
After the opening, examination and evaluation of the bids, the PBAC read
the bids of the prequalified bidders (p. 73, Rollo) as follows:

BRITISH IAL                                             P916,731,100.42

ISRAELI KOORTRADE                          P954,536,621.05

JAPANESE TOYO
MENKA                     P776,915,886.45

When INTER TECHNICAL’s bidding
documents were opened and examined, it was discovered that the entire set of
bidding documents and eight copies thereof did not contain a Form of Bid (see
copy pp. 186-187, Rollo).  The PBAC, allegedly upon the advice of the
assisting Japanese consultants in the committee, refused to read INTER TECHNICAL’s bid and rejected the same as “non complying.”

INTER TECHNICAL protested the action of the PBAC, explaining that
the Form of Bid was inadvertently left in the office; that its bid price was
clearly spelled out in the bidding documents; that its bid was accompanied by a
bid bond attached to the documents; that it complied with all the requirements
and that the “Form of Bid” was a mere formality which can be
rectified through cursory reading of the bidding documents it submitted; that
it is willing to accomplish right then and there the “Form of Bid”
and fill in the data required without varying the data or figures already
declared in the bidding documents submitted.

INTER TECHNICAL’s authorized
representative then publicly informed PBAC that its bid was Six Hundred Seven
Million One Hundred Sixty Nine Thousand and Four Hundred FORTY-FOUR PESOS and
FIFTY CENTAVOS (P607,169,444.50).

Despite INTER TECHNICAL’s plea, the
PBAC adjourned the proceedings.  INTER
TECHNICAL appealed for reconsideration to the ATO, PBAC and the Secretary of
Transportation and Communications, attaching in its letters of appeal the duly
accomplished “Form of Bid,” but all were not acted upon.

ATO, for its part, referred the matter to the Department of
Justice which in its Opinion dated January 10, 1990 (pp.87-89, Rollo) ruled that INTER TECHNICAL bid was invalid because
the Form of Bid is an essential bidding requirement embodying vital provisions,
namely:  1) an agreement to be bound by
his bid; 2) the obligation to submit a performance guarantee; 3) the amounts of
his bid bond, performance bond, and amount of third party insurance; 4)
respective periods of commencement of works, maintenance and completion; and 5)
authority of the person signing.  As
legal basis for the ruling, the Secretary of Justice cited paragraph 12.2 of
the “Instructions to Bidders” which states:  “Bids not fully complying with all the
requirements shall be disqualified,” and Rule IB 2.8 of the Implementing
Rules of Presidential Decree No. 1594 which provides that a Bid Form is part of
the contract for the project.

On January 22, 1990, INTER TECHNICAL filed a complaint for
specific performance, mandatory and prohibitory injunction with prayer for
preliminary injunction and restraining order against ATO and PBAC before the
Regional Trial Court, NCJR, Branch 134, Makati,
docketed as Civil Case No. 90-173, seeking the issuance of a writ of
preliminary injunction to enjoin PBAC from awarding the subject contract and
prayed that after trial, judgment be rendered ordering ATO and PBAC to read and
consider the bid of plaintiff and making the injunction, both prohibitory and
mandatory, permanent.  Upon filing of the
complaint, the court issued a temporary restraining order prayed for.

In their answer filed on February 13, 1990, ATO and PBAC alleged
that the Form of Bid is an indispensable bid document which is confirmed by the
Department of Justice; that due to the importance of this Form of Bid, the
failure to enclose this document in the set of submitted bidding documents will
nullify the bid as non-complying and it is as if no bid was submitted to be
considered or read.  By way of Special
and Affirmative Defenses, ATO and PBAC cited Presidential Decree No. 1818 which
deprives courts of jurisdiction to issue restraining orders, preliminary
prohibitory and mandatory injunctions in cases or controversies involving
infrastructure projects of the government; that the acceptance or rejection of
bids is within the sole discretion of PBAC and, therefore, may not be enjoined
by prohibitory or mandatory injunction, and finally, that INTER TECHNICAL’s complaint does not state a cause of action.

After hearing INTER TECHNICAL’s
petition for the issuance of a writ of preliminary injunction on January 29 and
February 2, 1990, respondent Judge Capulong issued an
Order dated February 12, 1990 granting the issuance of a writ of preliminary
injunction, thus, enjoining ATO and PBAC from awarding the contract to the
“second lowest bidder or whomsoever” until further orders from the
court.  Respondent Judge ruled that INTER
TECHNICAL submitted a bid bond and bidder’s bond which are indispensable to the
validation of a bid proposal, that the bid price was spelled out in the INTER TECHNICAL’s Summary of Schedule Proposal; and that the
tender of INTER TECHNICAL was the lowest and appeared to be the most beneficial
to the government; that the government of the Philippines will save
P252,302,630.00 with INTER TECHNICAL’s supposed bid,
and that not to read such bid will work injustice to INTER TECHNICAL (p. 78, Rollo).

On March 16, 1990, the Republic of the Philippines, represented
by the ATO and PBAC of the Department of Transportation and Communications,
filed with the Court of Appeals a petition for certiorari and
prohibition to nullify the Order dated February 12, 1990 issued by respondent
judge granting the petition of INTER TECHNICAL for the issuance of a writ of
preliminary injunction.  A supplemental
petition for injunction was thereafter filed on April 4, 1990 to enjoin respondent judge from exercising
jurisdiction in Civil Case No. 90-173 as it involves an infrastructure project
covered by P.D. 1818 and that the action in Civil Case No. 90-173 is in fact an
action for mandamus and mandamus does not lie against
discretionary acts of petitioner.

While the petition of the Republic was pending before the Court
of Appeals, respondent Judge rendered a decision dated April 17, 1990 in Civil Case No. 90-­173
directing ATO and PBAC to immediately convene or reconvene and to read and
consider INTER TECHNICAL’s bid (p. 72, Rollo).

INTER TECHNICAL, on the other hand, filed a manifestation/motion
dated April 26, 1990
informing the Court of Appeals that the Republic’s petition had become moot and
academic in view of the decision dated April
17, 1990 in Civil Case No. 90-173.

After filing on May 2, 1990 its motion for reconsideration of the
decision of April 17, 1990 in Civil Case No. 90-173 before the RTC of Makati, Branch 134, the Republic filed on May 4, 1990
before the Court of Appeals an urgent motion reiterating its prayer for the
issuance of a restraining order and writ of preliminary prohibitory injunction
as to respondent judge.  This was
followed on May 18, 1990 by another urgent motion for issuance of restraining
order and writ of preliminary prohibitory injunction stating therein that
respondent judge’s decision of April
17, 1990 had not yet become final. 
Both were not favorably acted upon by the Court of Appeals.

On May 22, 1990, respondent judge denied the motion for
reconsideration filed by the Republic in Civil Case No. 90-173.

The Republic then filed a motion to withdraw petition for certiorari
and supplemental petition with the Court of Appeals pursuant to its commitment
in its motion for extension of time within which to file petition for review on
certiorari with this Court.  Such
motion was granted by the Court of Appeals on July 29, 1990.

Hence, this petition.

After the required pleadings were filed by the parties, this
Court, in the resolution of October
23, 1990 (p. 257-A, Rollo), gave due
course to the petition for review on certiorari and required the parties
to submit their respective memoranda.  In
compliance therewith, the Republic filed its memorandum on December 4, 1990, and INTER TECHNICAL, on January 10, 1991.  The case was then submitted for
deliberation.  On April 26, 1991, the
Solicitor General filed an Urgent Motion for Early Resolution (p. 381, Rollo), manifesting that Acting Secretary Pete Nicomedes Prado of the Department
of Transportation and Communications urged him in a letter (p. 384, Rollo) to seek early resolution of the case because the
final disbursement by the Overseas Economic Cooperation Fund (OECF) of Japan
which is financing the Nationwide Air Navigation Facilities Modernization
Project Phase II, subject of this case, cannot be made later than May 30, 1991,
after which no further disbursement therefrom can be
made; that the government is exerting efforts to secure an extension of the
disbursement period for the loan agreement and thus, save the project but that
it foresees a considerable resistance from the lending institution; and that
construction of a new domestic terminal building can not commence unless the
Nationwide Air Navigation Facilities Modernization Project Phase II
materializes.  Such motion was noted in
the resolution of April 30, 1991.

Considering that We already have deliberated on the petition and
have reached a consensus on its merits favorable to the petitioner as well as
have assigned to this writer the task of making the opinion of the Court and in
order that the project of the government would not be prejudiced as time is of
the essence in this case, We issued a resolution dated May 30, 1991.  In this resolution, We granted the petition,
without prejudice to rendering an extended opinion in due course, and annulled
and set aside the respondent Judge’s Order dated February 12, 1990, his
decision dated April 17, 1990, his Order dated May 22, 1990 in Civil Case No.
90-173 as well as allowed the petitioner to proceed with the awarding of the
contract (p. 387, Rollo).

Indeed, a careful and in-depth study of the records constrains Us to reverse the judgment and orders of the respondent
court.

In this case, a controversy exists whether the failure of INTER
TECHNICAL to enclose in its bidding documents the duly accomplished and signed
Form of Bid is, under the circumstances of the case, a valid ground for the
PBAC of ATO to reject its bid to furnish the necessary goods and services for
works under the Nationwide Air Navigation Facilities Modernization Project
Phase II of the Air Transportation Office, Department of Transportation and
Communication.  The controversy gave rise
to the next question:  may the respondent
court step into the controversy by ordering the award and bidding committee to
reconvene and read INTER TECHNICAL’s bid when the
discretion to determine whether or not a bidder complies with the bidding
requirements lies with the said bidding committee.

Petitioner asserts that the Form of Bid is the central unifying
document containing the substantial legal requirements of the bid while the
other documents, like the summary of bid or the bid bond, merely support the
Form of Bid; that the Form of Bid is the document which authenticates and
summarizes the amounts on the Summary of Schedule Proposals; that in view of
the absence of a Form of Bid, INTER TECHNICAL in effect has not submitted a
bid, thus since there is no bid, there is no basis for claiming that INTER
TECHNICAL is the lowest bidder.

In support of its contention that the Form of Bid is a principal
document, petitioner cited the stipulations contained therein which the bidder agrees to do and undertake, thus:

1.  To undertake the work complete in conformity
with the abovementioned documents (Conditions of Contract, Technical Specifica­tions,
Bid Schedule and Drawings) for the specified sum (in foreign currency and peso);

2.  If bid is accepted, to commence the work
within 30 days (mobilization period) after receipt of the Employer’s Notice to
Commence Work and to complete and deliver the whole of the Works comprised in
the contract within 600 calendar days calculated from the last day of the
aforesaid period in which the Works are to be commenced;

3.  If bid is accepted, to submit a Performance
Guarantee with effectivity period to be specified in
a written advice to be made by ATO and PBAC, or, in the event that this guarantee
is deemed insufficient, sureties acceptable to ATO and PBAC from a bank to be
jointly and severally bound, for the faithful and satisfactory performance of
the contract.

4.  To abide by this Bid for a period of 120
calendar days from the date set for the opening of Bids and it shall remain
binding upon the (bidder) and may be accepted at any time before the expiration
of that period;

5.  Unless and until a formal Agreement is
prepared and executed, this Bid, together with the (agency’s) acceptance thereof,
shall constitute a binding contract between them;

6.  The understanding that the agency is not bound
to accept the lowest or any Bid the agency may receive.  (see Annex 1, Form
of Bid, p. 186, Rollo)

Without a duly accomplished Form of Bid submitted before the
opening of bids, petitioner argues that a prospective bidder will not be bound
by the foregoing stipulations. 
Consequently, for lack of a Form of Bid, INTER TECHNICAL was not bound
to complete the project for a specific compensation.

The arguments set forth by the petitioner are persuasive.  The Form of Bid, as technically used in this
case, contains the offer to undertake the works for as specified sum of money
expressed in foreign currency and Philippine peso and, it stipulates the terms
and conditions in the call for bid which the bidder, thru its duly authorized
signing representative, agrees to undertake and abide once the bid is accepted
by the PBAC.  Specifically, it is a
standard form made available to prequalified bidders
containing the bidder’s “offer to undertake the work complete in
conformity with the above-mentioned documents” – to wit:  Conditions of Contract, Technical
Specifications, Bid schedule and Drawings” -for specified sum of money,
one in foreign currency and the other in Philippine pesos.  In essence, a duly accomplished and signed
Form of Bid submitted to the bidding committee together with the written
acceptance by the government agency constitutes a binding preliminary contract
governing the relationship between the bidder and the government agency
concerned during the examination and evaluation period of the bid proposal
until the Notice of Award is given to and the Project Contract is executed by
the winning bidder.  If there is no duly
accomplished and signed Form of Bid submitted to the bidding committee, there
is nothing to accept on the part of the government agency.

Under Section 5 of Presidential Decree No. 1594 (June 11, 1978),
the law which prescribes the policies, guidelines, rules and regulations for
government infrastructure contracts, the contract may be awarded to the lowest
bidder whose bid as evaluated complies with all the terms and conditions in the
call for bid, thus:

“SEC. 5. Award and
Contract. – The contract may be awarded to the lowest prequalified bidder whose bid as evaluated complies with
all the terms and conditions in the
call for bid and is the most advantageous to the
Government.

To guarantee the faithful performance of the contractor, he shall,
prior to the award, post a performance bond, in an amount to be established in
accordance with the rules and regulations to be promulgated under Section 12 of
this Decree.

All awards and contracts duly executed in accordance with the
provisions of this Decree shall be subject to the approval of the Minister of
Public Works, Transportation and Communications, the Minister of Public
Highways, or the Minister of Energy, as the case may be.”

It is not disputed by petitioner that INTER TECHNICAL submitted a
Bid Bond in the form of an Irrevocable Domestic Standby Letter of Credit No.
SFM-L-027-89 in the amount not exceeding the Philippine peso equivalent of US
$800,000.00 issued on behalf of INTER TECHNICAL by the Philippine National Bank
in favor of ATO and PBAC.  However, a
careful examination of the records of the case reveals that the filing of said
Bid Bond together with the other bid documents does not constitute substantial
compliance with the stipulations contained in the Form of Bid under Presi­dential
Decree No. 1594 and its Rules and Regulations and, more particularly, the
Instructions to Bidders made available to prequalified
bidders in the instant case.

There is no question that the Bid Bond is an indispensable
requirement for the validation of a bid proposal.  The bond insures good faith of the bidders
and binds them to enter into a contract with the Government should their
proposal be accepted (see Padilla v. Zaldivar, L-22789,
October 30, 1964, 12 SCRA
260).  Yet, there is nothing in the Bid
Bond submitted in the instant case which guarantees that INTER TECHNICAL will
commence the work within 30 days (mobilization period) after receipt of
Employer’s Notice to Commence Work and to complete and deliver the whole of the
work within 600 days as provided in stipulation no. 2 of the Form of Bid.  Nowhere in the Bid Bond does INTER TECHNICAL
agree to abide by the bid for a period of 120 calendar days from the date set
for the opening of the bid.  Besides, the
Bid Bond does not contain any undertaking that it shall remain binding upon
INTER TECHNICAL and maybe accepted at any time before the expiration of that
period as provided in stipulation no. 4 of the Form of Bid.  There is likewise no formal acknowledgment on
the part of INTER TECHNICAL that the PBAC and ATO are not bound to accept the
lowest or any bid they may receive as provided in stipulation no. 6 of the Form
of Bid.  Lastly, the Bid Bond does not
even state the amount of the bid expressed in foreign currency and Philippine
peso as clearly required in the Form of Bid.

The Irrevocable Domestic Standby Letter of Credit merely states
that drafts shall be drawn under the letter of credit in the event INTER
TECHNICAL withdraws its bid before the expiration of the specified period:  or after being awarded the contract, INTER
TECHNICAL refuses or fails to furnish the performance bond within the required
period, thus:

“This Credit is available by the Beneficiary’s sight drafts
(“Drafts”) in duplicate drawn on us without recourse to the
drawer.  Drawing against this Credit
shall be made by the beneficiary only upon failure of the Accountee
to fulfill its obligation under the Bid.

Drafts drawn under this Credit must be accompanied by the
following:

1.  
Original of this Credit

2.  
Beneficiary’s certificate stating:

a) that the Accountee Inter?Technical
Pacific Philippines, Inc. has withdrawn its bid before the expiration of the
specified period; or

b) that after being awarded the contract, refuses or fails to
furnish the performance bond within the required period.”

In other words, the letter of credit merely guarantees that INTER
TECHNICAL will not withdraw its bid before the expiration of the period
specified by ATO and PBAC and that after being awarded the contract, it will
furnish the performance bond within the period required by ATO and PBAC.  Clearly then, the letter of credit standing
alone does not guarantee that INTER TECHNICAL will enter into a contract under
the terms and conditions stipulated in the Form of Bid.

It must be noted that prior to the opening of the bids on
November 10, 1989, PBAC was guided by the existing rules and regulations
formulated pursuant to Section 12 of P.D. 1594. 
In the evaluation of the bids, PBAC was guided by Rule IB 2.3 of the
Implementing Rules and Regulations of P.D. 1594 which provides,  thus:

“IB 2.3 – Evaluation of Bids.  A bid which does not comply with the
conditions or requirements of the bid documents shall be rejected by the PBAC
(or the Bid and Award Committee as the case may be) giving the reason or
reasons for its rejection.  The
Government, however, in the evaluation of bids received, reserves the right to
waive the consideration of minor deviations in the bids received which do not
affect the substance and validity of the bids.” (84 OG No. 23, p. 3350)

The PBAC was also guided by the following rules, among others,
under the Instruction to Bidders, thus:

“OPENING
AND EXAMINATION OF BIDS

17.1.  At the time, date and place advised in the
Invitation to Bid, Bids will be publicly opened and witnessed for examination
and evaluation of the Prequalification, Bidding and Award Committee (PBAC)
created for the purpose.  Bidders or
their authorized representatives are instructed to be present during the
opening of bids.

17.2.  Prior to the opening and reading of the
separately sealed Bid Price of the Works, contents of the Individual Bid shall
be examined as to their conformity and agreement with the Bidding requirements,
and Bids not fully complying with all
requirements shall be disqualified.  (Underscoring supplied)

17.3.  Only Bids considered satisfactory by the
Committee will qualify for the opening and reading of the separately sealed Bid
Price for the Works.  Percentage
deductions, contingent or otherwise quoted in accordance with the provisions of
Clause B.13 hereof, will be publicly announced as component of the Bid.”
(p. 285, Rollo)

INTER TECHNICAL calls the attention of the Court that the Form of
Bid is but a mere formality which does not affect the substance and validity of
its bid.  It asserts that it submitted a
duly accomplished and signed Form of Bid the day after the bids were opened on
November 10, 1989 and its intention to comply with its alleged bid is shown by
the filing of the instant case before the RTC; and that the Form of Bid is only
a surplusage which could be dispensed with as long as
a bid bond is submitted.  To bolster its
argument, INTER TECHNICAL urges Us to consider an
Opinion No. 142-A, Series of 1952 of the Secretary of Justice which stated that
the failure of the lowest bidder to secure a license as a transportation
operator at the time of the opening of the bids does not affect its bid.  The Secretary of Justice at that time
considered the following peculiar circumstances of the case:  that the bidder then had a pending
application for such license; that while he was not a licensed operator on the
date the bids were opened, his application as a transportation operator was
approved before an award of the contract was made to any of its bidders; that
there being no awards as yet, the bids are still under consideration; and that
since he qualified prior to the date of the awarding of bids, his bid should be
considered, otherwise the interests of the government would be sacrificed for a
mere technicality.

We are unconvinced.  PBAC
was guided by the rules, regulations or guidelines existing before the bid
proposals were opened on November 10,1989.  The basic rule in public bidding is that bids
should be evaluated based on the required documents submitted before and
not after the opening of bids. 
Otherwise, the foundation of a fair and competitive public bidding would
be defeated.  Strict observance of the
rules, regulations, and guidelines of the bidding process is the only safeguard
to a fair, honest and competitive public bidding.

In underscoring the Court’s strict application of the pertinent
rules, regulations and guidelines of the public bidding process, We have ruled
in C & C Commercial vs. Menor (L-28360, January
27, 1983, 120 SCRA 112), that Nawasa properly
rejected a bid of C & C Commercial to supply asbestos cement pressure which
bid did not include a tax clearance certificate as required by Administrative
Order No. 66 dated June 26, 1967.  In Caltex (Phil.) Inc., et. al. vs.
Delgado Brothers, Inc. et. al., (96 Phil. 368, 375),
We stressed that public biddings are held for the protec­tion of the public and
the public should be given the best possible advantages by means of open
competition among the bidders.

Basically, the purpose of the statute requiring competitive
bidding is that each bidder, actual or possible, shall be put upon the same
footing.  Therefore, authorities should
not be permitted to waive any substantial variance between the conditions under
which bids are invited and the proposal submitted.  If one bidder is relieved from conforming to
the conditions which impose some duty upon him, or lay the ground for holding
him to a strict performance of his contract, that bidder is not contracting in
fair competition with those bidders who propose to be bound by all the
conditions (Case vs. Inhabitants of Trenton, 76 N.J.L. 696, 74 A. 672; Lupter et. al. vs. Atlantic County, et. al., 87 N.J. Eq. 491, 100 A. 927, cited in Cobacha
and Lucenario, Law on Public Bidding and Government
Contracts, p. 7).

INTER TECHNICAL’s failure to comply
with what is perceived to be an elementary and customary practice in a public
bidding process, that is, to enclose the Form of Bid in the original and eight
separate copies of the bidding documents submitted to the bidding committee is
fatal to its cause.  All the four prequalified bidders which include INTER TECHNICAL were
subject to Rule IB 2.1 of the Implementing Rules and Regulations of P.D. 1594
in the preparation of bids, bid bonds, and prequalification statement and Rule
IB 2.8 which states that the Form of Bid, among others, shall form part of the
contract.  INTER TECHNICAL’s
explanation that its bid form was inadvertently left in the office (p. 6,
Memorandum for Private Respondent, p.355, Rollo) will
not excuse compliance with such a simple and basic requirement in the public
bidding process involving a multi-million project of the Government.  There should be strict application of the
pertinent public bidding rules, otherwise the essential requisites of fairness,
good faith, and competitiveness in the public bidding process would be rendered
meaningless.

The 1952 Opinion of the Secretary of Justice is not relevant to
this present case.  A meticulous
examination of the opinion reveals that the invitation to bid issued by the
Department of Agriculture and Natural Resources contained no requirement that
the bidder must be a duly licensed transportation operator at the time of the
opening of the bids.  The invitation to
bid expressly provided that a bid not conforming with the specifications
therein contained will not be considered. 
The circumstances in the case at bar are exactly the opposite of the
situation in the 1952 Opinion.  In the
Instruction to Bidders, notably 17.2 thereof (supra), copies of which
were furnished to all the four prequalified bidders,
it was categorically provided that bids not fully qualifying shall be
disqualified.  Furthermore, the
Implementing Rules and Regulations of P.D. 1594, IB. 2.3 emphasizes that a bid
which does not comply with the conditions or requirements of the bid documents
shall be rejected by the PBAC giving the reason or reasons for its rejection (supra).  Such rule cannot be treated lightly in view
of PD No. 1594, Sec. 12, which makes the implementing rules and regulations
applicable to all contracts for infrastructure and other construction projects
of all government agencies including government-owned or controlled
corporations and other instrumentalities. 
Given such clear and manifest intention of the law, INTER TECHNICAL’S
plea cannot be heeded.

As stated earlier, the controversy in the instant case, arose
from a complaint instituted by INTER TECHNICAL before the RTC of Makati to compel PBAC to read it’s
bid.  On the face of the allegations in
the complaint, it is clear that the complaint is actually one for mandamus.

As a rule, mandamus lies only to compel an officer to
perform a ministerial duty and not a discretionary act.  In Meralco
Securities Corporation v. Savellano (L-36748, October
23, 1982, 117 SCRA 804, 812), We ruled that “(d)iscretion
when applied to public functionaries, means a power or right conferred upon
them by law of acting officially, under certain circumstances, uncontrolled by
the judgment or conscience of others.  A
purely ministerial act or duty in contradiction to a discretional act is one
which an officer or tribunal performs in a given state of facts, in a
prescribed manner, in obedience to the mandate of a legal authority, without
regard to or the exercise of his own judgment upon the propriety or impropriety
of the act done.  If the law imposes a
duty upon a public officer and gives him the right to decide how or when the
duty shall be performed, such duty is discretionary and not ministerial.  The duty is ministerial only when the
discharge of the same requires neither the exercise of official discretion or
judgment.” As a general rule, a writ of mandamus will not issue to
control or review the exercise of discretion of a public officer since it is
his judgment that is to be exercised and not that of the court (see Magtibay vs. Garcia, G.R. No. L-28971, January 28, 1983, 120 SCRA 370). 
Thus, the courts will not interfere to modify, control or inquire into
the exercise of this discretion unless it be alleged and proven that there has
been an abuse or an excess of authority on the part of the officer concerned
(see Calvo v. de Gutierrez, et al., 4 Phil. 2033).

A perusal of INTER TECHNICAL’s
complaint shows that it is bereft of any allegation that ATO and PBAC committed
grave abuse of discretion in rejecting its bid. 
It did not submit proof that ATO and PBAC acted arbitrarily,
fraudulently and against the interest of the public when they rejected its
bid.  Apparently, INTER TECHNICAL’s belated allegation of grave abuse of discretion
in their comment on the herein petition for review on certiorari is a
mere afterthought.

Under Rule IB 2.3 of the Rules implementing Presidential Decree
No. 1594, and in the Invitation to Bid (p. 81, Rollo),
the Government has expressly reserved the right to reject any or all bids.  PBAC’s authority to
evaluate the bids during the opening and examination thereof clearly indicates
its discretion to determine compliance or non-compliance with the bidding
requirements.  Consequently, when PBAC
made a preliminary evaluation of the required documents and found INTER TECHNICAL’s bid non-complying for lack of a Form of Bid,
the former merely exercised its discretion under the law.  In the absence of an allegation and proof
that PBAC committed grave abuse of discretion, the respondent judge committed
an error in directing and ordering ATO and PBAC to do an act which clearly
involves the exercise of discretion on their part.

Finally, INTER TECHNICAL insinuates that the Japanese consultants
of the project made the decision to reject INTER TECHNICAL’s
bidding documents.  A careful review of
the records indicates that this insinuation obviously seeks to confuse the
issues submitted to this Court.  On the
contrary, We find the following unrebutted
facts:  that INTER TECHNICAL was given
every opportunity before the ATO and PBAC to be heard and tender its
explanation for not enclosing the duly accomplished and signed Form of Bid;
that the other bidders were even present and allowed to speak; that the PBAC’s final decision to reject INTER TECHNICAL’s
bidding documents came only after the issues were extensively discussed not
only by the PBAC members but the other bidders as well; and that the Japanese
consultants were merely allowed to give their opinion on the matter and it was
the PBAC which made the final decision. 
To that extent therefore, the fairness, good faith, competitiveness, and
stability of the public bidding process were not undermined where, as in the
instant case, a decision was reached after due deliberation in the presence of
all parties concerned.

ACCORDINGLY, the petition is GRANTED.  Respondent Judge’s Order dated February 12,
1990, his decision dated April 17, 1990, as well as his Order dated May 22,
1990 in Civil Case No. 90-173 are hereby ANNULLED and SET ASIDE.  As a consequence thereof, petitioner is
allowed to proceed with the awarding of the bid contract.

SO ORDERED.

Narvasa, Melencio-Herrera,
Cruz, Paras, Feliciano, Padilla, Bidin,
Sarmiento, Griño-Aquino, Regalado, and Davide, Jr., JJ., concur.

Gutierrez, Jr., J., see separate opinion.

Fernan, C.J., joins Justice
Gutierrez, Jr. in his separate opinion.

Gancayco, J., on leave.