Government or public contract - contract entered into by state officers acting on behalf of the state, and in which the

entire people of the state are

directly interested.
 It relates wholly to matter of public concern, and affects private rights only so far as the statute confers such rights when its provisions
are carried out by the officer to whom it is confided to perform.
 A government contract is essentially similar to a private contract contemplated under the Civil Code. The legal requisites of consent of
the contracting parties, an object certain which is the subject matter, and cause or consideration of the obligation must likewise concur.
Otherwise, there is no government contract to speak of.

Contracts to which the government is a party are generally subject to the same laws and regulations which govern the validity and sufficiency of
contracts between private individuals. A government contract, however, is perfected only upon approval by a competent authority, where such
approval is required.

RA 9184

Procurement – acquisition of supplies, materials and equipment for the various offices and branches of Government.

Governing Principles: (PACTS)

1. Public Monitoring – awareness and vigilance
2. Accountability – responsibility over actions and decisions (“answerable”)
3. Competitiveness – equal opportunity to all eligible bidders
4. Transparency – wider dissemination of bid opportunities
5. Streamlined Process – uniformly applicable to all government agencies; effective and efficient method

Essence of Public Monitoring

 Allows public involvement of qualified and eligible Civil Society Organizations (NGOs, PAs, academic institutions, and religious groups) to
observe and monitor the procurement process until contract implementation.
 Increased transparency of procurement transactions.

Accountability of Public Officials

 Pertinent laws and the prescribed procedures must be faithfully complied with in the discharge of functions in all stages of the
procurement process as well as the implementation of contracts.
 Private parties that deal with government should also be held accountable for their actions.

How to Ensure Transparency

1. Posting in the Procuring Entity’s website,
2. Posting in the PhilGEPS website, and
3. Posting in a conspicuous place within the premises of the PE is required for all procurements.

Each procurement transaction must be properly documented and such records must be maintained and made available to proper parties.

Essence of Streamlined Procurement System

 Uniform application to all government procurements.
 Simple and adaptable to advances in modern technology in order to ensure an effective and efficient method of procurement.

Scope of RA 9184
 Scope:
 National Government Agencies (NGAs)
 State Universities and Colleges (SUCs)
 Government Owned or Controlled Corporations (GOCCs)
 Government Financial Institutions (GFIs)
 Local Government Units (LGUs)
 Coverage:
 Goods and Services
 Infrastructure Projects
 Consulting Services
 All fully domestically-funded procurement activities;
 All foreign-funded procurement activities, unless otherwise provided in a treaty or int’l/executive agreement;
 As may be agreed upon by the GOP and International Financing Institution in their treaty or int’l/executive agreement;
 Except:
a) Procurement for goods, infrastructure projects, and consulting services funded from Foreign Grants covered by R.A. 8182, as
amended by R.A. 8555.
b) Acquisition of real property which shall be governed by R.A. 8974
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 c) Public-Private sector infrastructure or development projects and other procurement covered by R.A. 6957, as amended by R.A.
7718 (BOT Law)
d) Disposal of government properties
e) Leasing out of publicly-owned real property for private use
f) Consignment
g) Formation of Joint Venture Partnerships between government corporations and private entities

Procuring Entity
 is in the best position to determine the correct classification of its procurement based on its identified needs and the best way by which
these needs may be addressed, managed, and satisfied.

Approved Budget for the Contract (BAC)

 Refers to the budget for the contract duly approved by the Head of the Procuring Entity, as provided for in the General Appropriations Act
and/or continuing appropriations, in the National Government Agencies

Competitive Bidding
 Refers to a method of procurement which is open to participation by any interested party
 Process:
o Advertisement
o pre-bid conference
o eligibility screening of bids
o evaluations of bids
o post – qualification
o award of the contract

Alternative Process of Procurement: resort to alternative method shall be made only in highly exceptional cases to promote economy and
efficiency.
1. Selective Bidding - involves direct invitation to bid by the Procuring Entity from a set of pre-selected suppliers or consultants with known
experience and proven capability relative to the requirements of a particular contract.
2. Single Source Procurement - simply asked to submit a price quotation or a pro-forma voice together with the conditions of sale, which
offer may be accepted immediately or after some negotiations.
3. Repeat Order - involves a direct Procurement of Goods from the previous winning bidder, whenever there is a need to replenish Goods
procured under a contract previously awarded through Competitive Bidding.
4. Shopping - Procuring Entity simply requests for the submission of price quotations for readily available off-the-shelf Goods
5. Negotiated Procurement - Procuring Entity directly negotiates a contract with a technically, legally and financially capable supplier,
contractor or consultant.

Bidding Process:
 Goods and Infa:
o Pre-procurement Conference
o Advertisement and/or Posting
o Pre-bid Conference
o Bid submission
o Opening of Technical Proposal
o Opening of Financial Proposal
o Bid evaluation
o Post-qualification
o Award Contract
 Consulting:
o Pre-procurement Conference
o Advertisement and/or Posting
o Eligibility and shortlisting
o Pre-bid conference
o Bid submission (opening of bids)
o Bid evaluation
o Post qualification or negotiation
o Award contract

Procurement Organizations:

1. Head of Procuring Entity (HOPE)

 Establishes BAC and appoints its members
 Ensures that BAC members give their utmost priority to duties
 Ensures professionalization of members of the procurement organization
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  Approves the Annual Procurement Plan (APP)
 Approves/Disapproves the Contract Award
 Resolves Protests

2. Bids and Award Committee (BAC)

 Recommends Procurement Method
 Creates a Technical Working Group (TWG)
 Conducts the bidding activities
 Resolves Requests for Reconsideration
 Recommends Imposition of Sanctions
 Invites Observers during all stages of the procurement process
 Conducts due diligence review or verifications of the qualifications of observers
 Prepares Procurement Monitoring Report
 As a general rule, HOPE must create a single BAC. However, separate BACs may be created under any of the following
conditions:
o The items to be procured are complex or specialized;
o If the single BAC cannot reasonably manage the procurement transactions as shown by delays beyond the allowable
limits; or
o If the creation is required according to the nature of the procurement.
 Composition: 5 but not more than 7 members designated by HOPE
o Regular Members:
 Chairperson (3rd Ranking Permanent Official);
 Member representing the Legal or Administrative areas (5th or 3rd Ranking Permanent Personnel);
 Member representing the Finance Area (5th or 3rd Ranking Permanent Personnel);
o Provisional Members
 Officer possessing Technical expertise relevant to the procurement.
 End user unit Representative.
 Term: 1 year. In case of resignation, retirement, separation, transfer, re-assignment, or removal of a BAC member, the HOPE
shall designate a replacement that has similar qualifications as the official replaced. The replacement shall serve for the
unexpired term. In case of leave or suspension, the replacement shall serve only for the duration of the leave or suspension.
 Prohibited Members:
o head of the procuring entity and
o officials who approves procurement contracts
o Chief Accountant or Head of the Provincial/City/Municipal Accounting Office and his/her staff

3. Technical Working Group (TWG)

 Created by the BAC from a pool of legal, technical and financial experts
 Assist BAC in the following activities:
 Preparation of bidding document
 Eligibility check/short-listing
 Bid evaluation and preparation of report
 Post-qualification
 Preparation of post-qualification summary report
 Assist BAC and BAC Secretariat in preparing BAC Resolutions

4. Observers
 Observers represent the public, the taxpayers who are interested in seeing to it that procurement laws are observed and
irregularities are averted.
 In all stages of procurement process BAC must invite, in writing, at least three (3) Observers, at least 3 calendar days before
the date of the procurement stage/activity, who shall be:
o Representative from COA
o Duly recognized private group in the sector or discipline of the particular type of procurement involved
o Non-Government Organization (NGO)
 Observers shall be allowed access to the following documents upon their request, subject to signing of a confidentiality
agreement:
o Minutes of BAC meetings;
o Abstract of Bids;
o Post-qualification summary report;
o APP and related PPMP; and
o Opened proposals
 Responsibilities:
o Prepare report (jointly or separately) indicating their observations on the procurement activities
o Submit report to the PE and furnish a copy to the GPPB and the Office of the Ombudsman/Resident Ombudsman
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 o Immediately inhibit and notify in writing the PE of any actual or potential conflict of interest

Sec. 7: All procurement should be within the approved budget of the Procuring Entity and should be meticulously and judiciously planned by the
Procuring Entity concerned. Consistent with government fiscal discipline measures, only those considered crucial to the efficient discharge of
governmental functions shall be included in the Annual Procurement Plan t o be specified in the IRR. No government Procurement shall be
undertaken unless it is in accordance with the approved Annual Procurement Plan of the Procuring Entity.

Bidding Documents: Prepared by the Procuring Entity

1. Approved budget for the contract
2. Instructions to the bidders
3. Terms of references
4. Eligibility requirements
5. Plans and technical specifications
6. Form of bid price form and list of goods or bill of quantity
7. Delivery time or completion schedule
8. Form and amount of bid security
9. Form and amount of performance security and warranty
10. Form of contract and general and special conditions of contract

Sec. 18: Reference to brand names shall not be allowed. Specifications shall be based on relevant characteristics and/or performance
requirements.

Pre-Procurement Conference
 Assessment of the readiness of the procurement in terms of confirming the certification of availability of funds

Manner of Advertisement
 In a manner and for such length of time as may be necessary under the circumstances, in order to endure the widest possible
dissemination.
 Not limited to posting in the Procuring Entity's premises, in newspapers of general circulation, the G-EPS and the website of the Procuring
Entity, if available.

Invitation to Bid
(a) A brief description of the subject matter of the Procurement;
(b) A general statement on the criteria to be used by the Procuring entity for the eligibility check, the short listing of prospective bidders
(c) The date, time and place of the deadlines for the submission and receipt of the eligibility requirements, the pre-bid conference if any, the
submission and receipt of bids, and the opening of bids;
(d) The Approved Budget for the Contract to be bid;
(e) The source of funds;
(f) The period of availability of the Bidding Documents, and the place where these may be secured and;
(g) The contract duration; and
(h) Such other necessary information deemed relevant by the Procuring Entity
Receipt & Opening of Bids

Section 23: The eligibility requirements shall provide for fair and equal access to all prospective bidders. A prospective bidder may be allowed to
summit his eligibility requirement s 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.

Section 25: A bid shall have two (2) components, namely the technical and financial components which should be in separate sealed envelopes.
Bids submitted after the deadline shall not be accepted.

Section 26: A bidder may modify his bid, provided that this is done before the deadline for the receipt of bids.

A bidder may, through a letter, withdraw his bid or express his intention not to participate in the bidding before the deadline for the receipt of bids.
In such case, he shall no longer be allowed to submit another Bid or the same contract either directly or indirectly.

Prior to Bid evaluation, the BAC shall examine first the technical components of the bids using "pass/fail" criteria to determine whether all required
documents are present. Only bids that are determined to contain all the bid requirements of the technical component shall be considered for
opening and evaluation of their financial component.

Bid Evaluation

Section 31: Bid prices that exceed this ceiling shall be disqualified outright from further participating in the bidding. There shall be no lower limit to
the amount of the award.
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Procurement of Goods and Infrastructure Projects - ranked from lowest to highest = "Lowest Calculated Bid"

Consulting Services - ranked from highest to lowest = "Highest Rated Bid”

When negotiations with first-in- rank bidder fails, the financial proposal of the second rank bidder shall be opened for negotiations: Provided, that
the amount indicated in the financial envelope shall be made as the basis for negotiations and the total contract amount shall not exceed the
amount indicated in the envelope and the ABC. Whenever necessary, the same process shall be repeated until the bid awarded to the winning
bidder.

If the bidder with the Lowest Calculated Bid or Highest Rated Bid passes all the criteria for post-qualification, his Bid shall be considered the
"Lowest Calculated Responsive Bid," in the case of Goods and Infrastructure or the "Highest Rated Responsive Bid," in the case of Consulting
Services.

Post-Qualification

Stage where the bidder with the Lowest Calculated Bid, in the case of Goods and Infrastructure Projects, or the Highest Rated Bid, in the case of
Consulting Services, undergoes verification and validation whether he has passed all the requirements and conditions as specified in the Bidding
Documents.

If the bidder with the Lowest Calculated Bid or Highest Rated Bid passes all the criteria for post-qualification, his Bid shall be considered the
"Lowest Calculated Responsive Bid," in the case of Goods and Infrastructure or the "Highest Rated Responsive Bid," in the case of Consulting
Services. However, if a bidder fails to meet any of the requirements or conditions, he shall be "post-disqualified" and the BAC shall conduct the
post-qualification on the bidder with the second Lowest Calculate Bid or Highest Rated Bid.

Failure of Bidding: if there is…

1. No bids are received
2. No bid qualifies as the Lowest Calculated Responsive Bid
3. Whenever the bidder the highest rated/lowest calculated responsive bid refuses, without justifiable cayse.

Award Implementation and Termination of the Contract

Within a period not exceeding fifteen (15) calendar days from the determination and declaration by the BAC of the Lowest Calculated Responsive
Bid or Highest Rated Responsive Bid, and the recommendation of the award, the Head of the Procuring Entity or his duly authorized representative
shall approve or disapprove the said recommendation. In case of approval, the Head of the Procuring Entity or his duly authorized representative
shall immediately issue the Notice of Award to the bidder with the Lowest Calculated Responsive Bid or Highest Rated Responsive Bid.

Within ten (10) calendar days from receipt of the Notice of Award, the Winning bidder shall formally enter into contract with the Procuring Entity.
When further approval of higher authority is required, the approving authority for the contracts shall be given a maximum of twenty (20) calendar
days to approve or disapprove it.

In the case of government-owned and/or -controlled corporations, the concerned board shall take action on the said recommendation within thirty
(30) calendar days from receipt thereof.
The Procuring Entity shall issue the Notice to Proceed to the winning bidder not later than seven (7) calendar days from the date of approval of the
contract by the appropriate authority. All notices called for by the terms of the contract shall be effective only at the time of receipt thereof by the
contractor.

The procurement process from the opening of bids up to the award of contract shall not exceed three (3) months, or a shorter period to be
determined by the procuring entity concerned.

If for justifiable causes, the winning bidder refuses or is otherwise unable to enter into contract with the Procuring Entity, or if the bidder fails to
post the required performance security within the period stipulated in the Bidding Documents, the BAC shall disqualify the said bidder and shall
undertake post-qualification for the next-ranked Lowest Calculated Bid or Highest Rated Bid. This procedure shall be repeated until an award is
made. However, if no award is possible, the contract shall be subjected to a new bidding.

Head of the Agency reserves the right to reject any and all Bids, declare a failure of bidding, or not award the contract:
1. Collusion
2. BAC is found to have failed in following the prescribed bidding procedures; or
3. For any justifiable and reasonable ground where the award of the contract will not redound to the benefit of the government as defined
in the IRR.

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Protest Mechanism

Protest of Decisions of BAC

Where to file?
 Head of the Procuring Entity

Manner:
 In writing
 File a verified position paper
 Pay non-refundable protest fee

Resolution of Protests
 On the basis of records of BAC.
 Decisions of the Head of the Procuring Entity shall be final.

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.

Court Action
 Court action may be resorted to only after the protests contemplated in this Article shall have been completed.
 RTC – Rule 65

Settlement of Disputes

Arbitration
 Any and all disputes arising from the implementation of a contract covered by this Act
 Arbitral award may be appealed by way of petition for review to the CA

Contract Prices and Warranties

All bid prices shall be considered as fixed prices, and therefore not subject to price escalation during contract implementation, except under
extraordinary circumstances and upon prior approval of the GPPB.

SOME GPPB ISSUANCE:

On Resolving issue on post-disqualification

 GPPB cannot grant a bidder’s request to resolve the issue of their post-disqualification. Nonetheless, they are urged to follow the
prescribed rules and procedures on Protest Mechanism laid down in Section 55 of the IRR of RA 9184.
 It cannot dictate to the procuring entity how to decide or resolve issues relative to its procurement activities.

On Declaring Failure of Bidding

 GPPB is not vested with the authority to declare a PE’s procurement activity to have incurred a failure of bidding.
 Declaration of failure of bidding is within the authority and accountability of the Bids and Awards Committee and the Head of the
Procuring Entity to exercise, under Sections 35 and 41 of the IRR of RA 9184, respectively.

Leasing Out of Government Properties for Private Use

 As long as lease out undertakings do not involve expenditure of public funds for the procurement of goods, works and consulting
services, RA 9184, its IRR, and its associated rules will not apply.
 Transactions involving lease of government properties for private use are covered by Executive Order No. 301, series of 1987 (EO 301).

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JURISPRUDENCE:

“By its nature and characteristics, a competitive public bidding aims to protect public interest by giving the public the best possible advantages
through open competition” (Garcia v. Burgos)

Purpose is to avoid/preclude suspicion of favoritism and anomalies in the execution of public contracts. (COA vs. RTC-NCRJR)

A provision in the Instruction to Bidders that require a “minimum amount” of bid is not valid and runs contrary to the spirit of RA 9184. (Philippines
Sports Commission, et al., vs. Dear Johnson Services Inc.)

Payment of “protest fee” is a condition precedent before the protest of a bidder may acted upon, and eventually before the court may acquire
jurisdiction. (LTA v. Lanting Security Agency)

PH Pharma Inc. v. PH Children’s Medical Center BAC

Petitioner failed to avail of the administrative remedies before resorting to certiorari. In Sec. 23.3 of Rule VIII of the IRR of RA 9184:

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. The BAC may request a prospective bidder to clarify its eligibility documents, if
it is deemed necessary.

Petitioner has 7 days from the time it was verbally notified 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. The petition for certiorari filed with the Regional Trial Court by the petitioner is premature.

LRA v. Lanting Security and Watchman Agency

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.

Respondent’s letter to the BAC­ PGSM Chairman 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.”

Even if the Court were to credit the appellate court’s pronouncement that the LRA had waived payment of the protest fee, the trial court still could
not have validly acquired jurisdiction over respondent’s petition for annulment for failure to heed the requirement under Section 58 that court
actions may be resorted to only after the protest contemplated in Section 55 shall have been completed.

G&S Transport v. CA

Neither would the allegations authorize us to issue the writ of mandamus compelling MIAA to award the concession contract in favor of petitioner
G & S. It is a settled rule that mandamus will lie only to compel the performance of a ministerial duty but does not lie to require anyone to fulfill
contractual obligations. Only such duties as are clearly and peremptorily enjoined by law or by reason of official station are to be enforced by the
writ. Whether MIAA will enter into a contract for the provision of a coupon taxi service at the international airport is entirely and exclusively within
its corporate discretion. It does not involve a duty the performance of which is enjoined by law and thus this Court cannot direct the exercise of this
prerogative.

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 NAIA's services. The Terms of Reference for Coupon Taxi Service
Concession observed, "[t]he 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 -

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x x x x 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.

COMELEC v. Judge Quijano-Padilla

The primordial question to be resolved is— may a successful bidder compel a government agency to formalize a contract with it notwithstanding
that its bid exceeds the amount appropriated by Congress for the project?

Petitioners are justified in refusing to formalize the contract with PHOTOKINA. Prudence dictated them not to enter into a contract not backed up
by sufficient appropriation and available funds. Definitely, to act otherwise would be a futile exercise for the contract would inevitably suffer the
vice of nullity.

PHOTOKINA, though the winning bidder, cannot compel the COMELEC to formalize the contract. Since PHOTOKINA’s bid is beyond the amount
appropriated by Congress for the VRIS Project, the proposed contract is not binding upon the COMELEC and is considered void; and that in issuing
the questioned preliminary writs of mandatory and prohibitory injunction and in not dismissing Special Civil Action No. Q-01-45405 (mandamus),
respondent judge acted with grave abuse of discretion. Petitioners cannot be compelled by a writ of mandamus to discharge a duty that involves
the exercise of judgment and discretion, especially where disbursement of public funds is concerned.

Antonio J. Villegas v. Auditor General

We are next ushered to the problem of whether the award in favor of BISI was authorized by law. The reason for the grant of power, in Section 2
(c) of Republic Act 2264, to the local committee on awards, is to remove red tape occasioned by the purchase made through the Bureau of Supply.
Safeguards, of course, have to be provided.

It matters not that the BISI bid did not satisfy certain provisions in the revised specifications. That the offer of BISI was "C and F, Manila" and not
"CIF, Manila", was properly remedied by the fact that in the award BISI was required to deliver "CIF, Manila". As to the guarantee as to spare parts,
this was also considered by the committee, which accepted the explanation given by BISI's representative to the effect that GAMI (the distributor
thereof) "will certainly cooperate by supplying any needed spare parts and accessories for the proposed units”. At any rate, the committee had
authority to waive informality in the bids. On top of all these is the fact that it became the duty of the committee on awards to reject CCH's bid for
the reason that, as heretofore stated, the previous performance of this company in a contract with the city was so unsatisfactory—a fact known to
the General Auditing Office—that the city was compelled to file suit against it.

If the acts of the committee on awards had any meaning at all, they exhibited care, meticulousness and a high regard for the responsibility on it
reposed. The committee inquired into the various bids, made comparisons to ascertain who was the most advantageous bidder, sought technical
advice, twice deliberated thereon, decided thereafter, At this distance, we are not prepared to say that the committee abused its wide discretion in
making the award. After all, there is the legal presumption that public duty has been regularly performed.

The authority of the Auditor General, in connection with expenditures, of funds, or property, is limited to the auditing of expenditures of funds or
property pertaining to, or held in trust by, the Government or the provinces or municipalities thereof (Sec. 2, Art. XI, of the Constitution). Such
function is limited to a determination of whether there is a law appropriating funds for a given purpose; whether a contract, made by the proper
officer, has been entered into in conformity with said appropriation law; whether the goods or services covered by said contract have been
delivered or rendered in pursuance of the provisions thereof, as attested to by the proper officer; and whether payment therefor has been
authorized by the officials of the corresponding department or bureau. If these requirements have been fulfilled, it is the ministerial duty of the
Auditor General to approve and pass in audit the voucher and treasury warrant for said payment. If he entertains the belief that the contract is
unwise or that the amount stipulated thereon is unreasonable. His duty is to bring the matter to the attention of proper administrative officer. This
duty implies a negation of the power to refuse and disapprove payment of such an expenditure, 'for its disapproval, if he had authority therefor,
would bring to the attention of the aforementioned administrative officer the reasons for the adverse action thus taken by the General Auditing
Office, and, hence, render the imposition of said duty unnecessary.

Information Technology Foundation v. COMELEC

The essence of public bidding is, after all, an opportunity’ for fair competition, and a fair basis for the precise comparison of bids. In common
parlance, public bidding aims to “level the playing field.” That means each bidder must bid under the same conditions; and be subject to the same
guidelines, requirements and limitations, so that the best offer or lowest bid may be determined, all other things being equal.

An essential element of a publicly bidded contract is that all bidders must be on equal footing. Not simply in terms of application of the procedural
rules and regulations imposed by the relevant government agency, but more importantly, on the contract bidded upon. Each bidder must be able
to bid on the same thing. The rationale is obvious. If the winning bidder is allowed to later include or modify certain provisions in the contract
awarded such that the contract is altered in any material respect, then the essence of fair competition in the public bidding is destroyed. A public
bidding would indeed be a farce if after the contract is awarded, the winning bidder may modify the contract and include provisions which are
favorable to it that were not previously made available to the other bidders.

KKMD 8
The public bidding was to be conducted under a two-envelope/two stage system. The bidder’s first envelope or the Eligibility Envelope should
establish the bidder’s eligibility to bid and its qualifications to perform the acts if accepted. On the other hand, the second envelope would be the
Bid Envelope itself.

The Eligibility Envelope was to contain legal documentssuch as articles of incorporation, business registrations, licenses and permits, mayor’s
permit, VAT certification, and so forth; technical documents containing documentary evidence to establish the track record of the bidder and its
technical and production capabilities to perform the contract, and financial documents, including audited financial statements for the last three
years, to establish the bidder’s financial capacity.

In the instant case, no such instrument was submitted to Comelec during the bidding process. So, it necessarily follows that, during the bidding
process, Comelec had no basis at all for determining that the alleged consortium really existed and was eligible and qualified; and that the
arrangements among the members were satisfactory and sufficient to ensure delivery on the Contract and to protect the government’s interest.
Notwithstanding such deficiencies, Comelec still deemed the “consortium” eligible to participate in the bidding, proceeded to open its Second
Envelope, and eventually awarded the bid to it, even though—per the Comelec’s own RFP—the BAC should have declared the MPC ineligible to bid
and returned the Second (Bid) Envelope unopened.

It is clear that Comelec gravely abused its discretion in arbitrarily failing to observe its own rules, policies and guidelines with respect to the bidding
process, thereby negating a fair, honest and competitive bidding. The problem is not that there are four agreements instead of only one. The
problem is that Comelec never bothered to check. It never based its decision on documents or other proof that would concretely establish the
existence of the claimed consortium or joint venture or agglomeration. It relied merely on the self-serving representation in an uncorroborated
letter signed by only one individual, claiming that his company represented a “consortium” of several different corporations.

KKMD 9