G.R. No. 216098 - Pabillo vs. Commission on Elections

In 1997, Congress enacted RA 8436 authorizing COMELEC to use an automated election system (AES) for national and local elections.
RA 9369, passed in 2007, amended RA 8436 to further endorse transparency, credibility, fairness, and accuracy in elections.
The procurement process for election-related services is governed by the Government Procurement Reform Act (RA 9184) which mandates competitive public bidding as the rule, with direct contracting allowed only under strictly defined exceptional circumstances.

In 2009, COMELEC issued a Request for Proposal (RFP) for the lease – with an option to purchase (OTP) – of an AES to be used in the May 2010 elections.
Smartmatic-TIM, a joint venture of Smartmatic International Corporation and Total Information Management Corporation, emerged as the winning bidder following the 2009 competitive bidding process.
The parties entered into a 2009 AES Contract, which included a provision for an option to purchase the AES equipment (the Precinct Count Optical Scan [PCOS] machines) at a predetermined price.
Subsequent to the initial contract, COMELEC exercised its option in phases, with a significant Deed of Sale executed in 2012 for the remaining PCOS units to be used in the May 2013 elections.

In November 2013 Smartmatic-TIM submitted a proposal to extend the warranty and provide repair, refurbishment, and maintenance services for the PCOS machines.
The COMELEC Advisory Council and later, the COMELEC itself, considered using the existing technology rather than procuring an entirely new system for the upcoming 2016 elections.
Negotiations ensued and on December 23, 2014, COMELEC En Banc approved Resolution No. 9922 which authorized a direct contracting arrangement with Smartmatic-TIM for an Extended Warranty Contract (Program 1).
This contract was to cover a five-month period during which Smartmatic-TIM would conduct an inventory, diagnostic tests, repair, preventive maintenance, and, if necessary, replacement (up to a defined percentage) of the PCOS machines.

Petitioners (including various registered voters, legal practitioners, and the Integrated Bar of the Philippines) challenged Resolution No. 9922 and the Extended Warranty Contract.
Their claim was that the COMELEC bypassed the mandatory public bidding procedure as required by RA 9184 by resorting to direct contracting even though the conditions specified under Section 50 (a, b, and c) of the GPRA were not met.
Additional concerns were raised regarding whether the “extended warranty” was in fact a new service contract that, if procured separately, would normally require a full competitive bidding process.
The petitioners also criticized COMELEC’s reliance on time constraints and technical risk as justifications for not conducting public bidding, arguing that these did not substantiate an exception under the procurement law.

Whether COMELEC’s direct contracting under Resolution No. 9922 complied with Section 50 of RA 9184 by establishing that the subject services were of a proprietary nature, involved critical components, or could be obtained only from an exclusive source.
Whether the COMELEC failed to conduct an initial industry survey and a pre-procurement conference, which are mandatory prerequisites for resorting to direct contracting.

Whether the use of direct contracting via Section 52 (h) of BP 881 (Omnibus Election Code) was legally justifiable given the stated time constraints for the 2016 elections.
Whether the urgency of the election schedule and technical risks genuinely warranted bypassing the competitive bidding process.

Whether the Extended Warranty Contract (Program 1) is simply an extension of the 2009 AES Contract or a distinct service contract that should have been subjected to a new bidding process.
Whether the contract’s characterization as a “warranty extension” is a circumvention of the statutory requirement of public procurement.