Case Digest (G.R. No. 183260)
Facts:
Philippine Sports Commission, Cesar Pradas, Noel Elnar, Emerenciana Samson, Cesar Abalon, Julia Llanto, Edgardo Mateo and Eric Buhain v. Dear John Services, Inc., G.R. No. 183260, July 04, 2012, the Supreme Court Third Division, Mendoza, J., writing for the Court.In December 2001 the Philippine Sports Commission (PSC) published an Invitation to Bid for janitorial and security services. Dear John Services, Inc. signified its intent to participate, paid the bidding fee and submitted a bid. After an initial cancellation and review, the Invitation to Apply for Eligibility and to Bid was re-advertised to comply with Executive Order No. 40, Series of 2001 (EO 40) and its Implementing Rules and Regulations (IRR); pre-bid and bidding were set for April 2002.
Both Dear John Services and Consolidated Building Maintenance, Inc. (CBMI) qualified and received an Instruction to Bidders. At bid opening Dear John Services’ offer was P18,560,078.00 while CBMI’s was P27,419,097.00. PSC awarded the contract to CBMI on the ground that Dear John Services’ bid was lower than a 60% floor of the Approved Agency Estimate (AAE) reflected in PSC’s bidding documents; the AAE amount had not been disclosed to bidders prior to opening.
Dear John Services protested administratively and then filed suit before the Regional Trial Court (RTC), Branch 196, Parañaque City, seeking injunctive relief to prevent award to CBMI. The RTC issued a temporary restraining order (TRO) but later denied extension of the TRO and a preliminary mandatory injunction; after trial on the merits the RTC dismissed the complaint for lack of merit, upholding PSC’s authority to award to CBMI.
On appeal the Court of Appeals (CA), in an April 17, 2008 decision (denial of reconsideration in a June 11, 2008 resolution), reversed the RTC. The CA found that the PSC-BAC’s imposition of a 60% lower limit based on an undisclosed AAE contravened EO 40/IRR (notably the duty to disclose the approved budget for the contract and the prohibition against a floor on bid amounts) and that the bidding procedure was tainted with irregularity and grave abuse; it ordered the individual defendants (the PSC officials) to pay Dear John Services P200,000.00 nominal damages and dismissed the Amended Complaint as to the PSC. Petitioners sought review under Rul...(Subscriber-Only)
Issues:
- Did the Court of Appeals err in finding that the imposition of a 60% lower limit tied to an undisclosed Approved Agency Estimate (AAE) and the non-disclosure of the AAE rendered the bidding procedure irregular and in violation of EO No. 40 and its IRR?
- Was the PSC justified in rejecting Dear John’s bid by virtue of the reservation clause in...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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