Title
Anti-Trapo Movement of the Philippines vs. Land Transportation Office
Case
G.R. No. 231540
Decision Date
Jun 27, 2022
Anti-Trapo Movement challenged LTO's contract award to Dermalog for driver's license cards, alleging procurement violations. SC dismissed, citing lack of legal standing, no grave abuse, and proper process.

Case Summary (A.C. No. 10243)

Relevant Dates and Applicable Law

The procurement process began in late 2016 with the Invitation to Bid published on December 1, 2016. The LTO’s Bids and Awards Committee (BAC) conducted bid openings and evaluations in early 2017, ultimately awarding the contract to Dermalog. The pertinent legal framework is the 1987 Philippine Constitution, Republic Act No. 9184 (Government Procurement Reform Act), including its 2016 Revised Implementing Rules and Regulations (IRR), as the events occurred after 1990.

Procurement Process and Bid Evaluation

The LTO’s BAC published an Invitation to Bid for the driver’s license cards contract with an approved budget of approximately ₱836 million. After pre-bid conferences and bid submissions from Banner Plasticard, Inc. (Banner), Kolonwel Trading and PT Pura Barutama Joint Venture (Kolonwel), and Dermalog, the BAC’s Technical Working Group preliminarily found Banner had the Lowest Calculated Bid (LCB), but subsequently post-disqualified Banner for non-compliance with technical specifications and other bid requirements—such as unverified equipment performance parameters and incomplete eligibility documents relating to subcontractors.

Following Banner’s post-disqualification, Kolonwel became the LCB but was also post-disqualified. Dermalog then underwent post-qualification and proof-of-concept demonstration, passing the technical requirements. The BAC subsequently declared Dermalog as the Lowest Calculated Responsive Bid (LCRB) and recommended awarding the contract to Dermalog, which the Head of the Procuring Entity approved by issuing a Notice of Award and later a Notice to Proceed.

Petitioner’s Claims and Legal Grounds

The Anti-Trapo Movement filed a Petition for Prohibition with a prayer for a temporary restraining order to enjoin the LTO from continuing any contract with Dermalog. Petitioner alleged grave abuse of discretion by the LTO for:

  • Awarding the contract to Dermalog despite pending reconsideration by Banner.
  • Violating Republic Act No. 9184 by failing to resolve Banner’s Request for Reconsideration before awarding the contract.
  • Failing to notify other bidders in a timely manner about the award recommendation.
  • Proceeding without acting on the Petitioner’s Observer’s Report, which raised concerns about transparency and technical compliance during the proof-of-concept process.
  • Causing overpricing to the government by awarding Dermalog’s higher bid of approximately ₱829 million compared with Banner’s ₱750 million.

The Petitioner also invoked “transcendental importance” of the issues to seek relaxation of procedural technicalities such as legal standing.

Respondent’s Defense and Procedural Arguments

The LTO argued for dismissal on multiple grounds:

  • The Petitioner lacked legal standing and legal capacity to sue, as it failed to sufficiently prove juridical personality and authority of Peralta to file on its behalf.
  • The Petition for Prohibition was improper because the challenged act was already accomplished; the contract was awarded and execution had begun.
  • Banner’s Request for Reconsideration was not a valid “protest” under RA 9184 since it was unverified, not filed with the Head of Procuring Entity, and unpaid for protest fees; thus, the LTO was neither required nor obligated to resolve it before awarding the contract.
  • The Petitioner’s Observer’s Report was not mandatory for action by the LTO, as the law only requires observers to submit reports but does not condition procurement steps on such reports.
  • The allegation of anomalies was unsupported by admissible evidence; newspaper articles submitted were hearsay and lacked probative value.
  • The LTO complied with proper legal processes and did not gravely abuse discretion when awarding the contract to Dermalog.

Legal Capacity and Standing of the Petitioner

The Supreme Court found that the Petitioner sufficiently established legal capacity by submitting its Certificate of Incorporation and Board Resolution authorizing Peralta to represent it. Unlike a previous case (Association of Flood Victims), where incorporation was incomplete, here the Petitioner had juridical personality.

However, the Court ruled that the Petitioner lacked legal standing because it did not demonstrate a personal, direct, and substantial interest or injury different from other parties. The mere invocation of “transcendental importance,” defined through elements such as the nature of public funds involved, clear disregard of prohibitions, and lack of other directly interested parties, was insufficient. Petitioner failed to prove that the LTO committed a blatant disregard of constitutional or statutory provisions or that no other party had a more direct interest.

Nature of the Writ of Prohibition and Fait Accompli

The writ of prohibition, as a preventive remedy, is designed to restrain acts about to be done that are illegal or ultra vires. It cannot be used to stop acts already completed (fait accompli). Since the LTO had issued the Notice to Proceed and the contract with Dermalog had commenced including distribution of cards, the act sought to be enjoined was already accomplished. The Court rejected the Petitioner’s argument that the continuing nature of the supply could justify prohibition.

Competitive Bidding Process and Governing Government Procurement Law

The Court expounded on the competitive bidding process under RA No. 9184 and its IRR, emphasizing transparency, competitiveness, and accountability. Bids are evaluated in two envelopes – technical and financial components – with a nondiscretionary pass/fail evaluation on eligibility and technical requirements before opening financial bids. The process involves post-qualification to verify compliance before awarding the contract.

In this case, Banner’s bid, though lowest financially, failed post-qualification due to non-compliance with bid specifications, justifying their post-disqualification. The BAC properly applied the procedure by evaluating the next lowest bids, eventually awarding to Dermalog.

Protest Mechanism Under RA No. 9184

The law provides a strict protest mechanism requiring protests to be in the form of a verified position paper, addressed to the head of the procuring entity, accompanied by the protest fee. A mere Request for Reconsideration to the BAC, lacking these formalities, does not c

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