Title
Malaga vs. Penachos, Jr.
Case
G.R. No. 86695
Decision Date
Sep 3, 1992
ISCOF's bidding process for a Micro Lab Building faced irregularities; petitioners disqualified for late submissions. Court ruled P.D. 1818 inapplicable, upheld injunction, and held respondents liable for procedural flaws.

Case Summary (G.R. No. 86695)

Trial Court Proceedings and Injunctive Relief

On Dec 12, petitioners sued PBAC members in RTC‐Iloilo, alleging wrongful exclusion from bidding and sought to reset the bid and enjoin any award. Judge Lebaquin issued a restraining order to halt bidding. Respondents moved to lift, invoking P.D. 1818’s ban on injunctions in government infrastructure projects and mootness due to late service of the order.

Application of P.D. 1818 and Preliminary Injunction

P.D. 1818 prohibits courts from issuing restraining or mandatory injunctions against any government infrastructure or public utility project. The trial court held the Micro Laboratory Building was an infrastructure project of a state college, hence within P.D. 1818’s coverage. It lifted the injunction also on grounds that PBAC had already conducted the bidding before service and that the ISCOF President held final award authority not before the court.

Petitioners’ Contentions on Irregularities

Petitioners argued:

  1. ISCOF’s autonomous charter placed it outside “national government” projects under P.D. 1818.
  2. The project was tainted by anomalies:
    a. Published deadlines omitted time, yet PBAC unilaterally applied a 10:00 a.m. cut-off.
    b. Bid opening advertised for 3:00 p.m. was held at 10:00 a.m.
    c. Invitation to Bid forms lacked required project particulars and proper Bill of Quantities.
    d. Materials-type bid form was used for a construction project.
  3. The bidding had not been finally awarded, keeping injunctive relief viable.
  4. Failure to issue plans and specifications thirty days prior breached P.D. 1594 rules.

Respondents’ Counter-Arguments

Respondents maintained that ISCOF is a government instrumentality under P.D. 1523 and the GAA, thus covered by P.D. 1818. They asserted that a bulletin-board notice fixed 10:00 a.m. and 1:00 p.m. deadlines, that petitioners filed only letters of intent by 10:00 a.m. Dec 2, and that late-stamped documents were rightly disqualified. They added that petitioners waited to challenge disqualification until after bidding, waiving relief. They denied procedural defects, citing expired petitioner licenses and timely posting of schedules.

Supreme Court’s Analysis on Government Instrumentality

Invoking the 1987 Administrative Code, the Court classified ISCOF as a “chartered institution” and government instrumentality. Its creation under a state policy, ex officio Treasurer, COA audit, and GAA funding confirmed public character. Nonetheless, P.D. 1818’s injunction ban, patterned after P.D. 605, did not shield purely legal or procedural questions from judicial review. Injunctions may issue when administrative bodies violate substantive or procedural law.

Supreme Court’s Findings on Bidding Irregularities

The Court identified two fatal breaches of P.D. 1594 implementing rules:

  1. PBAC unilaterally changed published deadlines without notifying all prospective bidders, undermining fair competition and the requirement of public advertisement.
  2. Plans, specifications, and proposal forms for a P1 M–P5 M project were issued only ten days before bidding instead of thirty.

These lapses destroyed the integrity of the competitive process—notice, competition, and exact comp





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