The following are two recent case laws on procurement:
1. G.R. No. 203655, August 13, 2014: SM Land, Inc. (SMLI) v.
Bases Conversion and Development Authority (BCDA) and Arnel Paciano D. Casanova, Esq., in his official capacity as President and CEO of BCDA The petition for certiorari, prohibition, and mandamus (with prayer for injunctive relief) seeks to nullify and set aside respondent BCDAs Supplemental Notice No.5 (as well as other acts stemming there from), which unilaterally aborted the Competitive Challenge instituted by SMLI for the development of BCDAs Bonifacio South Property, a 33.1-hectare lot located in Taguig City. Said Competitive Challenge was spurred by SMLI through a series of unsolicited proposals that assured BCDA of billions of pesos in revenue. Taking on SMLIs proposals, BCDA proceeded with the Competitive Challenge to see if there will be other Private Sector Entities (PSE) who can offer a proposal more advantageous to the government. The BCDA even created a Joint Venture Selection Committee (JV-SC) to oversee the selection process for the Competitive Challenge. After a series of negotiations between the SMLI and the JV-SC, the BCDA issued a Certification of Successful Negotiations (Certification). Instead of proceeding with the Competitive Challenge, BCDA wrote SMLI that the former shall welcome any voluntary and unconditional proposal to improve the original offer, but still respecting any rights accruing to SMLI. This prompted SMLI to further increase its offer and provided more financial incentives for BCDA. However, BCDA paid no heed to SMLIs latest offer. Instead, it sent a memorandum to the Office of the President (OP) recommending the termination of the Competitive Challenge and to proceed with the bidding of the subject property. Upon getting the OPs approval, BCDA issued the questioned Supplemental Notice No.5. SMLI argued that it already had a binding and enforceable contract with BCDA as evidenced by the Certification issued by the BCDA, while BCDA relied on a reservation clause in the TOR, which allegedly allowed it to unilaterally, cancel the Competitive Challenge. The Court, through Justice Velasco, granted SMLIs petition, and the previously issued TRO in SMLIs favor was made permanent. The ponente reasoned that SMLIs right to the competitive challenge was vested by the NEDA Joint Venture Guidelines and the Certification BCDA issued. Said reservation clause in the TOR could not prejudice SMLIs vested right. The decision based its ruling on the fact that the NEDA JV Guidelines are of mandatory character and reign supreme over the TOR which was only issued pursuant to the NEDA JV Guidelines. The NEDA JV Guidelines detail the so-called
Swiss Challenge where PSEs can present unsolicited proposals for
possible joint ventures with government entities (GE). The decision reasons further that since SMLI has already gone through the first two stages of the Swiss Challenge (Submission and Acceptance of Unsolicited Proposal and Detailed Negotiations), the third stage (Competitive Challenge) must follow in due course. More so that the BCDA had already issued in SMLIs favor a Certification of Successful Negotiations, the BCDA cannot invoke the said reservation clause since the same only refers to the third stage and not the entire process. Having undergone the first two stages of the Swiss Challenge gave SMLI vested rights for the conduct of the third stage or the competitive challenge. Thus, BCDAs act of unilaterally aborting the entire process and dispensing with the competitive challenge amounted to grave abuse of discretion. 2. G.R. No. 193796, July 2, 2014: Land Bank of the Philippines (LBP) v. Atlanta Industries Inc. (Atlanta) After executing an agreement with IBRD (World Bank), LBP entered into a Subsidiary Loan Agreement with the City Government of Iligan for the development and expansion of the citys water supply system. The City, through its BAC, conducted a public bidding in which Atlanta participated and submitted the second highest bid. But the BAC informed Atlanta that the bidding was a failure because World Bank did not concur with the Bid Report and because Atlanta failed to submit some documents. Apprehensive that BAC was using bidding documents, which were allegedly in contravention of RA 9184, Atlanta filed a petition for prohibition and mandamus with prayer for TRO to enjoin the re-bidding of the project. The Manila RTC declared the bidding null and void as being contrary to RA 9184. Hence this petition for certiorari which puts into issue Manila RTCs jurisdiction and the application of RA 8194 to the agreement for the procurement of water pipes. The Court, through Justice Perlas Bernabe, finds the petition meritorious. The Manila RTC acted beyond the limits of its jurisdiction in taking cognizance of a case in Iligan City. Meanwhile, the principal agreement LBP had entered into with IBRD expressly provides that it shall be in accordance with the IBRD Guidelines, the accessory contract between LBP and the Province of Iligan is thus beyond the purview of RA 9184.