Roque, Jr. vs.

Commission on Elections
G.R. No. 188456. September 10, 2009
FACTS:
(1) Petitioners filed a petitioner for certiorari, prohibition and mandamus with
prayer for a restraining order and/or preliminary injunction and are suing as
taxpayers and concerned citizens. They seek to nullify respondent
COMELECs award of the 2010 Elections Automation Project to the joint
venture of Total Information Management Corporation (TIM) and
Smartmatic International Corporation (Smartmatic)1 and to permanently
prohibit the Comelec, TIM and Smartmatic from signing and/or
implementing the corresponding contract-award.
(2) On Dec 22, 1997 Congress enacted RA 8346 authorizing the adoption of an
automated election system (AES) in the May 11, 1998 national and local
elections and onwards. However during 1998, 2001 and 2004, purely
manual elections were done.
(3) On Jan 23, 2007, the amendatory of RA 9369 was passed authorizing again
the COMELEC to use the AES. Sec 5 of that law authorised the COMELEC
to:
Use an automated election system or systems in the same election in different
provinces, whether paper-based or a direct recording automated election system as it
may deem appropriate and practical for the process of voting, counting of votes and
canvassing/consolidation and transmittal of results of electoral exercises: Provided,
that for the regular national and local election, which shall be held immediately after
effectivity of this Act, the AES shall be used in at least two highly urbanized cities
and two provinces each in Luzon, Visayas and Mindanao, to be chosen by the
Commission x x x x In succeeding regular national or local elections, the AES shall
be implemented nationwide.

(4) However, the COMELEC did not use any AES in the May 14 2007
elections.
(5) On July 19, 2009, the COMELEC and the TIM and Smartmatic (provider)
signed the contract for the automated tallying and recording of votes cast
nation-wide in the May 2010 elections.
(6) For around P7 billion, the COMELEC leased 82,200 optical scanners,
related equipment and hired ancillary services provider to be used in the
May 2010 elections.
(7) Hence this petition was filed to enjoin the signing of the Contract or its
implementation and to compel disclosure of the terms of the contract and
other agreements between the provider and its subcontractors.
(8) Petitioners sought the Contract's invalidation for non-compliance with the
requirement in Section 5 of RA 8436, as amended, mandating the partial use
of an automated election system before deploying it nationwide.
To further support their claim on the Contract's invalidity, petitioners alleged that:

(1) the optical scanners leased by the COMELEC do not satisfy the minimum
systems capabilities" under RA 8436, as amended (he was claiming that the
COMELEC must pilot test in 12 areas in the country in the national
elections of 2010, before doing fully computerized elections in the national
elections after 2010)
(2) the Provider not only failed to submit relevant documents during the
bidding but also failed to show "community of interest" among its
constituent corporations as required in Information Technology Foundation
of the Philippines v. COMELEC (Infotech).
ISSUE:

Is there a need for pilot testing of the PCOS machines offered by

Smartmatic and TIM? NO.
Was there an invalid joint venture agreement between COMELEC and the
provider during the bidding that would be in violation of the SCs holding in
the Information Technology Foundation of the Philippines v. COMELEC
(Infotech) which requires a joint venture to include a copy of its JVA
DURING the bidding? NONE
Was there an infringement of the constitutional right of the people to
secrecy of the ballot? NONE

HELD:
Pilot testing

The plain wordings of Republic Act No. 9369 (that amended RA 8436)
commands that the 2010 elections shall be fully automated, and such full
automation is not conditioned on pilot testing in the May 2007 elections.
Congress merely gave COMELEC the flexibility to partially use the AES in
some parts of the country for the May 2007 elections.
Any lingering doubt on the issue of whether or not full automation of the
2010 regular elections can validly proceed without a pilot run of the
Automated Election System (AES) should be put to rest with the enactment
in March 2009 of Republic Act No. 9525, in which Congress appropriated
PhP 11.301 billion to automate the 2010 electionsthe Republic Act No.
9525 is a compelling indication that it was never Congress intent to make
the pilot testing of a particular automated election system in the 2007
elections a condition precedent to its use or award of the 2010 Automation
Project.

Joint venture

As petitioners observed, that the TIM- Smartmatic joint venture remained

an unincorporated aggroupment during the bid- opening and evaluation
stages. It ought to be stressed, however, that the fact of non-incorporation
was without a vitiating effect on the validity of the tender offers.
For the bidding ground rules, as spelled out primarily in the RFP and the
clarificatory bid bulletins, does not require, for bidding purposes, that there
be an incorporation of the bidding joint ventures or consortiums
In fact, Bid Bulletin Nos. 19 and 20 recognize the existence and the
acceptability of proposals of unincorporated joint ventures. In response to a
poser, for example, regarding the 60% Filipino ownership requirement in a
joint venture arrangement, the SBAC, in its Bid Bulletin No. 22, stated:

As to petitioners contention that the PCOS would infringe on the secrecy and
sanctity of the ballot because the voter would be confronted with a three feet long
ballot:

As to the issue of the possible violation of the Anti Dummy Law given that the RFP
requirement of a joint venture bidder to be at least be 60% Filipino:

In an unincorporated joint venture, determination of the required Filipino

participation may be made by examining the terms and conditions of the [JVA] and
other supporting financial documents submitted by the joint venture.

And the Court held that petitioners have not shown that incorporation is part
of the pass/fail criteria used in determining eligibility

Infringement on secrecy and sanctity of the ballot and the possible violation of
the Anti-Dummy Law

Petitioners were contending that the COMELEC relinquished its

supervision and control of the system to be used for the automated elections
since the COMELEC would not be the one holding possession of the public
and private keys pair of the machines.
But Court held that the role of Smartmatic TIM Corporation is basically to
supply the goods necessary for the automation project, such as but not
limited to the PCOS machines, PCs, electronic transmission devices and
related equipment, both hardware and software, and the technical services
pertaining to their operation.
As lessees of the goods and the back-up equipment, the corporation and its
operators would provide assistance with respect to the machines to be used
by the Comelec which, at the end of the day, will be conducting the election
thru its personnel and whoever it deputizes. And if only to emphasize a
point, Comelecs contract is with Smartmatic TIM Corporation of which
Smartmatic is a 40% minority owner, per the JVA of TIM and Smartmatic
and the Articles of Incorporation of Smartmatic TIM Corporation.
Accordingly, any decision on the part or on behalf of Smartmatic will not be
binding on Comelec. As a necessary corollary, the board room voting
arrangement that Smartmatic and TIM may have agreed upon as joint
venture partners, inclusive of the veto vote that one may have power over
the other, should really be the least concern of the Comelec.

The Court held that, surely, the Comelec could put up such infrastructure as
to insure that the voter can write his preference in relative privacy. And as
demonstrated during the oral arguments, the voter himself will personally
feed the ballot into the machine. A voter, if so minded to preserve the
secrecy of his ballot, will always devise a way to do so. By the same token,
one with least regard for secrecy will likewise have a way to make his vote
known.

The winning bidder, TIM-Smartmatic joint venture, has Smartmatic, a

foreign corporation, owning 40% of the equity in, first, the joint venture
partnership, and then in Smartmatic TIM Corporation.
The Anti-Dummy Law has been enacted to limit the enjoyment of certain
economic activities to Filipino citizens or corporations. For liability for
violation of the law to attach, it must be established that there is a law
limiting or reserving the enjoyment or exercise of a right, franchise,
privilege, or business to citizens of the Philippines or to corporations or
associations at least 60 per centum of the capital of which is owned by such
citizens.
In the case at bench, the Court is not aware of any constitutional or statutory
provision classifying as a nationalized activity the lease or provision of
goods and technical services for the automation of an election. In fact, Sec.
8 of RA 8436, as amended, vests the Comelec with specific authority to
acquire AES from foreign sources, thus:

SEC 12. Procurement of Equipment and Materials.To achieve the purpose of

this Act, the Commission is authorized to procure, xxx, by purchase, lease, rent
or other forms of acquisition, supplies, equipment, materials, software,
facilities, and other services, from local or foreign sources xxx.

Petitioners cite Executive Order No. (EO) 584,98 Series of 2006,

purportedly limiting contracts for the supply of materials, goods and
commodities to government- owned or controlled corporation, company, agency or
municipal corporation to corporations that are 60% Filipino.

But the Court did not see the governing relevance of EO 584. For let alone
the fact that RA 9369 is, in relation to EO 584, a subsequent enactment and,
therefore, enjoys primacy over the executive issuance, the Comelec does
fall under the category of a government-owned and controlled corporation,
an agency or a municipal corporation contemplated in the executive order.