GR 155001 | Employees of various service its providers capacity to secure external financing for the (MIASCOR, MACROASIA-EUREST, project. MACROASIA OGDEN and Philippine Airlines) The PBAC Bulletin No. 3 specified: 1. that proof and labor unions (MIASCOR and PAL) vs. of Philippine International Air Terminals Co., Inc the financial capability of proponents will be (PIATCO), Manila International Airport Authority measured by proof to provide the minimum (MIAA), DOTC Secretary Mendoza amount GR 155547 | Members of the House of of equity for the project and a letter testimonial Representatives from vs. PIATCO, DOTC Secretary Mendoza, DPWH reputable banks attesting that the project Secretary Datumanong proponent GR 155661 | Employees of MIAA and members is banking with them, has good financial of labor standing, union Samahang Manggagawa sa Paliparan ng and have adequate resources; 2. basis for the Pilipinas (SMPP) vs. PIATCO, MIAA, DOTC prequalification Secretary Mendoza shall be the proponent's compliance with Puno [2003]. Special civil action in the SC. the minimum technical and financial --- requirements Facts: provided in the Bid Documents and the IRR of • 1989 | Study was made to determine the the capacity of BOT Law which is 30% of the Project Cost; 3. NAIA to cope with traffic development until Amendments to the draft Concession 2010 Agreement shall be issued from time to time. • 1993 | Asia’s Emerging Dragon Corp (AEDC) • September 1996 | The Paircargo Consortium was composed of People's Air Cargo and formed among John Gokongwei, Andrew Warehousing Co., Inc. (Paircargo), Phil. Air and Gotianun, Grounds Services, Inc. (PAGS) and Security Henry Sy, Sr., Lucio Tan, George Ty and Alfonso Bank Corp. (Security Bank) submitted their Yuchengco to explore the possibility of competitive proposal to the PBAC investing in the construction and operation of a new • September-October 1996 | AEDC submitted international its airport terminal objections to Paircargo Consortium as a pre- qualified • October 1994 | AEDC submitted unsolicited bidder due to the following reasons: the lack of proposal to Government for the NAIA corporate approvals and financial capability of International Passenger Terminal III (NAIA IPT Paircargo, the lack of corporate approvals and III) under build-operate-and transfer financial capability of PAGS, the prohibition arrangement imposed by the General Banking Act on the amount that • December 1995 | DOTC issued an order for Security Bank could legally invest in the the project, the Prequalification Bids and Awards Committee inclusion of Siemens as a contractor of the (PBAC) PAIRCARGO Joint Venture, the appointment of for the implementation of the NAIA IPT III Lufthansa as the facility operator, in view of the project. Philippine requirement in the operation of a The first envelope should contain the public Prequalification utility. October 1996 PBAC informed AEDC that Documents, the second envelope the Technical based on the documents submitted by Proposal, and the third envelope the Financial Paircargo and Proposal of the proponent. the established prequalification criteria, Paircargo, • The Bid Documents required that proponent had prequalified to undertake the project. The must Secretary of the DOTC approved the finding of have adequate financial capability. The the proponent PBAC. would be evaluated based on its ability to provide a • October 16, 1996 | According to their third airline service filed before this Court a petition envelopes, both proponents offered to: build for the NAIA prohibition Passenger Terminal III for at least $350 million at no • October 15, 2002 | Service providers, joining cost to the government and to pay the the government: cause of the petitioning workers, filed a motion 5% share in gross revenues for the first five for years of intervention and a petition-in-intervention operation, 7.5% share in gross revenues for the next • October 24, 2002 | Congressmen Salacnib ten years of operation, and 10%. share in gross Baterina, revenues for the last ten years of operation, in Clavel Martinez and Constantino Jaraula filed a accordance with the Bid Documents. The only similar petition with this Court difference in their proposal is AEDC’s offer to pay the • November 6, 2002 | Several employees of the government a total of P135 million as MIAA guaranteed likewise filed a petition assailing the legality of payment for 27 years while Paircargo the Consortium’s various agreements. 4 offer was for P17.75 billion for the same period. • December 11, 2002 | Another group of • February 27, 1997 | Paircargo Consortium Congressmen, Hon. Jacinto V. Paras, Rafael P. incorporated into Philippine International Nantes, Eduardo C. Zialcita, Willie B. Villarama, Airport Prospero C. Nograles, Prospero A. Pichay, Jr., Terminals Co., Inc. (PIATCO). Harlin Cast Abayon and Benasing O. Macaranbon, • July 9, 1997 | The DOTC issued the notice of moved award to intervene in the case as Respondents- for the project to PIATCO Intervenors. They filed their Comment-In-Intervention • July 12, 1997 | Government, through then defending DOTC the validity of the assailed agreements and Secretary Arturo T. Enrile, and PIATCO, through praying its for the dismissal of the petitions. President, Henry T. Go, signed the "Concession Agreement for the Build-Operate-and-Transfer • November 29, 2002 | President Gloria Arrangement of the Ninoy Aquino International Macapagal Airport Passenger Terminal III" (1997 Arroyo, in her speech at the 2002 Golden Shell Concession Export Awards at Malacañang Palace, stated Agreement). The agreement grants PIATCO the that franchise to operate and maintain the terminal she will not "honor (PIATCO) contracts which during the the concession period (25 years, renewable for Executive Branch's legal offices have another 25 at the government’s discretion) and concluded (as) to null and void. collect the fees, rentals and other charges in accordance with the rates or schedules • March 6, 2003 | PIATCO informed the Court stipulated in that on the 1997 Concession Agreement. March 4, 2003 PIATCO commenced arbitration proceedings before the International Chamber of Commerce, International Court of Arbitration • November 26, 1998-June 22, 2001 | Further (ICC) by amendments and supplements were made to filing a Request for Arbitration with the the Secretariat of PIATCO 1997 Concession Agreement the ICC against the Government of the Republic of • September 17, 2002 | Employees of the the Philippines acting through the DOTC and international MIAA. Issues/Held: • Public respondents argue that the Paircargo A. PROCEDURAL Consortium, PIATCO's predecessor, was not a 1. Do petitioners have legal standing? duly • G.R. No. 155001 – YES | individual petitioners pre-qualified bidder on the unsolicited proposal are employees of various service providers7 submitted by AEDC as the Paircargo having separate concession contracts with Consortium MIAA. Initiated by petitioners as taxpayers failed to meet the financial capability required claiming that their rights and interests would under be violated if the contract was implemented. the BOT Law and the Bid Documents. Court held they have legal standing. • They allege that in computing the ability of the • G.R. No. 155661 – YES | petitioners constitute Paircargo Consortium to meet the minimum employees of MIAA and Samahang equity Manggagawa sa Paliparan ng Pilipinas - a requirements for the project, the entire net legitimate labor union and accredited as the worth of sole and exclusive bargaining agent of all the Security Bank, a member of the consortium, employees in MIAA. Initiated by petitioners as should taxpayers claiming that they have legitimate not be considered. General Banking Act Sec. interests to protect in the implementation of 21-B the contract. Court held they have legal limits the any bank from investing more than standing. 15% of its total networth in any single venture. The contract states that upon the operation of • As such, the total net worth therefore of the NAIA Paircargo IPT III, terminals I and II will be closed down as Consortium, after considering the maximum international airports. Since their contracts as amounts employees and service providers will not be that may be validly invested by each of its automatically availed of by PIATCO, the Court members found that they have a direct and substantial is P558,384,871.55 or only 6.08% of the project interest to protect their source of livelihood. cost, much substantially less than the prescribed • G.R. No. 155547 – YES | Initiated by members minimum of the House of Representatives claiming that equity investment required for the project in the contract violates the legislators’ rights the since it compels them to disburse funds before amount of P2,755,095,000.00 or 30% of the an appropriation for the contract was made. project cost. Further, "insofar as taxpayers' suits are • We hold that Paircargo Consortium was not a concerned . . . (this Court) is not devoid of qualified bidder. Thus the award of the contract discretion as to whether or not it should be by entertained." the PBAC to the Paircargo Consortium, a disqualified 2. Jurisdiction of the Court bidder, is null and void. • Hierarchy of Courts – Does not bar the Court 2. Is the 1997 Concession Agreement valid? from NO. resolving the issues since the questions to be Part C6 of Bid Bulletin No. 3 — “Amendments to answered are legal in nature. It need not pass the Draft before Concessions Agreement shall be issued from the trial courts since the facts in not in time to question. time. Said amendments only cover items that • Ongoing Arbitration – Arbitration settles would not disputes only materially affect the preparation of the between parties to the contract. Since the proponent’s petitioners approval.” (paraphrased) are not parties to the contract assailed, that • Public bidding aims to protect the public the Court interest resolve the issues in a single proceeding would by giving the public ththe best possible best advantages through open competition. An serve justice. essential element of a publicly bidded contract B. MERITS is 1. Is PIATCO a qualified bidder? NO. that all bidders must be on equal footing, not only on the terms of application of procedural rules and regulations, but also on the contract
The Small-Business Guide to Government Contracts: How to Comply with the Key Rules and Regulations . . . and Avoid Terminated Agreements, Fines, or Worse