International Technology Foundation of the Philippines v. COMELEC Ponente: Panganiban, J. Facts: y June 7, 1995: Congress passed R.A.

8046, authorizing COMELEC to conduct a nationwide demonstration of a computerized election system and allowed the poll body to test the system in the March 1996 elections in the ARMM. y December 22, 1997: Congress enacted R.A. 8436 authorizing COMELEC to use an automated election system (AES) for the process of voting, counting votes and canvassing/consolidating the results of the national and local elections. It also mandated the acquisition of automated counting mechanisms (ACMs), computer equipment, devices and materials. y During the May 11, 1998 elections, COMELEC decided not to pursue a national implementation and instead limited implementation of the AES to the ARMM. However, due to the failure of the machines to read some of the automated ballots correctly, the poll body later ordered a manual count for the entire province of Sulu. y October 29, 2002: COMELEC adopted in its Resolution 02-0170 a modernization program for the 2004 elections. It resolved to conduct biddings for the three (3) phases of its Automated Election System; namely, Phase I Voter Registration and Validation System; Phase II Automated Counting and Canvassing System; and Phase III Electronic Transmission. y January 24, 2003: President Gloria Macapagal-Arroyo issued Executive Order No. 172, which allocated the sum of P2.5 billion to fund the AES for the May 10, 2004 elections. Upon the request of COMELEC, she authorized the release of an additional P500 million. y y January 28, 2003: the Commission issued an "Invitation to Apply for Eligibility and to Bid February 17, 2003: the COMELEC released the RFP to procure the election automation schemes. y February 18, 2003: The Bids and Awards Committee convened a pre-bid conference and gave prospective bidders until March 10, 2003 to submit their bids. y Out of the 57 bidders, BAC found MPC and the Total Information Management Corporation (TIMC) eligible. After being referred to the BACs Technical Working Group and the DOST, it was found that both of them obtained failed marks in the technical evaluation. y April 15, 2003: COMELEC promulgated Resolution no. 6074 awarding project to MPC. The Commission publicized this resolution and the award of the project to MPC on May 16, 2003.

May 29, 2003: five individuals and entities (including the herein Petitioners Information Technology Foundation of the Philippines, represented by its president, Alfredo M. Torres; and Ma. Corazon Akol) wrote a letter to COMELEC Chairman Benjamin Abalos Sr. They protested the award of the Contract to Respondent MPC "due to glaring irregularities in the manner in which the bidding process had been conducted." Citing therein the noncompliance with eligibility as well as technical and procedural requirements (many of which have been discussed at length in the Petition), they sought a re-bidding.

Issues: 1. WON the petitioners have locus standi. 2. WON the instant petition is premature. 3. WON the COMELEC committed grave abuse of discretion in the bidding process and the awarding of the contract to MPC. Held/Ratio: 1. Yes, petitioners have standing.According to the court, the matter at hand is a matter of public concern and imbued with public interest and possesses transcendental importance. Moreover, the court has held that taxpayers are allowed to sue when there is a claim of illegal disbursement of public funds, or if public money is being deflected to any improper purpose; or whenpetitioners seek to restrain respondent from wasting public funds through the enforcement of an invalid or unconstitutional law. In the case, the petitioners, suing as taxpayers, assert a material interest in seeing to it that public funds are properly and lawfully used. In the petition, they claim that the bidding was defective, the winning bidder not a qualified entity, and the award of the contract contrary to law and regulation. Accordingly, they seek to restrain respondents from implementing the contract and from making any unwarranted expenditure of public funds.

2. No, the petition is not premature. The respondents claim that the petitioners acted prematurely, given the fact that they had not first utilized the protest mechanism available to them under RA 9184, otherwise known as the Government Procurement Reform Act. The court disagreed with this assertion. The letter addressed to Chairman Benjamin Abalos Sr. dated May 29, 2003 28 serves to eliminate the prematurity issue as it was an actual written protest against the decision of the poll body to award the Contract. The letter was signed by/for, inter alia, two of herein petitioners: the Information Technology Foundation of the Philippines, represented by its president, Alfredo M. Torres; and Ma. Corazon Akol. Such letter-protest is sufficient compliance with the requirement

to exhaust administrative remedies particularly because it hews closely to the procedure outlined in Section 55 of RA 9184. Even without the letter of protest, the Court still holds that the petitioners need not exhaust administrative remedies, citing Paat v. Court of Appeals. The case enumerates the instances when the rule on exhaustion of administrative remedies may be disregarded, as follows: "(1) (2) (3) when there is a violation of due process, when the issue involved is purely a legal question, when the administrative action is patently illegal amounting to lack or excess of

jurisdiction, (4) (5) (6) when there is estoppel on the part of the administrative agency concerned, when there is irreparable injury, when the respondent is a department secretary whose acts as an alter ego of the

President bears the implied and assumed approval of the latter, (7) (8) (9) (10) (11) when to require exhaustion of administrative remedies would be unreasonable, when it would amount to a nullification of a claim, when the subject matter is a private land in land case proceedings, when the rule does not provide a plain, speedy and adequate remedy, and when there are circumstances indicating the urgency of judicial intervention."

According to the court, the issue falls within the exception within nos. 7, 10 and 11.

3. Yes, there was a grave abuse of discretion on the part of the COMELEC. y Bidding: a. The Certifications from DOST fail to divulge in what manner and by what standards or criteria the condition, performance and/or readiness of the machines were re-evaluated and re-appraised and thereafter given the passing mark. b. The Automated Counting and Canvassing Project involves not only the manufacturing of the ACM hardware but also the development of three (3) types of software, which are intended for use in the following: 1. Evaluation of Technical Bids 2. Testing and Acceptance Procedures 3. Election Day Use." c. In short, the COMELEC evaluated the bids and made the decision to award the Contract to the "winning" bidder partly on the basis of the operation of the ACMs running a base" software. That software was therefore nothing but a sample or

"demo" software, which would not be the actual one that would be used on Election Day. d. The COMELEC violated the public policy on public biddings by (1) allowing MPC/MPEI to participate in the bidding even though it was not qualified to do so and (2) by eventually awarding the contract to MPC/MPEI. The further desecrated the law on public bidding by allowing the winning bidder to change and alter the subject of the contract (software), in effect allowing a substantive amendment without public bidding. e. According to the Court, the whole point in going through the public bidding exercise was completely lost. The very rationale was totally subverted by the commission.

Awarding: a. The public bidding system designed by COMELEC under its RFP (Request for Proposal for the Automation of the 2004 Election) mandated the use of a twoenvelope, two-stage system. A bidder's first envelope (Eligibility Envelope) was meant to establish its eligibility to bid and its qualifications and capacity to perform the contract if its bid was accepted, while the second envelope would be the Bid Envelope itself. b. The Eligibility Envelope was to contain legal documents such as articles of incorporation, business registrations, licenses and permits, mayor's permit, VAT certification, and so forth; technical documents containing documentary evidence to establish the track record of the bidder and its technical and production capabilities to perform the contract; and financial documents, including audited financial statements for the last three years, to establish the bidder's financial capacity. c. However, there is no sign whatsoever of any joint venture agreement, consortium agreement, memorandum of agreement, or business plan executed among the members of the purported consortium. So, it necessarily follows that, during the bidding process, COMELEC had no basis at all for determining that the alleged consortium really existed and was eligible and qualified; and that the arrangements among the members were satisfactory and sufficient to ensure compliance with the contract.

Ruling: The Petition is GRANTED. The Court hereby declares NULL and VOID Comelec Resolution No. 6074

Dissenting Opinion: Tinga, J: y no constitutional provision or letter of a statute was alleged to have been violated. The Court nullified the contract for an automated election system (AES) simply on the ground that in making the award the COMELEC has allegedly violated its bidding rules and an unfounded apprehension that the counting machines would not work on Election Day. On the other hand, not one of the losing bidders has joined the

petition;neither did the petitioners question the fairness of the price tag for the machines. y In deciding the instant case, the Court shall consider only the undisputed or admitted facts and resolve only the specific questions raised by the parties. The Court is not a repository of remedies or a super-legal-aid bureau. We cannot grant relief for every perceived violation of the law or worse, on the basis of prophetic wisdom. y It is not the Courts function to actively ensure that the automation is successfully implemented or that the elections are made free of fraud, violence, terrorism and other threats to the sanctity of the ballot. This duty lies primarily with the COMELEC. y The Court has constantly underscored the importance of giving the COMELEC considerable latitude in adopting means and methods that will insure the accomplishment of the objective for which it was created to promote free, orderly, honest, peaceful and credible elections. y As correctly pointed out by the respondents, at no time during the entire bidding process did the petitioners question the determination of the COMELEC Bids and Awards Committee (BAC) finding Mega Pacific Consortium (MPC) eligible to bid. Under R.A. 9184, decisions of the BAC should be appealed to the COMELEC en banc. Consequently, the determination of the BAC that MPC was eligible to bid, adopted subsequently by the COMELEC, became final. y Considering the circumstances, the premature invocation of this Courts judicial power is fatal to the petitioners cause of action. y [W]hatever perceived deficiencies there are in the supplementary contracts entered into by MPEI and the other members of the consortium as regards their joint and several undertaking were cured, or better still prevented from arising, by the abovequoted provisions from which it can be immediately established that each of the members of MPC is solidarily liable with the lead company, MPEI, albeit only for the particular contract or aspect of the joint venture of which it is in charge.

[The] paper requirements should yield to the reality that, collectively, the members of the consortium have furnished the COMELEC with sufficient information to enable it to judiciously gauge MPCs eligibility and qualifications. The strict and inflexible adherence to the bidding requirements by each and every component of the consortium advanced by the petitioners would negate the salutary purpose of R.A. 8436 and frustrate the long-anticipated modernization of the electoral system.

Reckoned from the standpoint of the established legal presumptions of validity of official acts and regularity in the performance of official duty, it is unjustified to speculate, as the ponenciadoes, on the good or bad motives that impelled the COMELEC to award the Contract to MPC.