"x x x.
The Court finds no merit in the petition.
Public bidding, as a method of government procurement, is governed by the principles of transparency, competitiveness, simplicity, and accountability.[21] By its very nature and characteristic, a competitive public bidding aims to protect the public interest by giving the public the best possible advantages thru open competition and in order to avoid or preclude suspicion of favoritism and anomalies in the execution of public contracts.[22] Except only in cases in which alternative methods of procurement are allowed, all government procurement shall be done by competitive bidding.[23]
In the case of Agan, Jr. v. Philippine International Air Terminals Co, Inc.,[24]the Court held:
Competition must be legitimate, fair and honest. In the field of government contract law, competition requires, not only bidding upon a common standard, a common basis, upon the same thing, the same subject matter, the same undertaking, but also that it be legitimate, fair and honest; and not designed to injure of defraud the government.
It has been held that the three principles in bidding are the offer to the public, opportunity for competition, and a basis for the exact comparison of bids. A regulation of the matter which excludes any of these factors destroys the distinctive character of the system and thwarts the purpose of its adoption.[25]
As pointed out in the case of Power Sector Assets and Liabilities Management Corporation v. Pozzolanic Philippines Incorporated,[26] an essential element of a publicly bidded contract is that all bidders must be on equal footing, not simply in terms of application of the procedural rules and regulations imposed by the relevant government agency, but more importantly, on the contract bidded upon.
In the case at bench, PSC-BAC failed to comply with the requirements and procedures for competitive bidding specified under E.O. No. 40.
Section 14 of E.O. No. 40 provides:
Section 14. Invitation to Bid. The invitation to bid shall contain, among others: a brief description of the items to be procured; the eligibility requirements; the place, date and time of the deadlines for receipt of eligibility requirements and bids; the approved budget for the contract to be bid; time and place of the opening of bids; and the contract duration or delivery. [Underlining supplied]
Section 14 of the Implementing Rules and Regulations (IRR) of E.O. No. 40 specifically mandates the BAC to include in the “Invitation to Apply for Eligibility and to Bid” the following information to guide the prospective bidders, to wit:
Section 14. Invitation to Bid
14.1. Contents of the Invitation to Apply for Eligibility and to Bid
x x x x
1. The name, address, telephone number, facsimile number, e-mail and website addresses of the concerned agency, as well as its designated contact person;
2. For the procurement of:
a) Goods, the name of the contract to be bid and a brief description of the goods to be procured;
b) Civil works, the name and location of the contract to be bid, the project background and other relevant information regarding the proposed contract works, including a brief description of the type, size, major items, and other important or relevant features of the works; and
c) Consulting services, the name of the contract to be bid, a general description of the project and other important or relevant information;
3. The criteria to be used by the agency in the following: (i) eligibility check of prospective bidders; (ii) examination and evaluation of bids; and (iii) post qualification; which shall be on a non-discretionary “pass/fail” basis;
4. The approved budget for the contract to be bid and the source of funding;
5. The period of availability of the bidding documents, the place where the bidding documents may be secured and, where applicable, the price of the bidding documents;
6. The date, time and place of the deadline for the submission and receipt of the eligibility requirements, the pre-bid conference if any, the submission and receipt of bids, and the opening of bids; and
7. The contract duration or delivery schedule. [Emphasis supplied]
Essentially, the procurement process involves the following steps: (1) pre-procurement conference; (2) advertisement of the invitation to bid; (3) pre-bid conference; (4) eligibility check of prospective bidders; (5) submission and receipt of bids; (6) modification and withdrawal of bids; (7) bid opening and examination; (8) bid evaluation; (9) post qualification; (10) award of the contract; and (11) notice to proceed.[27] Parenthetically, from the first step of the procurement procedure, E. O. No. 40 and its implementing rules are clear to the effect that the approved budget for the contract and the source of the funding should be divulged to prospective bidders.
Under the Rules Implementing E.O. No. 40, the BAC shall indicate in the Invitation to Bid relevant information regarding the proposed project and the standards that would be used in determining the pre-qualification and post-qualification of the prospective bidders and in the evaluation of bids. It shall indicate, among others, a brief description of the project to be bid; the approved budget for the contract to be bid; the criteria to be used by the agency concerned for the eligibility check; the availability of the bidding documents; and the date, time and place of the deadline for the submission of the eligibility requirements. In other words, the BAC shall furnish all information on the projects necessary for prospective bidders to properly prepare their bids in order to give them fair and equal opportunity to bid.
Admittedly, PSC-BAC did not disclose in any of the bidding documents the amount of the AAE. The Bid Bulletin which was posted in conspicuous places and the“Instruction to Bidders” that was distributed to qualified bidders did not indicate the amount of the AAE. Petitioners’ contention, that they were not bound to disclose the AAE and that Dear John Services never demanded its disclosure, is untenable. Under the law, the PSC-BAC is mandated to disclose not only the description of the items to be procured, and the eligibility requirements, among others, but also the approved budget of the project. Competitive bidding is an essential element of a public bidding. Thus, it should be conducted fairly and openly with full and free opportunity for competition among bidders. It has been held in a long line of cases that a contract granted without the competitive bidding required by law is void and the party to whom it is awarded cannot benefit from it.[28] Had Dear John Services and CBMI known all the information regarding the bidding, a different set of bids might have emerged.
Moreover, Section 25 of E.O. No. 40 and its IRR prohibit the BAC from imposing a minimum amount to be offered in the bid. It states:
Section 25. Ceiling for Bid Price. The approved budget for the contract shall be the upper limit or ceiling for the bid price. Bid prices which exceed this ceiling shall be disqualified outright from further participating in the bidding. There shall be no lower limit to the amount of the award. For this purpose, the approved budget for the contract shall be that approved by the head of the agency. [Underscoring supplied]
Consequently, the provision in the “Instruction to Bidders” stating that no award of the contract shall be made to a bidder whose bid price is lower than the allowable government estimate (AGE) or AAE is not valid. The rule on the matter is clear. The PSC-BAC is obliged to observe and enforce the same in the procurement of goods and services for the project. The law on public bidding is not an empty formality.[29] A strict adherence to the principles, rules and regulations on public bidding must be sustained if only to preserve the integrity and the faith of the general public on the procedure.[30]
x x x."
