PUBLIC BIDDING

ATTY. ABDUL MAHID M. ATI

DHESS, CHAIR
ARTICLES 185-189
 Public auction is conduct to secure to the public the best price. This crime is
committed by a person who rigs the auction to frustrate this purpose of the law.
 Manuel, 7 Phil. 221, laid down this test to determine unfair competition: Whether
certain goods have been clothed with an appearance which is likely to deceive the
ordinary purchaser exercising ordinary care. Thus, if the goods are so crude and
the price so low that the ordinary purchaser cannot possibly be deceived, there is
no unfair completion. (Louis Vuitton S.A. v. Villanueva, A.C. No. MTJ-92-643,
Nov. 27, 1992)
 Compared to estafa, in unfair competition, the fake articles are offered to deceive
the general public, whereas in estafa, the fake article is offered to a particular
individual who is deceived to his damage and prejudice.
 Unfair competition is now covered by the new law on Intellectual Property which
expressly repealed the provisions of Arts. 188 and 189.
R.A. 9184- Public Bidding Law

 The new law on public bidding is R.A. 9184, the “Government Procurement
Reform Act of 2002.” Its declared policy is to promote the ideals of good
governance in all its branches, departments, agencies, subdivisions and
instrumentalities including government owned – and/or controlled corporations
(GOCCs) and local government units (LGUs).
 The governing principles of the public bidding law are:
 Transparency in the procurement process and in the implementation of the procurement contracts;
 Competitiveness by extending equal opportunity to enable private contracting parties who are
eligible and qualified to participate;
 Streamlined procurement process that will uniformly apply to all government procurement. It shall
be simple and adaptable to advances in technology to ensure an affective and efficient method;
 System of accountability where both public officials directly or indirectly involved in the process
as well as in the implementation of procurement contracts and the private parties that deal with
government are, when warranted, investigated and held liable; and
 Public monitoring of the process and the implementation of awarded contracts to guarantee that
contracts are awarded pursuant to the provisions of the law and its implementing rules and
regulations (IRR), and that contracts are performed strictly according to specifications.
 The law covers government infrastructure projects, goods and consulting
services, regardless of source of funds for all its agencies, branches and
instrumentalities.
 Without prejudice to the Anti-Graft Law, the prohibited acts are:
 Opening any sealed bid and any and all documents required to be sealed, or divulging their
contents prior to the appointed time for the public opening of bids and other documents;
 Delaying, without justifiable cause, the screening for eligibility, opening of bids, evaluation and
post evaluation of bids, and awarding of contracts beyond the periods of action provided for in the
IRR;
 Unduly influencing or exerting undue pressure on any member of the Bids and Awards
Committee (BAC) or any officer or employee of the procuring entity to take a particular action
which favors or tend to favor a particular bidder;
 Splitting of contracts which exceed procedural purchase limits and competitive bidding; and
 Abusing the exercise by the head of agency of his power to reject any and all bids with manifest
preference to any bidder who is closely related to him.
 Private persons and public officers conniving with them shall suffer the same penalty for
the following acts:
 Two or more bidders agreeing and submitting different bids such that the contract will surely be
awarded to the pre-arranged lower bidder;
 A bidder submitting more that one bid through different persons or entities to create the appearance of
competition;
 Agreeing to refrain from bidding or to withdraw bids already submitted or which are otherwise
intended to secure an advantage to anyone of them;
 Employing schemes tending to restrain the natural rivalry of the parties or operating to stifle or
suppress competition;
 Submitting eligibility requirements containing false documents to influence the outcome of the
eligibility screening process or concealing such information which shall result to declaration of
ineligibility from participating in the bidding;
 Submitting bidding documents containing false information or falsified documents or
concealing such information in the bidding documents in order to influence the outcome of
the bidding;

 Participating in a public bidding using he name of another or allowing another to use one’s
name for the purpose of participating therein; and

 Withdrawing a bid after it shall have qualified as the Lowest Calculated Bid/Highest Rated
Bid or refusing to accept the award without just cause or for the purpose of forcing the
agency to award the contract to another bidder. This shall include non-submission within the
prescribed time or delaying the submission or requirements preparatory to the final award of
contract.
 When the bidder is a juridical entity, criminal liability and the accessory penalties shall be
imposed on its directors, officers or employees who actually committed the prohibited act.
 The criminal acts listed in the law do not include the deliberate act of not conducting
public bidding at all. The acts penalized are mostly those incurred in the course of or
during the public bidding itself.
 The aims of public bidding are:
 To protect interest by giving the public the best possible advantages thru open competition that is
legitimate, fair and honest;
 To avoid or preclude suspicion of favoritism and anomalies in the execution of public contracts.
 Compared public bidding of government contracts and public bidding for disposition of
government assets saying that they have the same purpose and objectives. Their only
difference, if at all, is that in the public bidding for public contracts the award is generally
given to the lowest bidder while in the disposition of government assets the award is to the
highest bidder.
 In a public bidding, there must be competition that is legitimate, fair
and honest. Thus, the three principles of a public bidding are:
 The offer to the public;
 An opportunity for competition; and
 A basis for exact comparison of bids.

 A contract granted without the competitive bidding required by law is

void, and the party to whom it is awarded cannot benefit from it.
 There is grave abuse of discretion (a) when an acts is done contrary to the Constitution, the
law or jurisprudence; or (b) when it is executed whimsically, capriciously or arbitrarily out
of malice, ill-will or personal bias. The COMELEC approved the Resolution and awarded
the Contract in clear violation of law and jurisprudence, and in reckless disregard of its own
bidding rules and procedure. For the automation of the counting and canvassing of the
ballots in the 2004 elections, COMELEC awarded the Contract to “Mega Pacific
Consortium” an entity that had not participated in the bidding. Despite this, the poll body
signed the actual automation Contract with “Mega Pacific eSolutions, Inc.,” a company that
joined the bidding but had not met the eligibility requirements.
 COMELEC awarded this billion-peso undertaking with inexplicable haste, without
adequately checking and observing mandatory financial, technical and legal requirements. It
also accepted the computer hardware and software even if, at the time of the award, they
had undeniably failed to pas eight critical requirements designed to safeguard the integrity
of elections.

 Because of the violations of law and the glaring grave abuse of discretion committed by COMELEC,
the Resolution and the Contract are void. COMELEC flagrantly violate the public policy on public
biddings (1) by 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 Commission further
desecrated the law on public bidding by permitting the winning bidder to change and alter the subject
of the Contract (the software, in effect allowing a substantive amendment without public bidding.
 This stance is contrary to settled jurisprudence requiring the strict application of pertinent
rules, regulations and guidelines for public bidding for the purpose of placing each bidder,
actual or potential, on the same footing. The essence of public bidding is an opportunity
for fair competition, and a fair basis for the precise comparison of bids. It aims to “level
the playing field,” i.e., each bidder must bid under the same conditions; and be subject to
the same guidelines, requirements and limitations, so that the best offer or lowest bid may
be determined, all other things being equal.
 It is contrary to the very concept of public bidding to permit a variance between the
conditions under which bids are invited and those under which proposals are submitted and
approved; in this case, the conditions under which the bid is won and those under which the
awarded Contract will be complied with. The substantive amendment of the contract bidded
out, without any public bidding after the bidding process had been concluded is violative of
the public policy on biddings, as well as the spirit and intent of R.A. 8436.
 As a necessary consequence of such nullity and illegality, the purchase of the machines and
all appurtenance thereto including the still-to-be-produced (“reprogrammed”) software, as
well as all the payments made therefor, have no basis whatsoever in law. The public funds
expended pursuant to the void Resolution and Contract must be recovered from the payees
and/or from the persons who made possible the illegal disbursements, without prejudice to
criminal prosecutions against them.
 The State is not bound by the mistakes and illegalities of its agents and servants. The Office
of the Ombudsman shall determine the criminal liability of the public officials and
conspiring private individuals involved. The Solicitor General shall also take measures to
protect the government and vindicate public interest from the ill-effect of the illegal
disbursements of public funds made thereby.
Thank you..