BAC has no discretion in determining eligible bidders

The Office of the Ombudsman ruled that “the BAC exercised its discretion in accepting their (referring to the six corporations that formed the consortium) collective bid as advantageous to the government in ruling MPCs eligibility to bid.”

It likewise points to the ruling in NPC vs Philip Brothers Oceanic Inc, (369 SCRA 629) in saying that “discretion given to the authorities to accept or reject a bid is of such latitude that (courts) should not interfere with unless it is shown that it is used as a shield to a fraudulent award.”

It further relied in GS Transport Corp. vs CA, (382 SCRA 262) to point out that “the determination of the winning bidder should therefore be left to the sound judgment of the agency which is in the best position to evaluate the proposals and to decide which bid would most complement the needed services. The exercise of the discretion to choose the best bid is a policy decision.”

In stressing the discretion of the BAC in accepting MPC’s bid, the Office of the Ombudsman showed an utter disregard of the IRR of EO 40, which were the applicable rules at the time of the bidding.

In the definition of terms in the IRR, eligibility check is defined as follows: “Eligibility Check refers to a simplified form of pre-qualification based on non-discretionary pass/fail criteria, as specified in Sections 16 and 17 of these IRR.”

The Office of the Ombudsman, then, is disregarding the applicable rules which clearly prescribe a “non-discretionary pass/fail criteria” in the determination of the eligibility of the bidders.

The IRR further states:

“16.4. In relation to Section 18 on submission of bids, and subject to the provisions of Section 14.6 of these IRR, the BAC shall determine if each prospective bidder is eligible to participate in the bidding by examining the completeness of each prospective bidder’s eligibility requirements or statements against a checklist of requirements, using a non-discretionary “pass/fail” criteria, as stated in the Invitation to Apply for Eligibility and to Bid, and shall be determined as either “eligible” or “ineligible.” If a prospective bidder is rated “passed” for all the eligibility requirements, it shall be considered eligible to participate in the bidding, and the BAC shall mark the set of eligibility documents of the prospective bidder concerned as “eligible.” If a prospective bidder is rated “failed” in any of the eligibility requirements, it shall be considered ineligible to participate in the bidding, and the BAC shall mark the set of eligibility documents of the prospective bidder concerned as “ineligible.” In either case, the markings shall be countersigned by the BAC chairperson or duly designated authority, and the documents shall be submitted to the head of the agency or his duly authorized representative for review and approval.”

The Eligibility Check is specified in Section 16.7 of the IRR”

“16.7. Eligibility Check for the Procurement of Goods and Civil Works
The determination of eligibility shall be based on the submission of the following documents to the BAC, utilizing the forms prepared by the BAC and using the criteria stated in Section 16.2:

1 BAC certification of the official registration of the prospective bidder, referred to in Section 16.1.1 of these IRR.

2 Technical Documents
a) Valid joint venture agreement, in case of a joint venture.
b) Letter authorizing the BAC or its duly authorized representative/s to verify any or all of the documents submitted for the eligibility check.
c) Statement of the prospective bidder that it is not “blacklisted” or barred from bidding by any government agency, office or corporation, including, in the case of procurement of civil works, non-inclusion in the “blacklist” of contractors issued by the Construction Industry Authority of the Philippines.
d) Statement of the prospective bidder of all its completed contracts in the last three (3) calendar years or more. The statement shall state for each contract whether said contract is:
d.1. Completed: in the last three (3) calendar years or more, as prescribed by the agency in the Invitation to Apply for Eligibility and to Bid; and
d.2. Similar in nature and complexity to the contract to be bid. The term ìSimilarî shall be defined by the concerned agency in the in the Invitation to Apply for Eligibility and to Bid. The statement shall include, for each contract, the following:
d.2.1. For the procurement of goods:
(i) the name of the contract;
(ii) date of the contract;
(iii) kinds of goods sold;
(iv) amount of contract;
(v) date of delivery;
(vi) end userís acceptance; and
(vii) specification whether prospective bidder is a manufacturer, supplier or distributor.”


Take note of the requirement of a valid joint venture agreement for joint ventures.

The fact that the consortium did not submit a valid joint venture agreement should have prompted the BAC to declare it “ineligible.” The BAC is given no discretion in determining the eligibility of the bidders when the IRR specified the use of a “non-discretionary pass/fail criteria.”

The fact that BAC exercised discretion in holding MPC eligible to bid when it was not given any discretion in the determination of eligible bidders, renders its act invalid as it acted without authority. It is not an abuse of discretion but an invalid act that BAC has committed in ruling MPC to be an eligible bidder.