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The following are two recent case laws on procurement:

1. G.R. No. 203655, August 13, 2014: SM Land, Inc. (SMLI) v.


Bases Conversion and Development Authority (BCDA) and
Arnel Paciano D. Casanova, Esq., in his official capacity as
President and CEO of BCDA
The petition for certiorari, prohibition, and mandamus (with
prayer for injunctive relief) seeks to nullify and set aside respondent
BCDAs Supplemental Notice No.5 (as well as other acts stemming
there from), which unilaterally aborted the Competitive Challenge
instituted by SMLI for the development of BCDAs Bonifacio South
Property, a 33.1-hectare lot located in Taguig City. Said Competitive
Challenge was spurred by SMLI through a series of unsolicited
proposals that assured BCDA of billions of pesos in revenue. Taking
on SMLIs proposals, BCDA proceeded with the Competitive
Challenge to see if there will be other Private Sector Entities (PSE)
who can offer a proposal more advantageous to the government.
The BCDA even created a Joint Venture Selection Committee (JV-SC)
to oversee the selection process for the Competitive Challenge.
After a series of negotiations between the SMLI and the JV-SC, the
BCDA
issued
a
Certification
of
Successful
Negotiations
(Certification).
Instead of proceeding with the Competitive Challenge, BCDA
wrote SMLI that the former shall welcome any voluntary and
unconditional proposal to improve the original offer, but still
respecting any rights accruing to SMLI. This prompted SMLI to
further increase its offer and provided more financial incentives for
BCDA. However, BCDA paid no heed to SMLIs latest offer. Instead, it
sent a memorandum to the Office of the President (OP)
recommending the termination of the Competitive Challenge and to
proceed with the bidding of the subject property. Upon getting the
OPs approval, BCDA issued the questioned Supplemental Notice
No.5. SMLI argued that it already had a binding and enforceable
contract with BCDA as evidenced by the Certification issued by the
BCDA, while BCDA relied on a reservation clause in the TOR, which
allegedly allowed it to unilaterally, cancel the Competitive
Challenge.
The Court, through Justice Velasco, granted SMLIs petition,
and the previously issued TRO in SMLIs favor was made permanent.
The ponente reasoned that SMLIs right to the competitive challenge
was vested by the NEDA Joint Venture Guidelines and the
Certification BCDA issued. Said reservation clause in the TOR could
not prejudice SMLIs vested right. The decision based its ruling on
the fact that the NEDA JV Guidelines are of mandatory character and
reign supreme over the TOR which was only issued pursuant to the
NEDA JV Guidelines. The NEDA JV Guidelines detail the so-called

Swiss Challenge where PSEs can present unsolicited proposals for


possible joint ventures with government entities (GE). The decision
reasons further that since SMLI has already gone through the first
two stages of the Swiss Challenge (Submission and Acceptance of
Unsolicited Proposal and Detailed Negotiations), the third stage
(Competitive Challenge) must follow in due course. More so that the
BCDA had already issued in SMLIs favor a Certification of Successful
Negotiations, the BCDA cannot invoke the said reservation clause
since the same only refers to the third stage and not the entire
process. Having undergone the first two stages of the Swiss
Challenge gave SMLI vested rights for the conduct of the third stage
or the competitive challenge. Thus, BCDAs act of unilaterally
aborting the entire process and dispensing with the competitive
challenge amounted to grave abuse of discretion.
2. G.R. No. 193796, July 2, 2014: Land Bank of the
Philippines (LBP) v. Atlanta Industries Inc. (Atlanta)
After executing an agreement with IBRD (World Bank), LBP
entered into a Subsidiary Loan Agreement with the City Government
of Iligan for the development and expansion of the citys water
supply system. The City, through its BAC, conducted a public
bidding in which Atlanta participated and submitted the second
highest bid. But the BAC informed Atlanta that the bidding was a
failure because World Bank did not concur with the Bid Report and
because Atlanta failed to submit some documents. Apprehensive
that BAC was using bidding documents, which were allegedly in
contravention of RA 9184, Atlanta filed a petition for prohibition and
mandamus with prayer for TRO to enjoin the re-bidding of the
project. The Manila RTC declared the bidding null and void as being
contrary to RA 9184. Hence this petition for certiorari which puts
into issue Manila RTCs jurisdiction and the application of RA 8194 to
the agreement for the procurement of water pipes.
The Court, through Justice Perlas Bernabe, finds the petition
meritorious. The Manila RTC acted beyond the limits of its
jurisdiction in taking cognizance of a case in Iligan City. Meanwhile,
the principal agreement LBP had entered into with IBRD expressly
provides that it shall be in accordance with the IBRD Guidelines, the
accessory contract between LBP and the Province of Iligan is thus
beyond the purview of RA 9184.