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Information Technology Foundation of the Philippines v.

COMELEC
Theory and Justification of Legal Review \ Taxpayers Standing
INFORMATION TECHNOLOGY FOUNDATION OF THE PHILIPPINES, MA. CORAZON M. AKOL, MIGUEL
UY, EDUARDO H. LOPEZ, AUGUSTO C. LAGMAN, REX C. DRILON, MIGUEL HILADO, LEY SALCEDO, and
MANUEL ALCUAZ JR., petitioners, vs. COMMISSION ON ELECTIONS; COMELEC CHAIRMAN BENJAMIN
ABALOS SR.; COMELEC BIDDING and AWARD COMMITTEE CHAIRMAN EDUARDO D. MEJOS and
MEMBERS GIDEON DE GUZMAN, JOSE F. BALBUENA, LAMBERTO P. LLAMAS, and BARTOLOME
SINOCRUZ JR.; MEGA PACIFIC eSOLUTIONS, INC.; and MEGA PACIFIC CONSORTIUM, respondents.
DOCKET NUMBER: G.R. No. 159139
DATE: January 13, 2004
PONENTE: Justice Panganiban1
LEGAL ACTION: Petition1 under Rule 65 of Rules of Court
FACTS:
- June 7, 1995: Congress passed RA 8046
o Said act authorizes COMELEC to conduct nationwide demonstration of a computerized election
system
o Said act allows COMELEC to pilot-test the system in the March 1996 ARMM elections
- Dec. 22, 1997: Congress enacted RA 8436
o Said act authorizes COMELEC to use an automated election system (AES) for the process of
voting, counting votes, and canvassing/consolidating results of national and local elections.
o Poll body is also mandated by this act to acquire automated counting machines (ACMs), computer
equipment, devices and materials; and to adopt new electoral forms and printing materials.
- Feb. 9, 1998: COMELEC issues Resolution No. 2985
o In this resolution, COMELEC decides against the full national implementation of the AES. As a
consequence, the ballot counting for the May 2001 elections was done manually.
o Said resolution also limits AES to ARMM elections only (however, ACMs fail to correctly read some
automated ballots, prompting COMELEC later to order a manual recount for the entire Province of
Sulu).
- Oct 29, 2002: COMELEC adopts Resolution 02-0170
o Modernization program for the 2004 elections
o Resolves conduct of the biddings for the three phases of AES, namely Phase 1 Voter
Registration and Validation System; Phase 2 Automated Counting and Canvassing System; and
Phase 3 Electronic Transmission.
- Jan 24, 2003: Pres. GMA issues EO 172
o Allocation of Php 2.5 billion to fund the AES for the 2004 Elections
o Upon request of COMELEC, GMA authorizes release of additional Php 500 million
- Jan 28, 2003: COMELEC issues Invitation to Apply for Eligibility and to Bid
- Feb 11, 2003: COMELEC issues Resolution No. 5929, clarifying certain eligibility criteria for bidders, as
well as the schedule of activities for the project bidding.
- Feb 17, 2003: COMELEC releases the Request for Proposal to procure the election automation
machines
- Feb 18, 2003: The Bids and Awards Committee (BAC) of COMELEC convenes a pre-bid conference,
giving prospective bidders until March 10, 2003 to submit their respective bids.
- March April 2003: During the bidding process, out of the 57 bidders, the BAC found Mega Pacific
Corp. (MPC) and Total Information Management Corp (TIMC) as eligible. For the technical evaluation,
1

Petitioners labeled their pleading as one for prohibition and mandamus, but its allegations qualify it also as one for certiorari

they were referred to the BACs Technical Working Group (TWG) and the Department of Science and
Technology (DOST). The DOST, however, reported that both TIMC and MPC had obtained a number
of failed marks in the technical evaluation.
April 15, 2003: Despite these failed marks, COMELEC en banc promulgates Resolution No. 6074
awarding the project to MPC
April 21, 2003: BAC releases their technical evaluation report affirming COMELECs decision to award
the project to MPC.
May 16, 2003: COMELEC publicizes Resolution 6075 and the award of contract to MPC
May 29, 2003: Five individuals and entities (including petitioner Information Technology Foundation of the
Philippines, represented by its president Alfredo M. Torres, and Ma. Corazon Akol) write a letter to
COMELEC chairman Benjamin Abalos Sr. contesting the award of the contract to MPC.
June 6, 2003: The COMELEC chairman, speaking through his executive assistant Jaime Paz, rejected
the protest and declared that the award would stand up to the strictest scrutiny.

RATIO:
Issue
WoN petitioners have locus standi

Supreme Court
HELD: Yes, we agree with petitioners.

Petitioners, suing in their capacities as


taxpayers, registered voters, and
concerned citizens, have locus standi
because the issues central to this case
are of transcendental importance and
of national interest.2

Aside from the fact that this case is of transcendental importance


and of national interest (which should therefore give an allowance
for the relaxation of the rule on legal standing), this Court, in
several previous decisions2, 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 when petitioners seek to restrain
respondent from wasting public funds through the
enforcement of an invalid or unconstitutional law. In the
instant case, individual 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,
necessarily, from making any unwarranted expenditure of public
funds pursuant thereto. Thus, we hold that petitioners possess
locus standi.

DECISION:
The Petition is GRANTED. The Supreme Court declares Comelec Resolution No. 6074 NULL and VOID. Also
declared null and void is the subject Contract executed between COMELEC and Mega Pacific eSolutions, Inc.
(MPEI). COMELEC is further ORDERED to refrain from implementing any other contract or agreement entered into
with regard to this project.

Kilosbayan, Inc. v. Morato, supra.; Dumlao v. Comelec, 95 SCRA 392, January 22, 1980, per Melencio-Herrera, J.; Philconsa v. Mathay,
124 Phil. 890, October 4, 1966, per Reyes J.B.L., J.

COMPLEMENTARY ISSUES:
WoN the petition is premature

HELD: No, the Court is not persuaded.

Respondents claim that petitioners


acted prematurely, since they had not
first utilized the protest mechanism
available to them under RA 9184, the
Government Procurement Reform
Act, for the settlement of disputes
pertaining to procurement contracts.

COMELEC came out with its en banc Resolution No. 6074


awarding the project to MPC on April 15, 2003, even before the
BAC managed to issue its written report and recommendation on
April 21, 2003. Thus, how could petitioners have appealed
the BACs recommendation or report to the head of the
procuring entity (the chairman of Comelec), when the Comelec
en banc had already approved the award of the contract to
MPC even before petitioners learned of the BAC
recommendation? To put it bluntly, the COMELEC en banc
itself made it legally impossible for the petitioners to avail
themselves of the remedy offered in Sec. 55 of RA 9184.

WoN COMELEC gravely abused its


discretion when it awarded and
contracted with MPC

HELD: Yes, because COMELEC violated its own bidding rules


and procedures in its RFP when it awarded and contracted
with MPC/MPEI.

The Supreme Court focuses its


discussion on the following points that
impinge on the issue of grave abuse of
discretion:
WoN the award of contract to MPC is
valid, based on (a) identity, existence,
and eligibility of MPC as a bidder, (b)
failure of the ACMs to pass the DOST
technical tests, and (c) remedial
measures and re-testings undertaken
by COMELEC and DOST after the
award, and their effect on the present
controversy.3

(a) COMELEC failed to establish the identity, existence, and


eligibility of MPC as bidder. Mega Pacific eSolutions, Inc
(MPEI) was the real bidder for the project. However, the MPC
was awarded with the contract. In the eligibility documents
submitted by MPEI, there were no documents showing any
consortium or agreement between MPC and MPEI. Despite
the evidence submitted by the respondents alleging that there
is a consortium between MPC and MPEI (letter of intent to bid
from Pres. of MPEI dated March 7, 2003, allegedly for and on
behalf of MPC), there was no further proof submitted to show
that MPEI or its president have been duly pre-authorized by
the MPC group to bid on their behalf and to commit them
jointly and severally to the bid undertakings. COMELEC
therefore had no basis for determining that the alleged
consortium really existed, and was eligible and qualified
to bid. However, COMELEC still deemed the alleged
consortium eligible to participate in the bidding.
(b) COMELEC still awarded contract to MPC despite its ACMs
failure to meet key requirements in the COMELEC RFP
Mega Pacifics ACM had less failed marks than TIMs, based
on the Test Matrix submitted by DOST as evidence. However,
both MPC/MPEI and TIM failed on the accuracy rating
(99.9995%), a key requirement in the COMELEC RFP. The
bidders shouldve then been disqualified, and their bids
rejected outright. Other key requirements where MPC/MPEI
failed are (1) ability to detect previously downloaded precinct
results and prevent these from being entered again in to the
ACM, and (2) ability to print the audit trail without data loss.

(c) COMELECs post facto remedial measures were inadequate


According to the respondents, the MPEI/MPC ACMs inability
to detect previously downloaded precinct results and prevent
its reentry, as well as its inability to print audit trails without
data loss are just mere shortcomings that can be rectified by
reprogramming the software. However, there was no
evidence to suggest that COMELEC and its BAC inquired
with TWG or with DOST on whether the software can be
reprogrammed for the ACMs to comply with the key
requirements. COMELEC also admitted that the software
used was just a demo version, with the final version still being
developed and has not yet been finalized, which means that it
is not clear if the final version will work or not, come its
implementation. This means COMELEC awarded the
Contract without seeing, much less evaluating, the final
product the hardware and software that would be finally
utilized come Election Day.

DISSENT: Tinga, J. (has no comments on the locus standi of the petitioners, though - Red)
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.
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.
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.
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.
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.
Considering the circumstances, the premature invocation of this Courts judicial power is fatal to the petitioners
cause of action.
Whatever 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 above-quoted 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 ponencia does, on the good or bad motives
that impelled the COMELEC to award the Contract to MPC.