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Leo Y. Querobin Et Al vs. COMELEC GR 218787
Leo Y. Querobin Et Al vs. COMELEC GR 218787
COMELEC
Ponente: Velasco
Facts:
On October 27, 2014, the COMELEC en banc, through its Resolution No. 14-
0715, released the bidding documents for the "Two-Stage Competitive Bidding for the
Lease of Election Management System (EMS) and Precinct-Based Optical Mark Reader
(OMR) or Optical Scan (OP-SCAN) System to be used in the 2016 National and Local
Elections. The COMELEC Bids and Awards Committee (BAC) set the deadline for the
submission by interested parties of their eligibility requirements and initial technical
proposal on December 4, 2014.
During the opening of the bids, Smartmatic JV, in a sworn certification, informed
the BAC that one of its partner corporations, SMTC, has a pending application with the
Securities and Exchange Commission (SEC) to amend its Articles of Incorporation
(AOI), attaching therein all pending documents. The amendments adopted as early as
November 12, 2014 were approved by the SEC on December 10, 2014. On even date,
Smartmatic JV and Indra participated in the end-to-end testing of their initial technical
proposals for the procurement project before the BAC.
Upon evaluation of the submittals, the BAC, through its Resolution No. 1 dated
December 15, 2014, declared Smartmatic JV and Indra eligible to participate in the
second stage of the bidding process. The BAC then issued a Notice requiring them to
submit their Final Revised Technical Tenders and Price proposals on February 25, 2015,
to which the eligible participants complied. Finding that the joint venture satisfied the
requirements in the published Invitation to Bid, Smartmatic JV, on March 26, 2015, was
declared to have tendered a complete and responsive Overall Summary of the Financial
Proposal. Meanwhile, Indra was disqualified for submitting a non-responsive bid.
Subsequently, for purposes of post-qualification evaluation, the BAC required
Smartmatic JV to submit additional documents and a prototype sample of its OMR. The
prototype was subjected to testing to gauge its compliance with the requirements
outlined in the project's Terms of Reference (TOR).
After the conduct of post-qualification, the BAC, through Resolution No. 9 dated
May 5, 2015, disqualified Smartmatic JV on two grounds, viz.:
COMELEC en banc then ruled that the instant Protest is hereby GRANTED and to
RETURN to prospective bidders their respective payments made for the purchase of
Bidding Documents pertaining to the Second Round of Bidding.
Petitioners contend that SMTC misrepresented itself by leading the BAC to believe
that it may carry out the project despite its limited corporate purpose, and by claiming
that it is a Philippine corporation when it is, allegedly, 100% foreign owned. They add
that misrepresentation is a ground for the procuring agency to consider a bidder
ineligible and disqualify it from obtaining an award or contract. They further contend that
SMTC is the biggest shareholder in the bidding joint venture at 46.5%, making the joint
venture less than 60% Filipino-owned.
Issue:
Ruling:
Clause 5 of the Instruction to Bidders provides that the following may participate
in the bidding process:
5.1. Unless otherwise provided in the BDS, the following persons shall be eligible
to participate in the bidding:
Perusing SMTC's GIS proves useful in applying the control test. Upon
examination, SMTC's GIS reveals that it has an authorized capital stock of
P226,000,000.00, comprised of 226,000,000 common stocks 116 at P1.00 par value, of
which 100% is subscribed and paid. Applying the control test, 60% of SMTC's
226,000,000 shares, that is 135,600,000 shares, must be Filipino-owned. Based on the
GIS, it is clear that SMTC reached this threshold amount to qualify as a Filipino-owned
corporation.
Indeed, the application of the control test would yield the result that SMTC is a
Filipino corporation. There is then no truth to petitioners' claim that SMTC is 100%
foreign-owned. Consequently, it becomes unnecessary to confirm this finding through
the grandfather rule since the test is only employed when the 60% Filipino ownership in
the corporation is in doubt. Anent the nationality of the other joint venture partners, the
Court defers to the findings of the COMELEC and the BAC, and finds sufficient their
declaration that Smartmatic JV is, indeed, eligible to participate in the bidding process,
and is in fact the bidder with the lowest calculated responsive bid. Hence, there is no
other alternative for this Court other than to adopt the findings of the COMELEC and the
BAC upholding Smartmatic JV's eligibility to participate in the bidding process,
subsumed in which is the joint venture and its individual partners' compliance with the
nationality requirement.