GENARO R. REYES CONSTRUCTION, INC.

and UNIVERSAL
DOCKYARD., petitioners,
vs.
THE HONORABLE COURT OF APPEALS, THE DEPARTMENT OF PUBLIC WORKS
AND HIGHWAYS, JOSE P. DE JESUS, ROMULO M. DEL ROSARIO, ET AL.
G.R. No. 108718, July 14, 1994
MELO, J.:

FACTS:
Petitioners filed petition to stop Respondent DPWH from implementing
the notice of pre-termination in their contract for construction of the flood
control facilities and land improvement works in Butuan City.  Petitioners won
in a public bidding held for this purpose.  Respondents claimed that with
a 9.86% negative slippage (delay in the infrastructure project), the government was
either authorized to take over the project or let another contractor finish
it. Petitioners however claimed that not only were the delays caused
significantly by DPWH, but also termination of contract is only appropriate if the
negative slippage reaches 15%. Hence this Petition.

ISSUE: Whether or not termination of contract with Petitioners is valid.

HELD:
No, Respondents may not terminate contract with Petitioners and award the
contract to other bidders. The discretion of Respondent DPWH to terminate or rescind
the contract comes into play only in the event the contractor shall have incurred a
negative slippage of 15% or more, according to P.D. 1870 and DPWH
Circular No.102. The intent of the law in allowing the
g o v e r n m e n t   t o   t a k e   o v e r   d e l a y e d construction projects with negative
slippage of 15% or more is primarily “to save money and to avoid dislocation of
the financial projections and/or cash flow of the government.” Terminating
the contract and awarding it to Hanil, a previously disqualified bidder, would
actually result in a financial loss to the government.
 THE INSULAR LIFE ASSURANCE COMPANY, LTD., petitioner
vs.
ASSET BUILDERS CORPORATION, respondent.
G.R. No. 147410, February 5, 2004
PANGANIBAN, J.:

FACTS:
Insular Life Insurance Company, Limited invited companies to participate in the
bidding of the proposed Insular Life building. The Instruction to Bidders prepared by
Insular Life expressly required a formal acceptance and a period within which such
acceptance was to be made known to the winner. Asset Builders Corporation submitted
a bid proposal secured by bid bonds valid for 60 days. Under its proposal form, Asset
Builders bound and obliged itself to enter into a contract with Insular Life within 10 days
from the notice of the award, with good and sufficient securities. The project was
awarded to the Asset Builders and a notice to proceed with the construction was sent by
Insular Life to the former. However, Asset Builders project. Neither did it execute any
construction agreement. It informed Insular Life that it will not proceed with the project.
Hence, this petition.

ISSUE:
Whether or not there is a perfected contract between Insular Life and Asset
Builders.

HELD:
There was indeed no acceptance of the offer by Asset Builders. Such failure to
comply with the condition imposed for the perfection of the contract resulted in the
failure of the contract. 
It is elementary that, being consensual, a contract is perfected by mere consent.
From the moment of a meeting of the offer and the acceptance upon the object and the
cause that would constitute the contract, consent arises. However, "the offer must be
certain" and "the acceptance seasonable and absolute; if qualified, the acceptance
would merely constitute a counter-offer."
Negotiation begins when the prospective contracting parties manifest their
interest in the contract and ends at the moment of their agreement. Perfection occurs
when they agree upon the essential elements thereof. The last stage is the
consummation where they fulfill the terms agreed upon culminating in the
extinguishment of the contract.
Here, the parties did not get past the negotiation stage. There was only an offer
and a counteroffer that did not sum up to any final arrangement containing the elements
of a contract.
Hence, no meeting of minds was established.
 SARGASSO CONSTRUCTION & DEVELOPMENT CORPORATION/PICK &
SHOVEL, INC.,/ATLANTIC ERECTORS, INC. (JOINT VENTURE), Petitioner,
vs.
PHILIPPINE PORTS AUTHORITY, Respondent.
G.R. NO. 170530, July 5, 2010
MENDOZA, J.:

FACTS:
Sargasso Construction and Development Corporation, Pick and Shovel, Inc. and
Atlantic Erectors, Inc., a joint venture, was awarded the construction of Pier 2 and the
rock causeway for the port of San Fernando, La Union, after a public bidding conducted
by the PPA. Plaintiff offered to undertake the reclamation between the Timber Pier and
Pier 2 of the Port of San Fernando, La Union, as an extra work to its existing
construction of R.C. Pier 2 and Rock Causeway for a price of P36,294,857.03. PPA
replied thru its Assistant General Manager Teofilo H. Landicho
A Notice of Award signed by PPA General Manager Rogelio Dayan was sent to
plaintiff for the phase I Reclamation Contract in the amount of P30,794,230.89 and
instructing it to "enter into and execute the contract agreement with this Office" and to
furnish the documents representing performance security and credit line. General
Manager Carlos L. Agustin presented for consideration by the PPA Board of Directors
the contract proposal for the reclamation project. The Board decided not to approve the
contract proposal. PPA did not formally advise the plaintiff of the Board’s action on their
contract proposal.
As plaintiff learned that the Board was not inclined to favor its Supplemental
Agreement, Mr. Go wrote General Manager Agustin requesting that the same be
presented again to the Board meeting for approval. However, no reply was received by
plaintiff from the defendant. Plaintiff filed a complaint for specific performance and
damages.

ISSUE: Is the general manager of PPA is vested with authority to enter into a contract
for and on behalf of PPA?

HELD:
No. Contracts to which the government is a party are generally subject to the
same laws and regulations which govern the validity and sufficiency of contracts
between private individuals.
Under Article 1881 of the Civil Code, the agent must act within the scope of his
authority to bind his principal. So long as the agent has authority, express or implied,
the principal is bound by the acts of the agent on his behalf, whether or not the third
person dealing with the agent believes that the agent has actual authority.
Here, unless respondent’s Board validly authorizes its general manager, the
latter cannot bind respondent PPA to a contract.
Hence, the Court completely agrees with the CA that the petitioner failed to
present competent evidence to prove that the respondent’s general manager possessed
such actual authority delegated either by the Board of Directors, or by statutory
provision. The authority of government officials to represent the government in any
contract must proceed from an express provision of law or valid delegation of authority.
Without such actual authority being possessed by PPA’s general manager, there could
be no real consent, much less a perfected contract, to speak of. 
 TOMAS N. JOSON III, Petitioner
vs.
COMMISSION ON AUDIT, Respondent
G.R. No. 223762, November 7, 2017
TIJAM , J.:

FACTS:

In 2007, a Special Audit Team (SAT) of the COA conducted a special audit of
selected transactions of the Provincial Government of Nueva Ecija for calendar years
2004-2007. The SAT found an irregular award made by the province for the
construction of the Nueva Ecija Friendship Hotel to A.V.T. Construction. Thereafter, the
SAT issued Notice of Disallowance ND No. L-09-05-005(2004-2007) disallowing the
payments made to A.V.T. Construction.
The SAT found the members of the Bids and Awards Committee (BAC), the BAC
Technical Working Group (TWG), the provincial accountant, the provincial engineer and
herein Petitioner in his capacity as provincial governor of Nueva Ecija and as head of
the procuring entity, solidarily liable for the disallowed amount. Petitioner was held
solidarily liable for entering into the contract with A.V.T. Construction and for approving
the payment vouchers to the latter.
Petitioner appealed the disallowance. However, the Director of the Fraud Audit
and Investigation Office, Legal Services Sector (LSS) of the COA denied the appeal and
affirmed the disallowance in his LSS Decision .
Petitioner then filed a petition for exclusion from liability arguing that he should
not be held liable for the disallowed amount since the determination of whether a
prospective bidder is eligible or not is the exclusive responsibility of the BAC and if there
is indeed a liability, the members of the BAC should be held liable since they are the
persons directly responsible for the transaction.
The COA denied the petition.Petitioner filed a motion for reconsideration of the
COA decision, but the same was denied by the COA.
Hence this Petition.

ISSUE: Whether or not the COA gravely abused its discretion in holding petitioner
personally liable for the disallowed amount of Php 155,036,681.77.

HELD:

The petition is granted. The COA found the petitioner liable under Section 19 of
the Manual on Certificate of Settlement and Balances.
SECTION 103. General liability for unlawful expenditures. - Expenditures of
government funds or uses of government property in violation of law or regulations shall
be a personal liability of the official or employee found to be directly responsible
therefor.
Under this provision, an official or employee shall be personally liable for
unauthorized expenditures if the following requisites are present, to wit: (a) there must
be an expenditure of government funds or use of government property; (b) the
expenditure is in violation of law or regulation; and (c) the official is found directly
responsible therefor.17
Here, petitioner was held liable because he failed to exercise due diligence in the
performance of his duty relative to the award of the contract. By his signature in the
award of the contract to A.V.T. Construction and the contract itself, the COA held that
petitioner is presumed to have prior knowledge that the bidding process was tainted
with irregularity due to the ineligibility of A.V.T. Construction. As head of the procuring
entity and the former governor of Nueva Ecija, the COA maintained that petitioner has a
duty to ensure that all the requirements are met and complied with before entering into
a contract with A.V.T. Construction.
 FIRST UNITED CONSTRUCTORS CORPORATION, Petitioner,
vs.
PORO POINT MANAGEMENT CORPORATION (PPMC), THE SPECIAL BIDS &
AWARDS COMMITTEE (SBAC) of PPMC, ATTY. FELIX S. RACADIO, and SATRAP
CONSTRUCTION COMPANY, INC., Respondents.
G.R. No. 178799, January 19, 2009
NACHURA, J.:

FACTS:

PPMC approved the Contract for the Upgrading of the San Fernando Airport
Phase I. The SBAC then issued invitations to reputable contractors to pre-qualify for the
project. FUCC and two (2) other contractors - C.M. Pancho Construction, Inc. and EEI-
New Kanlaon Construction, Inc. Joint Venture responded to the invitation and were pre-
qualified to bid for the project. However, upon evaluation, none of the pre-qualified
bidders was chosen. FUCC sought reconsideration of the SBAC decision, but it was
denied. FUCC then filed a protest with the PPMC.
SBAC then scheduled a re-bidding and issued new invitations to bid for the
project. To enjoin the re-bidding, FUCC filed a petition for injunction with prayer for the
issuance of a preliminary injunction or temporary restraining order (TRO) with the
Regional Trial Court (RTC). On May 2, 2007, the RTC issued a TRO which, however,
was lifted because under Section 3 of Republic Act No. 8975, no court, except the
Supreme Court, shall issue a TRO or injunction or prohibit the bidding or award of a
government infrastructure project. SBAC thus proceeded with the re-bidding of the
project and awarded the project to SCCI as the lowest qualified bidder. The Contract for
the project was signed, and a notice to proceed was served on SCCI. FUCC filed an
amended petition with the RTC to enjoin the implementation of the project. The Office of
the Government Corporate Counsel (OGCC) moved to dismiss the petition for lack of
jurisdiction. Pending resolution of OGCC’s motion to dismiss, FUCC moved for the
dismissal of its amended petition, which was granted by the RTC.
Claiming that there is no appeal, or any speedy and adequate remedy in the
ordinary course of law, FUCC comes to us via this petition

ISSUE: Whether or not SBAC and PPMC committed grave abuse of discretion in
disqualifying its bid, in denying its protest, in conducting a re-bidding and in awarding
the project to SCCI.

HELD:

Republic Act (RA) No. 9184, or the Government Procurement Reform Act,
outlines the procedure to assail decisions of the SBAC in this wise: SEC. 58. Resort to
Regular Courts; Certiorari. – Court action may be resorted only after the protest
contemplated in this Article shall have been completed. Cases that are filed in violation
of the process specified in this Article shall be dismissed for lack of jurisdiction. The
regional trial court shall have jurisdiction over final decisions of the head of the
procuring entity. Court actions shall be governed by Rule 65 of the 1997 Rules of Civil
Procedure.
In the present case, FUCC adduced no special and important reason why direct
recourse to this Court should be allowed. Thus, we reaffirm the judicial policy that this
Court will not entertain a direct invocation of its jurisdiction unless the redress desired
cannot be obtained in the appropriate lower courts, and exceptional and compelling
circumstances justify the resort to the extraordinary remedy of a writ of certiorari.
Accordingly, there being no showing of grave abuse of discretion, FUCC has no
valid ground to demand annulment of the contract between PPMC and SCCI.
WHEREFORE, the petition is DISMISSED. The assailed Decision of the PPMC is
AFFIRMED.