SM Land, Inc. v. Bases Conversion Development Authority and Arnel Paciano D. Casanova, Esq., G.R. No. 203655, August 13, 2014
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Decision, Velasco, Jr. [J]
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Dissenting Opinion, Leonen [J]
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 203655 August 13, 2014
SM LAND, INC., Petitioner,
vs.
BASES CONVERSION AND DEVELOPMENT AUTHORITY and ARNEL PACIANO D. CASANOVA, ESQ., in his official capacity as President and CEO of BCDA, Respondents.
D E C I S I O N
VELASCO, JR., J.:
The Case
Before Us is a Petition for Certiorari, Prohibition and Mandamus under Rule 65 of the Rules of Court, with prayer for injunctive relief, seeking to nullify and set aside the Bases Conversion and Development Authority (BCDA) Supplemental Notice No. 5 as well as all other acts1 pursued in furtherance thereof, and to order respondents to immelliately conduct and complete the Competitive Selection Process on petitioner's duly accepted unsolicited proposal.
The Facts
As culled from the records, the facts are simple and undisputed.
Pursuant to Republic Act No. (RA) 7227 or the "Bases Conversion and Development Act of 1992," the BCDA opened for disposition and development its Bonifacio South Property, a 33.1-hectare expanse located at Taguig City that was once used as the command center for the country's military forces. Jumping on the opportunity, petitioner SM Land, Inc. (SMLI), on December 14, 2009, submitted to the BCDA an unsolicited proposal for the development of the lot through a public-private joint venture agreement. The proposal guaranteed the BCDA secured payments amounting to PhP 15,985/sqm or a total of PhP 8.1 billion.
Barely three months later, the initial proposal was followed by a second one with guaranteed secured payments of PhP 31,139/sqm, totaling PhP 20 billion. On May 4, 2010, however, SMLI submitted its third unsolicited proposal with guaranteed secured payments amounting to PhP 32,501/sqm for a total of PhP 22.6 billion.
Thereafter, the BCDA created a Joint Venture Selection Committee (JV-SC) following the procedures prescribed under Annex "C" of the Detailed Guidelines for Competitive Challenge Procedure for PublicPrivate Joint Ventures (NEDA JV Guidelines) promulgated by the National Economic Development Authority(NEDA). The said committee recommended the acceptance of the unsolicited proposal, which recommendation was favorablyacted upon by the BCDA. Through a letter dated May 12, 2010, the BCDA communicated to petitioner its acceptance of the unsolicited proposal. Despite its acceptance, however, the BCDA clarified that its act should not be construed to bind the agency to enter into a joint venture agreement with the petitioner but only constitutes an authorization granted to the JV-SC to conduct detailed negotiations with petitioner SMLI and iron out the terms and conditions of the agreement.
Pursuant to this authorization, the JV-SC and SMLI embarked on a series of detailed negotiations, and on July 23, 2010, SMLI submitted its final revised proposal with guaranteed secured payments amounting to a total of PhP 25.9 billion. Afterwards, upon arriving at mutually acceptable terms and conditions, a Certification of Successful Negotiations (Certification) was issued by the BCDA and signed by both parties on August 6, 2010. Through the said Certification, the BCDA undertook to "subject SMLI’s Original Proposal to Competitive Challenge pursuant to Annex C" and committed itself to "commence the activities for the solicitation for comparative proposals."1
In an attempt to comply with its obligations, the BCDA prepared for the conduct of a Competitive Challenge to determine whether or not there are other Private Sector Entities (PSEs)that can match the proposal of SMLI, and concurrently ensure that the joint venture contract will be awarded to the party that can offer the most advantageous terms in favor of the government. In furtherance thereof, the agency issued Terms of Reference (TOR),2 which mapped out the procedure to be followed in connection with the Competitive Challenge. Consequently, SMLI was required, as it did, to post a proposalsecurity in the amount of PhP 187 million, following the prescribed procedure outlined in the TOR and the NEDA JV Guidelines.
Afterwards, the BCDA set the Pre-eligibility Conference on September 3, 2010. Invitations to apply for eligibility and to submit comparative proposals were then duly published on August 12, 16 and 20, 2010. Hence, the pre-eligibility conference was conducted as scheduled. The companies that participated in the conference included SMLI, as the Original Proponent, and three (3) PSEs, namely Ayala Land, Inc., Rockwell Land Corp., and Filinvest Land, Inc.
On Ayala Land, Inc.’s request, the deadline for submission of Eligibility Documents was scheduled on October 20, 2010 through Supplemental Notice No. 1. However, the deadline was again moved to November 19, 2010 to allow the BCDA, in conjunction with other national agencies, to resolve issues concerning the relocation and replication of facilities located in the subject property.For this purpose, the BCDA issued Supplemental Notice No. 2.
Following a conference, the BCDA, on November 18, 2010, issued Supplemental Notice No. 3, again rescheduling the submission deadline this time to an unspecified future date "pending final results of the policy review by the Office of the President on the lease versus joint venture/sale mode and other issues."3 Henceforth, the BCDA repeatedly postponed the deadline of eligibility requirements untiltwo (2) years have already elapsed from the signing of the Certification without the Competitive Challenge being completed.
Then, instead of proceeding withthe Competitive Challenge, the BCDA addressed a letter4 to Jose T. Gabionza, Vice President of SMLI, stating that it will welcome any "voluntary and unconditional proposal" to improve the original offer, with the assurance that the BCDA will nonetheless respect any right which may have accrued in favor of SMLI. SMLI, through a letter dated December 22, 2011, replied by increasing the total secured payments to PhP 22.436 billion in over fifteen (15) years with an upfront payment of PhP 3 billion. SMLI likewise proposed to increase the net present value of the property to PhP 38,500.00/sqm. With this accelerated terms of payment, the total inflow to be received by the BCDA from the project after five (5) years would amount to PhP 9.289 billion. In the same letter, SMLI clarified that itsimproved offer is tendered on reliance of the BCDA’s previous commitment torespect SMLI’s status as the Original Proponent.
Without responding to SMLI’s new proposal, the BCDA sent a memorandum to the Office of the President (OP) dated February 13, 2012, categorically recommending the termination of the Competitive Challenge. The memorandum, in part, reads:
In view of the foregoing, may we respectfully recommend the President’s approval for BCDA to terminate the proceedings for the privatization and development of the BNS/PMC/ASCOM/SSU Properties in Bonifacio South through Competitive Challenge and proceed with the bidding of the property.5
Alarmed by this development, SMLI, in a letter dated August 10, 2012, urged the BCDA to proceed with the Competitive Challenge as agreed upon. However, the BCDA, via the assailed Supplemental Notice No. 5, terminated the Competitive Challenge altogether. Said Supplemental Notice pertinently reads:
This Supplemental Notice No. 05 is issued to inform the [PSEs] that the Competitive Challenge for the Selection of BCDA’s Private Sector Partner for the Privatization and Development of the approximately 33.1-hectare BNS/PMC/ASCOM/SSU Properties in Bonifacio South is hereby terminated. BCDA shall not dispose the property through Competitive Challenge.6
To support its position, the BCDA invoked Article VIII of the TOR on the subject "Qualifications and Waivers," to wit:
The BCDA reserves the right to call off [the] disposition prior to acceptance of the proposal(s) and call for a new disposition process under amended rules and without any liability whatsoever to any or all the PSEs, except the obligation to return the Proposal Security.
Thereafter, the BCDA informed SMLI of the OP’s decision to subject the development of the subject propertyto public bidding. When asked by SMLI, the JV-SC manifested its conformity with the actions thus taken by the BCDA and OP.
The JV-SC’s declaration proved to be the last straw that fractured SMLI’s patience as it lost no time in interposing the instant recourse.
In the meantime, the BCDA issuedin favor of SMLI Philippine National Bank Check No. 11-634-610001-0 in the amount of PhP 188,508,466.67 dated September 28, 2012. The check was sent through registered mail with no explanation whatsoever accompanying the same, although the BCDA admitted that its value corresponds to the proposal security posted by SMLI, plus interest in an unspecified rate. SMLI attempted to return the check but to no avail.
The BCDA likewise caused the publication of an "Invitation to Bid" for the development of the subject property in the December 21, 2012 issue of the Philippine Star.7 This impelled SMLI to file an Urgent Manifestation with Reiterative Motion to Resolve SMLI’s Application for Temporary Restraining Order (TRO) and Preliminary Injunctionon the same day. By Resolution8 of January 9, 2013, the Court issued the TRO prayed for by petitioner and enjoined respondent BCDA from proceeding with the new selection process for the development of the property.
The Issue
Without a doubt, the issue in this case boils down to whether or not the BCDA gravely abused its discretion in issuing Supplemental Notice No. 5, in unilaterally aborting the Competitive Challenge, and in subjecting the development of the project to public bidding.
For its part, SMLI alleged in its petition that the Certification issued by the BCDA and signed by the parties constituted a contract and that under the said contract, BCDA cannot renege on its obligation to conduct and complete the Competitive Challenge. The BCDA, on the other hand, relies chiefly on the reservation clause in the TOR, which allegedly authorized the agency to unilaterally cancel the Competitive Challenge. Respondents add that the terms and conditions agreedupon are disadvantageous to the government, and that it cannot legally be barred by estoppel in correcting a mistake committed by its agents.
The Court’s Ruling
The petition is impressed with merit. SMLI has the right to a completed competitive challenge pursuant to the NEDA JV Guidelines and the Certification issued by the BCDA. The reservation clause adverted to by the respondent cannot, in any way, prejudice said right.
The Procurement Process under the NEDA JV Guidelines
In resolving the case, discussing the procedure outlined under the NEDA JV Guidelines and a brief backgrounder thereof is apropos.
To streamline the procurement process and expedite the acquisition of goods and services, Executive Order No. (EO) 423 was issued on April 30, 2005, which prescribed the rules and procedures on the review and approval of government contracts. The EO, in part, provides: Section 8. Joint Venture Agreements. The NEDA, in consultation with the GPPB, shall issue guidelines regarding joint venture agreements with private entities with the objective of promoting transparency, competitiveness, and accountability in government transactions, and, where applicable, complying with the requirements of an open and competitive public bidding.
Taking its cue from the above-quoted provision, the NEDA promulgated the NEDA JV Guidelines, which detailed two (2) modes of selecting a private sector JV partner: by competitive selectionor through negotiated agreements.
Competitive selection involves a selection process based on transparent criteria, which should not constrain or limit competition, and is open to participation byany interested and qualified private entity.9 Selection by negotiated agreements10 or negotiated projects,11 on the other hand, comes about as an end result of an unsolicited proposal12 from a private sector proponent, or if the government has failed to identify an eligible private sector partner for a desired activity after subjecting the same to a competitive selection.
Relevant to the case at bar is the selection modality by negotiated agreement arising from the submission and acceptance of an unsolicited proposal, known as the Swiss Challenge method,13 in essea hybrid mechanism between the direct negotiation approach and the competitive bidding route.14 With the availability of the Swiss Challenge method for utilization by those in the private sector, PSEs have studied, formulated, and submitted numerous suo motoor unsolicited proposals with the ultimate goal of assisting the public sector in elevating the country’s place in the global economy, as in the case herein.
The development and adoption by several countries of the Swiss Challenge scheme15 is attributed to the recognition that the private sector can be an important source of technical and managerial expertise, as well as financing, as evidenced by private companies’ practice of directly approaching governments with new and innovative project ideas through unsolicited proposals.16 Some states, however, frown on the practice since transparency is allegedly compromised when the government directly negotiates with a proponent. In this method, the Original Proponent, who first submitted and secured acceptance ofthe unsolicited proposal, is given the right to match the successful bid received in the competitive bid process for the said project.17
Item III, Annex "C" of the NEDA JV Guidelines, where the Swiss Challenge format is tucked in, maps out a three-stage framework, to which Negotiated JV Agreements are to be mandatorily subjected, as summarized below:
Stage One
Submission and the Acceptance
or Rejection of the Unsolicited Proposal
Stage One18 of the process involves the submission, evaluation, and the acceptance of unsolicited proposals from private entities. The steps involved are:
1. A PSE submits an unsolicited proposalto the government entity (GE) or the GE seeks out a JV partner after a failed competition (open bidding) for a JV activity or project.
2. The GE, through its JV-SC, undertakes the initial evaluation of the proposal.
3. The head of the GE shall then either issue an acceptance or nonacceptance notice of the proposal.
a. An acceptance shall not bind the GE to enter into the JV activity, but shall mean that authorization is given to proceed with detailed negotiations on the terms and conditions of the JV activity.
b. In case of non-acceptance, the private sector entity shall be informed of the reasons/grounds for such action.
Stage Two
Detailed Negotiations
Stage Two19 entails negotiation on the terms and conditions of the JV activity. Below is a summary of the parameters adhered to in detailed negotiations, and the preparation of the proposal documents in case of successful negotiations:
1. The parties shall negotiate on, among other things, the scope as well as all legal, technical, and financial aspects of the JV activity.
2. The JV-SC shall determine the eligibility of the PSE to enter into the JV activity in accordance with pre-set rules.
3. Negotiations shall comply with the process, requirements and conditions as stipulated under Sections 6 (General Guidelines) and 7 (Process for Entering into JV Agreements) of the JV Guidelines.
a. If successful, the GE head and the representative of the PSE shall issue a signed certification of successful negotiation to the effect that:
a) an agreement has been reached;
b) the PSE is eligible to enter into the proposed JV activity; and
c) the GE shall commence the activities for the solicitation for comparative proposals.
b. If an acceptable agreement isnot reached, the GE may:
a) reject the proposal and thereafter accept a new one from private sector participants; or
b) pursue the proposed activity through alternative routes other than a joint venture.
4. After an agreement is reached, the contract documents, including the selection documents for the competitive challenge, are prepared.
Stage Three
Competitive Challenge
In Stage Three,20 upon the successful completion of the detailed negotiation phase, the JV activity shall be subjected to a competitive challenge,21 which includes the observance of the following procedure:
1. Preparation and approval of all tender documents including the draft contract before the invitation for comparative proposals is published.
2. Publication of the invitation for comparative proposals followed by the posting by the PSE of the proposal security.
3. Determination of the eligibility of comparative proponents/PSEs, issuance of supplemental competitive selection bulletins and pre-selection conferences, submission, opening and evaluation of comparative proposals.
4. In the evaluation of the comparative proposals as a prelude to determine the best offer, the original proposal of the original proponent shall be considered.
a. If the GE determines that an offer made by a comparative private sector participant is more advantageous to the government than the original proposal, the original proponent shall be given the right to match such superior or more advantageous offer.
b. Should no matching offer be received, the JV activity shall be awarded to the comparative private sector participant submitting the most advantageous proposal.
c. If a matching offer is received, or if there is no comparative proposal, the JV activity shall be awarded to the original proponent.
5. After the completion of the competitive challenge, the JV-SC shall submit the recommendation of award to the head of the GE.22
6. Embarking on activities leading to the execution of the Final Agreement.23
Deviation from the procedure outlined cannot be countenanced. Wellestablished is the rule that administrative issuances––such as the NEDA JV Guidelines, duly promulgated pursuant to the rule-making power granted by statute––have the force and effect of law.24 Being an issuance in compliance with an executive edict, the NEDA JV Guidelines, therefore, has the same binding effect as if it were issued by the President himself.25 As such, no agency or instrumentality covered by the JV Guidelines26 can validly stray from the mandatory procedures set forth therein, even if the other party acquiesced therewith27 or not.
SMLI’s rights as an Original Proponent and BCDA’s correlative duty under the NEDA JV Guidelinesand the parties’ agreement
It is well to point out that after BCDA accepted the unsolicited proposal of SMLI and after both parties herein successfully concluded the detailed negotiations on the terms and conditions of the project, SMLI acquired the status of an Original Proponent. An Original Proponent, per the TOR, pertains to the party whose unsolicited proposal for the development and privatization of the subject property though JV with BCDA has been accepted by the latter, subject to certain conditions, and is now being subjected to a competitive challenge.28
In this regard, SMLI insists that asan Original Proponent, it obtained the right to a completed competitive challenge. On the other hand, the BCDA argues that it can, at any time, withdraw from the disposition process as it is not bound to enter into the proposed JV activity with SMLI. Petitioner’s argument holds water.
A scrutiny of the NEDA JV Guidelinesreveals that certain rights are conferred to an Original Proponent. Ascorrectly pointed out by SMLI, these rights include:
1. The right to the conduct and completion of a competitive challenge;
2. The right to match the superior or more advantageous offer, if any;
3. The right to be awarded the JV activity in the event that a matching offer is submitted within the prescribed period; and
4. The right to be immediately awarded the JV activity should there be no comparative proposals.29 (emphasis added)
Material to the present case is the right to the conduct and completion of a Competitive Challenge. Based onthe NEDA JV Guidelines, it is necessary that Stages One and Two of the Swiss Challenge shall have been fruitful for this right to arise.
To recall, Stages One and Two ofthe framework deal with the submission and evaluation of the unsolicited proposal and the conduct of the detailed negotiations. Should the parties productively conclude the in-depth negotiations, the guidelines require the preparation of the contract and selection documents for the competitive challenge.30 Following this, Stage Three of the same rules provides that the GE shall subject the terms agreed upon to a Competitive Challenge. Thus:
Stage Three – Once the negotiations have been successfully completed, the JV activity shallbe subjected to a competitive challenge, as follows:
1. The [GE] shallprepare the tender documents pursuant to Section II (Selection/Tender Documents) of Annex A hereof. The eligibility criteria used in determining the eligibility of the [PSE] shall be the same as those stated in the tender documents. x x x The Head of the [GE] shall approve all tender documents including the draft contract before the publication of the invitation for comparative proposals.
2. Within seven (7) calendar days from the issuance of the Certification of a successful negotiation referred toin Stage Two above, the JV-SC shall publish the invitation for comparative proposals in accordance with Section III.2. (Publication of Invitation to Apply for Eligibility and to Submit Proposal) under Annex A hereof.
3. The [PSE] shallpost the proposal security at the date of the first day of the publication of the invitation for comparative proposals in the amount and form stated in the tender documents.
4. The procedure for the determination of eligibility of comparative proponents/private sector participants, issuance of supplemental competitive selection bulletins and pre-selection conferences, submission and receipt of proposals, opening and evaluation of proposals shall follow the procedure stipulated under Annex A hereof. In the evaluation of proposals, the best offer shall be determined to include the original proposal of the [PSE]. If the [GE] determines that an offer made by a comparative private sector participant other than the original proponent is superior or more advantageous to the government than the original proposal, the [PSE] who submitted the original proposal shall be given the right to match such superior or more advantageous offerx x x. Should no matching offer be received within the stated period, the JV activity shallbe awarded to the comparative private sector participant submitting the most advantageous proposal. If a matching offer is received within the prescribed period, the JV activity shallbe awarded to the original proponent. If no comparative proposal isreceived by the [GE], the JV activity shallbe immediately awarded to the original private sector proponent.
5. Within seven (7) calendar days from the date of completion of the Competitive Challenge, the JV-SC shallsubmit the recommendation of award to the Head of the [GE]. Succeeding activities shall be in accordance with Sections VIII. (Awardand Approval of Contract) and X (Final Approval) of Annex A hereof.31 (emphasis added)
Anent the above-quoted directives, emphasis must be given to the repeated use of the word "shall." It is elementary that the word "shall" underscores the mandatory character of the rule. Itis a word of command, one which always has or must be given a compulsory meaning, and is generally imperative or mandatory.32 Considering the compulsory tenor of the order, the rule could not be any clearer––that once the negotiations at Stage Two shall have been successfully completed, it becomes mandatory for the GE to subject theJV activity to a competitive challenge. By the Guidelines’ explicit order, proceeding to Stage Three of the process is compulsory, conditioned only on the successful conclusion of Stage Two. The GE is not given any discretion to decide whether it will proceed with the competitive challenge or not. Furthermore, there is no question in the case at hand that the unsolicited proposal for the development of the subject property passed through scrutiny under the first two stages, resulting inthe issuance and signing of the Certification. As a matter of fact, this is clearly evinced in the whereas clauses of the Certification, to wit:
WHEREAS, on 04 May 2010, BCDA received from [SMLI] an unsolicited proposalfor the development of [the subject property]. x x x
WHEREAS, after evaluation of the unsolicited proposalsubmitted by SMLI in accordance with the provisions of Annex "C" of the JV Guidelines, the [JV-SC] created byBCDA x x x recommended to the BCDA Board, and the BCDA Board approved, per Board Resolution No. 2010-05-100, the acceptance ofthe unsolicited proposal, subject to the condition that such acceptance shall not bind BCDA to enter into a JV activity, but shall mean that authorization is given to proceed with detailed negotiationson the terms and conditions of the JV activity;
WHEREAS, pursuant to the authorization granted by the Board and issued pursuant to Annex "C", Part III, Stage One of the JV Guidelines, BCDA went into detailed negotiations with SMLI. The JV-SC simultaneously ascertained the eligibility of SMLI inaccordance with Annex "C", Part III, Stage 2 (2) of the JV Guidelines;
WHEREAS, this Certificationisissuedpursuant to Annex "C" Part III, Stage 2 (2) of the JV Guidelines;
NOW, THEREFORE, for and in consideration of the foregoing, BCDA and SMLI, after successful negotiationspursuant to Stage II of Annex C x x x reached an agreement on the purpose, terms and conditions of the JV development of the subjectproperty, which shall become the terms for the Competitive Challenge pursuant to Annex C of the JV Guidelinesx x x.33 (emphasis added)
Moreover, the Certification further discloses that the BCDA has the obligation to subject SMLI’s unsolicited proposal to a Competitive Challenge, to which SMLI assented. As provided:
BCDA and SMLI have agreed to subject SMLI’s Original Proposal to Competitive Challenge pursuant to Annex C – Detailed Guidelines for Competitive Challenge Procedure for Public-Private Joint Ventures of the NEDA JV Guidelines, which competitive challenge process shall be immediately implemented following the Terms of Reference (TOR) Volumes 1 and 2. BCDA shall, thus, commence the activities for the solicitation for comparative proposals with the publication of the Invitation to Apply for Eligibility and to Submit Comparative Proposals (IAESCP) thrice for two (2) consecutive weeks in three (3) major newspapers starting on 10 August 2010, on which date SMLI shall post the required Proposal Security as statedabove. Pursuant to Annex C of the NEDA JV Guidelines, if, after solicitation of comparative proposals, BCDA determines that an offer by a comparative PSE is found to be superior to SMLI’s Original Proposal,SMLI shall be given the right to match such superior offer within the period prescribed in the attached TOR Volumes 1 and 2. If SMLI is ableto match such superior offer, SMLI shall be issued the Notice of Award, subject to Item No. 19 above. In the event, however, that SMLI is unable to match the superior offer, the comparative PSE which submitted such superior offer shall be awarded the contract, subject to Item No. 19 above.34 (emphasis added)
By their mutual consent and in signing the Certification, both parties, in effect, entered into a binding agreement to subject the unsolicited proposal to the Competitive Challenge. Evidently, the certification partakes of a contractwherein BCDA committed itself to proceed with the Third Stage of the process and simultaneously grants SMLI the right to expect that the BCDA will fulfill its obligations under the same. The preconditions to the conduct of the Competitive Challenge having been met, what is left, therefore, is tosubject the terms agreed upon to a Competitive Challenge pursuant to Stage Three, Annex "C" of the NEDA JV Guidelines.
The Reservation Clause only covers the Third Stage and cannot prejudice SMLI’s rights stemming from the first two stages
In an attempt to advance its claim, BCDA invokes the reservation clause in Article VIII of the TOR on "Qualifications and Waivers." To reiterate, said provision reads:
3. BCDA further reserves the right to call off this disposition prior to acceptance of the proposal(s) and call for a new disposition process under amended rules, and without any liability whatsoever to any or all of the PSEs, except the obligation to return the Proposal Security.35 (emphasis ours)
The BCDA insists that the "disposition process" to which the reservation clause refers is the entire Swiss Challenge, and not merely Stage Three thereof regarding the Competitive Challenge. This interpretation does not come as a surprise considering the term’s technical meaning, that is, alienation of property;36 the transfer of the property and possession of lands, tenements, or other things from one person to another; or the voluntary resignation of title to real estate by one person to another and accepted by the latter, in the forms prescribed by law.37 On the basis of said definition, indeed, the reservation clause seemingly refers to the Swiss Challenge itself since in the case at bar, it is the Swiss Challenge, not the competitive challenge, that is the avenue for the disposition.
To anchor the real import of the clause on the basis only of a single word may, however, result in a deviation from its true meaning by rendering all the other terms unnecessaryor insignificant. Suchan interpretation would run afoul Article 1373 of the Civil Code, which states that "[i]f some stipulation of any contract should admit of several meanings, it shall be understood as bearing that import which is most adequate to render it effectual." It is a cardinal rule in statutory construction that no word, clause, sentence, provision or part of a statute shall be considered surplusage or superfluous, meaningless, void and insignificant.38 For this purpose, an interpretation which renders every word operative is preferred over that which makes some words idle and nugatory.
We find that the reservation clausecannot justify the cancellation of the entire procurement process. Respondent cannot merely harp on the lone provision adverted to without first explaining the context surrounding the reservation clause. The said provision cannot be interpreted in a vacuum and should instead be read in congruence with the other provisions in the TOR for Us to fully appreciate its import.
At this juncture, it is worthy to point out that the TOR containing the reservation clause details the requirements for eligibility to qualify as a PSE that may submit its proposal for the JV,39 as well as the procedure to be followed in the assessment of the eligibility requirements submitted and in the conduct of the Competitive Challenge. It basically governs only part and parcel of Stage Three of the Swiss Challenge Process, that is, the requirements for and the determination of an interested PSE’s eligibility to participate inthe Competitive Challenge. This conclusion is deduced from the very provisions of the TOR, viz:
These [TOR] describe the procedures that shall be followed in connection with the disposition of the approximately Three Hundred Thirty-one Thousand Three Hundred Twenty-seven square meters (331,327 sq.m.) or 33.1-hectare Bonifacio Naval Station (BNS)/Philippine Marine Corps (PMC)/Army Support Command (ASCOM)/Service Support Unit (SSU) Properties in Bonifacio South (the "Property"), located along Lawton Avenue, Fort Bonifacio, Taguig City, Metro Manila, Philippines.
These TOR are issued in two (2) volumes: Volume 1 – Eligibility Documents; and Volume 2 – Tender Documents. This first volume details the requirements for eligibility to qualify as a Private Sector Entity (PSE) that may submit Technical and Financial Proposals for the Joint Venture (JV) Privatization and Development of [the] subject Property, and the procedures involved in the entire Competitive Challenge procedure. [PSEs] which shall be declared eligible shall be issued the second volume of the TOR which details the requirements and procedures for the submission of Technical and Financial Proposals, with the end-view of determining a Winning PSE for subject JV development.
x x x x
I. GENERAL INFORMATION
x x x x
2. Publication of Invitation for Comparative Proposals. BCDA shall publish x x x the "Invitation to Apply for Eligibility and to Submit a Comparative Proposal" (IAESCP). This shall serve to inform and to invite the prospective PSEs to the Competitive Challenge procedure at hand. x x x
3. Joint Venture Agreement.x x x the ultimate objective of BCDA in qualifying prospective PSEsto be eligible to submit Technical and Financial Proposals is to select a partner in the unincorporated/contractual [JV]for the privatization and development of the subject Property. x x x
x x x x
4. Amendment of these TOR. x x x Should any of the information and/or procedurescontained in these TOR be amended or replaced, the JV-SC shall inform and send Supplemental Notices to all PSEs. To ensure all PSEs are informed of any amendments, all PSEs are requested to inform BCDA of their contact [details].In addition, receipt of all Supplemental Notices shall beduly acknowledged by each PSEprior to the submission of eligibility documents and/or proposals and shall be soindicated therein.
5. Pre-Eligibility Conference. Interested parties are invited to attend a Pre-Eligibility Conference for prospective PSEs x x x.
6. One-on-One Meetings. Prospective PSEs may request for one-on-one meetings with the JV-SC or its duly authorized representatives. x x x
x x x x
9. Due Diligence. x x x
The PSE shall investigate x x x [and] carefully examine [the] conditions of and at the Property and its surrounding vicinities affecting the actual execution and such other information as to allow the PSE to make a competitive estimate. The PSE, by the act of submitting its proposal, acknowledges that it has inspected the Property and accepted all the terms and conditions for this competitive challenge as set in TOR Volumes 1 and 2.
x x x x
V. APPLICATION FOR ELIGIBILITY
1. Eligibility Requirements. Only eligible PSEs shall be allowed to submit comparative Technical and Financial Proposals, or collectively, the Tender Documents x x x. Hence, interested PSEs are invited to apply for eligibility and to participate in the Competitive Challenge procedure. Aside from being required to purchase the [TOR] – Volume1, for a non-refundable fee x x x, a PSE shall be considered eligible if it satisfies all of the following requirements:
1.1. Legal Requirements. The PSE must be a duly registered and existing corporation authorized by Philippine Laws to own, hold or develop lands in the Philippines. x x
x
1.2. Technical Requirements.
1.2.1. Firm Experience. The PSEx x x shall have completed within a period of ten (10) years from the date of submission and receipt of Proposals, a similar or related development project x x x.
1.2.2. Key Personnel. x x x
1.3. Financial Capability. The PSEx x x must have adequate capability to sustain the financing requirements for the proposed development ofthe Property. This shall be measured in terms of:
1.3.1. Net Worth. x x x
1.3.2. Good financial standing. x x x
1.3.3. No Arrears. x x x
1.3.4. Timely and complete Payment of Taxes. x x x
1.3.5. Financial Capacity to Undertake the
Project.
x x x x
2. Required Eligibility Documents. The PSEs x x x that wish to be considered for eligibility are required to submit x x x the following documents:
x x x x
VI. EVALUATION OF ELIGIBILITY
1. Opening of Eligibility Documents. x x x
2. Evaluation Process. Eligibility Documents submitted by the PSEshall be evaluated on a pass or fail basis to determine if the PSEx x x complies with or satisfies all of the requirements specified in Article V hereof. x x x
3. Motion for Reconsideration/Appeal on Eligibility. A prospective PSE determined as "Ineligible" has seven (7) calendar days upon written notice within which to file a motion for reconsideration tothe JV-SC. x x x
4. No Eligible [PSEs]. In the event that no PSE be found eligible or no PSE submitted itself to eligibility check for the Competitive Challenge procedure, BCDA shall proceed to the issuance of Notice of Award to SMLI, as the original proponent for the subject JV project.
x x x x
VII. CHANGE IN MEMBERSHIP OF AN ELIGIBLE PSE.
x x x x
VIII. QUALIFICATIONS AND WAIVERS
1. BCDA reserves the right to reject any or all Eligibility Documents, to waive any defect or informality thereon or minor deviations, which do notaffect the substance and validity of the proposal.
2. BCDA reserves the right to review other relevant information affecting the PSE or its Eligibility Documents before its declaration as eligible to participate further in the selection process, and be allowed to submit a Final Proposal. Should such review uncover any misrepresentations made in the eligibility documents, or any change in the situation of the PSE, which affects its eligibility, BCDA may disqualify the PSE from obtaining any award/contract.
3. BCDA further reserves the right tocall of this disposition prior to acceptance of the proposal(s) and call for a new disposition process under amended rules,and without any liability whatsoever to any or all the PSEs, except the obligation to return the Proposal Security x x x.40 (emphasis ours; citation omitted)
A cursory reading of the TOR, ascouched, readily shows that it focuses only on the eligibility requirements for PSEs who wish to challenge SMLI’s proposal as well as the procedure to be followed by the BCDA JVSC in the evaluation of the PSEs’ submittals. We thus find merit in SMLI’s thrust that since the TOR governs the eligibility requirements for PSE’s, the "disposition process" referred to inthe reservation clause could only refer to the eligibility process in Stage Three of the Swiss Challenge and not the entire Swiss Challenge process itself. We are convinced that the said provision does not authorize BCDA to abort the entire procurement process and cannot impair any of SMLI’s statutorily and contractuallyconferred rights stemming from the first two stages’ conclusion. To rule otherwise would grant the GE unbridled authority to thrust aside the agreement between the parties after successful detailed negotiations. It would disregard the fact that through the said covenant,the GE bound itself to conduct and complete the Competitive Challenge pertaining to SMLI’s proposal.
Provisions of the TOR cannot prevail over the NEDA JV Guidelines
In the same vein, We cannot also agree with respondents’ contention that the term "disposition" in the assailed reservation clause refers to the entire Swiss Challenge itself and authorizes the BCDA to abandon the negotiations even at Stage Three of the process for this would result in an interpretation that is antagonisticwith the NEDA JV Guidelines.
A review of the outlined three-stage framework reveals that there are only two occasions where pre-termination of the Swiss Challenge process is allowed: at Stage One, prior to acceptance of the unsolicited proposal; and at Stage Two, should the detailed negotiationsprove unsuccessful. In the Third Stage, the BCDA can no longer withdraw with impunity from conducting the Competitive Challenge as it became ministerial for the agency to commence and complete the same. Thus, acceding to the interpretation of the TOR offered byBCDA will, in effect, result not only in the alteration of the agreement between the parties but also of the NEDA JV Guidelines itself, both of which has the force and effect of law.
The interpretation offered by BCDA is, therefore, unacceptable. Between procedural guidelines promulgated by an agency pursuant to its rule-making power and a condition unilaterally designed and imposed for the implementation of the same, the former must prevail. BCDA does not wield any rule-making power such that it can validly alter or abandon a clear and definite provision in the NEDA JV Guidelines under the guise of a condition under the TOR. AsWe have time and again harped, the ones dutybound to ensure observance with laws and rules should not be the ones to depart therefrom.41 A contrary rule would open the floodgates to abuses and anomalies more detrimental to public interest.42 For how can others be expected to respect the rule of law if the very persons or entities tasked to administer laws and their implementing rules and regulations are the first to violate them, blatantly or surreptitiously?
BCDA gravely abused its discretion when it issued Supplemental
Notice No. 5 in breach of its contractual obligation to SMLI
"Grave abuse of discretion" implies such capricious and whimsical exercise of judgment as is equivalent tolack of jurisdiction. It must be so patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law.43 While it is the general policy of the Court to sustain the decisions of administrative authorities, not only on the basis of the doctrine of separation of powers but also for their presumed expertise in the laws they are entrusted to enforce, when said decisions and orders are tainted with unfairness or arbitrariness that would amount to grave abuse of discretion, the Courts are duty-bound to entertain petitions questioning the former’s rulings or actions.44
In the present case, the Court finds that BCDA gravely abused its discretion for having acted arbitrarily and contrary to its contractual commitment to SMLI, to the damage and prejudice of the latter. It veritably desecrated the rules the Government itself set in the award of public contracts.
To review, We have demonstratedthat the BCDA is duty-bound to proceed with and complete the competitive challenge if the detailed negotiations proved successful. Afterwards, it becomes mandatory for the competitive challenge to proceed. Whatever rights and obligations that may have accrued to the parties by that time can no longer be altered by a new disposition process. At most, the reservation clause in the TOR can only serve to alter the rules of the eligibility process under the Competitive Challenge.
In the case at bar, however, BCDA, in its mistaken reliance on the reservation clause, aborted not just the eligibility process of the Competitive Challenge but the entire Swiss Challenge. Even though the language of Supplemental Notice No. 5 at first blush appears to limit its application to the Third Stage of the framework, BCDA’s actuations say otherwise. Worthy of reiteration at this point is the fact that after BCDA issued the assailed notice, the agency also returned through registeredmail the security posted by SMLI. Coupled with the factthat BCDA subjected the property instead to straight bidding, it becomes obvious that BCDA no longer intends to comply with its obligations to SMLI and that it abandoned the Swiss Challenge process altogether, in contravention of its statutory and contractual obligations.
Moreover, the asseveration of the BCDA in its last ditch effort to salvage its position––that the withdrawal is justified since it allegedly found that the revised SMLI proposal shall not yield the best value for the government45 ––deserves scant consideration. On the contrary, the BCDA’s statements have been inconsistentwhen it comes to identifying the procurement process that would best serve the interest of the state.
Noticeably, in its November 8, 2010 Memorandum, the BCDA posited that competitive challenge is more advantageous to the government than straight bidding, to wit:
The price of the Bonifacio South properties has already been set by the winning price in the bidding for the joint venture development of the JUSMAG property (₱31,111/sq.m.). Thus, BCDA has established the benchmark for the price of the remaining Bonifacio South properties, of which the JUSMAG property is the most prime. Logically the minimum bid price under straight bidding for the BNS/PMC/ASCOM/SSU property, which is a far less inferior property, would be ₱31,111/sq.m. However, with SM’s submission of a revised unsolicited proposal at ₱31,732/sq.m. and later further revised to ₱32,500/sq.m., BCDA saw the opportunity to negotiate for better terms and eventually arrived at a higher price of ₱36,900/sq.m. In this case, BCDA deemed that going into Competitive Challenge was more advantageous to the government than Competitive Selection (straight bidding) because of the opportunity to increase the price.
Furthermore, subjecting the price tosubsequent price challenge will possibly drive up the price even higher than ₱38,900/sq.m. These opportunities cannot be taken advantage of under a straight bidding where failure of bidding would likely ensue if in case BCDA immediately sets the price of the property too high. The competition in the real estate industry and as experienced by BCDA issuch that the other developers will usually challenge the original proposal to "up the ante" as they cannot allow the original proponent to get the property easily.46
Despite this testament, the BCDA, over a year later, made a complete turnaround stating that straight bidding will be best for the Government.47 As can be gleaned from the BCDA’s Memorandum to the Presidentdated February 13, 2012, respondents themselves recommended to the President that the selection proceedings be terminated. To reiterate:
In view of the foregoing, may we respectfully recommend the President’s approval for BCDA to terminate the proceedings for the privatization and development of the BNS/PMC/ASCOM/SSU Properties in Bonifacio South through Competitive Challenge and proceed with the bidding of the property.48
The BCDA offered no explanation to reconcile its opposing positions. It also neglected to inform SMLI of the provisions in its proposal that it deemed disadvantageous to the government. The sweeping statement of the BCDA that the terms are disadvantageous cannot be accepted at face value, bearing in mind that a fruitful in-depthnegotiation necessarily implies that BCDA found the terms offered by SMLI acceptable. Consider also that should the Competitive Challenge prove to be unsuccessful, it has no other recourse but to award the project toSMLI, the Original Proponent. This caveat forces BCDA to ensure that the terms agreed upon during the detailed negotiations are advantageousto it, lest it run the risk of being bound to a project that is not beneficial to the government in the first place.
Overall, the foregoing goes to showthat the BCDA failed to establish a justifiable reason for its refusal to proceed with the Competitive Challenge and for canceling the entire Swiss Challenge. Because of BCDA’s mistaken reliance on the TOR provision, and by changing its stand on the conduct of the Competitive Challenge without pointing out with specificity the socalled unfavorable terms, Weare left to believe that the cancellation of the Swiss Challenge was only due to BCDA’s whims and caprices.
Acceptance of Unsolicited Proposal vis-à-vis Estoppel
Lastly, respondents argue that the government cannot be estopped by the mistakes or errors of its agents, implying that when it issued the Certification, it committed a lapse of judgment as it later discovered that the terms of the proposal allegedly turnedout to be disadvantageous to the Government. Thus, according to them, it cannot be compelled to proceed with the Competitive Challenge.
We are very much aware of the time-honored rule that "the government cannot be estopped by the mistakes or errors of its agents."49 Suffice it to state, however, that this precept is not absolute. As jurisprudence teaches, this rule on estoppel cannot be used to perpetrate an injustice.50
In the case at bar, it is evident that to allow BCDA to renege on its statutory and contractual obligationswould cause grave prejudice to petitioner, who already invested time, effort, and resources in the study and formulation of the proposal, in the adjustment thereof, as well as in the negotiations. To permit BCDA to suddenly cancel the procurement process and strip SMLI of its earlier-enumerated rights as an Original Proponent at this point––after the former has already benefited from SMLI’s proposal through the acquisition of information and ideas for the development of the subject property––would unjustly enrich the agency through the efforts of petitioner. What is worse, to do so would be contrary to BCDA’s representations and assurances that it will respect SMLI’s earlier acquired rights, which statements SMLI reasonably and innocently believed.
All told, the BCDA’s acceptance ofthe unsolicited proposal and the successful in-depth negotiation cannot be written off as mere mistake or error that respondents claim to be reversible and not susceptible to the legal bar of estoppel. The subsequent cancellation of the Competitive Challenge on grounds that infringe the contractual rights of SMLI and violate the NEDA JV Guidelines cannot be shrouded with legitimacy by invoking the above-cited rule.
Conclusion
To increase government prospects, participation in joint ventures has been incentivized by granting rightsand advantages to the Original Proponent in the Competitive Challenge phase of a Swiss Challenge. Faithful observance of these provisions oflaw that grant the aforesaid rights, may it be sourced from a bilateral contract or executive edict, aids in improving government reliability. This, in turn, heavily correlates with greater availability of options when entering into future joint venture agreements with private sector entities via public-private enterprises as it will attract investors to contribute in formulating a roadmap towards a nationwide infrastructure development.
Needless to say, allowing government agencies to retract their commitments to the project proponents will essentially render inutile the incentives offered to and have accrued in favor of the private sector entity. Without securing these rights, the business community will be wary when it comes to forging contracts with the government. Simply put, the failure of the government to abide by the rules ititself set would have detrimental effects on the private sector’s confidence that the government will comply with its statutory and contractual obligations to the letter.
In the case at bench, considering the undisputed facts presented before Us, We cannot sustain the BCDA’s arguments that its withdrawal from the negotiations is permissible and was not done with grave abuse of discretion. Being an instrumentality of the government, it is incumbent upon the BCDA to abide by the laws, rules and regulations, and perform its obligations with utmost good faith. It cannot, under the guise of protecting the public interest, disregard the clear mandate of the NEDA JV Guidelines and unceremoniously disregard the very commitments it made to the prejudice of the SMLI that innocently relied on such promises.51 It is in instances such as this––where an agency, instrumentality or officer of the government evades the performance of a positive duty enjoined by law52 ––wherein the exercise of judicial power is warranted. Consistent with Our solemn obligation to afford protection by ensuring that grave abuses of discretion on the part of a branch or instrumentality of the government do not go unchecked, the Petition for Certiorari must be granted and the corresponding injunctive relief be made permanent.
As a final note, it is worth mentioning that the foreseeable repercussion of a contrary ponenciaencompasses the reduction of the number of interested private sector entities that would bewilling to submit suo motoproposals and invest in government projects. After all, what would be the point of developing ideas and allocating resources in the formulation of PPP projects when one’s rights asan Original Proponent, under the NEDA JV Guidelines and the agreement between the parties, can easily be wiped out should the agency decide tolevel the playing field and conduct straight bidding instead? Evidently, this would not attract but would, in contrast, repel investors from tendering offers. In addition, even if potential investors do submit unsolicited or comparative proposals, the terms therein might be driven to become less competitive due to the adjustment in the balance of risks and returns on investment. Taking into account the increased possibility of the development project not pushing through, investors might not be too keen in guaranteeing a high amount of secured payments for the same.1âwphi1 These considerations further validate the need to secure the private sector’s trust and confidence in the government.
WHEREFORE, premises considered, the petition is hereby GRANTED. The assailed Supplemental Notice No. 5 dated August 6, 2012 issued by the BCDA is hereby ANULLED and SET ASIDE. The Temporary Restraining Order issued bythis Court on January 9, 2013 is hereby madePERMANENT.
Respondent Bases Conversion and Development Authority and Arnel Paciano D. Casanova, or whoever assumes the position of president of BCDA, are hereby ORDEREDto conduct and complete the Competitive Challenge pursuant to the Certification, TOR, and NEDA JV Guidelines.
Specifically, the BCDA and/or the JV-SC are DIRECTEDto carry out the following:
1. Publish, within seven (7) calendar days from finality of this Decision, the "Invitation to Apply for Eligibility and to Submit a Comparative Proposal" (IAESCP) in three (3) newspapers of general nationwide circulation for two (2) consecutive weeks, and in the BCDA website (www.bcda.gov.ph), in accordance with Section III.2. (Publication of Invitation to Apply for Eligibility and to Submit Proposal), Section III (Project Rationale), Item 5 of the TOR, and Section III (General Information), Item 2 (Publication of Invitation for Comparative Proposals) of the TOR;
2. Immediately make the necessary adjustments to the timetable of activities set forth in Supplemental Notice No. 1, considering that the periods specified therein have already lapsed, without awaiting the lapse of the period for publication;
3. Strictly adhere to the TOR, Supplemental Notice No. 1, as adjusted, the Certification of Successful Negotiations, and the NEDA JV Guidelines, in the conduct and completion of the Swiss Challenge procedure on SM Land Inc.’s unsolicited proposal accepted by the BCDA; and
4. Perform any and all acts necessary to carry out and complete Stage Three of the Swiss Challenge pursuant to the provisions of the TOR and NEDA JV Guidelines, including, but not limited to, subjecting petitioner's unsolicited proposal to a competitive challenge.
In the event that SM Land, Inc. already obtained from BCDA the amount representing its Proposal Security, SM Land, Inc. is hereby DIRECTED to re-post the Proposal Security, in the same amount as the previous one, on the first day of the publication of the invitation for comparative proposals, per the NEDA JV Guidelines.
SO ORDERED.
PRESBITERO J. VELASCO, JR.
Associate Justice
WE CONCUR:
DIOSDADO M. PERALTA
Associate Justice
MARTIN S. VILLARAMA, JR.*
Associate Justice |
JOSE CATRAL MENDOZA
Associate Justice |
See Dissenting Opinion
MARVIC MARIO VICTOR F. LEONEN
Associate Justice
A T T E S T A T I O N
I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court's Division.
PRESBITERO J. VELASCO, JR.
Associate Justice
Chairperson
C E R T I F I C A T I O N
Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court's Division.
MARIA LOURDES P. A. SERENO
Chief Justice
Footnotes
* Acting member per Special Order No. 1691 dated May 22, 2014.
1 Rollo, p. 71.
2 Id. at 74-88.
3 Id. at 108.
4 Id. at 109.
5 Id. at 635.
6 Id. at 63.
7 The invitation was also published in the January 2 and 9, 2013 issues of the Financial Timesand Philippine Daily Inquirer.
8 Rollo, pp. 218-222.
9 Item 5.6, NEDA JV Guidelines.
10 Item 7.3. (b), NEDA JV Guidelines provides:
7.3 Modes of Selecting a JV Partner
x x x x
b. Negotiated Agreements – Negotiated agreements may be entered under the following circumstances:
i. When a Government Entity receives an unsolicited proposal;
ii. When there is failure of competition when noproposals are received or no private sector participant is found qualified and the Government Entity decides to seek out a JV partner; and
iii. When there is failure of competition, i.e., there is only a single interested party remaining as defined under VIII(6) of Annex A.
11 Item 5.9, JV Guidelines
12 An Unsolicited Proposalrefers to "project proposals submitted by the private sector to undertake Infrastructure or Development Projects without a formal solicitation issued by a Government Entity. These projects may be entered into by the Government Entity on a negotiated basis, provided, however, that there shall be no direct government guarantees for JVs resulting from an unsolicited proposal." (NEDA JV Guidelines)
13 The Swiss Challenge is a system where "[a] third party can bid on a project during a designated period but the original proponent can counter match any superior offer. x x x" From Toolkit for PublicPrivate Partnerships in Roads & Highways. Available at http://www.ppiaf.org/sies/ppiaf.org/files/documents/toolkits/highwaystoolkit/6/pdf-version/5-42/pdf. Last accessed March 11, 2013. See also Osmeña III. v. Social Security System, G.R. No. 165272, September 13, 2007, 533 SCRA 313. [Under the Swiss Challenge format, one of the bidders is given the option or preferential "right to match" the winning bid.]
14 Joshi, Piyush and Anuradha, R.V., Study on Competition Concerns in Concession Agreements in Infrastructure Sectors,Clarus Law Associates, June 2009. Available at http://www.cci.gov.in/’images/media/completed/ConAgreInfraSect_20100401141506.pdf. Last accessed March 14, 2013.
15 Ravi Development v. Shree Krishna Prathisthan & Ors., Civil Appeal No. OF 2009, May 11, 2009. Available at www.indiankoon.org/doc/544860/. Last accessed March 14, 2013; See also, Verma, Roopam, Swiss Challenge System for Infra Projects(2007). Available at http://www.projectsmonitor.com/detailnews.asp?newsid=13923. Last accessed March 13, 2013.
16 See Hodges, John and Dellacha, Georgina, Unsolicited Infrastructure Proposals: How some countries introduce competition and transparency, Gridlines, Note No. 19, March 2007. Available at http://www.ppiaf.org/. Lastaccessed March 14, 2013.
17 Id.
18 Rollo, p. 373.
19 Id. at 373-374.
20 Id. at 374-375.
21 Competitive Challenge is an alternative selection process wherein third parties shall be invited to submit comparative proposals to an unsolicited proposal. Accordingly, the private sector entity that submitted the unsolicited proposal is accorded the right to match any superior offers given by a comparative private sectorparticipant. (Item 5.8, NEDA JV Guidelines).
22 Rollo, p. 534. Article VIII, Annex "A," NEDA JV Guidelines.
23 Id. at 537. Article X, Annex "A," NEDA JV Guidelines.
24 Atlas Consolidated Mining and Development v. Commissioner of Internal Revenue, G.R. No. 159490, February 18, 2008, 456 SCRA 150; citing Eslao v. COA, G.R. No. 108310, September 1, 1994.
25 See Constantino, Jr. v. Cuisia, Jr., G.R. No. 106064, October 13, 2005, 472 SCRA 505, where the Court affirmed the exerciseby the Secretary of Finance, acting as the President’s alter ego, of the President’s power to formulate a scheme for the implementation of a policy publicly expressed by the President herself. There, the Court pronounced, "As it was, the backdrop consisted of a major policy determination made by then President Aquino that sovereign debts have to be respected and the concomitant reality that the Philippines did not have enough funds to pay the debts. Inevitably, it fell upon the Secretary of Finance, as the alter egoof the President regarding ‘the sound and efficient management of the financial resources of the Government,’ to formulate a scheme for the implementation of the policy publicly expressed by the President herself."
26 See Item 4, NEDA JV Guidelines
4.0 Coverage.
4.1 These guidelines shall apply to all government-owned and/or controlled corporations (GOCCs), government corporate entities (GCEs), government instrumentalities with corporate powers (GICPs), government financial institutions (GFIs), state universities and colleges (SUCs), as defined under Section 5.0 and which are expressly authorized by law or their respective charters to enter into JV Agreements. Local Government Units (LGUs) are not covered by these Guidelines.
4.2 Transactions of GFIs in the ordinary course of business as part of their normal and ordinary banking, financial or portfolio management operations shall not be covered by the provisions of these Guidelines.]
27 SeeArticle 1306, New Civil Code. [The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.]; See also Information Technology Foundation of the Philippines v. COMELEC, G.R. No. 159139, January 13, 2004, 419 SCRA 141, where the Court held that the COMELEC flagrantly desecrated the public policy on public biddings when it violated RA 9184 (Government Procurement Reform Act); See alsoPower Sector Assets and Liabilities Management Corporation v. Pozzolanic Philippines, Inc., G.R. No. 183789, August 24, 2011, 656 SCRA 214, where the Court, citing Ongsiako v. Gamboa, 86 Phil. 50 (1950), declared that an agreement is against public policy if it is injurious to the interest of the public, contravenes some established interest of society, violates some public statute, is against good morals, tends to interfere with the public welfare of safety, or, as it is sometimes put, if it is at war with the interests of society and is in conflict with the morals of the time.
28 Rollo, p. 76.
29 NEDA JV Guidelines.
30 Item 4, Stage Two, Annex "C," NEDA JV Guidelines.
31 Annex "C," NEDA JV Guidelines.
32 Regalado v. Go, G.R. No. 167988, February 6, 2007, 514 SCRA 616.
33 Rollo, pp. 64-65.
34 Id. at 71.
35 Id. at 87.
36 Bouvier’s Law Dictionary, 3rd ed.
37 Black’s Law Dictionary, 2nd ed.
38 Philippine Health Care Providers, Inc. v. CIR, G.R. No. 167330, September 18, 2009, 600 SCRA 413.
39 Rollo, p. 74.
40 Id. at 74-88.
41 See RE: Problem of Delays in Cases Before the Sandiganbayan, A.M. No. 00-8-05-SC, November 28, 2001, 370 SCRA 658.
42 See Central Bank of the Philippines v. Court of Appeals, No. L-33022, April 22, 1975, 63 SCRA 431.
43 Domondon v. Sandiganbayan, G.R. No. 129904, March 16, 2000, 328 SCRA 292.
44 Cuerdo v. COA, No. L-84592, October 27, 1988, 166 SCRA 657.
45 Rollo, p. 635, BCDA’s February 13, 2012 Memorandum to the President.
46 Id. at 580-581.
47 Id. at 115.
48 Id. at 635.
49 Leca Realty Corporation v. Republic, G.R. No. 155605, September 27, 2006, 503 SCRA 563.
50 Id.
51 See Central Bank of the Philippines v. Court of Appeals, supra note 42.
52 See Ligeralde v. Patalinghug, G.R. No. 168796, April 15, 2010, 618 SCRA 315.
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