The substance of a bid

This is in response to the letter of Mr. Noel Kintanar of Ayala Corp., which appeared in the 4 July 2014 issue of your newspaper. Mr. Kintanar wrote lengthily about the bidding for Daang Hari, basically claiming that the entire process was fair and above board. In this regard, please allow us, as a critical stakeholder of the project, to provide our analysis of the Daang Hari bid process for the information and consideration of your readers.

The initial documents provided by DPWH for the Daang Hari bid provided a basic design wherein the connection to SLEX would be through a rotunda, connected to the Susana Heights toll plaza.

Through a later bid bulletin, DPWH allowed the submission of an alternate design for the connection to SLEX but, as Mr. Kintanar noted in his letter, the alternate design should have been “acceptable to the Government agencies, Local Government Unit (sic) and private sectors.” One such member of the private sector is SLTC, the SLEX concessionaire and the party directly affected by Ayala’s alternate design.

The design of Ayala included tunnels and ramps which entered into the right-of-way of SLEX and prevented SLTC from expanding SLEX to ten(10) lanes. Furthermore, the design provided for an entry ramp to Daang Hari that would slice through the center of the SLEX toll plaza at Susana Heights. In violation of the provision that the alternative design must be acceptable to the private sectors, Ayala did not consult with SLTC prior to submitting the alternate design. In fact, the design was very unacceptable to SLTC, for valid reasons, and as proof of that, the design had to undergo extensive, expensive changes after the award of project which, as variation orders, are now being shouldered by the government.

Considering that it was Ayala that erred in not consulting SLTC, should it not also be Ayala who should shoulder the cost of the variation orders? The more basic issue, however, is that Ayala did not consult SLTC and this was a blatant violation of the bid rules which should have led to the disqualification of its bid. Yet, SMC did not pursue the disqualification of Ayala in the Daang Hari bid. On the contrary, SMC (through SLTC) cooperatedwith DPWH and Ayala to come up with a mutually acceptable engineering design and operating arrangements. SMC did not bother to harp on the “sanctity of bid rules”, even with the serious violation of Ayala, because Ayala did indeed submit a higher bid for Daang Hari.

It is thus frustrating for SMC that its bid competitors forCALAX, who submitted bids that were more than P8 billion less than SMC’s bid, are now seeking its disqualification on the basis of a mere typographical error. The bid rules provide for procedures whereby such minor errors may be cured and yet, the DPWH chose to ignore those rules even as SMC, upon the instructions of DPWH pursuant to the bid rules, submitted a clarification with supporting documents, that cured the typographical error. Contrary to the insinuations of its competitors, it is SMC that has been strictly following the bid rules. Nonetheless, let us not lose sight of the substance of a bid, rather than get lost in form and procedure.  SMC submitted a bid which is P8.45 billion higher than its nearest competitor and its bid is substantially responsive. Based on the bid rules, SMC should not have been disqualified, and should have won and been awarded the CALAX contract.

Raoul Romulo

Authorized Representative

Optimal Infrastructure Development Inc.