Manila regional trial court Branch 18 Judge Myra Garcia-Fernandez said there is basis to prevent the government to bid out the contract for textbooks to Vibal by pointing out the petitioner, Kolonwel Trading, being the lowest bidder, will suffer "irreparable damage" because of the flawed bidding process.
In a 60-page ruling, the court granted the position taken by Kolonwel in pointing out the irregularity of the contract by the government agencies concerned with Vibal.
The government agencies named respondents in the case include the Department of Budget and Management-Procurement Service (DBM-PS), the Inter-Agency Bids and Awards Committee (IABAC) of the Department of Education (DepEd).
The private respondents were Vibal, SD Publications, Inc., LG&M Corp. (LG&M), Watana Phanit Printing and Publishing Co., Ltd. (Watana) and Alkem Co., Pte Ltd., (Alkem).
Court records showed Kolonwel was among the 18 firms that joined the bidding for the purchase of 17.5 million copies of Social Studies textbooks and teacher’s manual for elementary and high school in the country.
The acquisition program would be partially funded by the World Bank (WB) under its Second Social Expenditure Management Program (SEMP2) loan agreement, and the Asian Development Bank (ADB) through its Secondary Education Development and Improvement Project (SEDIP) loan agreement.
The case stemmed from the request made by DepEd to acquire the textbooks, which prompted the DBM-PS and IABAC to hold an international competitive bidding on Oct. 27 last year.
Kolonwel was among those who participated in the bidding to publish the textbooks.
Of the 18 initial prospective bidders, only 11 publishing firms, included Kolonwel and Vibal, submitted their respective proposals for the project on Dec. 9, 2005.
On Sept. 12 this year, DBM-PS entered into purchaser-supplier contracts with Vibal and Watana.
Kolonwel argued the respondents were in a hurry to consummate the deal.
When the IABAC issued notices of award to Vibal and the other respondent firms, Kolonwel filed a motion for reconsideration twice, but in both instances the IABAC turned it down.
The delivery of the textbooks was supposed to start on Nov. 20, prompting Kolonwel to stop the deal by filing a case against the respondents and for a temporary restraining order, which the court later granted.
"The petitioner contends that if respondents are not enjoined from proceeding with the consummation of highly irregular contract, petitioner, who is rightfully the bidder having the lowest evaluated bill, will suffer irreparable damage," the court said.
"They should now desist from insisting on the implementation of a flawed contract and instead agree to a total rebidding of the contract and ensure their transparency," lawyer Harry Roque said.
Roque said the court has noted "fraudulent acts" committed by the respondent government agencies and bidders to corner the World Bank-funded contract.
"We have filed a certiorari for a temporary restraining order, now we have a permanent injunction," Roque said. He said the court also did not find credible the argument made by a WB economist that the awarding of the contract did not have conflict with the WB guidelines.
Roque cited a study made by a DepEd official who earlier noted the irregularity of the purchase contract with Vibal.
He said the DepEd official had noted the contracts were awarded to several publishing firms all owned by Vibal.
Earlier, Roque and his clients have also brought the same issue before the Integrity Tribunal of the WB, which has yet to issue a ruling.
However, a representative from the World Bank disputed claims of fraud by Roque, along with opposition Sen. Panfilo Lacson who "exposed" the issue, over the multi-billion contract cornered by the supposed Vibal group of bidders.
In a two-page rejoinder to The STAR, Joachim von Amsberg, WB’s country director for Philippines, East Asia and the Pacific Region, said the awards "were made in accordance with applicable guidelines for procurement under World Bank financing and with the provisions of the legal agreement for the WB-assisted Second Social Expenditure Management Project."
Since the government implemented textbook procurement reform, with fair, open and transparent competition, there has been a substantial increase in the number of legitimate bidders. The increase in bidders has made it difficult for bidders to collude, von Amsberg said.
"The World Bank treats cases of allegations or signs of fraud or corruption in projects it financed as a very serious issue. It reviews and, as needed, investigates such cases, and uses the appropriate sanctions as agreed under the respective Loan Agreements," he said.
Under this particular project, the WB executive said the government has achieved a savings of around 50 percent in the prices paid for textbooks since the procurement reforms supported by the SEMP-2 Project were implemented by the DepEd.
Some quarters alleged irregularity after Vibal managed to corner 75.96 percent of the bids from 1999 to 2004, which is equivalent to a total of P2,658,756,511.
Players in the publishing industry have complained Vibal was "being favored by an influential institution which bends its own rule just to accommodate their desired end." —With Christina Mendez, Sandy Araneta