SC junks PMA alumni’s suit vs road project’s contract

The Supreme Court (SC) has dismissed a suit filed by a group of Philippine Military Academy (PMA) alumni questioning the awarding of a Catanduanes road project funded by the Japanese government through the Japan Bank for International Cooperation (JBIC).

In a 41-page decision penned by Associate Justice Romeo Callejo, the SC’s third division said guidelines set by the JBIC on projects which it funds are binding on the Philippine government.

The petitioners in the suit were members of the PMA’s ’59 Foundation Inc. represented by its president, Commodore Carlos Agustin.

They questioned the awarding of the contract to China Road and Bridge Corp. even if its bid exceeded by more than P200 million the contract ceiling set by the government.

Associate Justices Consuelo Ynares-Santiago, Ma. Alicia Austria-Martinez and Minita Chico-Nazario concurred with the ruling which pointed out that JBIC rules which prohibit ceilings on project bids are valid and binding.

In their petition, the PMA alumni also asked the SC to nullify a resolution of the Department of Public Works and Highways’ bids and awards committee awarding the contract to China Road and Bridge Corp. Former DPWH Secretary Florante Soriquez approved the resolution.

The project involved the improvement and rehabilitation of the San Andres (Codon)-Virac-Junction-Bago-Viga Road in Catanduanes.

It was one of the four packages comprising the improvement and rehabilitation of the Catanduanes Circumferential Road, which covered 204 kilometers.

The road section was part of the Arterial Road Links Development Project funded under Loan Agreement No. PH-P204 which the Philippine government and JBIC entered into on Dec. 28, 1999.

The arterial road project is the second biggest of the 11 JBIC-funded projects nationwide with a total cost of 80 billion yen.

A total of 23 foreign and local contractors submitted pre-qualification documents for the project on Jan. 23, 2003.

Eight contractors were subsequently considered eligible to bid as concurred in by the JBIC. One of them, however, later withdrew.

Before the opening of the bids, it was announced that the approved budget for the contract was P738 million.

The contract was awarded to China Road and Bridge Corp. as it offered the lowest bid of P952.5 million or more than P200 million than the approved budget.

The PMA alumni’s group questioned the awarding of the contract, accusing the DPWH of grave abuse of discretion in giving the project to a bidder whose bid exceeded the approved budget by more than P200 million.

They added that the contract between DPWH and China Road was void as it violated Republic Act 9184 or the Government Procurement Reform Act.

They cited a provision of RA 9184 stipulating that "bid prices that exceed the ceiling shall be disqualified outright from participating in the bidding."

But under the circumstances, the SC said the JBIC may well be considered an adjunct of the Japanese government and that the loan agreement was indubitably an integral part of the exchange of notes.

"Significantly, an exchange of notes is considered a form of an executive agreement, which becomes binding through executive action without the need of a vote by the Senate or Congress," it said.

The SC also noted that under JBIC rules, the imposition of ceilings on bids is prohibited.

"The JBIC procurement guidelines forbid any procedure under which bids above or below a predetermined bid value assessment are automatically disqualified. It absolutely prohibits the imposition of ceilings on bids," it said.

As such, the SC said the DPWH rightfully awarded the contract for the Catanduanes road project to China Road and Bridge Corp.