NPM 107-2004

Requesting Entity: BM Marketing & Construction

Issues Concern: Conduct of Bidding for the Construction and Development of the Balangiga Municipal Water Supply System Project by the Municipality of Balangiga



1. Whether or not the non-submission of a Special License issued by the Philippine Contractors’ Association Board (PCAB) for a Joint Venture (JV) is an act of misrepresentation, which is a ground to declare the prospective bidder ineligible, as contemplated under Section 23.4 of the IRR-A of R.A. 9184.

Misrepresentation, in legal parlance as well as in its ordinary sense connotes misstatement or falsification; it is certainly associated with fraud, and implies an intent to cause deception. Under Philippine jurisprudence, misrepresentation is defined as a false representation of a material fact by one of the parties to the other, tending directly to induce the other to enter into the contract, or to do on less favorable terms to himself, when otherwise he might not enter into the contract at all, or might demand terms more favorable.

Based on these definitions, it may be difficult to interpret that the non-submission of a Special PCAB License by a prospective JV bidder constitutes an act of misrepresentation on the latter’s status as a JV considering that neither the element of fraud nor the intent to cause deception is present. It may be observed that the non-submission or failure to submit any of the eligibility documents, as required, need not be construed as an act of misrepresentation to disqualify a failing bidder as it will per se, render the JV ineligible to participate in the bidding due to the non-discretionary “pass/fail” criteria prescribed under the IRR-A of R.A. 9184.

2. Whether or not the procuring agency may increase the minimum eligibility requirements that a prospective bidder has to satisfy, specifically as regards the requirement on the “largest single completed contract”

Although Section 17.3 of the IRR-A of R.A. 9184 allows the procuring agency to require additional document requirements or specifications such as summary of data, facilities and/or services from the prospective bidders to be included in their respective bids, we believe that such prerogative by the agency may only be exercised whenever necessary and applicable in consideration of the size, cost and type of project being bidded out.

However, with regard to the requirement on the largest single completed contract, we are of the opinion that it is the spirit of the law to fix and define the minimum requirement that the prospective bidders will have to satisfy on the basis of such “single” completed contract in establishing its track record and capacity to perform contractual obligations. Otherwise stated, the procuring agency can only require a “single” largest completed contract from the prospective bidders as the basis for the eligibility criterion prescribed under Section 23.11.2 (3) of the IRR-A of R.A. 9184, however, the bidders may submit more than the said minimum requirements fixed by law.

3. Whether or not the term “protests” mentioned in the proviso under Section 57 of the IRR-A of R.A. 9184 include the possible court action as a consequence of an unsuccessful protest filed by a losing bidder, such that, said court action must first be resolved or decided upon by the court before the procuring agency may award the contract.

The “protests” mentioned in the proviso under Section 57 of the IRR-A of R.A. 9184 do not include or cover the possible court action that may be resorted to by the losing party since said court action may only be had after the protests have been resolved by the head of the procuring entity with finality. Evidently, a protest under R.A. 9184 and its IRR-A and a court action sanctioned by the Rules of Court, are two distinct and separate remedies, considering that an original action for certiorari is an independent action and not a continuation or part of the protest proceedings. Hence, we are of the opinion that the “protests” referred to in Section 57 of the IRR-A pertain only to protests decided by the head of the procuring entity with finality and not to court actions being tried in the regular courts. Accordingly, the contract shall be awarded after all the protests have been resolved with finality by the head of the procuring entity, and that a court action after the protest proceedings does not necessarily carry with it restraint on the head of the procuring entity in awarding the contract, save in cases where there is a temporary restraining order or injunctive relief granted by the court.