NPM 145-2012

Requesting Entity: Jodaar Cottage Industries

Issues Concern: Protest Fee; Sealing and Marking of Bids



Whether a bidder may be disqualified on the basis of non-observance of the procedure on sealing and marking of bids.

[W]hile rules of procedure on the marking of the bids are detailed and more specific, the rules of procedure on sealing are simple and general. However, although the rules simply provide that the envelopes containing the technical and financial components should be sealed, the main purpose of maintaining the integrity of the submitted documents through the proper sealing of the envelopes is imperative upon the BAC and the bidders.

Clauses 20.1 and 20.2, Section II. ITB of the PBD for Goods use the word "shall", which connotes command and compulsion. It is a basic legal construction that where words of command such as "shall," "must," or "ought" are employed, they are generally and ordinarily regarded as mandatory.

Accordingly, x x x these mandatory provisions give the BAC enough bases to disqualify the bidder in the event the procedures that is, marking and sealing of bids, contained therein are not observed. Acts which are executed against the provisions of mandatory or prohibitory laws shall be void, except when the law itself authorizes their validity.

On the other hand, it is our view that Clause 20.5, ITB, PBD for Goods only intends to discharge the public officer concerned from any liability under Section 65 of the IRR that may result from the improper sealing and marking of the bids, without fault or negligence on the part of the public officer. This provision, however, does not undermine the mandatory provisions to be followed in the submission, sealing and marking of bids.

Whether it is mandatory for an aggrieved bidder to pay the non-refundable fee equivalent to 1% of the Approved Budget for the Contract as a condition sine qua non for filing a written protest before the Head of the Procuring Entity (HOPE).

In DBM-PS v. Kolonwel Trading, the Honorable Supreme Court had the occasion to declare that the payment of a non-refundable fee is one of the requirements for filing a protest before the head of the procuring entity x x x.

[B]eing one of the indispensable requirements for filing a protest, the non-payment of the protest fee does not toll the prescriptive period for filing a protest and it becomes a justifiable basis for the HOPE not to entertain a protest. Simply stated, a bidder whose request for reconsideration was denied must pay the required protest fee to avail of the protest mechanism under the procurement law and its associated rules.