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THE
Court of Appeals (CA) has granted the petition of Urban
Corp. to declare null and void the award by the
Department of Finance (DOF) to Nagayama Taisei
Consortium (NTC) of the contract to develop the
Nampeidai Property of the Philippine government in
Tokyo, Japan.
In a
19-page decision by Associate Justice Apolinario
Bruselas Jr., the appellate court’s Special Eighth
Division held that the award of the project to NTC
should be nullified as it was issued with grave abuse of
discretion amounting to excess of jurisdiction.
The CA
reinstated with modification the August 22, 2007,
original decision of Judge Vedasto Marco of the Regional
Trial Court in Manila canceling the award of the
contract to NTC, specifically for violating the
provisions of Republic Act 9184, or the Government
Procurement Reform Act.
“It is
the public respondents who have violated the clear
mandate of RA 9184…as well as rudimentary rules of fair
play, due process and the public nature of the award
process, by their failure to seasonably inform the
petitioner about the turnaround in the project award, or
the reasons therefore that were kept secret.”
The
Nampeidai property is one of three Philippine properties
in Japan that have been offered to investors under a
build-operate-transfer scheme.
The
public bidding, under the Government Procurement Reform
Act or Republic Act 9184, was held by the BAC, which
declared Nagayama the
winning bidder after it offered to construct a
¥1.7-billion building on the property and pay the
Philippine government an additional ¥480-million.
In its
ruling, the CA also deleted the lower court’s directive
for the Head of the Procuring Entity “to issue a notice
of award” of the Nampeidai Project to petitioner Urban.
However,
the appeals court did not rule on whether the project
should be given to Urban or not.
“In a
procurement process (bidding) controversy, courts may
only determine whether or not the procedures laid down
by law have been observed; and if not so observed,
declare such fact to be so on grounds of grave abuse of
discretion, nullifying in the process acts so take in
excess of jurisdiction. Courts may not go further to
award any contract,” the CA said.
The CA
said the award of the project to NTC suffered “from
transparency issues” as the DOF, BAC and NTC
short-circuited the process to ease out Urban, which
clearly won the bidding.
Based on
the records, several bidders submitted development
proposals to the BAC which include Daiwa Jisyo-Mabuchi-Sakura,
Urban, NTC and CHKEN Corporatio. They were later deemed
qualified for the bidding.
On
November 28, 2003, the BAC declared Urban the winning
bidder with the lowest calculated responsive bid.
In
calculating the bidders’ PV, Urban Corp.’s proposal of
lowest calculated responsive bid, as required under
Section 37 of RA 9184 emerged more favorable to the
government, with Y466.6-million with three months’
maturity date or maximum period of payment, as opposed
to NTC’s Y464.2-million with a 30-day maturity. Thus,
Urban was awarded the project.
However,
neither the Office of the President nor the DOF as head
of the procuring entity, officially acted on BAC’s
recommendation, in violation of Section 37 of RA 9184.
Such inaction meant that the project shall be deemed as
approved, pursuant to Section 37 and 38 of the
procurement law.
Meanwhile, the NTC wrote a series of letters to the DOF
and BAC seeking a re-evaluation of the PV of its gross
bid price based on its offer to pay within a shorter
period
In a
letter on March 1, 2006, Teves officially told Urban
that the project had been awarded to the NTC as early as
June 16, 2005, prompting the aggrieved bidder to file a
petition for certiorari before the Pasay Court.
The NTC
also reiterated in its subsequent letters that its
“clarification” of its offer to pay the second tranche
within 30 days means that it is paying in 7 days, thus,
resulting in a better present value computation than
Urban’s bid, wherein the second tranche of the latter’s
bid is “payable in three months.”
The BAC
initially affirmed Urban’s right to the contract but on
June 16, 2005, it favorably resolved NTC’s motion.
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