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Competition requires not only bidding upon a common standard, a common basis, upon the same thing,

the same subject matter, and the same undertaking, but also that it be legitimate, fair and honest and
not designed to injure or defraud the government. The essence of competition in public bidding is that
bidders are placed on equal footing which means that all qualified bidders have an equal chance of
winning the auction through their bids.

R.A. 9184 now allows exceptions to the public bidding rule in certain instances, conditions, or
extraordinary circumstances. Section 48 subsection (b) in relation to Section 50 and its subsection (c) of
R.A. No. 9184 in particular, authorizes direct contracting as one of the alternative methods of

Direct contracting, otherwise known as “Single Source Procurement,” refers to “a method of

Procurement that does not require elaborate Bidding Documents because the supplier is simply asked to
submit a price quotation or a pro-forma invoice together with the conditions of sale.

There is enough evidence to show that petitioners did not just dispense with public bidding for no
compelling reason. It was clearly and convincingly proven that direct contracting was resorted to based
on a preliminary determination that there was no suitable substitute to Bio Nature liquid fertilizers that
can be obtained at more advantageous terms to the government. This is compliant with the condition
laid down in Section 50 of R.A. No. 9184.

BAC entered into contract with Feshnan Philippines, Inc. following the findings of the Technical Working
Group that only Bio Nature sold by Feshnan Philippines, Inc. fits the description or composition
recommended by Rumbawa in the Purchase Request dated September 10, 2014. The specifications for
the fertilizers cannot be said to have been highly restrictive such that it effectively foreclosed the
possibility of competitiveness from other suppliers since there was no evidence that the specifications
submitted to the BAC were supplanted or countermanded by a different finding.

The right product to best address the agricultural needs of the farmers/beneficiaries in the Province of
Rizal caertainly lies with the studies and surveys conducted by the Provincial Agriculturist Office of Rizal.
The recommendation of Rumbawa based thereon should be accorded respect. In National Center for
Mental Health Management v. Commission on Audit, the Supreme Court ruled stating: “the sanitation
supplies from Ferchem Inc. were sold by an exclusive distributor, and while there could have been
substitute items, the judgment of the NCMHM, however, on the suitability of the product, given the
nature of its services should be accorded respect.”

In terms of reviewing actions of agencies entrusted with procurement is limited. As explained in First
United Constructors Corporation v. Poro Point Management Corporation:
The discretion to accept ot reject a bid and award contracts is vested in the Government agencies
entrusted with that function. The discretion given to the authorities on this matter is of such wide
latitude that the Courts will not interfere therwith, unless it is apparent that it is used as a shield to a
fraudulent award (Jalandoni v. NARRA, 108 Phil. 486 [1960]). The exercise of this discretion is a policy
decision that necessitates prior inquiry, investigation, comparison, evaluation, and deliberation. The role
of the Courts is to ascertain whether a branch or instrumentality of the Government has transgressed
its constitutional boundaries. But the Courts will not interfere with executive or legislative discretion
exercised within those boundaries. Otherwise, it strays into the realm of policy decision making.”
(Emphasis supplied)

In the case at bar, absent a clear showing that directly contracting with Feshnan Philippines, Inc. was
fraudulent, and that the Government was placed in a disadvantageous position as a result thereof, the
presumption of regularity should apply in Petitioners’ favour. Mere surmises and conjecture, absent any
proof whatsoever, will not tilt the balance against this presumption, if only to provide constancy in the
official acts of authorized government personnel and officials. (Flores v. Montemayor, G.R. No. 170146,
August 25, 2010).

Good faith as a defense is appreciated in favour of petitioners.

The ruling in Sistoza v. Desierto is worth telling:

In situations of fallible discretion, good faith is nonetheless appreciated when the document
relied upon and signed shows no palpable nor patent, no definite nor certain defects or when
the public officer’s trust and confidence in his subordinates upon whom the duty primarily lies
are within parameters of tolerable judgment and permissible margins of error. As it is settled,
evidence of guilt must be premised upon a more knowing, personal and deliberate participation
of each individual who is charged with others as part of conspiracy.

While misconduct generally means wrongful, improper or unlawful conduct motivated by a

premeditated, obstinate or intentional purpose, it does not necessarily imply corruption, the element
which qualifies misconduct as grave misconduct. Thus, unless there is substantial evidence of
corruption, the transgression of an established rule is properly characterized as only simple misconduct.
(Imperial, Jr. v. GSIS, G.R. No. 191224, October 4, 2011)

A public officer shall be liable for grave misconduct only when the elements of corruption, clear intent to
violate the law or flagrant disregard of established rule are manifest. These qualifying elements must
also be established by substantial evidence, separate from the showing of the misconduct itself.