Itf VS Comelec PDF

2/10/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 419
VOL. 419, JANUARY 13, 2004 141

Information Technology Foundation of the Philippines
vs. Commission on Elections
*
G.R. No. 159139. January 13, 2004.
INFORMATION TECHNOLOGY FOUNDATION OF THE

PHILIPPINES, MA. CORAZON M. AKOL, MIGUEL UY,
EDUARDO H. LOPEZ, AUGUSTO C. LAGMAN, REX C.
DRILON, MIGUEL HILADO, LEY SALCEDO, and
MANUEL ALCUAZ, JR., petitioners, vs. COMMISSION
ON ELECTIONS; COMELEC CHAIRMAN BENJAMIN
ABALOS, SR.; COMELEC BIDDING and AWARD
COMMITTEE CHAIRMAN EDUARDO D. MEJOS and
MEMBERS GIDEON DE GUZMAN, JOSE F.
BALBUENA, LAMBERTO P. LLAMAS, and BARTOLOME
SINOCRUZ, JR.; MEGA PACIFIC eSOLUTIONS, INC.;
and MEGA PACIFIC CONSORTIUM, respondents.
Constitutional Law; Powers; Judicial Power;

Constitutionality; Legal Standing; Petitioners’ legal standing
recognized following the liberal policy of this Court whenever a
case involves “an issue of overarching significance to our
society.”—Our nation’s political and economic future virtually
hangs in the balance, pending the outcome of the 2004 elections.
Hence, there can be no serious doubt that the subject matter of
this case is “a matter of public concern and imbued with public
interest”; in other words, it is of “paramount public interest” and
“transcendental importance.” This fact alone would justify
relaxing the rule on legal standing, following the liberal policy of
this Court whenever a case involves “an issue of overarching
significance to our society.” Petitioners’ legal standing should
therefore be recognized and upheld.
Administrative Law; Commission on Elections; Doctrine of
Exhaustion of Administrative Remedies; Exceptions; The case of
Paat vs. Court of Appeals enumerates the instances when the rule
on exhaustion of administrative remedies may be disregarded.—
The instances when the rule on exhaustion of administrative
remedies may be disregarded, as follows: “(1) when there is a
violation of due process, (2) when the issue involved is purely a
http://www.central.com.ph/sfsreader/session/00000168d776b0f122f00183003600fb002c009e/t/?o=False 1/147
legal question, (3) when the administrative action is patently

illegal amounting to lack or excess of jurisdiction, (4) when there
is estoppel on the part of the administrative agency concerned, (5)
when there is irreparable injury, (6) when the respondent is a
department secretary whose acts as an alter ego of the President
bears the implied and assumed approval of the latter, (7) when to
require exhaustion of administrative remedies would be
unreasonable, (8) when it would amount to a nullification of a
claim, (9) when the subject matter is a private land in land case
_______________
* EN BANC.
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142 SUPREME COURT REPORTS ANNOTATED

proceedings, (10) when the rule does not provide a plain, speedy
and adequate remedy, and (11) when there are circumstances
indicating the urgency of judicial intervention.”
Same; Same; Words and Phrases; Joint Venture; Definition.—
This Court in Kilosbayan v. Guingona defined joint venture as “an
association of persons or companies jointly undertaking some
commercial enterprise; generally, all contribute assets and share
risks. It requires a community of interest in the performance of
the subject matter, a right to direct and govern the policy in
connection therewith, and [a] duty, which may be altered by
agreement to share both in profit and losses.”
Same; Same; Public Bidding; Rationale; The essence of public
bidding is, after all, the opportunity for fair competition, and a
fair basis for the precise comparison of bids.—The essence of
public bidding is, after all, an opportunity’ for fair competition,
and a fair basis for the precise comparison of bids. In common
parlance, public bidding aims to “level the playing field.” That
means each bidder must bid under the same conditions; and be
subject to the same guidelines, requirements and limitations, so
that the best offer or lowest bid may be determined, all other
things being equal.
YNARES-SANTIAGO, J.,Concurring Opinion:
Administrative Law; Commission on Elections; Exhaustion of

Administrative Remedies; The underlying principle of the rule on
exhaustion of administrative remedies rests on the presumption
that when the administrative body, or grievance machinery, is
afforded a chance to pass upon the matter, it will decide the same
correctly.—A long line of cases establishes the basic rule that
regular courts of justice should not interfere in matters which are
addressed to the sound discretion of government agencies
entrusted with the regulation of activities coming under the
special technical knowledge and training of such agencies. The
underlying principle of the rule on exhaustion of administrative
remedies rests on the presumption that when the administrative
body, or grievance machinery, is afforded a chance to pass upon
the matter, it will decide the same correctly. The principle of
exhaustion of administrative remedies is not an ironclad rule.
This doctrine is relative, and its flexibility is called upon by the
peculiarity and uniqueness of the factual and circumstantial
settings of a case.
Same; Same; Joint Venture; A joint venture may be likened to
a partnership.—The legal concept of a joint venture is of common
law origin. It has no precise legal definition, but it has been
generally understood to mean an organization formed for some
temporary purpose. It is hardly distinguishable from the
partnership, since their elements are similar—community of
interest in the business, sharing of profits and losses, and a
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mutual right of control. The main distinction cited by most

opinions in common law jurisdiction is that the partnership
contemplates a general business with some degree of continuity,
while the joint venture is formed for the execution of a single
transaction, and is thus of a temporary nature. This observation
is not entirely accurate in this jurisdiction, since under the Civil
Code, a partnership may be particular or universal, and a
particular partnership may have for its object a specific
undertaking. It would seem therefore that under Philippine law, a
joint venture is a form of partnership and should thus be
governed by the law of partnerships. The Supreme Court has
however recognized a distinction between these two business
forms, and has held that although a corporation cannot enter into
a partnership contract, it may however engage in a joint venture

with others.
Same; Same; Same; Public Bidding; An essential element of a
publicly bidded contract is that all bidders must be on equal
footing.—An essential element of a publicly bidded contract is
that all bidders must be on equal footing. Not simply in terms of
application of the procedural rules and regulations imposed by the
relevant government agency, but more importantly, on the
contract bidded upon. Each bidder must be able to bid on the
same thing. The rationale is obvious. If the winning bidder is
allowed to later include or modify certain provisions in the
contract awarded such that the contract is altered in any material
respect, then the essence of fair competition in the public bidding
is destroyed. A public bidding would indeed be a farce if after the
contract is awarded, the winning bidder may modify the contract
and include provisions which are favorable to it that were not
previously made available to the other bidders.
SANDOVAL-GUTIERREZ, J.,Concurring Opinion:
Administrative Law; Commission on Elections; Joint Venture;

In the Philippines, the prevailing school of thought is that a joint
venture is a species of partnership.—A joint venture is an
commercial enterprise with all of them generally contributing
assets and sharing risks. It requires a community of interest in
the performance of the subject matter, a right to direct and govern
the policy in connection therewith, and duty, which may be
altered by agreement to share both in profit and losses. In the
Philippines, the prevailing school of thought is that a joint
venture is a species of partnership.
Same; Same; Same; Characteristics; Since joint venture is a
species or a special type of partnership, it is said to have the
following characteristics of partnership.—Since joint venture is a
species or a special type of partnership, it is said to have the
following characteristics of partnership: “(a) It would have a
juridical personality separate and distinct from that of
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each of the joint-venturers; (b) Each of the co-venturers would be

liable with their private property to the creditors of the joint
venture beyond their contributions to the joint venture; (c) Even if
a co-venturer transfers his interest to another, the transferee does
not become a co-venturer to the others in the joint venture unless
all the other co-venturers consent. This is in consonance with the
delectus personarum principle applicable to partnerships; (d)
Generally, the co-venturers acting on behalf of the joint venture
are agents thereof as to bind the joint venture; and (e) Death,
retirement, insolvency, civil interdiction or dissolution of a co-
venturer dissolves the joint venture.”
DAVIDE, JR., J., Separate Opinion:
Administrative Law; Commission on Elections; Contracts; As

the Court did not issue a Temporary Restraining Order in this
case, the parties were not barred from performing their respective
obligations under the contract.—The Court did not issue a
Temporary Restraining Order in this case. This showed an initial
finding that on its face the allegations in the petition were
insufficient to justify or warrant the grant of a temporary
restraining order. In the meantime then the parties were not
barred from performing their respective obligations under the
contract.
VITUG, J., Separate Opinion:
Constitutional Law; Powers; Judicial Power; Supreme Court;

The Supreme Court is not expected, whenever one is simply
minded, to pass judgment on an action of a government agency
upon which authority, as well as corresponding duty, devolves.—
The Supreme Court is not expected, whenever one is simply
minded, to pass judgment on an action of a government agency
upon which authority, as well as corresponding duty, devolves.
The Court neither controls nor supervises the exercise of
authority and the discharge of function by another government
office. If it were otherwise, the act of governance and the
responsibility that thereto attaches are then effectively shifted
from where they belong over to where they should not be. The
Court is bound merely to construe and to apply the law,
regardless of its wisdom and salutariness, and to strike it down
only when constitutional proscriptions are disregarded. It is what
the fundamental law mandates, and it is what the Court must do.
TINGA, J., Dissenting Opinion:
Actions; Pleadings and Practice; Prohibition; When Available.

—Prohibition is an extraordinary writ directed against any
tribunal, corporation, board, officer or person, whether exercising

judicial, quasi-judicial or ministerial functions, commanding the
respondent to desist from further proceedings when said
proceedings are without or in excess of the respon-
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dent’s jurisdiction or are attended with grave abuse of discretion

amounting to lack or excess of jurisdiction and there is no appeal
or any other plain, speedy, and adequate remedy in the ordinary
course of law.
Same; Same; Mandamus; When available.—Mandamus, on
the other hand, is an extraordinary writ commanding a tribunal,
corporation, board, officer or person, immediately or at some other
specified time, to do the act required to be done, when the
respondent unlawfully neglects the performance of an act which
the law specifically enjoins as a duty resulting from an office,
trust, or station, or when the respondent excludes another from
the use and enjoyment of a right or office to which such other is
entitled, and there is no other plain, speedy and adequate remedy
in the ordinary course of law.
Constitutional Law; Powers; Judicial Power; Judicial power,
however large, has an orbit more or less strictly defined by well-
organized presuppositions regarding the kind of business that
properly belongs to courts.—Judicial power, however large, has an
orbit more or less strictly defined by well-recognized
presuppositions regarding the kind of business that properly
belongs to courts. Their business is adjudication, not speculation.
They are concerned with actual, living controversies, and not
abstract disputation.”
Administrative Law; Commission on Elections; Powers; Due
regard to the independent character of the Commission, as
ordained in the Constitution, requires that the power of this court
to review the acts of that body should, as a general proposition, be
used sparingly, but firmly in appropriate cases.—The Court has
constantly underscored the importance of giving the COMELEC
considerable latitude in adopting means and methods that will
insure the accomplishment of the objective for which it was
created—to promote free, orderly, honest, peaceful and credible
elections. Thus, in the past we have prudently declined to
interfere with the COMELEC’s exercise of its administrative
functions absent any showing of grave abuse of discretion. As

luminously stated in Sumulong v. COMELEC. “[I]n the matter of
the administration of the laws relative to the conduct of elections,
as well as in the appointment of election inspectors, we must not
by any excessive zeal take away from the Commission on
Elections the initiative which by constitutional and legal
mandates properly belongs to it. Due regard to the independent
character of the Commission, as ordained in the Constitution,
requires that the power of this court to review the acts of that
body should, as a general proposition, be used sparingly, but
firmly in appropriate cases.”
Same; Same; Exhaustion of Administrative Remedies;
Rationale; Where the enabling statute indicates a procedure for
administrative review, and provides a system of administrative
appeal, or reconsideration, the
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courts, for reasons of law, comity and convenience, will not

entertain the case unless the available administrative remedies
have been resorted to and the appropriate authorities have been
given an opportunity to act and correct the errors committed in the
administrative forum.—The doctrine of exhaustion of
administrative remedies requires that when an administrative
remedy is provided by law, relief must be sought by exhausting
this remedy before the courts will act. No recourse can be had
until all such remedies have been exhausted and special civil
actions against administrative officers should not be entertained
if superior administrative officers could grant relief. In Hon.
Carale v. Hon. Abarintos, the Court enunciated the reasons for
the doctrine, thus: Observance of the mandate regarding
exhaustion of administrative remedies is a sound practice and
policy. It ensures an orderly procedure which favors a preliminary
sifting process, particularly with respect to matters peculiarly
within the competence of the administrative agency, avoidance of
interference with functions of the administrative agency by
withholding judicial action until the administrative process had
run its course, and prevention of attempts to swamp the courts by a
resort to them in the first instance. The underlying principle of the
rule rests on the presumption that the administrative agency, if
afforded a complete chance to pass upon the matter, will decide the
same correctly. There are both legal and practical reasons for this
principle. The administrative process is intended to provide less

expensive and more speedy solutions to disputes. Where the
enabling statute indicates a procedure for administrative review,
and provides a system of administrative appeal, or
reconsideration, the courts, for reasons of law, comity and
convenience, will not entertain the case unless the available
administrative remedies have been resorted to and the appropriate
authorities have been given an opportunity to act and correct the
errors committed in the administrative forum.
Same; Same; Same; Exceptions; In Paat vs. Court of Appeals,
the Court enumerated the instances when the rule on exhaustion of
administrative remedies may be disregarded.—InPaat vs. Court of
Appeals, the Court enumerated the instances when the rule on
exhaustion of administrative remedies may be disregarded: . . . (1)
when there is a violation of due process, (2) when the issue
involved is purely a legal question, (3) when the administrative
action is patently illegal amounting to lack or excess of
jurisdiction, (4) when there is estoppel on the part of the
administrative agency concerned, (5) when there is irreparable
injury, (6) when the respondent is a department secretary whose
acts as an alter ego of the President bear the implied and assumed
approval of the latter, (7) when to require exhaustion of
administrative remedies would be unreasonable, (8) when it
would amount to a nullification of a claim, (9) when the subject
matter is a private land in land case proceedings, (10) when the
rule does not provide a plain, speedy and adequate remedy, and
(11) when there are circumstances indicating the urgency of
judicial intervention.
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Same; Same; Contracts; Joint Venture; Definition.—

InKilosboyan v. Guingona, we defined a joint venture as “an
commercial enterprise; generally all contribute assets and share
risks. It requires a community of interest in the performance of
the subject matter, a right to direct and govern the policy in
connection therewith, and duty, which may be altered by
agreement to share both in profit and losses.”
Constitutional Law; Powers; Judicial Power; Supreme Court;
Grave Abuse of Discretion; By grave abuse of discretion is meant
such capricious and whimsical exercise of judgment as is
equivalent to lack of jurisdiction.—By grave abuse of discretion is

meant such capricious and whimsical exercise of judgment as is
equivalent to lack of jurisdiction. Mere abuse of discretion is not
enough. It must be grave abuse of discretion as when the power is
exercised in an arbitrary or despotic manner by reason of passion
or personal hostility, and must be so patent and so gross as to
amount to an evasion of a positive duty or to a virtual refusal to
perform the duty enjoined or to act at all in contemplation of law.
Failure on the part of the petitioner to show grave abuse of
discretion will result in the dismissal of the petition. In rendering
this Decision, this Court never forgets that the Senate, whose act
is under review, is one of two sovereign houses of Congress and is
thus entitled to great respect in its actions. It is itself a
constitutional body independent and coordinate, and thus its
actions are presumed regular and done in good faith. Unless
convincing proof and persuasive arguments are presented to
overthrow such presumptions, this Court will resolve every doubt
in its favor.
SPECIAL CIVIL ACTION in the Supreme Court.

Certiorari.
The facts are stated in the opinion of the Court.

Antonio C. Pastelero and Alvin Jose B. Felizardo for
petitioners.
Batuhan, Blando, Concepcion & Francisco for movant
John H. Osmeña.
Florentino A. Tuason, Jr. for and in behalf of all
public respondents.
Alfredo V. Lazaro, Jr., Juanito I. Velasco, Jr., and
Ma. Concepcion V. Murillo for respondents MPC and
MPEI.
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PANGANIBAN, J.:
There is grave abuse of discretion (1) when an act is done

1
contrary to the Constitution, the law or jurisprudence; or
(2) when it is executed whimsically, capriciously 2
or
arbitrarily out of malice, ill will or personal bias. In the
present case, the Commission on Elections approved the
assailed Resolution and awarded the subject Contract not
only in clear violation of law and jurisprudence, but also in
reckless disregard of its own bidding rules and procedure.

For the automation of the counting and canvassing of the
ballots in the 2004 elections, Comelec awarded the
Contract to “Mega Pacific Consortium” an entity that had
not participated in the bidding. Despite this grant, the poll
body signed the actual automation Contract with “Mega
Pacific eSolutions, Inc.,” a company that joined the bidding
but had not met the eligibility requirements.
Comelec awarded this billion-peso undertaking with
inexplicable haste, without adequately checking and
observing mandatory financial, technical and legal
requirements. It also accepted the proferred computer
hardware and software even if, at the time of the award,
they had undeniably failed to pass eight critical
requirements designed to safeguard the integrity of
elections, especially the following three items:
• They failed to achieve the accuracy rating criteria of

99.9995 percent set-up by the Comelec itself
• They were not able to detect previously downloaded
results at various canvassing or consolidation levels and
to prevent these from being inputted again
• They were unable to print the statutorily required
audit trails of the count/canvass at different levels
without any loss of data
Because of the foregoing violations of law and the glaring

grave abuse of discretion committed by Comelec, the Court
has no
3
choice but to exercise its solemn “constitutional
duty” to void the assailed Resolution and the subject
Contract. The illegal, imprudent and hasty actions of the
Commission have not only desecrated legal and
_______________
1 Republic v. Cocofed, 372 SCRA 462, 493, December 14, 2001.

2 Tañada v. Angara, 272 SCRA 18, 79, May 2, 1997.
3 Francisco v. House of Representatives, G.R. No. 160261 and
consolidated cases, November 10, 2003, 415 SCRA 44, per Morales, J.
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VOL. 419, JANUARY 13, 2004 149

jurisprudential norms, but have also cast serious doubts

upon the poll body’s ability and capacity to conduct
automated elections. Truly, the pith and soul of democracy
—credible, orderly, and peaceful elections—has been put in
jeopardy by the illegal and gravely abusive acts of Comelec.
The Case
4
Before us is a Petition under Rule 65 of the Rules of Court,
seeking (1) to declare null and void Resolution No. 6074 of
the Commission on Elections (Comelec), which awarded
“Phase II of the Modernization Project of the Commission
to Mega Pacific Consortium (MPC);” (2) to enjoin the
implementation of any further contract that may have been
entered into by Comelec “either with Mega Pacific
Consortium and/or Mega Pacific eSolutions, Inc. (MPEI);”
and (3) to compel Comelec to conduct a re-bidding of the
project.
The Facts
The following facts are not disputed. They were culled from
official documents, the parties’ pleadings, as well as from
admissions during the Oral Argument on October 7, 2003. 5
On June 7, 1995, Congress passed Republic Act 8046,
which authorized Comelec to conduct a nationwide
demonstration of a computerized election system and
allowed the poll body to pilottest the system in the March
1996 elections in the Autonomous Region in Muslim
Mindanao (ARMM).
On6 December 22, 1997, Congress enacted Republic Act
8436 authorizing Comelec to use an automated election
system (AES) for
_______________
4 Rollo, Vol. I, pp. 3-48. While petitioners labeled their pleading as one
for prohibition and mandamus, its allegations qualify it also as one for
certiorari.
5 An act authorizing the Commission on Elections to conduct a
nationwide demonstration of a computerized election system and pilot-test
it in the March 1996 elections in the Autonomous Region in Muslim
Mindanao (ARMM) and for other purposes.
6 An act authorizing the Commission on Elections to use an automated
election system in the May 11, 1998 national or local elections and in
subsequent national and local electoral exercises, providing funds therefor
and for other purposes.
150

the process of voting, counting votes and

canvassing/consolidating the results of the national and
local elections. It also mandated the poll body to acquire
automated counting machines (ACMs), computer
equipment, devices and materials; and to adopt new
electoral forms and printing materials.
Initially intending to implement the automation during
the May 11, 1998 presidential elections, Comelec—in
7
its
Resolution No. 2985 dated February 9, 1998 —eventually
decided against full national implementation and limited
the automation to the Autonomous Region in Muslim
Mindanao (ARMM). However, due to the failure of the
machines to read correctly some automated ballots in one
town, the poll body later8 ordered their manual count for the
entire Province of Sulu.
In the May 2001 elections, the counting and canvassing
of votes for both national and local positions were also done
manually, as no additional ACMs had been acquired for
that electoral exercise allegedly because of time
constraints.
On October 29, 2002, Comelec adopted in its Resolution
02-0170 a modernization program for the 2004 elections. It
resolved to conduct biddings for the three (3) phases of its
Automated Election System; namely, Phase I—Voter
Registration and Validation System; Phase II—Automated
Counting and Canvassing System; and Phase III—
Electronic Transmission.
On January 24, 2003, President Gloria Macapagal-
Arroyo issued Executive Order No. 172, which allocated the
sum of P2.5 billion to fund the AES for the May 10, 2004
elections. Upon the request of Comelec, she authorized the
release of an additional P500 million.
On January 28, 2003, the Commission issued an
“Invitation to Apply for Eligibility and to Bid,” which we
quote as follows:
_______________
7 Section 6 of RA 8436 provides “[i]f in spite of its diligent efforts to

implement this mandate in the exercise of this authority, it becomes
evident by February 9, 1998 that the Commission cannot fully implement
the automated election system for national positions in the May 11, 1998
elections, the elections for both national and local positions shall be done
manually except in the Autonomous Region in Muslim Mindanao (ARMM)
where the automated election system shall be used for all positions.”
8 Loong v. Commission on Elections, 365 Phil. 386; 305 SCRA 832, April
14, 1999; see also Panganiban, Leadership by Example, 1999 ed., pp. 201-
249.
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VOL. 419, JANUARY 13, 2004 151

“INVITATION TO APPLY FOR ELIGIBILITY AND TO BID
The Commission on Elections (COMELEC), pursuant to the

mandate of Republic Act Nos. 8189 and 8436, invites interested
offerors, vendors, suppliers or lessors to apply for eligibility and to
bid for the procurement by purchase, lease, lease with option to
purchase, or otherwise, supplies, equipment, materials and
services needed for a comprehensive Automated Election System,
consisting of three (3) phases: (a) registration/verification of
voters, (b) automated counting and consolidation of votes, and (c)
electronic transmission of election results, with an approved
budget of TWO BILLION FIVE HUNDRED MILLION
(Php2,500,000,000) Pesos.
Only bids from the following entities shall be entertained:
a. Duly licensed Filipino citizens/proprietorships;

b. Partnerships duly organized under the laws of the
Philippines and of which at least sixty percent (60%) of the
interest belongs to citizens of the Philippines;
c. Corporations duly organized under the laws of the
Philippines, and of which at least sixty percent (60%) of
the outstanding capital stock belongs to citizens of the
Philippines;
d. Manufacturers, suppliers and/or distributors forming
themselves into a joint venture, i.e., a group of two (2) or
more manufacturers, suppliers and/or distributors that
intend to be jointly and severally responsible or liable for a
particular contract, provided that Filipino ownership
thereof shall be at least sixty percent (60%); and
e. Cooperatives duly registered with the Cooperatives
Development Authority.
Bid documents for the three (3) phases may be obtained

starting 10 February 2003, during office hours from the Bids and
Awards Committee (BAC) Secretariat/Office of Commissioner

Resurreccion Z. Borra, 7th Floor, Palacio del Governador,
Intramuros, Manila, upon payment at the Cash Division,
Commission on Elections, in cash or cashier’s check, payable to
the Commission on Elections, of a non-refundable amount of
FIFTEEN THOUSAND PESOS (Php 15,000.00) for each phase.
For this purpose, interested offerors, vendors, suppliers or lessors
have the option to participate in any or all of the three (3) phases
of the comprehensive Automated Election System.
A Pre-Bid Conference is scheduled on 13 February 2003, at
9:00 a.m. at the Session Hall, Commission on Elections, Postigo
Street, Intramuros, Manila. Should there be questions on the bid
documents, bidders are required to submit their queries in
writing to the BAC Secretariat prior to the scheduled Pre-Bid
Conference.
Deadline for submission to the BAC of applications for
eligibility and bid envelopes for the supply of the comprehensive
Automated Election
152

System shall be at the Session Hall, Commission on Elections,

Postigo Street, Intramuros, Manila on 28 February 2003 at 9:00
a.m.
The COMELEC reserves the right to review the qualifications
of the bidders after the bidding and before the contract is
executed. Should such review uncover any misrepresentation
made in the eligibility statements, or any changes in the situation
of the bidder to materially downgrade the substance of such
statements, the COMELEC shall disqualify the bidder upon due
notice without any obligation whatsoever for any expenses9 or
losses that may be incurred by it in the preparation of its bid.”
On February 11, 2003, Comelec issued Resolution No. 5929
clarifying certain eligibility criteria for bidders and the schedule
of activities for the project bidding, as follows:
“1.) Open to Filipino and foreign corporation duly registered

and licensed to do business and is actually doing business
in the Philippines, subject to Sec. 43 of RA 9184 (An Act
providing In the Modernization Standardization and
Regulation of the Procurement Activities of the
Government and for other purposes etc.)
2.) Track Record:
a) For counting machines—should have been used in at least

one (1) political exercise with no less than Twenty Million
Voters;
b) For verification of voters—the reference site of an existing
data base installation using Automated Fingerprint
Identification System (AFIS) with at least Twenty Million.
3.) Ten percent (10%) equity requirement shall be based on

the total project cost; and
4.) Performance bond shall be twenty percent (20%) of the bid
offer.
RESOLVED moreover, that:
1) A. Due to the decision that the eligibility requirements and

the rest of the Bid documents shall be released at the
same time, and the memorandum of Comm. Resurreccion
Z. Borra dated February 7, 2003, the documents to be
released on Friday, February 14, 2003 at 2:00 o’clock p.m.
shall be the eligibility criteria, Terms of Reference (TOR)
and other pertinent documents;
B. Pre-Bid conference shall be on February 18, 2003; and
_______________
9 Annex “7” of the Comment of Private Respondents MPC and MPEI,

Rollo, Vol. II, p. 638.
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VOL. 419, JANUARY 13, 2004 153

C. Deadline for the submission and receipt of the Bids shall

be on March 5, 2003.
2) The aforementioned documents will be available at the

following offices:
a) Voters Validation: Office of Comm. Javier

b) Automated Counting Machines: Office of Comm. Borra
10
c) Electronic Transmission: Office of Comm. Tancangco”
On February 17, 2003, the poll body released the Request

for Proposal (RFP) to procure the election automation
machines. The Bids and Awards Committee (BAC) of
Comelec convened a pre-bid conference on February 18,
2003 and gave prospective bidders until March 10, 2003 to

submit their respective bids.
Among others, the RFP provided that bids from
manufacturers, suppliers and/or distributors forming
themselves into a joint venture may be entertained,
provided that the Philippine ownership thereof shall be at
least 60 percent. Joint venture is defined in the RFP as “a
group of two or more manufacturers, suppliers and/or
distributors that intend to be jointly and 11
severally
responsible or liable for a particular contract.”
Basically, the public bidding was to be conducted under
a two-envelope/two stage system. The bidder’s first
envelope or the Eligibility Envelope should establish the
bidder’s eligibility to bid and its qualifications to perform
the acts if accepted. On the other hand, the second
envelope would be the Bid Envelope itself. The RFP
outlines the bidding procedures as follows:
“25. Determination of Eligibility of Prospective Bidders
“25.1 The eligibility envelopes of prospective Bidders

shall be opened first to determine their eligibility.
In case any of the requirements specified in Clause
20 is missing from the first bid envelope, the BAC
shall declare said prospective Bidder as ineligible to
bid. Bid envelopes of ineligible Bidders shall be
immediately returned unopened.
“25.2 The eligibility of prospective Bidders shall be
determined using simple ‘pass/fail’ criteria and
shall be determined as either eligible
_______________
10 Annex “8” of the Comment of Private Respondents MPC and MPEI,

Rollo, Vol. II, pp. 641-642.
11 Annex “G” of the Petition, Request for Proposal, p. 12; Rollo, Vol. I, p.
71.
154

or ineligible. If the prospective Bidder is rated

‘passed’ for all the legal, technical and financial
requirements, he shall be considered eligible. If the
prospective Bidder is rated ‘failed’ in any of the

requirements, he shall be considered ineligible.
“26. Bid Examination/Evaluation
“26.1 The BAC will examine the Bids to determine

whether they are complete, whether any
computational errors have been made, whether
required securities have been furnished, whether
the documents have been properly signed, and
whether the Bids are generally in order.
“26.2 The BAC shall check the submitted documents of
each Bidder against the required documents
enumerated under Clause 20, to ascertain if they
are all present in the Second bid envelope
(Technical Envelope). In case one (1) or more of the
required documents is missing, the BAC shall rate
the Bid concerned as ‘failed’ and immediately
return to the Bidder its Third bid envelope
(Financial Envelope) unopened. Otherwise, the
BAC shall rate the first bid envelope as ‘passed.’
“26.3 The BAC shall immediately open the Financial
Envelopes of the Bidders whose Technical
Envelopes were passed or rated on or above the
passing score. Only Bids that are determined to
contain all the bid requirements for both
components shall be rated ‘passed’ and shall
immediately be considered for evaluation and
comparison.
“26.4 In the opening and examination of the Financial
Envelope, the BAC shall announce and tabulate the
Total Bid Price as calculated. Arithmetical errors
will be rectified on the following basis: If there is a
discrepancy between words and figures, the amount
in words will prevail. If there is a discrepancy
between the unit price and the total price that is
obtained by multiplying the unit price and the
quantity, the unit price shall prevail and the total
price shall be corrected accordingly. If there is a
discrepancy between the Total Bid Price and the
sum of the total prices, the sum of the total prices
prevail and the Total Bid Price shall be corrected
accordingly.
“26.5 Financial Proposals which do not clearly state the
Total Bid Price shall be rejected. Also, Total Bid
Price as calculated that exceeds the approved
budget for the contract shall also be rejected.
27. Comparison of Bids
27.1 The bid price shall be deemed to embrace all costs,

charges and fees associated with carrying out all
the elements of the proposed Contract, including
but not limited to, license fees, freight charges and
taxes.
27.2 The BAC shall establish the calculated prices of all
Bids rated ‘passed’ and rank the same in ascending
order.
155
VOL. 419, JANUARY 13, 2004 155

x x x x x x x x x
“29. Postqualification
“29.1 The BAC will determine to its satisfaction whether

the Bidder selected as having submitted the lowest
calculated bid is qualified to satisfactorily perform
the Contract.
“29.2 The determination will take into account the
Bidder’s financial, technical and production
capabilities/resources. It will be based upon an
examination of the documentary evidence of the
Bidder’s qualification submitted by the Bidder as
well as such other information as the BAC deems
necessary and appropriate.
“29.3 A bid determined as not substantially responsive
will be rejected by the BAC and may not
subsequently be made responsive by the Bidder by
correction of the non-conformity.
“29.4 The BAC may waive any informality or non-
conformity or irregularity in a bid which does not
constitute a material deviation, provided such
waiver does not prejudice or affect the relative
ranking of any Bidder.
“29.5 Should the BAC find that the Bidder complies with
the legal, financial and technical requirements, it
shall make an affirmative determination which
shall be a prerequisite for award of the Contract to
the Bidder. Otherwise, it will make a negative
determination which will result in rejection of the
Bidder’s bid, in which event the BAC will proceed to

the next lowest calculated bid to make a similar
determination of that 12
Bidder’s capabilities to
perform satisfactorily.”
13
Out of the 57 bidders, the BAC found MPC and the Total
Information Management Corporation (TIMC) eligible. For
technical evaluation, they were referred to the BAC’s
Technical Working Group (TWG) and the Department of
Science and Technology (DOST).
In its Report on the Evaluation of the Technical
Proposals on Phase II, DOST said that both MPC and
TIMC had obtained a number of failed marks in the
technical evaluation. Notwithstanding these failures,
Comelec en banc, on April 15, 2003, promulgated
Resolution No. 6074 awarding the project to MPC. The
Commission publicized this Resolution and the award of
the project to MPC on May 16, 2003.
_______________
12Id., pp. 21-23 & 80-82.

13 According to Public Respondent Comelec’s Memorandum prepared by
the OSG, p. 8; Rollo, Vol. IV, p. 2413.
156

On May 29, 2003, five individuals and entities (including

the herein Petitioners Information Technology Foundation
of the Philippines, represented by its president,14
Alfredo M.
Torres; and Ma. Corazon Akol) wrote a letter to Comelec
Chairman Benjamin Abalos Sr. They protested the award
of the Contract to Respondent MPC “due to glaring
irregularities in the manner in which the bidding process
had been conducted.” Citing therein the noncompliance
with eligibility as well as technical and procedural
requirements (many of which have been discussed at
length in the Petition), they sought a re-bidding.
15
In a letter-reply dated June 6, 2003, the Comelec
chairman—speaking through Atty. Jaime Paz, his head
executive assistant—rejected the protest and declared that
the award “would stand up to the16
strictest scrutiny.”
Hence, the present Petition.
The Issues
In their Memorandum, petitioners raise the following

issues for our consideration:
_______________
14 Photocopy appended as Annex “B” of the Petition; Rollo, Vol. I, pp.

52-53.
15 Photocopy appended as Annex “C” of the Petition; Rollo, Vol. I, pp.
54-55.
16 The case was deemed submitted for decision on November 5, 2003,
upon this Court’s receipt of Private Respondent MPC/MPEI’s
Memorandum, which was signed by Attys. Alfredo V. Lazaro, Jr., Juanito
I. Velasco, Jr. and Ma. Concepcion V. Murillo of the Lazaro Law Firm On
October 27, 2003, the Court received petitioners’ Memorandum, which
was signed by Atty. Alvin Jose B. Felizardo of Pastelero Law Office, and
Public Respondent Comelec’s Memorandum, signed by Comelec Comm.
Florentino A. Tuason, Jr. Apart from these, the Office of the Solicitor
General (OSG) filed another Memorandum on behalf of Comelec, also on
October 27, 2003, signed by Asst. Sol. Gen. Carlos N. Ortega, Asst. Sol.
Gen. Renan E. Ramos, Sol. Jane E. Yu and Asso. Sol. Catherine Joy R.
Mallari, with a note that Sol. Gen. Alfredo L. Benipayo “inhibited
himself.” The writing of the Decision in this case was initially raffled to
Justice Dante O. Tinga. However, during the Court’s deliberations, the
present ponente’s then “Dissenting Opinion” to the draft report of Justice
Tinga was upheld by the majority. Hence, the erstwhile Dissent was
rewritten into this full ponencia.
157
VOL. 419, JANUARY 13, 2004 157

“1. The COMELEC awarded and contracted with a

non-eligible entity; x x x
“2. Private respondents failed to pass the Technical
Test as required in the RFP. Notwithstanding, such
failure was ignored. In effect, the COMELEC
changed the rules after the bidding in effect
changing the nature of the contract bidded upon.
“3. Petitioners have locus standi.
“4. Instant Petition is not premature.
17
Direct resort to
the Supreme Court is justified.”
In the main, the substantive issue is whether the

Commission on Elections, the agency vested with the
exclusive constitutional mandate to oversee elections,
gravely abused its discretion when, in the exercise of its
administrative functions, it awarded to MPC the contract
for the second phase of the comprehensive Automated
Election System.
Before discussing the validity of the award to MPC,
however, we deem it proper to first pass upon the
procedural issues: the legal standing of petitioners and the
alleged prematurity of the Petition.
This Court’s Ruling
The Petition is meritorious.
First Procedural Issue:

Locus Standi of Petitioners
Respondents chorus that petitioners do not possess locus

standi, inasmuch as they are not challenging the validity or
constitutionality of RA 8436. Moreover, petitioners
supposedly admitted during the Oral Argument that no law
had been violated by the award of the Contract.
Furthermore, they allegedly have no actual and material
interest in the Contract and, hence, do not stand to be
injured or prejudiced on account of the award.
On the other hand, petitioners—suing in their capacities
as taxpayers, registered voters and concerned citizens—
respond that the
_______________
17 Page 11, Rollo, Vol. IV, p. 2390. During the Oral Argument on
October 7, 2003, the Court limited the issues to the following: (1) locus
standi of petitioners; (2) prematurity of the Petition because of non-
exhaustion of administrative remedies for failure to avail of protest
mechanisms; and (3) validity of the award and the Contract being
challenged in the Petition.
158

issues central to this case are “of transcendental

importance and of national interest.” Allegedly, Comelec’s
flawed bidding and questionable award of the Contract to
an unqualified entity would impact directly on the success
or the failure of the electoral process. Thus, any taint on
the sanctity of the ballot as the expression of the will of the
people would inevitably affect their faith in the democratic
system of government. Petitioners further argue that the
award of any contract for automation involves
disbursement of public funds in gargantuan amounts;
therefore, public interest requires that the laws governing
the transaction must be followed strictly.
We agree with petitioners. Our nation’s political and
economic future virtually hangs in the balance, pending the
outcome of the 2004 elections. Hence, there can be no
serious doubt that the subject matter of this case is “a 18
matter of public concern and imbued with public interest”;
19
in other words, it is of “paramount
20
public interest” and
“transcendental importance.” This fact alone would justify
relaxing the rule on legal standing, following the liberal
policy of this Court whenever a case involves
21
“an issue of
overarching significance to our society.” Petitioners’ legal
standing should therefore be recognized and upheld.
Moreover, this Court has held that taxpayers are
allowed to sue when there 22
is a claim of “illegal
disbursement of public funds,” or if 23 public money is being
“deflected to any improper purpose”; or when petitioners
seek to restrain respondent from “wasting public funds
through
24
the enforcement of an invalid or unconstitutional
law.” In the instant case, individual petitioners, suing as
taxpay-
_______________
18 Chavez v. Presidential Commission on Good Government, 360 Phil.

133; 299 SCRA 744, December 9, 1998, per Panganiban, J.
19 Kilosbayan, Inc. v. Morato, 320 Phil. 171; 250 SCRA 130, November
16, 1995, per Mendoza, J.
20 Tatad v. Secretary of the Department of Energy, 346 Phil. 321; 281
SCRA 330, November 5, 1997, per Puno, J.
21 Del Mar v. Philippine Amusement and Gaming Corporation, 346
SCRA 485, November 29, 2000, per Puno, J.
22 Kilosbayan, Inc. v. Morato, supra.
23 Dumlao v. Comelec, 95 SCRA 392, January 22, 1980, per Melencio-
Herrera, J.
24 Philconsa v. Mathay, 124 Phil. 890; 18 SCRA 300, October 4, 1966,
per Reyes J.B.L., J.
159
VOL. 419, JANUARY 13, 2004 159

ers, assert a material interest in seeing to it that public

funds are properly and lawfully used. In the Petition, they
claim that the bidding was defective, the winning bidder
not a qualified entity, and the award of the Contract
contrary to law and regulation. Accordingly, they seek to
restrain respondents from implementing the Contract and,
necessarily, from making any unwarranted expenditure of
public funds pursuant thereto. Thus, we hold that
petitioners possess locus standi.
Second Procedural Issue:

Alleged Prematurity Due to Non-Exhaustion
of Administrative Remedies
Respondents claim that petitioners acted prematurely,

since they had not first utilized the protest mechanism
available to them under RA 9184, the Government
Procurement Reform Act, for the settlement of disputes
pertaining to procurement contracts.
Section 55 of RA 9184 states that protests against
decisions of the Bidding and Awards Committee in all
stages of procurement may be lodged with the head of the
procuring entity by filing a verified position paper and
paying a protest fee. Section 57 of the same law mandates
that in no case shall any such protest stay or delay the
bidding process, but it must first be resolved before any
award is made.
On the other hand, Section 58 provides that court action
may be resorted to only after the protests contemplated by
the statute shall have been completed. Cases filed in
violation of this process are to be dismissed for lack of
jurisdiction. Regional trial courts shall have jurisdiction
over final decisions of the head of the procuring entity, and
court actions shall be instituted pursuant to Rule 65 of the
1997 Rules of Civil Procedure.
Respondents assert that throughout the bidding process,
petitioners never questioned the BAC Report finding MPC
eligible to bid and recommending the award of the Contract
to it (MPC). According to respondents, the Report should
have been appealed to the Comelec en banc, pursuant to
the aforementioned sections of RA 9184. In the absence of
such appeal, the determination and recommendation of the

BAC had become final.
The Court is not persuaded.
160

Respondent Comelec came out with its en banc Resolution

No. 6074 dated April 15, 2003, awarding the project to
Respondent MPC even before the BAC managed to issue its
written report and recommendation on April 21, 2003.
Thus, how could petitioners have appealed the BAC’s
recommendation or report to the head of the procuring
entity (the chairman of Comelec), when the Comelec en
banc had already approved the award of the contract to
MPC even before petitioners learned of the BAC
recommendation? 25
It is claimed by Comelec that during its April 15, 2003
session, it received and approved the verbal report and
recommendation of the BAC for the award of the Contract
to MPC, and that the BAC subsequently re-affirmed its
verbal report and recommendation by submitting it in
writing on April 21, 2003. Respondents insist that the law
does not require that the BAC Report be in writing before
Comelec can act thereon; therefore, there is allegedly
nothing irregular about the Report as well as the en banc
Resolution.
However, it is obvious that petitioners could have
appealed the BAC’s report and recommendation to the
head of the procuring entity (the Comelec chair) only upon
their discovery thereof, which at the very earliest would
have been on April 21, 2003, when the BAC actually put its
report in writing and finally released it. Even then, what
would have been the use of protesting/appealing the report
to the Comelec chair, when by that time the Commission en
banc (including the chairman himself)had already
approved the BAC Report and awarded the Contract to
MPC?
And even, assuming arguendo that petitioners had
somehow gotten wind of the verbal BAC report on April 15,
2003 (immediately after the en banc session), at that point
the Commission en banc had already given its approval to
the BAC Report along with the award to MPC. To put it
bluntly, the Comelec en banc itself made it legally
impossible for petitioners to avail themselves of the
administrative remedy that the Commission is so impiously

harping on. There is no doubt that they had not been
accorded the opportunity to avail themselves of the process
provided under Section 55 of RA 9184, according to which a
protest against a decision of the BAC may be filed with the
head of the procuring entity. Nemo
_______________
25 Respondent Comelec’s Memorandum, pp. 50-51.
161
VOL. 419, JANUARY 13, 2004 161

26
tenetur ad impossible,27
to borrow private respondents’
favorite Latin excuse.
Some Observations on the

BAC Report to the Comelec
We shall return to this issue of alleged prematurity shortly,
but at this interstice, we would just want to put forward a
few observations regarding the BAC Report and the
Comelec en banc’s approval thereof.
First, Comelec contends that there was nothing unusual
about the fact that the Report submitted by the BAC came
only after the former had already awarded the Contract,
because the latter had been asked to render its report and
recommendation orally during the Commission’s en banc
session on April 15, 2003. Accordingly, Comelec supposedly
acted upon such oral recommendation and approved the
award to MPC on the same day, following which the
recommendation was subsequently reduced into writing on
April 21, 2003. While not entirely outside the realm of the
possible, this interesting and unique spiel does not speak
well of the process that Comelec supposedly went through
in making a critical decision with respect to a multi-billion-
peso contract.
We can imagine that anyone else standing in the shoes
of the Honorable Commissioners would have been
extremely conscious of the overarching need for utter
transparency. They would have scrupulously avoided the
slightest hint of impropriety, preferring to maintain an
exacting regularity in the performance of their duties,
instead of trying to break a speed record in the award of
multi-billion-peso contracts. After all, between April 15 and
April 21 were a mere six (6) days. Could Comelec not have
waited out six more days for the written report of the BAC,
instead of rushing pell-mell into the arms of MPC?
Certainly, respondents never cared to explain the nature of
the Commission’s dire need to act immediately without
awaiting the formal, written BAC Report.
In short, the Court finds it difficult to reconcile the
uncommon dispatch with which Comelec acted to approve
the multi-billion-
_______________
26 The law obliges no one to perform the impossible.

27See private respondents’ Memorandum, p. 60.
162

peso deal, with its claim of having been impelled by only

the purest and most noble of motives.
At any rate, as will be discussed later on, several other
factors combine to lend negative credence to Comelec’s tale.
Second, without necessarily ascribing any premature
malice or premeditation on the part of the Comelec officials
involved, it should nevertheless be conceded that this cart-
before-the-horse maneuver (awarding of the Contract
ahead of the BAC’s written report) would definitely serve
as a clever and effective way of averting and frustrating
any impending protest under Section 55.
Having made the foregoing observations, we now go
back to the question of exhausting administrative
remedies. Respondents may not have realized it, but the
letter addressed28
to Chairman Benjamin Abalos, Sr. dated
May 29, 2003 serves to eliminate the pre-maturity issue
as it was an actual written protest against the decision of
the poll body to award the Contract. The letter was signed
by/for, inter alia, two of herein petitioners: the Information
Technology Foundation of the Philippines, represented by
its president, Alfredo M. Torres; and Ma. Corazon Akol.
Such letter-protest is sufficient compliance with the
requirement to exhaust administrative remedies
particularly because it hews closely to the procedure
outlined in Section 55 of RA 9184.
And even without that May 29, 2003 letter-protest, the
Court still holds that petitioners need not exhaust
administrative
29
remedies in the light of Paat v. Court of
Appeals. Paat enumerates the instances when the rule on
exhaustion of administrative remedies may be disregarded,
as follows:
“(1) when there is a violation of due process,

(2) when the issue involved is purely a legal question,
(3) when the administrative action is patently illegal
amounting to lack or excess of jurisdiction,
(4) when there is estoppel on the part of the
administrative agency concerned,
(5) when there is irreparable injury,
_______________
28 Photocopy appended as Annex “B” of the petition.

29 334 Phil. 146; 266 SCRA 167, January 10, 1997.
163
VOL. 419, JANUARY 13, 2004 163

Information Technology Foundation of the Philippines vs.
Commission on Elections
(6) when the respondent is a department secretary

whose acts as an alter ego of the President bears the
implied and assumed approval of the latter,
(7) when to require exhaustion of administrative
remedies would be unreasonable,
(8) when it would amount to a nullification of a claim,
(9) when the subject matter is a private land in land
case proceedings,
(10) when the rule does not provide a plain, speedy and
adequate remedy, and
(11) when there are circumstances 30
indicating the
urgency of judicial intervention.”
The present controversy precisely falls within the

exceptions listed as Nos. 7, 10 and 11: “(7) when to require
exhaustion of administrative remedies would be
unreasonable; (10) when the rule does not provide a plain,
speedy and adequate remedy, and (11) when there are
circumstances indicating the urgency of judicial
intervention.” As already stated, Comelec itself made the
exhaustion of administrative remedies legally impossible
or, at the very least, “unreasonable.”
In any event, the peculiar circumstances surrounding

the unconventional rendition of the BAC Report and the
precipitate awarding of the Contract by the Comelec en
banc—plus the fact that it was racing to have its Contract
with MPC implemented in time for the elections in May
2004 (barely four months away)—have combined to bring
about the urgent need for judicial intervention, thus
prompting this Court to dispense with the procedural
exhaustion of administrative remedies in this case.
Main Substantive Issue:

Validity of the Award to MPC
We come now to the meat of the controversy. Petitioners

contend that the award is invalid, since Comelec gravely
abused its discretion when it did the following:
1. Awarded the Contract to MPC though it did not

even participate in the bidding
_______________
30Id., p. 153, per Torres, Jr., J.
164

2. Allowed MPEI to participate in the bidding despite

its failure to meet the mandatory eligibility
requirements
3. Issued its Resolution of April 15, 2003 awarding the
Contract to MPC despite the issuance by the BAC
of its Report, which formed the basis
31
of the assailed
Resolution, only on April 21, 2003
4. Awarded the Contract, notwithstanding the fact
that during the bidding process, there were
violations of the mandatory requirements of RA
8436 as well as those set forth in Comelec’s own
Request for Proposal on the automated election
system
5. Refused to declare a failed bidding and to conduct a
re-bidding despite the failure of the bidders to pass
the technical tests conducted by the Department of
Science and Technology
6. Failed to follow strictly the provisions of RA 8436 in

the conduct of the bidding for the automated
counting machines
After reviewing the slew of pleadings as well as the matters

raised during the Oral Argument, the Court deems it
sufficient to focus discussion on the following major areas
of concern that impinge on the issue of grave abuse of
discretion:
A. Matters pertaining to the identity, existence and

eligibility of MPC as a bidder
B. Failure of the automated counting machines
(ACMs) to pass the DOST technical tests
C. Remedial measures and re-testings undertaken by
Comelec and DOST after the award, and their effect
on the present controversy
A. Failure to Establish the Identity, Existence and

Eligibility of the Alleged Consortium as a Bidder
On the question of the identity and the existence of the real

bidder, respondents insist that, contrary to petitioners’
allegations, the bidder was not Mega Pacific eSolutions,
Inc. (MPEI), which
_______________
31 Although by its Resolution 6074, Comelec awarded the bid to MPC,

the actual Contract was entered into by Comelec with MPEI. The Contract
did not indicate an exact date of execution (except that it was allegedly
done on the “___ day of May,”) but it was apparently notarized on June 30,
2003.
165
VOL. 419, JANUARY 13, 2004 165

was incorporated only on February 27, 2003, or 11 days

prior to the bidding itself. Rather, the bidder was Mega
Pacific Consortium (MPC), of which MPEI was but a part.
As proof thereof, they point to the March 7, 2003 letter of
intent to bid, signed by the president of MPEI allegedly for
and on behalf of MPC. They also call attention to the
official receipt issued to MPC, acknowledging payment for

the bidding documents, as proof that it was the
“consortium” that participated in the bidding process.
We do not agree. The March 7, 2003 letter, signed by
only one signatory—“Willy U. Yu, President, Mega Pacific
eSolutions, Inc., (Lead Company/Proponent) For: Mega
Pacific Consortium”—and without any further proof, does
not by itself prove the existence of the consortium. It does
not show that MPEI or its president have been duly pre-
authorized by the other members of the putative
consortium to represent them, to bid on their collective
behalf and, more important, to commit them jointly and
severally to the bid undertakings. The letter is purely self-
serving and uncorroborated.
Neither does an official receipt issued to MPC,
acknowledging payment for the bidding documents,
constitute proof that it was the purported consortium that
participated in the bidding. Such receipts are issued by
cashiers without any legally sufficient inquiry as to the real
identity or existence of the supposed payor.
To assure itself properly of the due existence (as well as
eligibility and qualification) of the putative consortium,
Comelec’s BAC should have examined the bidding
documents submitted on behalf of MPC. They would have
easily discovered the following fatal flaws.
Two-Envelope,
Two-Stage System
As stated earlier in our factual presentation, the public
bidding system designed by Comelec under its RFP
(Request for Proposal for the Automation of the 2004
Election) mandated the use of a two-envelope, two-stage
system. A bidder’s first envelope (Eligibility Envelope) was
meant to establish its eligibility to bid and its qualifications
and capacity to perform the contract if its bid was accepted,
while the second envelope would be the Bid Envelope itself.
166

The Eligibility Envelope was to contain legal documents

such as articles of incorporation, business registrations,
licenses and permits, mayor’s permit, VAT certification,
and so forth; technical documents containing documentary
evidence to establish the track record of the bidder and its
technical and production capabilities to perform the

contract, and financial documents, including audited
financial statements for the last three years, to establish
the bidder’s financial capacity.
In the case of a consortium or joint venture desirous of
participating in the bidding, it goes without saying that the
Eligibility Envelope would necessarily have to include a
copy of the joint venture agreement, the consortium
agreement or memorandum of agreement—or a business
plan or some other instrument of similar import—
establishing the due existence, composition and scope of
such aggrupation. Otherwise, how would Comelec know
who it was dealing with, and whether these parties are
qualified and capable of delivering 32
the products and
services being offered for bidding?
_______________
32 In connection with this, public respondents, in their Memorandum

made reference to the Implementing Rules and Regulations of RA 6957 as
amended by RA 7718 (the Build-Operate-Transfer Law), and considered
said IRR as being applicable to the instant case on a suppletory basis,
pending the promulgation of implementing rules for RA 9184 (the
Government Procurement Act) For our purposes, it is well worth noting
that Sec. 5.4 of the IRR for RA 6957 as amended, speaks of
prequalification requirements for project proponents, and in sub-section
(b)(i), it provides that, for purposes of evaluating a joint venture or
consortium, it shall submit as part of its prequalification statement a
business plan which shall among others identify its members and its
contractor(s), and the description of the respective roles said members and
contractors shall play or undertake in the project. If undecided on a
specific contractor, the proponent may submit a short list of contractors
from among which it will select the final contractor. Short listed
contractors are required to submit astatement indicating willingness to
participate in the project and capacity to undertake the requirements of the
project. The business plan shall disclose which of the members of the joint
venture/consortium shall be the lead member, the financing arm, and/or
facility operator(s), and the contractor(s). In other words, since public
respondents argue that the IRR of RA 6957 as amended would be
suppletorily applicable to this bidding, they could not have been unaware
of the requirement under Sec. 5.4 (b)(i) thereof, in respect of submission of
the requisite business plan by a joint venture or consortium participating
in a bidding.
167
VOL. 419, JANUARY 13, 2004 167

In the instant case, no such instrument was submitted to

Comelec during the bidding process. This fact can be
conclusively ascertained by scrutinizing the two-inch thick
“Eligibility Requirements” file submitted by Comelec last
October 9, 2003, in partial compliance with this Court’s
instructions given during the Oral Argument. This file
purports to replicate the eligibility documents originally
submitted to Comelec by MPEI allegedly on behalf of MPC,
in connection with the bidding conducted in March 2003.
Included in the file are the incorporation papers and
financial statements of the members of the supposed
consortium and certain certificates, licenses and permits
issued to them.
However, there is no sign whatsoever of any joint
venture agreement, consortium agreement, memorandum
of agreement, or business plan executed among the
members of the purported consortium.
The only logical conclusion is that no such agreement
was ever submitted to the Comelec for its consideration, as
part of the bidding process.
It thus follows that, prior the award of the Contract,
there was no documentary or other basis for Comelec to
conclude that a consortium had actually been formed
amongst MPEI, SK C&C 33
and WeSolv, along with
Election.com and ePLDT. Neither was there anything to
indicate the exact relationships between and among these
firms; their diverse roles, undertakings and prestations, if
any, relative to the prosecution of the project, the extent of
their respective investments (if any) in the supposed
consortium or in the project; and the precise nature and
extent of their respective liabilities with respect to the
contract being offered for bidding. And apart from the self-
serving letter of March 7, 2003, there was not even any
indication that MPEI was the lead company duly
authorized to act on behalf of the others.
_______________
33 Now, what would prevent an enterprising individual from obtaining

copies of the Articles of Incorporation and financial statements of, let us
say, San Miguel Corporation and Ayala Corporation from the SEC, and
using these to support one’s claim that these two giant conglomerates
have formed a consortium with one’s own penny-ante company for the
purpose of bidding for a multi-billion peso contract? As far as Comelec is
concerned, the answer seems to be: Nothing.
168

So, it necessarily follows that, during the bidding process,

Comelec had no basis at all for determining that the
alleged consortium really existed and was eligible and
qualified; and that the arrangements among the members
were satisfactory and sufficient to ensure delivery on the
Contract and to protect the government’s interest.
Notwithstanding such deficiencies, Comelec still deemed
the “consortium” eligible to participate in the bidding,
proceeded to open its Second Envelope, and eventually
awarded the bid to it, even though—per the Comelec’s own
RFP—the BAC should have declared the MPC ineligible to
bid and returned the Second (Bid) Envelope unopened.
Inasmuch as Comelec should not have considered MPEI
et al. as comprising a consortium or joint venture, it should
not have allowed them to avail themselves of the provision
in Section 5.4 (b) (i) of the IRR for RA 6957 (the Build-
Operate-Transfer Law), as amended by RA 7718. This
provision states in part that a joint venture/consortium
proponent shall be evaluated based on the individual or
collective experience of the member-firms of the joint
venture or consortium and of the contractor(s) that it has
engaged for the project. Parenthetically, respondents have
uniformly argued that the said IRR of RA 6957, as
amended, have suppletory application to the instant case.
Hence, had the proponent MPEI been evaluated based
solely on its own experience, financial and operational
track record or lack thereof, it would surely not have
qualified and would have been immediately considered
ineligible to bid, as respondents readily admit.
At any rate, it is clear that Comelec gravely abused its
discretion in arbitrarily failing to observe its own rules,
policies and guidelines with respect to the bidding process,
thereby negating a fair, honest and competitive bidding.
Commissioners Not
Aware of Consortium
In this regard, the Court is beguiled by the statements of
Commissioner Florentino Tuason, Jr., given in open court
during the Oral Argument last October 7, 2003. The good
commissioner affirmed that he was aware, of his own
personal knowledge, that
169
VOL. 419, JANUARY 13, 2004 169

there had indeed been 34a written agreement among the

“consortium” members, 35
although it was an internal
matter among them, and of the fact that 36
it would be
presented by counsel for private respondent.
However, under questioning by Chief Justice Hilario G.
Davide, Jr. and Justice Jose C. Vitug, Commissioner
Tuason in effect admitted that, while he was the
commissioner-in-charge of Comelec’s Legal Department, he
had never37 seen, even up to that late date, the agreement he
spoke of. Under further questioning, he was likewise
unable to provide any information regarding the amounts
invested into 38
the project by several members of the claimed
consortium. A short while later, he admitted that the 39
Commission had not taken a look at the agreement (if any).
He tried to justify his position by claiming that he was
not a member of the BAC. Neither was he the
commissioner-in-charge of the Phase II Modernization
project (the automated election system); but that, in any
case, the BAC and the Phase II Modernization Project
Team did look into the aspect of the composition of the
consortium.
It seems to the Court, though, that even if the BAC or
the Phase II Team had taken charge of evaluating the
eligibility, qualifications and credentials of the consortium-
bidder, still, in all probability, the former would have
referred the task to Commissioner Tuason, head of
Comelec’ s Legal Department. That task was the
appreciation and evaluation of the legal effects and
consequences of the terms, conditions, stipulations and
covenants contained in any joint venture agreement,
consortium agreement or a similar document—assuming of
course that any of these was available at the time. The fact
that Commissioner Tuason was barely aware of the
situation bespeaks the complete absence of such document,
or the utter failure or neglect of the Comelec to examine it
—assuming it was available at all—at the time the award
was made on April 15, 2003.
_______________
34 TSN, October 7, 2003, p. 104.

35Ibid.
36Id., pp. 104-105.

37Id., pp. 103-108.
38Id., pp. 108-114.

39Id., pp. 142-145.
170

In any event, the Court notes for the record that

Commissioner Tuason basically contradicted his
statements in open court about there being one written
agreement among all 40the consortium members, when he
subsequently referred to the four41 (4) Memoranda of
Agreement (MOAs) executed by them.
At this juncture, one might ask: What, then, if there are
four MOAs instead of one or none at all? Isn’t it enough
that there are these corporations coming together to carry
out the automation project? Isn’t it true, as respondent
aver, that nowhere in the RFP issued by Comelec is it
required that the members of the joint venture execute a
single written agreement to prove the existence of a joint
venture. Indeed, the intention to be jointly and severally
liable may be evidenced not only by a single joint venture
agreement, but also by supplementary documents executed
by the parties signifying such intention. What then is the
big deal?
The problem is not that there are four agreements
instead of only one. The problem is that Comelec never
bothered to check. It never based its decision on documents
or other proof that would concretely establish the existence
of the claimed consortium or joint venture or
agglomeration. It relied merely on the self-serving
representation in an uncorroborated letter signed by only
one individual, claiming that his company represented a
“consortium” of several different corporations. It concluded
forthwith that a consortium indeed existed, composed of
such and such members, and thereafter declared that the
entity was eligible to bid.
True, copies of financial statements and incorporation
papers of the alleged “consortium” members were
submitted. But these papers did not establish the existence
of a consortium, as they could have been provided by the
companies concerned for purposes other than to prove that
they were part of a consortium or joint venture. For
instance, the papers may have been intended to show that
those companies were each qualified to be a sub-contractor
(and nothing more) in a major project. Those documents did

not by
_______________
40 On pp. 42-43 of the Memorandum of public respondents, filed with

this Court on October 27, 2003, Comm. Tuason himself signed this
pleading in his capacity as counsel of all the public respondents.
41 Copies of these four agreements were belatedly submitted to this
Court by MPEI through a Manifestation with Profuse Apologies filed on
October 9, 2003.
171
VOL. 419, JANUARY 13, 2004 171

themselves support the assumption that a consortium or

joint venture existed among the companies.
In brief, despite the absenceof competent proof as to the
existence and eligibility of the alleged consortium (MPC),
its capacity to deliver on the Contract, and the members’
joint and several liability therefor, Comelec nevertheless
assumedthat such consortium existed and was eligible. It
then went ahead and considered the bid of MPC, to which
the Contract was eventually awarded, in gross violation of
the former’s own bidding rules and procedures contained in
its RFP. Therein lies Comelec’s grave abuse of discretion.
Sufficiency of the
Four Agreements
Instead of one multilateral agreement executed by, and
effective and binding on, all the five “consortium
members”—as earlier claimed by Commissioner Tuason in
open court—it turns out that what was actually executed 42
were four (4) separate and distinct bilateral Agreements.
Obviously, Comelec was furnished copies of these
Agreements only after the bidding process had been
terminated, as these were not included in the Eligibility
Documents. These Agreements are as follows:
● A Memorandum of Agreement between MPEI and SK

C&C
● A Memorandum of Agreement between MPEI and
WeSolv
● A “Teaming Agreement” between MPEI and
Election.com Ltd.
● A “Teaming Agreement” between MPEI and ePLDT
In sum, each of the four different and separate bilateral

Agreements is valid and binding only between MPEI and
the other contracting party, leaving the other “consortium”
members total strangers thereto. Under this setup, MPEI
dealt separately with each of the “members,” and the latter
(WeSolv, SK C&C, Elec-
_______________
42 Copies of the four separate bilateral agreements were submitted to

the Court last October 9, 2003.
172

tion.com, and ePLDT) in turn had nothing to do with one

another, each dealing only with MPEI.
Respondents assert that these four Agreements were
sufficient for the purpose of enabling the corporations to
still qualify (even at that late stage) as a consortium or
joint venture, since the first two Agreements had allegedly
set forth the joint and several undertakings among the
parties, whereas the latter two clarified the parties’
respective roles with regard to the Project, with MPEI being
the independent contractor and Election.com and ePLDT
the subcontractors.
Additionally, the use of the phrase “particular contract”
in the Comelec’s Request for Proposal (RFP), in connection
with the joint and several liabilities of companies in a joint
venture, is taken by them to mean that all the members of
the joint venture need not be solidarily liable for the entire
project or joint venture, because it is sufficient that the
lead company and the member in charge of a particular
contract or aspect of the joint venture agree to be solidarily
liable.
At this point, it must be stressed most vigorously that
the submission of the four bilateral Agreements to Comelec
after the end of the bidding process did nothing to eliminate
the grave abuse of discretion it had already committed on
April 15, 2003.
Deficiencies Have
Not Been “Cured”
In any event, it is also claimed that the automation

Contract awarded by Comelec incorporates all documents
executed by the “consortium” members, even if these
documents are not referred to therein. The basis of this
assertion appears to be the passages from Section 1.4 of the
Contract, which is reproduced as follows:
“All Contract Documents shall form part of the Contract even if

they or any one of them is not referred to or mentioned in the
Contract as forming a part thereof. Each of the Contract
Documents shall be mutually complementary and explanatory of
each other such that what is noted in one although not shown in
the other shall be considered contained in all, and what is
required by any one shall be as binding as if required by all,
unless one item is a correction of the other.
“The intent of the Contract Documents is the proper,
satisfactory and timely execution and completion of the Project, in
accordance with the Contract Documents. Consequently, all items
necessary for the proper and
173
VOL. 419, JANUARY 13, 2004 173

timely execution and completion of the Project shall be deemed

included in the Contract.”
Thus, it is argued that whatever perceived deficiencies

there were in the supplementary contracts—those entered
into by MPEI and the other members of the “consortium”
as regards their joint and several undertakings—have been
cured. Better still, such deficiencies have supposedly been
prevented from arising as a result of the above-quoted
provisions, from which it can be immediately established
that each of the members of MPC assumes the same joint
and several liability as the other members.
The foregoing argument is unpersuasive. First, the
contract being referred to, entitled “The Automated
Counting and Canvassing Project Contract,” is between
Comelec and MPEI, not the alleged consortium, MPC. To
repeat, it is MPEI—not MPC—that is a party to the
Contract. Nowhere in that Contract is there any mention of
a consortium or joint venture, of members thereof much less
of joint and several
43
liability. Supposedly executed sometime
in May 2003, the Contract bears a notarization date of
June 30, 2003, and contains the signature of Willy U. Yu
signing as president of MPEI (not for and on behalf of
MPC), along with that of the Comelec chair. It provides in

Section 3.2 that MPEI (not MPC) is to supply the
Equipment and perform the Services under the Contract,
in accordance with the appendices thereof; nothing
whatsoever is said about any consortium or joint venture or
partnership.
Second, the portions of Section 1.4 of the Contract
reproduced above do not have the effect of curing (much
less preventing) deficiencies in the bilateral agreements
entered into by MPEI with the other members of the
“consortium,” with respect to their joint and several
liabilities. The term “Contract Documents,” as used in the
quoted passages of Section 1.4, has a well-defined meaning
and actually refers only to the following documents:
● The Contract itself along with its appendices

● The Request for Proposal (also known as “Terms of
Reference”) issued by the Comelec, including the Tender
Inquiries and Bid Bulletins
● The Tender Proposal submitted by MPEI
_______________
43 The date was carelessly stated as “____ May, 2003.”
174

In other words, the term “Contract Documents” cannot be

understood as referring to or including the MOAs and the
Teaming Agreements entered into by MPEI with SK C&C,
WeSolv, Election.com and ePLDT. This much is very clear
and admits of no debate. The attempt to use the provisions
of Section 1.4 to shore up the MOAs and the Teaming
Agreements is simply unwarranted.
Thirdand last, we fail to see how respondents can arrive
at the conclusion that, from the above-quoted provisions, it
can be immediately established that each of the members
of MPC assumes the same joint and several liability as the
other members. Earlier, respondents claimed exactly the
opposite—that the two MOAs (between MPEI and SK
C&C, and between MPEI and WeSolv) had set forth the
joint and several undertakings among the parties; whereas
the two Teaming Agreements clarified the parties’
respective roles with regard to the Project, with MPEI being

the independent contractor and Election.com and ePLDT
the subcontractors.
Obviously, given the differences in their relationships,
their respective liabilities cannot be the same. Precisely,
the very clear terms and stipulations contained in the
MOAs and the Teaming Agreements—entered into by
MPEI with SK C&C, WeSolv, Election.com and ePLDT—
negate the idea that these “members” are on a par with one
another and are, as such, assuming the same joint and
several liability.
Moreover, respondents have earlier seized upon the use
of the term “particular contract” in the Comelec’s Request
for Proposal (RFP), in order to argue that all the members
of the joint venture did not need to be solidarily liable for
the entire project or joint venture. It was sufficient that the
lead company and the member in charge of a particular
contract or aspect of the joint venture would agree to be
solidarily liable. The glaring lack of consistency leaves us
at a loss. Are respondents trying to establish the same joint
and solidary liability among all the “members” or not?
Enforcement of
Liabilities Problematic
Next, it is also maintained that the automation Contract
between Comelec and the MPEI confirms the solidary
undertaking of the lead company and the consortium
member concerned for each particular Contract, inasmuch
as the position of MPEI and anyone
175
VOL. 419, JANUARY 13, 2004 175

else performing the services contemplated under the

Contract is described therein as that of an independent
contractor.
The Court does not see, however, how this conclusion
was arrived at. In the first place, the contractual provision
being relied upon by respondents is Article 14,
“Independent Contractors,” which states: “Nothing
contained herein shall be construed as establishing or
creating between the COMELEC and MEGA the
relationship of employee and employer or principal and
agent, it being understood that the position of MEGA and of
anyone performing the Services contemplated under this

Contract, is that of an independent contractor.”
Obviously, the intent behind the provision was simply to
avoid the creation of an employer-employee or a principal-
agent relationship and the complications that it would
produce. Hence, the Article states that the role or position
of MPEI, or anyone else performing on its behalf, is that of
an independent contractor. It is obvious to the Court that
respondents are stretching matters too far when they claim
that, because of this provision, the Contract in effect
confirms the solidary undertaking of the lead company and
the consortium member concerned for the particular phase
of the project. This assertion is an absolute non sequitur.
Enforcement of Liabilities
Under the Civil Code Not Possible
In any event, it is claimed that Comelec may still enforce
the liability of the “consortium” members under the Civil
Code provisions on partnership, reasoning that MPEI et
al.represented themselves as partners and members of MPC
for purposes of bidding for the Project. They are, therefore,
liable to the Comelec to the extent that the latter relied upon
such representation. Their liability as partners is solidary
with respect to everything chargeable to the partnership
under certain conditions.
The Court has two points to make with respect to this
argument. First, it must be recalled that SK C&C, WeSolv,
Election.com and ePLDT never represented themselves as
partners and members of MPC, whether for purposes of
bidding or for something else. It was MPEI alone that
represented them to be members of a “consortium” it
supposedly headed. Thus, its acts may not necessarily be
held against the other “members.”
176

44
Second, this argument of the OSG in its Memorandum
might possibly apply in the absence of a joint venture
agreement or some other writing that discloses the
relationship of the “members” with one another. But
precisely, this case does not deal with a situation in which
there is nothing in writing to serve as reference, leaving
Comelec to rely on mere representations and therefore
justifying a falling back on the rules on partnership. For,
again, the terms and stipulations of the MOAs entered into

by MPEI with SK C&C and WeSolv, as well as the
Teaming Agreements of MPEI with Election.com and
ePLDT (copies of which have been furnished the Comelec)
are very clear with respect to the extent and the limitations
of the firms’ respective liabilities.
In the case of WeSolv and SK C&C, their MOAs state
that their liabilities, while joint and several with MPEI,
are limited only to the particular areas of work wherein
their services are engaged or their products utilized. As for
Election.com and ePLDT, their separate “Teaming
Agreements” specifically ascribe to them the role of
subcontractor vis-à-vis MPEI as contractor and, based on
the terms of their particular agreements, neither
Election.com nor ePLDT 45is, with MPEI, jointly and
severally liable to Comelec. It follows then that in the
instant case, there is no justification for anyone, much less
Comelec, to resort to the rules on partnership and partners’
liabilities.
Eligibility of a Consortium
Based on the Collective
Qualifications of Its Members
Respondents declare that, for purposes of assessing the
eligibility of the bidder, the members of MPC should be
evaluated on a collective basis. Therefore, they contend, the
failure of MPEI to submit financial statements (on account
of its recent incorporation) should not by itself disqualify
MPC, since the other members of the “consortium” could
meet the criteria set out in the RFP.
Thus, according to respondents, the collective nature of
the undertaking of the members of MPC, their contribution
of assets and
_______________
44 At p. 38.
45 During the Oral Argument, counsel for public respondents admitted
that Comelec was aware that not all the members of the “consortium” had
agreed to be jointly and solidarily liable with MPEI.
177
VOL. 419, JANUARY 13, 2004 177

sharing of risks, and the community of their interest in the

performance of the Contract lead to these reasonable
conclusions: (1) that their collective qualifications should be
the basis for evaluating their eligibility; (2) that the sheer
enormity of the project renders it improbable to expect any
single entity to be able to comply with all the eligibility
requirements and undertake the project by itself; and (3)
that, as argued by the OSG, the RFP allows bids from
manufacturers, suppliers and/or distributors that have
formed themselves into a joint venture, in recognition of
the virtual impossibility of a single entity’s ability to
respond to the Invitation to Bid.
Additionally, argues the Comelec, the Implementing
Rules and Regulations of RA 6957 (the Build-Operate-
Transfer Law) as amended by RA 7718 would be
applicable, as proponents of BOT projects usually form
joint ventures or consortiums. Under the IRR, a joint
venture/consortium proponent shall be evaluated based on
the individual or the collective experience of the member-
firms of the joint venture/consortium and of the contractors
the proponent has engaged for the project.
Unfortunately, this argument seems to assume that the
“collective” nature of the undertaking of the members of
MPC, their contribution of assets and sharing of risks, and
the “community” of their interest in the performance of the
Contract entitle MPC to be treated as a joint venture or
consortium; and to be evaluated accordingly on the basis of
the members’ collective qualifications when, in fact, the
evidence before the Court suggest otherwise. 46
This Court in Kilosbayan v. Guingona defined joint
venture as “an association of persons or companies jointly
undertaking some commercial enterprise; generally, all
contribute assets and share risks. It requires a community
of interest in the performance of the subject matter, a right
to direct and govern the policy in connection therewith, and
[a] duty, which may be altered by agreement to share both
in profit and losses.”
Going back to the instant case, it should be recalled that
the automation Contract with Comelec was not executed by
the “consortium” MPC—or by MPEI for and on behalf of
MPC—but by MPEI, period. The said Contract contains no
mention whatsoever of any consortium or members thereof.
This fact alone seems to con-
_______________
46 232 SCRA 110, 144, May 5, 1994, per Davide, Jr., J.(now C.J.).
178

tradict all the suppositions about a joint undertaking that

would normally apply to a joint venture or consortium: that
it is a commercial enterprise involving a community of
interest, a sharing of risks, profits and losses, and so on.
Now let us consider the four bilateral Agreements,
starting with the Memorandum of Agreement between
MPEI and WeSolv Open Computing, Inc., dated March 5,
2003. The body of the MOA consists of just seven (7) short
paragraphs that would easily fit in one page! It reads as
follows:
“1. The parties agree to cooperate in successfully

implementing the Project in the substance and form
as may be most beneficial to both parties and other
subcontractors involved in the Project.
“2. Mega Pacific shall be responsible for any contract
negotiations and signing with the COMELEC and,
subject to the latter’s approval, agrees to give
WeSolv an opportunity to be present at meetings
with the COMELEC concerning WeSolv’s portion of
the Project.
“3. WeSolv shall be jointly and severally liable with
Mega Pacific only for the particular products
and/or services supplied by the former for the
Project.
“4. Each party shall bear its own costs and expenses
relative to this agreement unless otherwise agreed
upon by the parties.
“5. The parties undertake to do all acts and such other
things incidental to, necessary or desirable or the
attainment of the objectives and purposes of this
Agreement.
“6. In the event that the parties fail to agree on the
terms and conditions of the supply of the products
and services including but not limited to the scope
of the products and services to be supplied and
payment terms, WeSolv shall cease to be bound by
its obligations stated in the aforementioned
paragraphs.
“7. Any dispute arising from this Agreement shall be
settled amicably by the parties whenever possible.
Should the parties be unable to do so, the parties
hereby agree to settle their dispute through
arbitration in accordance with the existing laws of

the Republic of the Philippines.” (Italics supplied.)
Even shorter is the Memorandum of Agreement between

MPEI and SK C&C Co. Ltd., dated March 9, 2003, the body
of which consists of only six (6) paragraphs, which we
quote:
“1. All parties agree to cooperate in achieving the

Consortium’s objective of successfully implementing
the Project in the substance and form
179
VOL. 419, JANUARY 13, 2004 179

as may be most beneficial to the Consortium

members and in accordance w/ the demand of the
RFP.
“2. Mega Pacific shall have full powers and authority to
represent the Consortium with the Comelec, and to
enter and sign, for and in behalf of its members any
and all agreement/s which maybe required in the
implementation of the Project.
“3. Each of the individual members of the Consortium
shall be jointly and severally liable with the Lead
Firm for the particular products and/or services
supplied by such individual member for the project,
in accordance with their respective undertaking or
sphere of responsibility.
“4. Each party shall bear its own costs and expenses
relative to this agreement unless otherwise agreed
upon by the parties.
“5. The parties undertake to do all acts and such other
things incidental to, necessary or desirable for the
attainment of the objectives and purposes of this
Agreement.
“6. Any dispute arising from this Agreement shall be
settled amicably by the parties whenever possible.
Should the parties be unable to do so, the parties
hereby agree to settle their dispute through
arbitration in accordance with the existing laws of
the Republic of the Philippines.” (Italics supplied.)
It will be noted that the two Agreements quoted above are

very similar in wording. Neither of them contains any
specifics or details as to the exact nature and scope of the
parties’ respective undertakings, performances and
deliverables under the Agreement with respect to the
automation project. Likewise, the two Agreements are
quite bereft of pesos-and-centavos data as to the amount of
investments each party contributes, its respective share in
the revenues and/or profit from the Contract with Comelec,
and so forth—all of which are normal for agreements of
this nature. Yet, according to public and private
respondents, the participation of MPEI, WeSolv and SK
C&C comprises fully 90 percent of the entire undertaking
with respect to the election automation project, which is
worth about P1.3 billion.
As for Election.com and ePLDT, the separate “Teaming
Agreements” they entered into with MPEI for the
remaining 10 percent of the entire project undertaking are
ironically much longer and more detailed than the MOAs
discussed earlier. Although specifically ascribing to them
the role of subcontractor vis-à-vis MPEI as contractor,
these Agreements are, however, completely devoid of any
pricing data or payment terms. Even the appended
Schedules supposedly containing prices of goods and
services are shorn of any
180

price data. Again, as mentioned earlier, based on the terms

of their particular Agreements, neither Election.com nor
ePLDT—with MPEI—is jointly and severally liable to
Comelec.
It is difficult to imagine how these bare Agreements—
especially the first two—could be implemented in practice;
and how a dispute between the parties or a claim by
Comelec against them, for instance, could be resolved
without lengthy and debilitating litigations. Absent any
clear-cut statement as to the exact nature and scope of the
parties’ respective undertakings, commitments,
deliverables and covenants, one party or another can easily
dodge its obligation and deny or contest its liability under
the Agreement; or claim that it is the other party that
should have delivered but failed to.
Likewise, in the absence of definite indicators as to the

amount of investments to be contributed by each party,
disbursements for expenses, the parties’ respective shares
in the profits and the like, it seems to the Court that this
situation could readily give rise to all kinds of
misunderstandings and disagreements over money
matters.
Under such a scenario, it will be extremely difficult for
Comelec to enforce the supposed joint and several liabilities
of the members of the “consortium.” The Court is not even
mentioning the possibility of a situation arising from a
failure of WeSolv and MPEI to agree on the scope, the
terms and the conditions for the supply of the products and
services under the Agreement. In that situation, by virtue
of paragraph 6 of its MOA, WeSolv would perforce cease to
be bound by its obligations—including its joint and solidary
liability with MPEI under the MOA—and could forthwith
disengage from the project. Effectively, WeSolv could at
any time unilaterally exit from its MOA with MPEI by
simply failing to agree. Where would that outcome leave
MPEI and Comelec?
To the Court, this strange and beguiling arrangement of
MPEI with the other companies does not qualify them to be
treated as a consortium or joint venture, at least of the type
that government agencies like the Comelec should be
dealing with. With more reason is it unable to agree to the
proposal to evaluate the members of MPC on a collective
basis.
In any event, the MPC members claim to be a joint
venture/consortium; and respondents have consistently
been arguing that the IRR for RA 6957, as amended,
should be applied to the
181
VOL. 419, JANUARY 13, 2004 181

instant case in order to allow a collective evaluation of

consortium members. Surprisingly, considering these facts,
respondents have not deemed it necessary for MPC
members to comply with Section 5.4 (a) (iii) of the IRR for
RA 6957 as amended.
According to the aforementioned provision, if the project
proponent is a joint venture or consortium, the members or
participants thereof are required to submit a sworn
statement that, if awarded the contract, they shall bind
themselves to be jointly, severally and solidarily liable for

the project proponent’s obligations thereunder. This
provision was supposed to mirror Section 5 of RA 6957, as
amended, which states: “In all cases, a consortium that
participates in a bid must present proof that the members of
the consortium have bound themselves jointly and severally
to assume responsibility for any project. The withdrawal of
any member of the consortium prior to the implementation
of the project could be a ground for the cancellation of the
contract.”
The Court has certainly not seen any joint and several
undertaking by the MPC members that even approximates
the tenor of that which is described above. We fail to see
why respondents should invoke the IRR if it is for their
benefit, but refuse to comply with it otherwise.
B. DOST Technical Tests Flunked by the Automated

Counting Machines
Let us now move to the second subtopic, which deals with

the substantive issue: the ACM’s failure to pass the tests of
the Department of Science and Technology (DOST).
After respondent “consortium” and the other bidder,
TIM, had submitted their respective bids on March 10,
2003, the Comelec’s BAC—through its Technical Working
Group (TWG) and the DOST—evaluated their technical
proposals. Requirements that were highly technical in
nature and that required the use of certain equipment in
the evaluation process were referred to the DOST for
testing. The Department reported thus:
182

47
TEST RESULTS MATRIX
[Technical Evaluation of Automated Counting Machine]
KEY REQUIREMENTS MEGA- TOTAL

[QUESTIONS] PACIFIC INFORMATION
CONSORTIUM MANAGEMENT
YES NO YES NO

1. Does the machine
have an accuracy rating
of at least 99.995
percent?
At COLD environmental √ √
conditions
At NORMAL √ √ √
environmentalconditions
At HARSH √
environmental
conditions
2. Accurately records √ √
and reports the date and
time of the start and end
of counting of ballots per
precinct?
3. Prints election √ √
returns without any loss
of date during
generation of such
reports?
4. Uninterruptible √ √
backup power system,
that will engage
immediately to allow
operation of at least 10
minutes after outage,
power surge or
abnormal electrical
occurrences?
5. Machine reads two- √ √
sided ballots in one
pass?
Note: This
particular
requirement
needs
further
verification

6. Machine can detect √ √
previously counted
ballots and prevent
previously counted
ballots from being
counted more than once?
7. Stores results of √ √
counted votes by
precinct in external Note: This
(removable) storage particular
device?
_______________
47 Culled from table 6, DOST Report; Rollo, Vol. II, pp. 1059-1072.
183
VOL. 419, JANUARY 13, 2004 183

requirement

needs
further
verification
8. Data stored in external media √ √
is encrypted?
Note: This
particular
requirement
needs
further
verification
9. Physical key or similar device √ √
allows, limits, or restricts
operation of the machine?
10. CPU speed is at least √ √
400mHz?
Note: This
particular
requirement
needs
further
verification
11. Port to allow use of dot- √ √
matrix printers?
12. Generates printouts of the √ √ √ √
election returns in a format
specified by the COMELEC?
Generates printouts In format
specified by COMELEC
13. Prints election returns √ √
without any loss of data during
generation of such report?
14. Generates an audit trail of
the counting machine, both
hard copy and soft copy?
Hard copy √ √ √
Soft copy √ Note: This
particular
requirement
needs
further
verification
15. Does the City/Municipal √ √
Canvassing System consolidate
results from all precincts within Note: This
it using the encrypted soft copy particular
of the data generated by the requirement
counting machine and stored on needsfurther
the
184

removable data storage verification

device?
16. Does the √ √
City/Municipal
Note: This Note: This
Canvassing System
particular particular
consolidate results
requirement requirement
from all precincts
needs needs
within it using the
further further
encrypted soft copy of
verification verification
the data generated by
the counting machine

and transmitted
through an electronic
transmission media?
17. Does the system √ √
output a Zero
City/Municipal
Note: This
Canvass Report, which
particular
is printed on election
requirement
day prior to the
needs
conduct of the actual
further
canvass operation, that
verification
shows that all totals
for all the votes for all
the candidates and
other information, are
in-deed zero or null?
18. Does the system √ √
consolidate results
Note: This
from all precincts in
particular
the city/municipality
requirement
using the data storage
needs
device coming from the
further
counting machine?
verification
19. Is the machine √ √
100% accurate
Note: This
particular
requirement
needs
further
verification
20. Is the Program able √ √
to detect previously
Note: This
downloaded precinct
particular
results and prevent
requirement
these from being
needs
inputted again into the
further
System?
verification
21. The System is able
to print the specified
reports and the audit
trail without any loss
of data during
generation of the
above-mentioned
reports?
Prints specified √ √
reports
Audit Trail √ √
Note: This
particular
requirement
185
VOL. 419, JANUARY 13, 2004 185

needs

further
verification
22. Can the result of the √ √
city/municipal consolidation be
Note: This
stored in a data storage device?
particular
requirement
needs
further
verification
23. Does the system consolidate √
results from all precincts in the
√ Note: This
provincial/district/national using
particular
the data storage device from
requirement
different levels of consolidation?
needs
further
verification
24. Is the system 100% √ √
accurate?
Note: This
particular
requirement
needs
further
verification
25. Is the Program able to detect √ √
previously download precinct
Note: This
results and prevent these from
particular
being inputted again into the
requirement
System?
needs
further
verification
26. The System is able to print
the specified reports and the

audit trail without any loss of
data during generation of the
above-mentioned reports?
Prints specified reports √
Audit Trail √
√ √
Note: This
particular
requirement
needs
further
verification
27. Can the results of the √ √
provincial/district/national
consolida- Note: This
186

tion be stored in a data storage particular

device? requirement
needs
further
verification
According to respondents, it was only after the TWG and

the DOST had conducted their separate tests and
submitted their respective reports that the BAC, on the
basis of these reports formulated its
comments/recommendations on the bids of the consortium
and TIM.
The BAC, in its Report dated April 21, 2003,
recommended that the Phase II project involving the
acquisition of automated counting machines be awarded to
MPEI. It said:
“After incisive analysis of the technical reports of the DOST and

the Technical Working Group for Phase II—Automated Counting
Machine, the BAC considers adaptability to advances in modern
technology to ensure an effective and efficient method, as well as
the security and integrity of the system.
“The results of the evaluation conducted by the TWG and that

of the DOST (14 April 2003 report), would show the apparent
advantage of Mega-Pacific over the other competitor, TIM.
“The BAC further noted that both Mega-Pacific and TIM
obtained some ‘failed marks’ in the technical evaluation. In
general, the ‘failed marks’ of Total Information Management as
enumerated above affect the counting machine itself which are
material in nature, constituting noncompliance to the RFP. On
the other hand, the ‘failed marks’ of Mega-Pacific are mere
formalities on certain documentary requirements which the BAC
may waive as clearly indicated in the Invitation to Bid.
“In the DOST test, TIM obtained 12 failed marks and mostly
attributed to the counting machine itself as stated earlier. These
are requirements of the RFP and therefore the BAC cannot
disregard the same.
“Mega-Pacific failed in 8 items however these are mostly on the
software which can be corrected by reprogramming the software
and therefore can be readily corrected.
“The BAC verbally inquired from DOST on the status of the
retest of the counting machines of the TIM and was informed that
the report will be forthcoming after the holy week. The BAC was
informed that the retest is on a different parameters they’re being
two different machines being tested. One purposely to test if
previously read ballots will be read again and the other for the
other features such as two sided ballots.
187
VOL. 419, JANUARY 13, 2004 187

“The said machine and the software therefore may not be

considered the same machine and program as submitted in the
Technical proposal and therefore may be considered an
enhancement of the original proposal.
“Advance information relayed to the BAC as of 1:40 PM of 15
April 2003 by Executive Director Ronaldo T. Viloria of DOST is
that the result of the test in the two counting machines of TIM
contains substantial errors that may lead to the failure of these
machines based on the specific items of the RFP that DOST has to
certify.
OPENING OF FINANCIAL BIDS
“The BAC on 15 April 2003, after notifying the concerned

bidders opened the financial bids in their presence and the results
were as follows: Mega-Pacific:
Option 1—Outright purchase: Bid Price if Php1,248,949,088.00

Option 2—Lease option:
70% Down payment of cost of hardware or
Php642,755,757.07
Remainder payable over 50 months or a total of
Php642,755,757.07
Discount rate of 15% p.a. or 1.2532% per month.
Total Number of Automated Counting Machine—1,769 ACMs
(Nationwide)
TIM:
Total Bid Price—Php1,297,860,560.00
Total Number of Automated Counting Machine—2,272
ACMs (Mindanao and NCR only)
“Premises considered, it appears that the bid of Mega Pacific is
the lowest calculated responsive bid, and therefore, the Bids and
Awards Committee (BAC) recommends that the Phase II project
re Automated 48Counting Machine be awarded to Mega Pacific
eSolution, Inc.”
The BAC, however, also stated on page 4 of its Report:

“Based on the 14 April 2003 report (Table 6) of the DOST, it
appears that both Mega-Pacific and TIM (Total Information
Management Corporation) failed to meet some of the
requirements. Below is a comparative presentation of the
requirement wherein Mega-Pacific or TIM or both of them
failed: x x x.” What followed was a list of “key re-
_______________
48 Annex “I” of the Petition, Vol. I, pp. 116-118.
188

quirements,” referring to technical requirements, and an

indication of which of the two bidders had failed to meet
them.
Failure to Meet the

Required Accuracy Rating
The first of the key requirements was that the counting
machines were to have an accuracy rating of at least
99.9995 percent. The BAC Report indicates that both
Mega Pacific and TIM failed to meet this standard.
The key requirement of accuracy rating happens to be

part and parcel of the Comelec’s Request for Proposal
(RFP). The RFP, on page 26, even states that the ballot
counting machines and ballot counting software “must have
an accuracy rating of 99.9995% (not merely 99.995%) or
better as certified by a reliable independent testing agency.”
When questioned on this matter during the Oral
Argument, Commissioner Borra tried to wash his hands by
claiming that the required accuracy rating of 99.9995
percent had been set by a private sector group in tandem
with Comelec. He added that the Commission had merely
adopted the accuracy rating as part of the group’s
recommended bid requirements, which it had not bothered
to amend even after being advised by DOST that such
standard was unachievable. This excuse, however, does not
in any way lessen Comelec’s responsibility to adhere to its
own published bidding rules, as well as to see to it that the
consortium indeed meets the accuracy standard. Whichever
accuracy rating is the right standard—whether 99.995 or
99.9995 percent—the fact remains that the machines of the
so-called “consortium” failed to even reach the lesser of the
two. On this basis alone, it ought to have been disqualified
and its bid rejected outright.
At this point, the Court stresses that the essence of
public bidding is violated by the practice of requiring very
high standards or unrealistic specifications that cannot be
met—like the 99.9995 percent accuracy rating in this case
—only to water them down after the bid has been awarded.
Such scheme, which discourages the entry of prospective
bona fide bidders, is in fact a sure indication of fraud in the
bidding, designed to eliminate fair competition. Certainly,
if no bidder meets the mandatory requirements, standards
or specifications, then no award should be made and a
failed bidding declared.
189
VOL. 419, JANUARY 13, 2004 189

Failure of Software to Detect

Previously Downloaded Data
Furthermore, on page 6 of the BAC Report, it appears that
the “consortium” as well as TIM failed to meet another key
requirement—for the counting machine’s software program
to be able to detect previously downloaded precinct
results and to prevent these from being entered

again into the counting machine. This same deficiency
on the part of both bidders reappears on page 7 of the BAC
Report, as a result of the recurrence of their failure to meet
the said key requirement.
That the ability to detect previously downloaded data at
different canvassing or consolidation levels is deemed of
utmost importance can be seen from the fact that it is
repeated three times in the RFP. On page 30 thereof, we
find the requirement that the city/municipal canvassing
system software must be able to detect previously
downloaded precinct results and prevent these from being
“inputted” again into the system. Again, on page 32 of the
RFP, we read that the provincial/district canvassing
system software must be able to detect previously
downloaded city/municipal results and prevent these from
being “inputted” again into the system. And once more, on
page 35 of the RFP, we find the requirement that the
national canvassing system software must be able to detect
previously downloaded provincial/district results and
prevent these from being “inputted” again into the system.
Once again, though, Comelec chose to ignore this crucial
deficiency, which should have been a cause for the gravest
concern. Come May 2004, unscrupulous persons may take
advantage of and exploit such deficiency by repeatedly
downloading and feeding into the computers results
favorable to a particular candidate or candidates. We are
thus confronted with the grim prospect of election fraud on
a massive scale by means of just a few key strokes. The
marvels and woes of the electronic age!
Inability to Print
the Audit Trail
But that grim prospect is not all. The BAC Report, on
pages 6 and 7, indicate that the ACMs of both bidders were
unable to print the audit trail without any loss of data.
In the case of MPC, the audit trail system was “not yet
incorporated” into its ACMs.
190

This particular deficiency is significant, not only to this

bidding but to the cause of free and credible elections. The
purpose of requiring audit trails is to enable Comelec to
trace and verify the identities of the ACM operators

responsible for data entry and downloading, as well as the
times when the various data were downloaded into the
canvassing system, in order to forestall fraud and to
identify the perpetrators.
Thus, the RFP on page 27 states that the ballot counting
machines and ballot counting software must print an audit
trail of all machine operations for documentation and
verification purposes. Furthermore, the audit trail must be
stored on the internal storage device and be available on
demand for future printing and verifying. On pages 30-31,
the RFP also requires that the city/municipal canvassing
system software be able to print an audit trail of the
canvassing operations, including therein such data as the
date and time the canvassing program was started, the log-
in of the authorized users (the identity of the machine
operators), the date and time the canvass data were
downloaded into the canvassing system, and so on and so
forth. On page 33 of the RFP, we find the same audit trail
requirement with respect to the provincial/
districtcanvassing system software; and again on pages 35-
36 thereof, the same audit trail requirement with respect to
the national canvassing system software.
That this requirement for printing audit trails is not to
be lightly brushed aside by the BAC or Comelec itself as a
mere formality or technicality can be readily gleaned from
the provisions of Section 7 of RA 8436, which authorizes
the Commission to use an automated system for elections.
The said provision which respondents have quoted
several times, provides that ACMs are to possess certain
features divided into two classes: those that the statute
itself considers mandatory and other features or
capabilities that the law deems optional. Among those
considered mandatory are “provisions for audit trails”!
Section 7 reads as follows: “The System shall contain the
following features: (a) use of appropriate ballots; (b) stand-
alone machine which can count votes and an automated
system which can consolidate the results immediately; (c)
with provisions for audit trails; (d) minimum human
intervention; and (e) adequate safeguard/security
measures.” (Italics and emphases supplied.)
191
VOL. 419, JANUARY 13, 2004 191

In brief, respondents cannot deny that the provision

requiring audit trails is indeed mandatory, considering the
wording of Section 7 of RA 8436. Neither can Respondent
Comelec deny that it has relied on the BAC Report, which
indicates that the machines or the software was deficient in
that respect. And yet, the Commission simply disregarded
this shortcoming and awarded the Contract to private
respondent, thereby violating the very law it was supposed
to implement.
C. Inadequacy of Post Facto Remedial Measures
Respondents argue that the deficiencies relating to the

detection of previously downloaded data, as well as
provisions for audit trails, are mere shortcomings or minor
deficiencies in software or programming, which can be
rectified. Perhaps Comelec simply relied upon the BAC
Report, which states on page 8 thereof that Mega Pacific
failed in 8 items[;] however these are mostly on the software
which can be corrected by re-programming x x x and
therefore can be readily corrected.”
The undersigned ponente’s questions, some of which
were addressed to Commissioner Borra during the Oral
Argument, remain unanswered to this day. First of all, who
made the determination that the eight “fail” marks of Mega
Pacific were on account of the software—was it DOST or
TWG? How can we be sure these failures were not the
results of machine defects? How was it determined that the
software could actually be re-programmed and thereby
rectified? Did a 49qualified technical expert read and analyze
the source code for the programs and conclude that these
could be
_______________
49 Source code is the program instructions in their original form.

Initially, a programmer writes a computer program in a particular
programming language. This form of the program is called the source
program, or more generically, source code. To execute the program,
however, the programmer must translate it into machine language, the
language that the computer understands. Source code is the only format
that is readable by humans. When you purchase programs, you usually
receive them in their machine-language format. This means that you can
execute them directly, but you cannot read or modify them. Some software
manufacturers pro-
192

saved and remedied? (Such determination cannot be done

by any other means save by the examination and analysis
of the source code.)
Who was this qualified technical expert? When did he
carry out the study? Did he prepare a written report on his
findings? Or did the Comelec just make a wild guess? It
does not follow that all defects in software programs can be
rectified, and the programs saved. In the information
technology sector, it is common knowledge that there are
many badly written programs, with significant
programming errors written into them; hence it does not
make economic sense to try to correct the programs;
instead, programmers simply abandon them and just start
from scratch. There’s no telling if any of these programs is
unrectifiable, unless a qualified programmer reads the
source code.
And if indeed a qualified expert reviewed the source
code, did he also determine how much work would be
needed to rectify the programs? And how much time and
money would be spent for that effort? Who would carry out
the work? After the rectification process, who would
ascertain and how would it be ascertained that the
programs have indeed been properly rectified, and that
they would work properly thereafter? And of course, the
most important question to ask: could the rectification be
done in time for the elections in 2004?
Clearly, none of the respondents bothered to think the
matter through. Comelec simply took the word of the BAC
as gospel truth, without even bothering to inquire from
DOST whether it was true that the deficiencies noted could
possibly be remedied by reprogramming the software.
Apparently, Comelec did not care about the software, but
focused only on purchasing the machines.
What really adds to the Court’s dismay is the admission
made by Commissioner Borra during the Oral Argument
that the software currently being used by Comelec was
merely the “demo” version, inasmuch as the final version
that would actually be used in the elections was still being
developed and had not yet been finalized.
It is not clear when the final version of the software
would be ready for testing and deployment. It seems to the
Court that
_______________
vide source code, but this is useful only if you are an experienced
programmer.
193
VOL. 419, JANUARY 13, 2004 193

Comelec is just keeping its fingers crossed and hoping the

final product would work. Is there a “Plan B” in case it does
not? Who knows? But all these software programs are part
and parcel of the bidding and the Contract awarded to the
Consortium. Why is it that the machines are already being
brought in and paid for, when there is as yet no way of
knowing if the final version of the software would be able to
run them properly, as well as canvass and consolidate the
results in the manner required?
The counting machines, as well as the canvassing
system, will never work properly without the correct
software programs. There is an old adage that is still valid
to this day: “Garbage in, garbage out.” No matter how
powerful, advanced and sophisticated the computers and
the servers are, if the software being utilized is defective or
has been compromised, the results will be no better than
garbage. And to think that what is at stake here is the
2004 national elections—the very basis of our democratic
life.
Correction of Defects?
To their Memorandum, public respondents proudly
appended 19 Certifications issued by DOST declaring that
some 285 counting machines had been tested and had
passed the acceptance testing conducted by the
Department on October 8-18, 2003. Among those tested
were some machines that had failed previous tests, but had
undergone adjustments and thus passed re-testing.
Unfortunately, the Certifications from DOST fail to
divulge in what manner and by what standards or criteria
the condition, performance and/or readiness of the
machines were re-evaluated and re-appraised and
thereafter given the passing mark. Apart from that fact,
the remedial efforts of respondents were, not surprisingly,
apparently focused again on the machines—the hardware.
Nothing was said or done about the software—the
deficiencies as to detection and prevention of downloading
and entering previously downloaded data, as well as the
capability to print an audit trail. No matter how many
times the machines were tested and re-tested, if nothing was

done about the programming defects and deficiencies, the
same danger of massive electoral fraud remains. As anyone
who has a modicum of knowledge of computers would say,
“That’s elementary!”
And only last December 5, 2003, an Inq7.net news report
quoted the Comelec chair as saying that the new
automated poll system
194

would be used nationwide in May 2004, even as the

software for the system remained unfinished. It also
reported that a certain Titus Manuel of the Philippine
Computer Society, which was helping Comelec test the
hardware and software, said that the software for the
counting still had to be submitted on December 15, while
the software for the canvassing was due in early January.
Even as Comelec continues making payments for the
ACMs, we keep asking ourselves: who is going to ensure
that the software would be tested and would work
properly?
At any rate, the re-testing of the machines and/or the
100 percent testing of all machines (testing of every single
unit) would not serve to eradicate the grave abuse of
discretion already committed by Comelec when it awarded
the Contract on April 15, 2003, despite the obvious and
admitted flaws in the bidding process, the failure of the
“winning bidder” to qualify, and the inability of the ACMs
and the intended software to meet the bid requirements
and rules.
Comelec’s Latest
“Assurances” Are
Unpersuasive
Even the latest pleadings filed by Comelec do not serve to
allay our apprehensions. They merely affirm and compound
the serious violations of law and gravely abusive acts it has
committed. Let us examine them.
The Resolution issued by this Court on December 9,
2003 required respondents to inform it as to the number of
ACMs delivered and paid for, as well as the total payment
made to date for the purchase thereof. They were likewise
instructed to submit a certification from the DOST
attesting to the number of ACMs tested, the number found

to be defective; and “whether the reprogrammed software
has been tested and found to have complied50
with the
requirements under Republic Act No. 8436.”
In its “Partial Compliance and Manifestation” dated
December 29, 2003, Comelec informed the Court that 1,991
ACMs had al-
_______________
50 The key passages of the Court’s Resolution of December 9, 2003 were

cited and reproduced verbatim in the Comelec’s Partial Compliance and
Manifestation.
195
VOL. 419, JANUARY 13, 2004 195

ready been delivered to the Commission as of that date. It

further certified that it had already paid the supplier the
sum of P849,167,697.41, which corresponded to 1,973 ACM
units that had passed the acceptance
51
testing procedures
conducted by the MIRDC-DOST and which had therefore
been accepted by the poll body.
In the same submission, for the very first time, Comelec
also disclosed to the Court the following:
“The Automated Counting and Canvassing Project involves not

only the manufacturing of the ACM hardware but also the
development of three (3) types of software, which are intended for
use in the following:
1. Evaluation of Technical Bids

2. Testing and Acceptance Procedures
3. Election Day Use.”
Purchase of the First Type of

Software Without Evaluation
In other words, the first type of software was to be
developed solely for the purpose of enabling the evaluation
of the bidder’s technical bid. Comelec explained thus: “In
addition to the presentation of the ACM hardware, the
bidders were required to develop a ‘base’ software program
that will enable the ACM to function properly. Since the
software program utilized during the evaluation of bids is
not the actual software program to be employed on election

day, there being two (2) other types of software program that
will still have to be developed and thoroughly tested prior to
actual election day use, defects in the ‘base’ software that
can be readily corrected by reprogramming are considered
minor in nature, and may therefore be waived.”
In short, Comelec claims that it evaluated the bids and
made the decision to award the Contract to the “winning”
bidder partly on the basis of the operation of the ACMs
running a “base” software. That software was therefore
nothing but a sample or “demo” software, which would not
be the actual one that would be used on election day.
Keeping in mind that the Contract involves the acquisition
of not just the ACMs or the hardware, but also the software
_______________
51 Metals Industry Research and Development Center (MIRDC) of the

Department of Science & Technology (DOST).
196

that would run them, it is now even clearer that the

Contract was awarded without Comelec having seen, much
less evaluated, the finalproduct—the software that would
finally be utilized come election day. (Not even the “near-
final” product, for that matter).
What then was the point of conducting the bidding,
when the software that was the subject of the Contract was
still to be created and could conceivably undergo
innumerable changes before being considered as being in
final form? And that is not all!
No Explanation for Lapses

in the Second Type of Software
The second phase, allegedly involving the second type of
software, is simply denominated “Testing and Acceptance
Procedures.” As best as we can construe, Comelec is
claiming that this second type of software is also to be
developed and delivered by the supplier in connection with
the “testing and acceptance” phase of the acquisition
process. The previous pleadings, though—including the
DOST reports submitted to this Court—have not heretofore
mentioned any statement, allegation or representation to
the effect that a particular set of software was to be

developed and/or delivered by the supplier in connection
with the testing and acceptance of delivered ACMs.
What the records do show is that the imported ACMs
were subjected to the testing and acceptance process
conducted by the DOST. Since the initial batch delivered
included a high percentage of machines that had failed the
tests, Comelec asked the DOST to conduct a 100 percent
testing; that is, to test every single one of the ACMs
delivered. Among the machines tested on October 8 to 18,
2003, were some units that had failed previous tests but
had subsequently been re-tested and had passed. To
repeat, however, until now, there has never been any
mention of a second set or type of software pertaining to
the testing and acceptance process.
In any event, apart from making that misplaced and
uncorroborated claim, Comelec in the same submission also
professes (in response to the concerns expressed by this
Court) that the reprogrammed software has been
tested and found to have complied with the
requirements of RA 8436. It reasoned thus: “Since the
software program is an inherent element in the automated
counting system, the certification issued by the MIRDC-
DOST that one thousand nine hundred seventy-three
(1,973) units
197
VOL. 419, JANUARY 13, 2004 197

passed the acceptance test procedures is an official

recognition by the MIRDC-DOST that the software
component of the automated election system, which has been
reprogrammed to comply with the provisions of Republic
Act No. 8436 as prescribed in the Ad Hoc Technical
Evaluation Committee’s ACM Testing and Acceptance
Manual, has passed the MIRDC-DOST tests.”
The facts do not support this sweeping statement of
Comelec. A scrutiny 52
of the MIRDC-DOST letter dated
December 15, 2003, which it relied upon, does not justify
its grand conclusion. For clarity’s sake, we quote in full the
letter-certification, as follows:
“15 December 2003

“HON. RESURRECCION Z. BORRA
Commissioner-in-Charge
Phase II, Modernization Project

Intramuros, Manila
Attention:Atty. Jose M. Tolentino, Jr.

Project Director
“Dear Commissioner Borra:
“We are pleased to submit 11 DOST Test Certifications

representing 11 lots and covering 158 units of automated counting
machines (ACMs) that we have tested from 02-12 December 2003.
“To date, we have tested all the 1,991 units of ACMs, broken
down as follow: (sic)
1st batch - 30 units 4th batch - 438 units

2nd batch - 288 units 5th batch - 438 units
3rd batch - 414 units 6th batch - 383 units
"It should be noted that a total of 18 units have failed the test.
Out of these 18 units, only (1) unit has failed the retest.
"Thank you and we hope you will find everything in order.
“Very truly yours,
_______________
52 Photocopy of the MIRDC-DOST letter of Dec. 15, 2003 is attached as

Annex “A” to Respondent Comelec’s Partial Compliance and
Manifestation. However, the 11 Test Certifications of the DOST (covering
11 lots or 158 ACMs) which were purportedly attached to this letter, have
not been reproduced and submitted to the Court, for reasons known only
to respondents.
198

“ROLANDO T. VILORIA, CESO III

Executive Director cum
Chairman, DOST-Technical Evaluation Committee”
Even a cursory glance at the foregoing letter shows that it

is completely bereft of anything that would remotely
support Comelec’s contention that the “software component
of the automated election system x x x has been
reprogrammed to comply with” RA 8436, and “has passed
the MIRDC-DOST tests.” There is no mention at all of any
software reprogramming. If the MIRDC-DOST had indeed

undertaken the supposed reprogramming and the process
turned out to be successful, that agency would have
proudly trumpeted its singular achievement.
How Comelec came to believe that such reprogramming
had been undertaken is unclear. In any event, the
Commission is not forthright and candid with the factual
details. If reprogramming has been done, who performed it
and when? What exactly did the process involve? How can
we be assured that it was properly performed? Since the
facts attendant to the alleged reprogramming are still
shrouded in mystery, the Court cannot give any weight to
Comelec’s bare allegations.
The fact that a total of 1,973 of the machines has
ultimately passed the MIRDC-DOST tests does not by itself
serve as an endorsement of the soundness of the software
program, much less as a proof that it has been
reprogrammed. In the first place, nothing on record shows
that the tests and re-tests conducted on the machines were
intended to address the serious deficiencies noted earlier.
As a matter of fact, the MIRDC-DOST letter does not even
indicate what kinds of tests or re-tests were conducted,
their exact
53
nature and scope, and the specific objectives
thereof. The absence of relevant supporting documents,
combined with the utter vagueness of the letter, certainly
fails to inspire belief or to justify the expansive confidence
displayed by Comelec. In any event, it goes without saying
that remedial measures such as the alleged repro-
_______________
53 For example, one can conduct tests to see if certain machines will tip
over and fall on their sides when accidentally bumped, or if they have a
tendency to collapse under their own weight. A less frivolous example
might be that of conducting the same tests, but lowering the bar or
passing mark.
199
VOL. 419, JANUARY 13, 2004 199

gramming cannot in any way mitigate the grave abuse of

discretion already committed as early as April 15, 2003.
Rationale of Public Bidding Negated

by the Third Type of Software
Respondent Comelec tries to assuage this Court’s anxiety

in these words: “The reprogrammed software that has
already passed the requirements of Republic Act No. 8436
during the MIRDC-DOST testing and acceptance
procedures will require further customization since the
following additional elements, among other things, will
have to be considered before the final software can be used
on election day: 1. Final Certified List of Candidates x x x
2. Project of Precincts x x x 3. Official Ballot Design and
Security Features x x x 4. Encryption, digital certificates
and digital signatures x x x. The certified list of candidates
for national elective positions will be finalized on or before
23 January 2004 while the final list of projects of precincts
will be prepared also on the same date. Once all the above
elements are incorporated in the software program, the Test
Certification Group created by the Ad Hoc Technical
Evaluation Committee will conduct meticulous testing of the
final software before the same can be used on election day.
In addition to the testing to be conducted by said Test
Certification Group, the Comelec will conduct mock
elections in selected areas nationwide not only for purposes
of public information but also to further test the final
election day program. Public respondent Comelec, therefore,
requests that it be given up to 16 February 2004 to comply
with this requirement.”
The foregoing passage shows the imprudent approach
adopted by Comelec in the bidding and acquisition process.
The Commission says that before the software can be
utilized on election day, it will require “customization”
through addition of data—like the list of candidates, project
of precincts, and so on. And inasmuch as such data will
become available only in January 2004 anyway, there is
therefore no perceived need on Comelec’s part to rush the
supplier into producing the final (or near-final) version of
the software before that time. In any case, Comelec argues
that the software needed for the electoral exercise can be
continuously developed, tested, adjusted and perfected,
practically all the way up to election day, at the same time
that the Commission is undertaking
200

all the other distinct and diverse activities pertinent to the

elections.
Given such a frame of mind, it is no wonder that

Comelec paid little attention to the counting and
canvassing software during the entire bidding process,
which took place in February-March 2003. Granted that
the software was defective, could not detect and prevent
the re-use of previously downloaded data or produce the
audit trail—aside from its other shortcomings—
nevertheless, all those deficiencies could still be corrected
down the road. At any rate, the software used for bidding
purposes would not be the same one that will be used on
election day, so why pay any attention to its defects? Or to
the Comelec’s own bidding rules for that matter?
Clearly, such jumbled ratiocinations completely negate
the rationale underlying the bidding process mandated by
law.
At the very outset, the Court has explained that
Comelec flagrantly violated the public policy on public
biddings (1) by allowing MPC/MPEI to participate in the
bidding even though it was not qualified to do so; and (2) by
eventually awarding the Contract to MPC/MPEI. Now,
with the latest explanation given by Comelec, it is clear
that the Commission further desecrated the law on public
bidding by permitting the winning bidder to change and
alter the subject of the Contract (the software), in effect
allowing a substantive amendment without public bidding.
This stance is contrary to settled jurisprudence
requiring the strict application of pertinent rules,
regulations and guidelines for public bidding for the
purpose of placing each bidder, actual or potential, on the
same footing. Theessence of public bidding is, after all, an
opportunity’ for fair competition, and a fair basis for the
precise comparison of bids. In common parlance, public
bidding aims to “level the playing field.” That means each
bidder must bid under the same conditions; and be subject
to the same guidelines, requirements and limitations, so
that the best offer or lowest bid may be determined, all
other things being equal.
Thus, it is contrary to the very concept of public bidding
to permit a variance between the conditions under which
bids are invited and those under which proposals are
submitted and approved; or, as in this case, the conditions
under which the bid is won and those under which the
awarded Contract will be complied with. The substantive
amendment of the contract bidded out, without any public
bidding—after the bidding process had been concluded—is
201
VOL. 419, JANUARY 13, 2004 201

violative of the public policy on public biddings, as well as

the spirit and intent of RA 8436. The whole point in going
through the public bidding exercise was completely lost. The
very rationale of public bidding was totally subverted by the
Commission.
From another perspective, the Comelec approach also
fails to make sense. Granted that, before election day, the
software would still have to be customized to each precinct,
municipality, city, district, and so on, there still was
nothing at all to prevent Comelec from requiring
prospective suppliers/bidders to produce, at the very start of
the bidding process, the “next-to-final” versions of the
software (the best software the suppliers had)—pre-tested
and ready to be customized to the final list of candidates
and project of precincts, among others, and ready to be
deployed thereafter. The satisfaction of such requirement
would probably have provided far better bases for
evaluation and selection, as between suppliers, than the so-
called demo software.
Respondents contend that the bidding suppliers’
counting machines were previously used in at least one
political exercise with no less than 20 million voters. If so,
it stands to reason that the software used in that past
electoral exercise would probably still be available and, in
all likelihood, could have been adopted for use in this
instance. Paying for machines and software of that
category (already tried and proven in actual elections and
ready to be adopted for use) would definitely make more
sense than paying the same hundreds of millions of pesos
for demo software and empty promises of usable programs
in the future.
But there is still another gut-level reason why the
approach taken by Comelec is reprehensible. It rides on the
perilous assumption that nothing would go wrong; and
that, come election day, the Commission and the supplier
would have developed, adjusted and “re-programmed” the
software to the point where the automated system could
function as envisioned. But what if such optimistic
projection does not materialize? What if, despite all their
herculean efforts, the software now being hurriedly
developed and tested for the automated system performs
dismally and54 inaccurately or, worse, is hacked and/or
manipulated? What then will we do with
_______________
54 In the December 15, 2003 issue of the Philippine Daily Inquirer is an

item titled “Digital ‘dagdag-bawas’: a nonpartisan issue” by Dean Jorge
Bocobo, from which the following passages appear:
202

all the machines and defective software already paid for in

the amount of P849 million of our tax money? Even more
important, what will happen to our country in case of
failure of the automation?
The Court cannot grant the plea of Comelec that it be
given until February 16, 2004 to be able to submit a
“certification relative to the additional elements of the
software that will be customized,” because for us to do so
would unnecessarily delay the resolution of this case and
would just give the poll body an unwarranted excuse to
postpone the 2004 elections. On the other hand, because
such certification will not cure the gravely abusive actions
complained of by petitioners, it will be utterly useless.
Is this Court being overly pessimistic and perhaps even
engaging in speculation? Hardly. Rather, the Court holds
that Comelec should not have gambled on the unrealistic
optimism that the supplier’s software development efforts
would turn out well. The Commission should have adopted
a much more prudent and judicious approach to ensure the
delivery of tried and tested software, and readied
alternative courses of action in case of failure. Considering
that the nation’s future is at stake here, it should have
done no less.
_______________
“The Commission on Elections will use automated counting machines to

tally paper ballots in the May elections, and a telecommunications network
to transmit the results to headquarters, along with CDs of the data. Yet,
with only five months to go, the application software packages for that
crucial democratic exercise—several hundred thousand lines of obscure
and opaque code—has not yet even been delivered in its final form, Comelec
Chairman Benjamin Abalos admitted last week.
“My jaw dropped in amazement. Having built software for General
Electric Co.’s medical systems business and military aircraft engines
division (in another lifetime), I have learned the hard and painful way that
90 percent of unintended fatal problems with complex software lies in the

last 10 percent of the code produced. From experience, I can assure you now
with metaphysical certainty that not even the people furiously writing that
software know whether it will actually work as intended on May 10, much
less guarantee it. Simply put, the proposed software-hardware combination
has neither been tested completely nor verified to comply with
specifications.”
203
VOL. 419, JANUARY 13, 2004 203

Epilogue
Once again, the Court finds itself at the crossroads of our

nation’s history. At stake in this controversy is not just the
business of a computer supplier, or a questionable
proclamation by Comelec of one or more public officials.
Neither is it about whether this country should switch from
the manual to the automated system of counting and
canvassing votes. At its core is the ability and capacity of
the Commission on Elections to perform properly, legally
and prudently its legal mandate to implement the
transition from manual to automated elections.
Unfortunately, Comelec has failed to measure up to this
historic task. As stated at the start of this Decision,
Comelec has not merely gravely abused its discretion in
awarding the Contract for the automation of the counting
and canvassing of the ballots. It has also put at grave risk
the holding of credible and peaceful elections by shoddily
accepting electronic hardware and software that
admittedly failed to pass legally mandated technical
requirements. Inadequate as they are, the remedies it
proffers post facto do not cure the grave abuse of discretion
it already committed (1) on April 15, 2003, when it illegally
made the award; and (2) “sometime” in May 2003 when it
executed the Contract for the purchase of defective
machines and non-existent software from a non-eligible
bidder.
For these reasons, the Court finds it totally
unacceptable and unconscionable to place its imprimatur
on this void and illegal transaction that seriously
endangers the breakdown of our electoral system. For this
Court to cop-out and to close its eyes to these illegal
transactions, while convenient, would be to abandon its

constitutional duty of safeguarding public interest.
As a necessary consequence of such nullity and
illegality, the purchase of the machines and all
appurtenances thereto including the still-to-be-produced
(or in Comelec’s words, to be “reprogrammed”) software, as
well as all the payments made therefor, have no basis
whatsoever in law. The public funds expended pursuant to
the void Resolution and Contract must therefore be
recovered from the payees and/or from the persons who
made possible the illegal disbursements, without prejudice
to possible criminal prosecutions against them.
Furthermore, Comelec and its officials concerned must
bear full responsibility for the failed bidding and award,
and held account-
204

able for the electoral mess wrought by their grave abuse of

discretion in the performance of their functions. The State,
of course, is not bound by the mistakes and illegalities of its
agents and servants.
True, our country needs to transcend our slow, manual
and archaic electoral process. But before it can do so, it
must first have a diligent and competent electoral agency
that can properly and prudently implement a well-
conceived automated election system.
At bottom, before the country can hope to have a speedy
and fraud-free automated election, it must first be able to
procure the proper computerized hardware and software
legally, based on a transparent and valid system of public
bidding. As in any democratic system, the ultimate goal of
automating elections must be achieved by a legal, valid and
above-board process of acquiring the necessary tools and
skills therefor. Though the Philippines needs an automated
electoral process, it cannot accept just any system shoved
into its bosom through improper and illegal methods. As
the saying goes, the end never justifies the means.
Penumbral contracting will not produce enlightened
results.
WHEREFORE, the Petition is GRANTED. The Court
hereby declares NULL and VOID Comelec Resolution No.
6074 awarding the contract for Phase II of the AES to
Mega Pacific Consortium (MPC). Also declared null and
void is the subject Contract executed 55

between Comelec and
Mega Pacific eSolutions (MPEI). Comelec is further
ORDERED to refrain from implementing any other
contract or agreement entered into with regard to this
project.
Let a copy of this Decision be furnished the Office of the
Ombudsman which shall determine the criminal liability, if
any, of the public officials (and conspiring private
individuals, if any) involved in the subject Resolution and
Contract. Let the Office of the Solicitor General also take
measures to protect the government and vindicate public
interest from the ill effects of the illegal disbursements of
public funds made by reason of the void Resolution and
Contract.
SO ORDERED.
Carpio, Austria-Martinez, Carpio-Morales and

Callejo, Sr., JJ.,concur.
_______________
55 Dated “_____ May, 2003” but notarized on June 30, 2003.
205
VOL. 419, JANUARY 13, 2004 205

Davide, Jr. (CJ.) and Vitug, J., file separate

opinions.
Puno, J., concurs and joins the opinion of Justice
Ynares-Santiago.
Quisumbing, J., concurs in the result.
Ynares-Santiago and Sandoval-Gutierrez, JJ., file
concurring opinions.
Corona and Azcuna, JJ., join the dissent of Justice
Tinga.
Tinga, J., files dissenting opinion.
CONCURRING OPINION
YNARES-SANTIAGO, J.:
I am mindful of our ruling,1 expressed only recently in

Macalintal v. COMELEC, that the Commission on
Elections (“COMELEC”), being an independent

constitutional body, ought to be given considerable latitude
in the discharge of its functions. The key point to be
remembered is the fundamental objective which all of the
COMELEC’s actuations should be destined to achieve, i.e.
the accomplishment of free, orderly and honest elections. If
the means adopted by the COMELEC run clearly contrary
to its fundamental objective, it is our right—more, our duty
—to nullify the COMELEC’s actuations.
Our experience during the May 11, 1998 regular
elections held in the2
Autonomous Region in Muslim
Mindanao (ARMM) should have taught us that the
Philippines may be unprepared for the use of automated
counting machines. Whereas it is successfully adopted in
many countries around the world, this sophisticated
technological advancement seems beyond the reach of the
Philippines at this stage in our country’s development. If
we persist in attempting the use thereof, even if—as in this
case—such machines do not meet the standards of accuracy
that our own laws demand, we would be tampering with
the conduct of free, orderly and honest elections, and thus
we would be distorting the will of the electorate.
_______________
1 G.R. No. 157013, 10 July 2003, 405 SCRA 614.

2 See Loong v. Commission on Elections, 365 Phil. 386; 305 SCRA 832
(1999).
206

As pointed out by the Honorable Justice Jose C. Vitug in

his Separate Opinion, this Court is not a trier of facts, and
a review of the technical evidence is not the proper office
3
of
a petition for certiorari, prohibition and mandamus. The
questions of law, however, and the questions of the
COMELEC’s grave abuse of discretion, are squarely within
the purview of this Court in this case.
In my opinion, there are three main grounds which
warrant granting the instant petition. First, I believe that
the special circumstances availing in this case warrant the
relaxation of the rule on exhaustion of administrative
remedies. Second, the COMELEC gravely abused its
discretion when it clearly contracted with a non-eligible
entity, and therefore the contract for the second phase of

the automated counting system is null and void. Finally,
even assuming the eligibility of the other contracting party,
the COMELEC gravely abused its discretion when it
changed the technical requirements for accuracy of the
automated machines and software, which warrants the
nullification of the contract.
I On Non-Exhaustion of Administrative Remedies
A long line of cases establishes the basic rule that regular

courts of justice should not interfere in matters which are
addressed to the sound discretion of government agencies
entrusted with the regulation of activities coming under
the special
4
technical knowledge and training of such
agencies. The underlying principle of the rule on
exhaustion of administrative remedies rests on the
presumption that when the administrative body, or
grievance machinery, is afforded a chance 5
to pass upon the
matter, it will decide the same correctly.
_______________
3 Separate Opinion, Vitug, J.,at p. 2.

4 Sta. Ines Melale Forest Products Corporation v. Macaraig, Jr., 359
Phil. 831; 299 SCRA 491 (1998); Felipe Ysmael, Jr. and Co. v. Deputy
Executive Secretary, G.R. No. 79538, 18 October 1990, 190 SCRA 673;
Concerned Officials of MWSS v. Vasquez, 310 Phil. 549; 240 SCRA 502
(1995). See SEVERIANO S. TABIOS, Annotation on Failure to Exhaust
Administrative Remedies as a Ground for Motion To Dismiss, 165 SCRA
352, 357-362 (1988).
5 Union Bank of the Philippines v. Court of Appeals, 352 Phil. 808; 290
SCRA 198 (1998); University of the Philippines v. Catungal, Jr., 338 Phil.
808; 272 SCRA 221 (1997).
207
VOL. 419, JANUARY 13, 2004 207

The principle of exhaustion of administrative remedies is

not an ironclad rule. This doctrine is relative, and its
flexibility is called upon by the peculiarity and uniqueness
6
of the factual and circumstantial settings of a case.
In the past, the principle has been
7
disregarded when (1)
there is a violation of due process; (2) the issue involved is
8
8
purely a legal question; (3) the administrative action is9
patently illegal amounting to lack or excess of jurisdiction;
(4) there is estoppel
10
on the part of the administrative
11
agency concerned; (5) there is irreparable injury; (6) the
respondent is a department secretary whose acts, as an
alter ego of the President,
12
bear the implied and assumed
approval of the latter; (7) to require exhaustion 13
of
administrative remedies would be unreasonable;
14
(8) it
would amount to a nullification of a claim; (9) the15
subject
matter is a private land in land case proceedings; (10) the
rule does not provide a plain, speedy and adequate remedy;
and (11) there are circumstances indicating
_______________
6 Paat v. Court of Appeals, 334 Phil. 146; 266 SCRA 167 (1997).
7 Quisumbing v. Judge Gumban, G.R. No. 85156, 5 February 1991, 193
SCRA 520; Salinas v. National Labor Relations Commission, G.R. No.
114671, 24 November 1999, 319 SCRA 54; Samson v. National Labor
Relations Commission, 32 Phil. 135; 253 SCRA 112 (1996). See
SEVERIANO S. TABIOS, Annotation on Failure to Exhaust
Administrative Remedies as a Ground for Motion to Dismiss, 165 SCRA
352, 357-362 (1988).
8 Eastern Shipping Lines v. Philippine Overseas Employment Agency,
G.R. No. L-76633, 18 October 1988, 166 SCRA 533; Paat v. Court of
Appeals, 334 Phil. 146; 266 SCRA 167 (1997).
9 Industrial Power Sales, Inc. v. Sinsuat, G.R. No. L-29171, 15 April
1988, 160 SCRA 19.
10 Vda. de Tan v. Veterans Backpay Commission, 105 Phil. 377 (1959).
11 De Lara, Jr. v. Cloribel, 121 Phil. 1062; 14 SCRA 269 (1965).
12 Demaisip v. Court of Appeals, 106 Phil. 237 (1959).
13 Cipriano v. Marcelino, 150 Phil. 336; 43 SCRA 291 (1972).
14 Alzate v. Aldana, 107 Phil. 298 (1960).
15 Soto v. Jareno, G.R. No. L-38962, 15 September 1986, 144 SCRA 116.
208

16
the urgency of judicial
17
intervention, as when public
interest is involved.
There is no plainer example of a case in which the issues
are of transcendental importance. The preservation of an
honest, upright system of electing our nation’s public
officers bears urgent public interest considerations. More,
as I will discuss below, the administrative action involved

here is patently illegal, amounting to lack or excess of
jurisdiction.
These two reasons warrant the relaxation of the rule of
exhaustion of administrative remedies.
II. On the Non-Eligibility of Private Respondents.
I am not persuaded by the argument that the individual

members of the so-called “Consortium” bound themselves
to perform particular obligations under individual
agreements executed with MPEI, and that these separate
agreements suffice to constitute an eligible “joint venture”
under the Request For Proposal (“RFP”) promulgated by
the COMELEC. The fact that WeSolve, SK C & C,
Election.Com and ePLDT bound themselves to MPEI does
not mean that a joint venture was executed. These
individual entities are merely the sub-contractors of MPEI,
and their liability for any breach is only to MPEI.
Under the RFP, a “joint venture” has been given a very
strict definition. To be eligible to submit a bid, the
following criteria must be met:
Manufacturers, suppliers and/or distributors forming themselves

into a joint venture, that intend to be jointly and severally liable
for a
_______________
16 Quisumbing v. Judge Gumban, G.R. No. 85156, 5 February 1991, 193 SCRA
520; Indiana Aerospace University v. Commission on Higher Education (CHED),
G.R. No. 139371, 4 April 2001, 356 SCRA 367.
17 Indiana Aerospace University v. Commission on Higher Education (CHED),
G.R. No. 139371, 4 April 2001, 356 SCRA 367, citing Liberty Insurance Corp. v.
Court of Appeals, 222 SCRA 37, 47 (1993); Alindao v. Joson, 264 SCRA 211, 220
(1996); Tan v. Court of Appeals, 275 SCRA 568, 574-575 (1997); and Tan Jr. v.
Sandiganbayan, 292 SCRA 452, 457-458 (1998).
209
VOL. 419, JANUARY 13, 2004 209

particular
18
contract, provided Filipino ownership thereof shall be
60%. (italics supplied)
There are therefore three qualifications for eligibility under

the RFP. First, the manufacturers, suppliers and/or
distributors must expressly form themselves into a joint

venture. Second, this joint venture must demonstrate an
intent that the individual members be jointly and severally
liable for a particular contract. Finally, the Filipino
ownership of the joint venture must be 60%.
Whereas the RFP does not require the members of the
joint venture to execute a single document to constitute the
joint venture, there must be sufficient evidence that such a
joint venture was indeed formed, whether this evidence is a
single document, or a multiplicity of documents. It is plain
that the “joint venture” must be formed as a single entity,
responsible for the entirety of the contract, even if separate
agreements among the individual members of the joint
venture would lay out the specific tenor of the obligations
to each other; otherwise, it would be impossible to evaluate
the nationality of this joint venture, which nationality is
the third requirement for eligibility.
Conspicuously absent from the records of this case are
documents that demonstrate that the individual members
of the so-called “Consortium” actually formed or constituted
themselves into a joint venture. Jurisprudence discussing a
joint venture lays out the rule that such an entity
“presupposes generally a parity of standing between the
joint co-ventures or partners, in which each party has an
equal proprietary interest in the capital or property
contributed, and where each19party exercises equal rights in
the conduct of the business.”
InAurbach, et al. 20
v. Sanitary Wares Manufacturing
Corporation, et al., we expressed the view that a joint
venture may be likened to a partnership, thus:
The legal concept of a joint venture is of common law origin. It has

no precise legal definition, but it has been generally understood to
mean an organization formed for some temporary purpose. It is
hardly distin-
_______________
18 RFP, at p. 12.
19 Sevilla v. Court of Appeals, G.R. Nos. L-41182-83, 15 April 1988, 160 SCRA
171.
20 G.R. No. 75875, 15 December 1989, 180 SCRA 130.
210

guishable from the partnership, since their elements are similar—

community of interest in the business, sharing of profits and
losses, and a mutual right of control. The main distinction cited
by most opinions in common law jurisdiction is that the
partnership contemplates a general business with some degree of
continuity, while the joint venture is formed for the execution of a
single transaction, and is thus of a temporary nature. This
observation is not entirely accurate in this jurisdiction, since
under the Civil Code, a partnership may be particular or
universal, and a particular partnership may have for its object a
specific undertaking. It would seem therefore that under
Philippine law, a joint venture is a form of partnership and should
thus be governed by the law of partnerships. The Supreme Court
has however recognized a distinction between these two business
forms, and has held that although a corporation cannot enter into
a partnership contract, it may however engage in a joint venture
with others. (citations omitted)
In other words, the legal concept of a “joint venture,” since

akin to a partnership, involves a common agreement—in
which all individuals and entities party to the joint venture
bind themselves, jointly, to perform a common undertaking
or undertakings. The definition of a “joint venture” under
the RFP is in line with this legal definition.
There is nothing in the records that would indicate that
any such entity was created by the individual members of
the so-called “Consortium.” In the absence of any evidence,
we must conclude that no such agreement exists.
Since we are unable to conclude that the “joint venture”
has any legal existence, it is impossible to evaluate
whether or not the third criterion—setting out the
nationality requirement for an eligible joint venture—has
been met by the so-called “Consortium.” The so-called
“Consortium”, therefore, has failed to meet the first and
third criteria.
There is also a gross failure on the part of the private
respondents to meet the second criterion. There is a
marked absence of intent that the individual members of
the so-called “Consortium” be jointly and severally liable
for the contract.
The records contain particular individual agreements
that MPEI entered into with other entities. A perusal of the
individual agreements that MPEI entered into with the
other entities readily demonstrates that it was always the
intent of MPEI to have direct and primary liability for any
breach of the Contact with COMELEC.
211
VOL. 419, JANUARY 13, 2004 211

Part of the records are so-called “Teaming Agreements” 21

which MPEI 22
entered into with Election.Com Ltd. and
ePLDT Inc., both dated March 3, 2003. An examination of
the language of these “Teaming Agreements” would once
more demonstrate that it was MPEI, and MPEI alone,
which intended to bid for the Contract with the COMELEC,
and intended to be bound thereby. First, both these
“Teaming Agreements” contain stipulations designating
MPEI as the “Contractor
23
and the other party as merely the
“Sub-contractor.” Each of these “Teaming Agreements”
acknowledges that the agreements were entered into in the
expectation that COMELEC 24
would award the Contract to
the Contractor, MPEI. Absent from either of these
“Teaming Agreements” is any reference to the possibility
that COMELEC would contract with the so-called
“Consortium.”
Moreover, both of these agreements state that the
obligation of the Subcontractor was the delivery of
equipment
25
or provision of services to the Contractor,
MPEI, and indeed expressly limit the Subcontractor’s role
in the entire project to be26
merely that of a provider of the
equipment and services. Liability for failure to perform
these obligations is expressly limited. The Subcontractors
would be liable only to MPEI, and not to the COMELEC.
Also part of the records is the “Memorandum of
Agreement” entered
27
into between MPEI and WeSolv Open
Computing, Inc. The very first preambulatory clause
thereof reads:
WHEREAS, pursuant to an open competitive bidding to be

conducted by the Commission on Elections (“COMELEC”) of the
Philippine Government, Mega Pacific intends to submit a bid for
Phase II: Automated Counting and Canvassing System (the
“Project”) of the28 Modernization Program of the Philippine
Electoral System; (italics supplied)
_______________
21 Rollo, p. 2355.
22Id.,p. 2364
23Id., pp. 2355 and 2364.
24Id., pp. 2358 and 2367.
25Id., pp. 2355 and 2364.
26Id.
27Id., p. 2348.
28Id.
212

“Mega Pacific,” the entire referred

29
to, is defined as “Mega
Pacific eSolutions, Inc.” and not the so-called
“Consortium.” In other words, MPEI and WeSolv
understood that MPEI would be bidding for the Contract,
and MPEI alone would be contracting with COMELEC.
The expression of “joint and several liability” of
“WeSolv” does not transform the agreement into a joint
venture. There is a clear limit to the extent of this liability.
As plainly stated in the Memorandum of Agreement:
WeSolv shall be jointly and severally liable with Mega Pacific only
for the particular
30
products and/or services supplied by the former
for the Project.
The very first reference to any so-called “Consortium” is in

the Memorandum of Agreement” dated March 9, 2003,
between MPEI and SK C & C, “a corporation organized and
existing31 under and by virtue of the laws of the Republic of
Korea.” The initial preambulatory clause reads:
WHEREAS, pursuant to an open competitive bidding to be

conducted by the Commission on Elections (“COMELEC”) of the
Philippine Government, the Mega Pacific Consortium shall bid for
Phase II: Automated Counting and Canvassing System (the
“Project”) of the Modernization
32
Program of the Philippine
Electoral System; xxx xxx xxx.
That Memorandum of Agreement also contains the

following clause:
Each of the individual members of the Consortium shall be jointly

and severally liable with the Lead Firm for the particular
products and/or services supplied by such individual member for
the project, in accordance
33
with their respective undertaking or
sphere of responsibility.
Three things are significant about this Memorandum of

Agreement.
_______________
29Id.
30Id., p. 2349.
31Id., p. 2352.
32Id.
33Id., p. 2353.
213
VOL. 419, JANUARY 13, 2004 213

First, whereas there is reference to a “Consortium,” the

specific composition of the “Consortium” is not specified.
Thus, the records are bereft of any evidence that would
demonstrate which entities, if any, would be parties to this
“Consortium.” It is therefore impossible to make a factual
determination as regards whether the “Consortium” would
meet the strict requirements for a qualified bidder outlined
in the RFP.
Second, the Memorandum of Agreement specifically
limits the liability of each member of this “Consortium”
only in accordance with their respective undertaking or
sphere of responsibility. Thus, the “joint and several”
liability of each member of the Consortium would again be
only within a very limited application, i.e., only to the
extent of its individual undertaking.
Third, and most significant, the Memorandum of
Agreement is only between MPEI and SK C & C. There is
no evidence of any similar Memorandum of Agreement,
referring to a Consortium, entered into between MPEI and
any other entity. The joint and several liability referred to
in the quoted paragraph, therefore, would pertain only to
MPEI and SK C & C, since these are the only two parties to
this particular contract, and not to any other member of the
Consortium, if any. In the absence of evidence, it is
impossible to conclude that there are other members of the
Consortium, and equally impossible to determine the
extent of their liability, if any.
In sum, therefore, there is a conspicuous dearth of
evidence to demonstrate that there was, indeed, a
Consortium; if there was a Consortium, the specific
composition thereof; and, if there was a Consortium, the
liability of its individual members, for breach of the
contract to COMELEC.
All this demonstrates that, even if the other contracting
party were the so-called “Consortium,” this “Consortium”
would be ineligible to enter into the contract with the

COMELEC.
However, it is plain that the COMELEC entered into a
contract not with this “Consortium,” but rather with MPEI
—an entity which, it is acknowledged, would per se be
ineligible to bid. A plain reading of the contract
denominates the parties to be:
COMMISSION ON ELECTIONS, the government institution

charged with the enforcement and administration of laws relative
to the conduct of elections, with principal office address at Postigo
Street, Intra-
214

muros, Manila, Philippines, represented in this act by its

Chairman, Hon. Benjamin S. Abalos, hereinafter referred to as
the “COMELEC.”
—and—
MEGA PACIFIC eSOLUTIONS, INC., a corporation duly

organized and existing under and by virtue of the laws of the
Republic of the Philippines, with principal office address at Suite
707, Tower One & Exchange Plaza, Ayala Triangle, Ayala
Avenue, Makati City, Philippines, represented in this act34 by its
President, Willy U. Yu, hereinafter referred to as “MEGA.”
The “Contract Documents” referred to are the following:
1.4. Contract Documents

The following documents, referred to collectively as the
Contract Documents, are hereby incorporated and made integral
parts of the Contract:
(1) this Contract together with its Appendices;

(2) the Request for Proposal (also known as “Terms of
Reference”) issued by the Comelec including Tender
Inquiries and Bid Bulletins;
(3) Tender Proposal as submitted by Mega.
All Contract Documents shall form part of the Contract even if

they or any one of them is not referred to or mentioned in the
the other shall be as binding as if required by all, unless one item

is a correction of the other.
The Intent of the Contract Documents is the proper,
satisfactory, and timely execution and completion of the Project in
necessary for the proper and timely execution and completion of
the Project shall be deemed included in the Contract.
Again,conspicuously absent from this contractual definition

of a “Contract Document” is any mention of any subsidiary
agreement between a purported “Consortium” and the
COMELEC. Indeed, a plain reading of the definition of the
“Contract Document” would indicate that, insofar as the
parties to the contract were concerned, the bid itself was
submitted by MPEI and not the “Consortium.”
_______________
34 “Automated Counting and Canvassing Project Contract,” Rollo, at p.

2198.
215
VOL. 419, JANUARY 13, 2004 215

Moreover, the definition of “Contract Document” could

easily have integrated the subsidiary agreements,
incorporating them by reference, in the same way that the
“Request for Proposal” and “Tender Proposal” were
incorporated by reference.
These contracts were not even appended as annexes to
the main contract. The appendices to the main contract
are: “Products and Services to be Acquired from, and
Provided by, Mega
35
Pacific Solutions, Inc., 36and Technical
Specifications”; “Ballot Counting
37
System”; “Canvassing
of Votes 38 System/Software”; “Project Management 39
Approach”; 40 “Implementation 41
and Roll-Out Plan”; 42
“Timelines”; “List of 43Goods”; “List of Documentation”;
44
“Training Summary”; “List of Services”; “Schedule of 45
Communication/ Information46 Dissemination Materials”;
and “Global Price Summary.”
Moreover, an examination of the various obligations in
the contract readily demonstrates that all those obligations
pertain only to either COMELEC or MPEI. None of the
other entities under the so-called “Consortium” has any
obligations to COMELEC under the Contract. It is
apparent that only COMELEC and MPEI are bound

thereunder. The argument that the “Consortium,” as an
entity, bound itself to perform particular obligations under
the contract is easily debunked by an examination of the
contract itself.
Various other documents also support the fact that only
MPEI, not any so-called “Consortium,” contracted with
COMELEC. For instance, there is the Secretary’s
Certificate, dated March 5, 2003, executed by Enrique T.
Tansipek, the Corporate Secretary of MPEI, which attests
to the corporate authority given by the MPEI
_______________
35Id., Appendix A, Rollo, at p. 2218.

36Id., Appendix B, Rollo, at p. 2238.
37Id., Appendix C, Rollo, at p. 2259.
38Id., Appendix D, Rollo, at p. 2275.
39Id., Appendix E, Rollo, at p. 2292.
40Id., Appendix F, Rollo, at p. 2310.
41Id., Appendix H, Rollo, at p. 2314 Appendix G, if any, is not part of
the records.
42Id., Appendix I, Rollo, at p. 2322.
43Id., Appendix J, Rollo, at p. 2326.
44Id. Appendix K, Rollo, at p. 2335.
45Id., Appendix L, Rollo, at p. 2341.
46Id., Appendix M, Rollo, at p. 2344.
216

board to enable MPEI (not the so-called “Consortium”) to

participate in the bidding, in its own47 behalf, and not in
behalf of any so-called “Consortium.” There are various
“Affidavits of Undertaking” dated March 7, 2003, executed
by Willy U. Yu, President of MPEI, which attest that (1)
MPEI (not any so-called “Consortium”) will be participating
in the bid for the contract; and (2) the other entities, such
as WeSolv, Oracle, and Election.com
48
Ltd., are referred to
merely as the “foreign suppliers,” and not as joint venture
partners, or as individual members of a so-called
“Consortium.”
III. On the Failure of Private Respondents to Meet the

Requirements for Eligible Bids.
Finally, even if we were to concede that the COMELEC

contracted with an eligible entity, it appears that the
counting machines and ballot-counting software submitted
by the so-called “Consortium” simply failed to meet the
accuracy rating required by the RFP.
In the RFP, the COMELEC required that both the
counting machines and ballot-counting software should
have an accuracy rating of 99.9995 or better.
After the bids were submitted, the accuracy criteria
were suddenly changed to 99.995 percent.
49
Only very recently, in the Piatco case, we held:
An essential element of a publicly bidded contract is that all

bidders must be on equal footing. Not simply in terms of
application of the procedural rules and regulations imposed by the
relevant government agency, but more importantly, on the
contract bidded upon. Each bidder must be able to bid on the
same thing. The rationale is obvious. If the winning bidder is
allowed to later include or modify certain provisions in the
contract awarded such that the contract is altered in any material
respect, then the essence of fair competition in the public bidding
is destroyed. A public bidding would indeed be a farce if after the
contract is awarded, the winning bidder may modify the contract
and include provisions which are
_______________
47 Rollo, p. 1408.
48Id., pp. 1870; 1954; 2052.
49 Lopez v. Piatco, G.R. No. 155661, 5 May 2003, 402 SCRA 612.
217
VOL. 419, JANUARY 13, 2004 217

favorable to it that were not previously made available to the

other bidders.
It is inherent in public biddings that there shall be a fair

competition among the bidders. The specifications in such
biddings provide the common ground or basis for the
bidders. The specifications should, accordingly,
50
operate
equally or indiscriminately upon all bidders.
To change the eligibility requirements mid-stream, and

after bids had already been submitted, completely subverts
the integrity of the bidding process and warrants the
nullification of the award of the contract, whether the other
contracting party was MPEI or the so-called “Consortium.”
In sum, the serious defects in the bidding process
indicate a grave abuse of discretion on the part of public
respondent COMELEC, which seemed to display a marked
bias in favor of awarding the contract to the private
respondent MPEI or the so-called “Consortium.” Whereas
automated counting might greatly speed up our election
process, we should take great pains to make certain that
the machines used are not flawed. To my mind, the
subversion of the bidding process already makes the
automation of the 2004 elections inherently suspect, which
will have a potential negative effect on the integrity of the
results. At this stage in our nation’s history, we should all
strive toward restoring the public’s faith in the stability of
our government institutions, and the use of suspect
machines in counting votes cannot but subvert that faith.
IN VIEW WHEREOF, I CONCUR with the majority
opinion and vote to GRANT the petition, specifically, to: (1)
declare NULL and VOID Resolution No. 6074 of the
COMELEC awarding the contract for the second phase of
the automated counting and canvassing system of the
Modernization Program of the Philippine Electoral System
to either Mega Pacific eSolutions, Inc. or the Mega Pacific
Consortium; (2) PROHIBIT the COMELEC from
implementing any contract entered into with either Mega
Pacific eSolutions, Inc. or the Mega Pacific Consortium for
the second phase of the automated counting and
canvassing system of the Modernization Program of the
Philippine Electoral System; and (3) COMPEL the
_______________
50 A. Cobacha & D. Lucenario, LAW ON PUBLIC BIDDING AND

GOVERNMENT CONTRACTS 13 (1960).
218

COMELEC to conduct a re-bidding of the second phase of

the automated counting and canvassing system of the
Modernization Program of the Philippine Electoral System.
CONCURRING OPINION
SANDOVAL-GUTTERREZ, J.:
“Hasty and adventurous schemes are at first view

flattering, in execution difficult,
1
and in the
issue disastrous.”
Election is indeed the bedrock of every democratic

institution. Thus, when it comes to automating the election
system, the standards must be as high as the stakes. The
government and the suppliers of the voting machines carry
the burden of proof that the machines are working correctly
and that the election results will be accurate. All of
democracy is founded on the idea that the loser of an
election understands that he lost fair and square and that
the election represents the will of the electorate. If we get
into elections with outcomes that people do not believe in,
where the candidates challenge the integrity of the
machine, people are going to feel less and less2 confident in
the results of elections run on these machines.
The petition before us raises a number of serious
concerns about the viability of the automated voting
machines intended for the May 2004 Elections. The matter
strikes at the heart of our democratic system. If the system
fails, there again looms a threat to our country’s stability.
More than any other time, what we need today is a system
that will bolster the legitimacy of our government.
With the foregoing premise, I vote to grant the petition
and declare Comelec Resolution No. 6074 null and void.
The facts are undisputed.
_______________
1LIVY, History. Bk XXXV, ch. 32.

2Electronic Voting: What You Need To Know, William Rivers Pitt,
Interview of David L. Dill, a Professor of Computer Science at Stanford
University. Monday, 20 October 2003.
219
VOL. 419, JANUARY 13, 2004 219

On December
3
22, 1997, Congress enacted Republic Act No.
8436 authorizing the Commission on Election (COMELEC)
to use an automated election system for the process of
voting, counting of votes and consolidating results of the
national and local elections. It mandated the COMELEC to
acquire automated counting machines 4
(ACM), computer
equipment, devices and materials.
Accordingly, the COMELEC issued an Invitation to Bid
on January 28, 2003, inviting interested bidders to apply
for eligibility and to bid for the supply and delivery 5of the
ACM with an estimated budget of P2,500,000,000.00.
On February 17, 2003, the COMELEC released to the
public the “Request for Proposal” providing that bids from
manufacturers, suppliers and/or distributors forming
themselves into a joint venture may be entertained as long
as the Filipino ownership thereof shall be at least 60%. For
this purpose, a joint venture was defined as “a group of two
(2) or more manufacturers, suppliers and/or distributors
that intend to be6 jointly and severally responsible or liable
for the contract.”
The next day, February 18, 2003, the Bids and Awards
Committee (BAC) convened a pre-bid conference and gave
prospective bidders until March 10, 2003 to submit their
bid proposals.
On March 10, 2003, Mega Pacific Consortium (MP
CONSORTIUM) submitted its bid. Enclosed in it bidding
documents was a letter dated March 7, 2003 expressing
that Mega Pacific eSolutions, Inc. (MPEI), Election. Com,
Ltd. (Election.Com), We Solv Open Computing, Inc. (We
Solv), SK C&C, ePLDT and Oracle Sys-
_______________
3 An act authorizing the Commission on Elections to use an automated

election system in the May 11, 1998 national or local elections and in
subsequent national and local electoral exercises, providing funds
therefore and for other purposes.
4 Section 7.
5 President Gloria Macapagal-Arroyo had earlier issued Executive
Order (EO) No. 172 on January 24, 2003, allocating P2,500,000,000.00 to
fund the AES. To augment this amount, the President issued EO No. 175
on February 10, 2003, allocating an additional P500,000,000.00 for the
Project. The COMELEC reconfigured the modernization program into the
three (3) phases mentioned above and reallocated the budget as follows:
(a) P1 Billion for Phase I; (2) P1.7 Billion for Phase II; and (3) P300
Million for Phase III.
6 Rollo at p. 124.
220

tem (Philippines), Inc. (Oracle) have agreed to form a

consortium to bid for the Project. In the same letter, MPEI,
through its President, made known its role as the lead
company and proponent of MP CONSORTIUM.
Of more than 57 bidders, the BAC found MP
CONSORTIUM and Total Information Management
Corporation (TIMC) eligible to bid. Their bid proposals
were thereafter referred to the BAC’s Technical Working
Group (TWG) and the Department of Science and
Technology (DOST) for technical evaluation.
Thereafter, the TWG prepared a Technical Evaluation
Form listing the minimum requirements for the Project
with columns to indicate whether the bidder “passed” or
“failed” to meet certain requirements. Requirements that
were highly technical in nature and called for technical
equipment for evaluation were referred to the DOST.
Based on the findings of the 7
TWG and the DOST, the
BAC submitted a Report noting that both MP
CONSORTIUM and TIMC obtained some failed marks in
the technical evaluation. Regardless thereof, the
COMELEC en banc, in Resolution No. 6074 awarded the
Project to MP CONSORTIUM on April 15, 2003. It
publicized this Resolution on May 16, 2003.
Unsatisfied with the COMELEC’s bidding process, five
individuals and entities (including petitioner Information
Technology Foundation of the Philippines) wrote a letter
dated May 29, 2003 to COMELEC Chairman Benjamin
Abalos, Sr. protesting the award of the contract to MP
CONSORTIUM. They cited MP CONSORTIUM’S non-
compliance with eligibility as well as technical
requirements.
On June 6, 2003, COMELEC Chairman Abalos rejected
the protest and declared that the award “would stand up to
strictest scrutiny.”
Undaunted, Information Technology Foundation of the
Philippines (ITFP), Ma. Corazon M. Akol, Miguel Uy,
Eduardo H. Lopez, Augusto C. Lagman, Rex C. Drilon,
Miguel Hilado, Ley Salcedo and Manuel Alcuaz, Jr.,
petitioners herein, filed the present petition for prohibition
and mandamusseeking (1) to declare null and void
COMELEC’s Resolution No. 6074; (2) to enjoin the
implemen-
_______________
7 Report on the Evaluation of the Technical Proposal on Phase II.
221
VOL. 419, JANUARY 13, 2004 221

tation of the contract that may have been entered into by

COMELEC either with MP CONSORTIUM or MPEI; and
(3) to compel COMELEC to conduct a re-bidding of the
Project.
After carefully reviewing the records of this case, I find
the exhaustive ponencia of Mr. Justice Artemio V.
Pangamban worthy of my fullest concurrence.
First, I must deal with the procedural roadblocks.
Petitioners come to us via a petition for prohibition and
mandamus, thus, it is argued that the recourse taken is
improper. It is a well established rule, particularly in
public biddings, that courts cannot compel an agency to do
a particular act or to enjoin such act within its prerogative
or discretion. This is not an iron-clad rule. One noted
exception is when in the exercise of8 its authority it gravely
abuses or exceeds its jurisdiction. Judicial review may be
justified on the grounds of grave abuse of discretion,
arbitrary rejection of bids, 9
and lack of freedom of
competition among bidders. In the case at bar, petitioners
alleged in their petition that public respondents “acted
without or in 10excess of its jurisdiction or with grave abuse
of discretion” when they awarded the Project to MPEI.
Thus, the following pronouncement of this Court 11
in JG
Summit Holdings, Inc. vs. Court of Appeals deserves
reiteration:
Be that as it may, the Court of Appeals erred when it dismissed

the petition on the sole ground of the impropriety of the special
civil action of mandamus. It must be stressed that the petition was
also one for certiorari, seeking to nullify the award of the sale to
private respondent of the PHILSECO shares. Verily, the petition
alleges that ‘respondents COP and APT have committed such a
grave abuse of discretion tantamount to lack or excess of their
jurisdiction in insisting on awarding the bid to Philyards, for the
various reasons stated herein, particularly since the right of first
refusal and the right to top the bid are unconstitutional, contrary
to law and public policy.’ Petitioner’s failure to include certiorari
in its caption should not negate the fact that the petition charged
public respondent with grave abuse of discretion in awarding the
sale to private respondent. Well-
_______________
8 Republic of the Philippines vs. Silerio, G.R. No 108869, May 6, 1997, 272
SCRA 280, citing Provident Tree Farms, Inc. vs. Batano, Jr., 231 SCRA 471 (1994),
Lim, Sr. v. Secretary of Agriculture and Natural Resources, 34 SCRA 751 (1970).
9 50 SCRA 498-499 (1973).
10 Petition at p. 39.
11 G.R. No. 124293, November 20, 2000, 345 SCRA 143.
222

settled is the rule that it is not the caption of the pleading but the
allegations therein that determine the nature of the action and
the Court shall grant relief warranted by the allegations and the
proof even if no such relief is prayed for.
Neither can I subscribe to respondents’ view that

petitioners have no legal standing to file the present case
and that the petition should be dismissed for their failure
to exhaust administrative remedies.
Section 7 of R.A. No. 8436 provides that the COMELEC,
in the procurement of an automated election system, shall
create an “Advisory Council to be composed of technical
experts from the Department of Science and Technology
(DOST), the Information Technology Foundation of the
Philippines (ITFP), the University of the Philippines (UP)
and two (2) representatives form the private sector
recommended by the Philippine Computer Society (PCS).”
Obviously, petitioner ITFP is a member of the Advisory
Council mandated to aid the COMELEC in the
procurement of the ACM. As such, it has “actual and
material interest” to ensure that in the procurement of the
ACM, the bidding procedures are followed and the
technical requirements are complied with. The same
interest redounds to petitioners who are members of the
ITFP and who, in addition, are suing as “taxpayers,
registered voters and concerned citizens of the Philippines.”
In Del Mar12 vs. Philippine Amusement and Gaming
Corporation, we ruled that taxpayers are allowed to sue
(1) where there is a claim of illegal disbursement of public
funds, (2) or that public money is being deflected to any
improper purpose, (3) or where petitioners seek to restrain
respondent from wasting public funds through the
enforcement of an invalid or unconstitutional law.
Considering that the assailed award involves the
disbursement of billions of pesos from the public treasury, I

must say that petitioners possess the required locus standi.
Anent petitioners’ failure to exhaust administrative
remedies, suffice it to say that their letter dated May 29,
2003 to COMELEC Chairman Abalos objecting to the
process which led to the award of the contract to MPEI
satisfies the above procedural condition. Certainly,
petitioners could not be expected13 to follow the protest
mechanisms outlined in Section 55, Rule XVII of Republic
Act No.
_______________
12 G.R. No. 138298, November 29, 2000; 346 SCRA 485.

13Section55. Protests on Decisions of the BAC
223
VOL. 419, JANUARY 13, 2004 223

14
9184 considering that the assailed award was made
known to the public only on May 16, 2003 or more than one
(1) month from the time Resolution No. 6074 was
promulgated. Respondents would15 argue that under the
subsequent provision, Section 58 of the same Rule, the
court which has jurisdiction over final decisions of the head
of the procuring entity is the Regional Trial Court. This is
not really a legal16 obstacle. In Commission on Elections vs.
Quijano-Padilla, we ruled that: “[T]he doctrine of
hierarchy of courts is not an iron-clad dictum. On several
instances where this Court was confronted with cases of
national interest and of serious implications, it never
hesitated to set aside the rule
17
and proceed with the judicial
determination of the case. The case at bar is of similar
import. It is in the interest of the State that questions
relating to government contracts be settled without delay.
This is more so when
_______________
55.1 Decisions of the BAC with respect to the conduct of bidding may be
protested in writing to the head of the procuring entity; Provided,
however, That a prior motion for reconsideration should have been filed by
the party concerned within the reglementary periods specified in this IRR-
A and the same has been resolved. The protest must be resolved filed
within seven (7) calendar days from receipt by the party concerned of the
resolution of the BAC denying its motion for reconsideration. A protest

may be made by filing a verified position paper with the head of the
procuring agency concerned, accompanied by the payment of a non-
refundable protest fee. The non-refundable protest fee shall be in an
amount equivalent to no less than one percent (1%) of the ABC.
14 An Act Providing for the Modernization, Standardization, and
Regulation of the Procurement Activities of the Government and for Other
Purposes.
15Section 58. Resort to Regular Courts: Certiorari.
58.1 Court action may be resorted to only after the protests contemplated in this
Rule shall have been completed, i.e., resolved by the head of the procuring entity
with finality. The regional trial court shall have jurisdiction over final decisions of
the head of the procuring entity. Court actions shall be governed by Rule 65 of the
1997 Rules of Civil Procedure.
16 G.R. No. 151992, September 18, 2002, 389 SCRA 353.

17 See Buklod ng Kawaning EIIB vs. Zamora, G.R. Nos. 142801-802,
July 10, 2001, 360 SCRA 718; Dario vs. Mison, G.R. No. 81954, August 8,
1989, 176 SCRA 84; Fortich vs. Corona, G.R. No. 131457, April 24, 1998,
289 SCRA 624.
224

the alleged contract involves the disbursement of public

funds and the modernization of our country’s election
process.”
The substantive issues in this case may be reduced into
two queries: first,Did the Comelec abuse its discretion
when it allowed MPEI to actively participate in the bidding
despite its failure to meet the mandatory eligibility
requirement?; and second, Did the COMELEC abuse its
discretion when it awarded the contract to MPEI?
At this juncture, it bears stressing that MPEI was
incorporated only on February 18
27, 2003 as evidenced by its
Certificate of Incorporation. This goes to show that from
the time the COMELEC issued its Invitation to Bid
(January 28, 2003) and Request for Proposal (February 17,
2003) up to the time it convened the Pre-bid Conference
(February 18, 2003), MPEI was literally a non-existent
entity. It came into being only on February 27, 2003 or
eleven (11) days prior to the submission of its bid, i.e.March
10, 2003. This poses a legal obstacle to its eligibility as a
bidder. The Request for Proposal requires the bidder to
submit financial documents that will establish to the BAC’s

satisfaction its financial capability which include:
“(1) audited financial statements of the Bidder’s firm for

the last three (3) calendar years, stamped
“RECEIVED” by the appropriate government
agency, to show its capacity to finance the
manufacture and supply of Goods called for and a
statement or record of volumes of sales;
(2) Balance Sheet;
(3) Income Statement; and
(4) Statement of Cash Flow.”
As correctly pointed out by petitioners, how could MPEI

comply with the above requirement of audited financial
statements for the last three (3) calendar years if it came
into existence only eleven (11) days prior to the bidding?
To do away with such complication, MPEI asserts that it
was MP CONSORTIUM who submitted the bid on March
10, 2003. It pretends compliance with the requirements by
invoking the financial capabilities and long time existence
of the alleged members of the MP CONSORTIUM, namely,
Election.Com, We Solv, SK C&C,
_______________
18 Rollo, Vol. IV at p. 1784.
225
VOL. 419, JANUARY 13, 2004 225

ePLDT and Oracle. It wants this Court to believe that it is

MP CONSORTIUM who was actually dealing with the
COMELEC and that its (MPEI) participation is merely
that of a “lead company and proponent” of the joint
venture. This is hardly convincing. For one, the contract for
the supply and delivery of ACM was19 between COMELEC
and MPEI, not MP CONSORTIUM. As a matter of fact,
there cannot be found in the contract any reference to the
MP CONSORTIUM
20
or any member thereof for that
matter. For another, the agreements among the alleged
members of MP CONSORTIUM do not show the existence
of a joint-venture agreement. Worse, MPEI cannot produce
the agreement as to the “joint and several liability” of the
alleged members of the MP CONSORTIUM as required by

this Court in its Resolution dated October 7, 2003.
What is apparent from the four (4) agreements I
gathered is the existence of either a “contractor-
subcontractor” or “buyer-supplier” relationship between
MPEI on the one hand and the alleged members of the MP
CONSORTIUM. There was no assumption of a “joint and
several liability” over the entire Project of the COMELEC
nor an intention to enter directly into a contract with
COMELEC.
In the “Memorandum of Agreement” between MPEI and
WeSolv, the latter only agreed to be one of its suppliers.
Contrary to MPEI’s asseveration that it was MP
CONSORTIUM which bid for the project, the
Memorandum clearly states that MPEI “will undertake
negotiations with the COMELEC for the purpose of
finalizing the contract for the said Project in the event that
it [MPEI] is declared as the winning bidder and the Project
is awarded in its [MPEI]
_______________
19 In open court, Atty. Lazaro, counsel for private respondent Mega

Pacific eSolutions, Inc. was directed by this Court to submit the following
documents:
(a) contract executed between consortium represented by Mega Pacific

eSolutions, Inc. and COMELEC;
(b) agreement among the consortium members;
(c) financial statements of the members of the consortium;
(d) agreement as to the joint and several liability of the members of
the consortium; status report of the Department of Science and
Technology (DOST) as to whether the machines are already free of
the eight (8) defects or failing marks. (Resolution dated October 7,
2003, Rollo, Vol. II at pp. 1221-1222.)
20 Rollo, Vol. IV at p. 2198.
226

favor.” As if to emphasize the absence of “joint and several

liability” over the entire Project, the Memorandum
expressly provides that WeSolv shall be jointly and
severally liable with MPEI “only for the particular products
and/or services supplied by the former for the Project” and

that “in the event that they failed to agree on the terms and
conditions of the supply of the products and services
including but not limited to the scope of the products and
services to be supplied and payment terms, WeSolv shall
cease to be bound by its obligations.” The same provisions
are to be found in the “Memorandum
21
of Agreement”
between MPEI and SK C&C.
The “Teaming22
Agreement” between MPEI and
Election.Com also negates MPEI’s assertion that it was
MP CONSORTIUM that bid for the Project. Here, MPEI is
singled out as the one who intended to submit a proposal to
the COMELEC. Under the “Teaming Agreement,” MPEI
“has identified the subcontractor [Election.Com] as one of
its suppliers.” It was stipulated therein that “the parties
shall each be individually liable for any penalties or
liabilities incurred by them in connection with the Project, if
it can be shown that the said penalties or liabilities are a
direct result of errors in data or, non-performance of
products and/or services supplied.” The same limitation on
liability is present23 in the “Teaming Agreement” between
MPEI and ePLDT.
A joint venture is an association of persons or companies
jointly undertaking some commercial enterprise with all of
them generally contributing assets and sharing risks. It
requires a community of interest in the performance of the
subject matter, a right to direct and govern the policy in
connection therewith, and duty, which may be altered 24
by
agreement to share both in profit and losses. In the
Philippines, the prevailing school of25thought is that a joint
venture is a species of partnership. Since joint venture is
a species or a special type of partnership, it is said to have
the following characteristics of partnership:
_______________
21 The MOA between MPEI and SK C&C was entered only on March 9,
2003.
22 Rollo, Vol. IV at pp. 2355-2363.
23Id.,at pp. 2364-2371.
24 JG Summit Holdings, Inc. vs. Court of Appeals, supra.
25 Villanueva, Philippine Corporate Law, 2002 at p. 917.
227
VOL. 419, JANUARY 13, 2004 227

“(a) It would have a juridical personality separate and

distinct from that of each of the joint-venturers
(b) Each of the co-venturers would be liable with their
private property to the creditors of the joint venture
beyond their contributions to the joint venture;
(c) Even if a co-venturer transfers his interest to
another, the transferee does not become a co-
venturer to the others in the joint venture unless all
the other co-venturers consent. This is in
consonance with the delectus personarum principle
applicable to partnerships;
(d) Generally, the co-venturers acting on behalf of the
joint venture are agents thereof as to bind the joint
venture; and
(e) Death, retirement, insolvency, civil interdiction or
dissolution
26
of a co-venturer dissolves the joint
venture.”
The agreements cited above do not show that each of the

alleged members of the MP CONSORTIUM recognizes the
latter as an entity with a separate and distinct juridical
personality. What is more, its member limits its liability
only to the extent of their participation.
Surely, it is grave abuse of discretion on the part of the
COMELEC to award a billion worth of contract to an entity
whose existence and eligibility is highly questionable. It
risks the accomplishment of a great undertaking such as
the automation of our country’s election system. From a
brief survey of the four (4) agreements, I am convinced that
the COMELEC, and ultimately the people, stand on the
losing end should the Project fail because of the obvious
difficulty in determining where the culpability lies.
It bears reiterating for the consumption of our public
officers that in the exercise of their contracting prerogative,
they should be the first judges of the legality, propriety and
wisdom of the contract they entered into. They must
exercise a high degree of caution so that the Government 27
may not be the victim of ill-advised or improvident action.
Prudence should be their primordial virtue. Thus, even
though they have broad discretion to determine the
qualifications of the bidders, it may not act arbitrarily and
they must conform to statutory requirements governing the
awarding of
_______________
26Id.,at pp. 918-919.

27 Rivera vs. Maclang, G.R. No. L-15948, January 31, 1963, 7 SCRA 57.
228

28
public contracts. Reason must govern the acts of such
officials, and courts will not hesitate to interfere when it is
clearly made to appear that they have acted arbitrarily,
dishonestly or beyond the reasonable limits of the discretion
conferred upon them.
Another arbitrary act of the COMELEC is its awarding
of the contract to MPEI despite the fact that it failed in
some of the technical requirements.
“Below is a comparative presentation of the requirements wherein

Mega-Pacific or TIM or both of them failed.
KEY REQUIREMENTS BIDDER/S

THAT
FAILED
Does the machine have an accuracy
rating of at least 99.995 percent? (Item
No. 1, Table 6, DOST Report)
At normal environment Mega
At harsh environment Mega TIM
Uninterruptible back-up power system, that TIM
will engage immediately to allow operation of
at least 10 minutes after outrage, power
surge or abnormal electrical occurrences?
(Item No. 4, Table 6, DOST Report) TIM
Machines read two sided ballots in one pass? TIM*
(Item No. 5, Table 6, DOST Report
Machine can detect previously counted ballots TIM
and prevent previously counted ballots from
being counted more than once? (Item No. 6,
Table 6, DOST Report)
Store results of counted votes by precinct in TIM
external (removable) storage device? (Item
Data stored in external media is encrypted? TIM
(Item No. 8, Table 6, DOST Report)
CPU speed is at least 400 mHz? (Item No. 10, TIM
KEY REQUIREMENTS BIDDER/S

THAT
FAILED
Generates printouts of the election
returns in a
_______________
28 64 Am Jur 2d § 64.
229
VOL. 419, JANUARY 13, 2004 229

format specified by the Comelec? (Item Mega TIM

Generates an audit trail of the counting
machine, both hard and soft copy? (Item No.
14, Table 6, DOST Report)
Soft copy TIM*
Does the city/municipal canvassing system TIM*
consolidates results from all precincts within
it using the encrypted soft copy of the data
generated by the counting machine and
stored on the removable data storage device?
Does the city/municipality canvassing Mega TIM*
system consolidate results from all
precincts within it using the encrypted
soft copy of the data generated by
counting machine and transmitted
through an electronic transmission
media? (Item No. 16, Table 6, DOST
Report)
Note: No facilities/resources available to test
the transmission of data through electronic
means.
Does the system output a Zero City/ TIM*
Municipal Canvass Report, which is printed
on election day prior to the conduct of the
actual canvass operation, that shows that all
totals for all the votes for all the candidates
and other information are indeed zero or
null? (Item No. 17, Table 6, DOST Report)
Does the system consolidate results from all TIM*

precincts in the city/municipality using the
data storage device coming from the counting
machine? (Item No. 18, Table 6, DOST
Report)
Is the machine 100% accurate? (Item No. 19, TIM*
Is the Program able to detect previously Mega Mega
downloaded precinct results and
prevent these from being inputted again
into the System? (Item No. 20, Table 6,
DOST Report)
The System is able to print the specified
reports and the audit trail without any
loss of data during generation of the
abovementioned reports? (Item No. 21,
Print specified reports
Audit trail Mega TIM*
230

(Note: Audit TIM*

trail not yet
incorporate
Can the result of the city/municipal TIM*
consolidation be stored in a data
storage device? (Item No. 22, Table 6,
DOST Report)
Does the System consolidate results
from all precincts in the
provincial/district/national using the
data storage device from different
levels of consolidation?
(Item No. 23, Table 6, DOST Report) TIM*
Is the System 100% accurate? (Item
Is the Program able to detect
previously downloaded precinct
results and prevent these from being
imported again into the System?

The System is able to print the
specified reports and the audit
trail without any loss of data
during generation of the
abovementioned reports? (Item
Print specified reports? TIM*
Audit trail? Mega TIM*
(Audit trail
not yet
incorporated)
Can the results of the TIM*
provincial/district/national
consolidation be stored in a data
storage device? (Item No. 27, Table 6,
DOST Report)
Notwithstanding the above failed marks the COMELEC

still awarded the contract to MPEI. This is highly
irregular. The above requirements where MPEI failed
cannot be considered as insubstantial. They have a bearing
on the required features of the automated election system
under Section 7 of R.A. No. 8436, such as (1)
231
VOL. 419, JANUARY 13, 2004 231

use of appropriate ballots, (2) stand-alone machine which

can count votes and an automated system which can
consolidate the results immediately, (c) with provisions for
audit trails, (d) minimum human intervention, and (e)
adequate safeguard/ security measures.
COMELEC’s stance that it can waive certain
requirements is misplaced in the present case because
what it waives are those which concerns the integrity and
accuracy of the ACM and thus, affect the substance and the
validity of the bids. Statutory or regulatory mandatory
requirements with respect to bidding on public 29contracts
cannot be waived. Presidential Decree No. 1594, for one,
expressly states that the Government, in the evaluation of
bid received, “reserves the right to waive the consideration
of minor deviations in the bids received which do not affect

the substance and validity of the bids.” Thus, while a
reservation in the advertisement of the right to reject any
bid generally vests in the authorities a wide discretion as to
who is the best and most advantageous bidder, however, 30
it
may not be used as a shield to a fraudulent award. Should
this be the case, judicial interference would be justified.
One final note. There is a long history of election
irregularities that suggests that vote fraud using voting
machines has been occurring. As a matter of fact, many
voting security experts agree that voting machines
represent a pandora’s box for the election process. If the
computer science community remains mute and allow
unreliable voting systems to be procured, then it abdicates
what may be its only opportunity to ensure the democratic
process in elections. Government officials need help in
understanding the serious risks inherent in computer-
related elections system. Like petitioners, everyone must
do his share.
WHEREFORE, I vote to GRANT the Petition.
COMELEC Resolution No. 6074 is declared NULL and
VOID.
_______________
29 Prescribing Policies, Guidelines, Rules and Regulations for

Government Infrastructure Contracts; Promulgated June 11, 1978.
30 Fernandez, Jr., A Treatise on Government Contracts Under
Philippine Law, 2001 at pp. 30-31, citing Borromeo vs. City of Manila, 62
Phil. 512 (1960); Jalandoni vs. NARRA, 108 Phil. 486 (1935); Filipinas
Engineering vs. Ferrer, G.R. No. L-31455, February 28, 1985, 135 SCRA
25.
232

SEPARATE OPINION
DAVIDE, JR., C.J.:
I join Mr. Justice Jose C. Vitug in his separate opinion and

strongly recommend, for the reasons therein stated, that
this case be DISMISSED.
Let me further add other compelling reasons which

strengthen my view that this case should be dismissed.
The Court did not issue a Temporary Restraining Order
in this case. This showed an initial finding that on its face
the allegations in the petition were insufficient to justify or
warrant the grant of a temporary restraining order. In the
meantime then the parties were not barred from
performing their respective obligations under the contract.
As of today, the COMELEC has already paid a large
portion of its contracted obligation and the private
respondent has delivered the contracted equipment for
automation. It is to be reasonably presumed that during
the same period the COMELEC focused its attention, time
and resources toward the full and successful
implementation of the comprehensive Automated Election
System for the May 2004 elections. Setting aside the
contract in question at this late hour may have unsettling,
disturbing and even destabilizing effect. For one, it will
leave the COMELEC insufficient time to prepare for a non-
automated electoral process, i.e., the manual process, which
would necessarily include the acquisition of the security
paper and the purchase of a “dandy roll” to watermark the
ballot paper, printing of other election forms, as well as the
bidding and acquisition of the ballot boxes. For another, the
law on Automated Election System (R.A. 8436) and
Executive Order No. 172 (24 January 2003) which allocated
the sum of P2.5 Billion, and Executive Order No. 175 (10
February 2003) which allocated the additional sum of P500
Million for the implementation in the May 2004 elections of
the Automated Election System would be put to naught as
there is absolutely no more time to conduct a re-bidding.
Finally, there is no suggestion that graft and corruption
attended the bidding process, or that the contract price is
excessive or unreasonable. All that the petitioners claim is
that “the bidding and the award process was fatally flawed.
The public respondents acted without or excess of its
jurisdiction or with grave abuse of discretion amounting to
lack or excess of jurisdiction when it [sic]
233
VOL. 419, JANUARY 13, 2004 233

awarded the project.” It may be precipitate for this Court to

declare void the contract in question.
SEPARATE OPINION
VITUG, J.:
While the Supreme Court exercises original jurisdiction

over petitions for certiorari and prohibition (along with
petitions for prohibition, mandamus, quo warranto, habeas
corpus and 1
injunction), that jurisdiction, however, is not
exclusive. A direct recourse to the Supreme Court, for the
issuance of these writs in disregard of the rule on
hierarchy, should be appropriate only when, besides the
attendance of clearly exceptional 2
and compelling reasons
clearly set out in the petition, there are no contentious
factual assertions of the parties that need to be threshed
out before any objective and definitive conclusion can be
reached.
What appears to be a significant issue in the instant
petition is the legality of respondent COMELEC’s award of
the contract relative to the procurement of automated
counting machines to respondent Mega Pacific under
alleged questionable circumstances. The Supreme Court is
not a trier of facts; indeed, a review of the evidence is not
the proper office
3
of a petition for certiorari,prohibition or
mandamus. These proceedings are availed of only when
there can be no other plain, adequate and speedy remedy in
the ordinary course of law.
Incertiorari or prohibition, issues affecting the
jurisdiction of the tribunal, board and officers involved4 may
be resolved solely on the basis of undisputed facts. The
enormity of the factual disputes in the instant petition,
among which include the eligibility of Mega Pacific to
participate in the bidding process, the veracity and
effectivity of the testing, and the technical evaluation
conducted by the Department of Science and Technology
(DOST) on the automated counting machine of the bidders,
would essentially require an ex-
_______________
1 People v. Cuaresma, 172 SCRA 415 (1989).

2 Santiago v. Vasquez, 217 SCRA 633 (1993).
3 People v. Chavez, 358 SCRA 810 (2001).
4 Matuguina Integrated Wood Products, Inc. vs. Court of Appeals, 263
SCRA 490 (1996); Mafinco Trading Corp. vs. Ople, 70 SCRA 139 (1976).
234

tensive inquiry into the facts. An insistence that it be

resolved despite unsettled factual points5 would be
inadequate to allow an intrusion by the Court.
The Supreme Court is not expected, whenever one is
simply minded, to pass judgment on an action of a
government agency upon which authority, as well as
corresponding duty, devolves. The Court neither controls
nor supervises the exercise of authority and the discharge
of function by another government office. If it were
otherwise, the act of governance and the responsibility that
thereto attaches are then effectively shifted from where
they belong over to where they should not be. The Court is
bound merely to construe and to apply the law, regardless
of its wisdom and salutariness, and to strike it down only
when constitutional proscriptions are disregarded. It is
what the fundamental law mandates, and it is what the
Court must do.
The electoral process, it is true, should be of paramount
and immediate concern to every Filipino. It is also probably
true that the computerization/automation of our electoral
process, as well as the progress that it brings, is just as
important. Nevertheless, it could also be unwise for the
Court, for that sake alone, to precipitately take on the case;
after all, we have been without it for decades. The opinions
expressed by my colleagues, collectively and individually,
should indeed give compelling reasons for the Commission
on Elections to perhaps take notice and, on its own, to
forthwith reexamine the assailed bidding process.
Accordingly, at this stage, I am constrained to vote
against the Court’s taking cognizance of the case.
DISSENTING OPINION
TINGA, J.:
Prologue
Once again, the Court availing of its extraordinary powers
or so-called “certiorari” jurisdiction has struck down a
government contract, sealed no less by the respondent
Commission on Elections (COMELEC) in the exercise of its
administrative powers granted
_______________
5See Article VIII, Section 17 of the 1987 Constitution.
235
VOL. 419, JANUARY 13, 2004 235

by the Constitution in relation to the conduct of elections.

Apparently, the Court has opted to1 trudge the trail 2
it
blazed recently in the Amari and PIATCO cases.
Amarivoided the Manila 3
Bay reclamation project on
constitutional grounds and PIATCO struck down the
NAIA Terminal 4
III contract 5 for violations of the
Constitution and some other laws to boot.
But in this case, no constitutional provision or letter of a
statute was alleged to have been violated. The Court
nullified the contract for an automated election system
(“AES”) simply on the ground that in making the award the
COMELEC has allegedly violated its bidding rules and an
unfounded apprehension that the counting machines would
not work on election day. On the other hand, not one of the
losing bidders has joined the petition, as neither they nor
the petitioners questioned the fairness of the price tag for the
machines.
The year 2004 could have well been marked in the
annals of the Philippines by the maiden use of the
automated election. But the country was deprived of the
golden chance to join the growing roster of states with
modern election systems which include developing
countries such as Kenya, Mali, Zambia, Romania, Albania,
Mexico and Argentina because of the Decision of the Court.
In the process, the Court has disregarded the
fundamental postulates by which this case should have
been decided. They are the following:
First. The instant original petition is one for prohibition
and mandamus under Rule 65 of the 1997 Rules of Civil
Procedure. Prohibition is an extraordinary writ directed
against any tribunal, corporation, board, officer or person,
whether exercising judicial, quasi-judicial or ministerial
functions, commanding the respondent to desist from
further proceedings when said proceedings are without or
in excess of the respondent’s jurisdiction or are attended
with grave abuse ofdiscretion amounting to lack or excess
of jurisdiction and there is no appeal or any other plain,
speedy, and ade-
_______________
1 G.R. No. 133250, July 9, 2002, 384 SCRA 152.

2 G.R. No. 155001, May 5, 2003, 402 SCRA 612.
3 Secs. 2 & 3, Art. XII, 1987 Const.
4 Sections 17 & 19, Art. XII, 1987 Const.
5 BOT Law and its Implementing Rules and Regulations.
236

6
quate remedy in the ordinary course of law. Mandamus, on
the other hand, is an extraordinary writ commanding a
tribunal, corporation, board, officer or person, immediately
or at some other specified time, to do the act required to be
done, when the respondent unlawfully neglects the
performance of an act which the law specifically enjoins as
a duty resulting from an office, trust, or station, or when
the respondent excludes another from the use and
enjoyment of a right or office to which such other is
entitled, and there is no other plain,7 speedy and adequate
remedy in the ordinary course of law.
Second. In deciding the instant case, the Court shall
consider only the undisputed or admitted facts and8
resolve
only the specific questions raised by the parties. The Court
is not a9 repository of remedies or a “super-legal-aid
bureau.” We cannot grant relief for every perceived
violation of the law or worse, on the basis of prophetic
wisdom. Paraphrasing an old decision, Mr. Justice Felix
Frankfurter wrote: “Judicial power, however large, has an
orbit more or less strictly defined by well-recognized
presuppositions regarding the kind of business that
properly belongs to courts. Their business is adjudication,
not speculation. They are concerned with10 actual, living
controversies, and not abstract disputation.”
Third.The Court does not, as indeed it cannot,
guarantee the success of the automation or the integrity of
the coming elections. It is not the Court’s function to
actively ensure that the automation is successfully
implemented or that the elections are made free of fraud,
violence, terrorism and other threats to the sanctity11 of the
ballot. This duty lies primarily with the COMELEC.
_______________
6 Sec. 2.
7 Sec. 3.
8 For instance, issues covering Phase I (Voters’ Registration and
Validation System) and Phase III (Electronic Transmission) which were
raised in the media are not before the Court.
9 Dissenting opinion of Mr. Justice Felix Frankfurter, Uveges v.
Commonwealth of Pennsylvania, 335 U.S. 437.
10 Frankfurter, Felix Frankfurter on the Supreme Court Extra Judicial
Essays on the Court and the Constitution, 1970, p. 339, citing United
States v. Ferreira, 1 How. 40 (1851).
11E.g., the COMELEC has to promulgate new rules on casting of votes,
appreciation, counting and canvassing of ballots, conduct a voters’
education program on the automated system and train personnel who will
operate the ACMs.
237
VOL. 419, JANUARY 13, 2004 237

Fourth. The Court has constantly underscored the

importance of giving the COMELEC considerable latitude
in adopting means and methods that will insure the
accomplishment of the objective for which it was created—
to promote free, orderly, honest, peaceful and credible
elections. Thus, in the past we have prudently declined to
interfere with the COMELEC’s exercise of its
administrative functions
12
absent any showing of grave
abuse of discretion.
13
As luminously stated in Sumulong v.
COMELEC. “[I]n the matter of the administration of the
laws relative to the conduct of elections, as well as in the
appointment of election inspectors, we must not by any
excessive zeal take away from the Commission on Elections
the initiative which by constitutional and legal mandates
properly belongs to it. Due regard to the independent
character of the Commission, as ordained in the
Constitution, requires that the power of this court to
review the acts of that body should, as a general
proposition,
14
be used sparingly, but firmly in appropriate
cases.”
For the reasons I shall discuss hereunder, I find myself
unable to subscribe to the ponencia and join the ranks of
my colleagues in the majority.
Let me first mention that at the opening part of the
Decision, the Court opined that there is grave abuse of
discretion when the assailed act is contrary to
“jurisprudence.” Yet, the 99-page Decision failed to mention

a single Court decision which the respondents have defied.
Petitioners failed to exhaust

administrative remedies
I agree with the respondents that the petitioners failed to
exhaust, or better still avail of, the administrative remedies
outlined in R.A. 9184, as follows:
“SEC. 55. Protests on Decisions of the BAC.—Decisions of the

BACin all stages of procurement may be protested to the head of
the procuringentity and shall be in writing. Decisions of the BAC
may be protested byfiling a verified position paper and paying a
non-refundable protest fee.
_______________
12 Cauton v. Commission on Elections, G.R. No. L-25467, April 27, 1967, 19

SCRA 911.
13 73 Phil. 288 (1942).
14Id., at pp. 295-296.
238

The amount of the protest fee and the periods during which the
protestsmay be filed and resolved shall be specified in the IRR.
SEC. 56. Resolution of Protests.—The protests shall be resolved
strictly on the basis of the records of the BAC. Up to a certain
amount to be specified in the IRR, the decisions of the Head of the
Procuring Entity shall be final.
SEC. 57. Non-interruption of the Bidding Process.—In no case
shall any protest taken from any decision treated in this Article
stay or delay the bidding process. Protests must first be resolved
before any award is made.
SEC. 58. Resort to Regular Courts; Certiorari.—Court action
may be resorted to only after the protests contemplated in this
Article shall be have been completed. Cases that are filed in
violation of the process specified in this Article shall be dismissed
for lack of jurisdiction. The regional trial court shall have
jurisdiction over final decisions of the head of the procuring
entity. Court actions shall be governed by Rule 65 of the 1997
Rules of Civil Procedure.
This provision is without prejudice to any law conferring on the
Supreme Court the sole jurisdiction to issue temporary
restraining orders and injunctions relating to Infrastructure

Projects of Government.” [Emphasis supplied]
As correctly pointed out by the respondents, at no time

during the entire bidding process did the petitioners
question the determination of the COMELEC Bids and
Awards Committee (BAC) finding Mega Pacific Consortium
(MPC)eligible to bid. Under R.A. 9184, decisions of the BAC
should be appealed to the COMELEC en banc.
Consequently, the determination of the BAC that MPC was
eligible to bid, adopted subsequently by the COMELEC,
became final.
The doctrine of exhaustion of administrative remedies
requires that when an administrative remedy is provided
by law, relief must be sought by exhausting this remedy
before the courts will act. No recourse can be had until all
such remedies have been exhausted and special civil
actions against administrative officers should not be
entertained
15
if superior administrative officers16 could grant
relief. In Hon. Carale v. Hon. Abarintos, the Court
enunciated the reasons for the doctrine, thus:
_______________
15 Gonzales, Administrative Law—A text, 1979, p. 137.

16 336 Phil. 126; 269 SCRA 132 (1997).
239
VOL. 419, JANUARY 13, 2004 239

Observance of the mandate regarding exhaustion of

administrative remedies is a sound practice and policy. It ensures
an orderly procedure which favors a preliminary sifting process,
particularly with respect to matters peculiarly within the
competence of the administrative agency, avoidance of interference
with functions of the administrative agency by withholding
judicial action until the administrative process had run its course,
and prevention of attempts to swamp the courts by a resort to them
in the first instance. The underlying principle of the rule rests on
the presumption that the administrative agency, if afforded a
complete chance to pass upon the matter, will decide the same
correctly. There are both legal and practical reasons for this
principle. The administrative process is intended to provide less
expensive and more speedy solutions to disputes. Where the
enabling statute indicates a procedure for administrative review,
and provides a system of administrative appeal, or

reconsideration, the courts, for reasons of law, comity and
convenience, will not entertain the case unless the available
administrative remedies have been resorted to and the appropriate
authorities have been given an opportunity to act and correct the
errors committed in the administrative forum.
Accordingly, the party with an administrative remedy must not
merely initiate the prescribed administrative procedure to obtain
relief, but also pursue it to its appropriate conclusion before
seeking judicial intervention in order to give the administrative
agency an opportunity to decide the matter by itself correctly and
17
prevent unnecessary and premature resort to the court.
[Emphasis supplied]
Moreover, under the Rules of Court, judicial review of

administrative decisions may be availed of only through
special civil actions. Such proceedings cannot lie if there is
an appeal, or any other plain,18speedy, and adequate remedy
in the ordinary course of law. 19
InPaat vs. Court of Appeals, the Court enumerated the
instances when the rule on exhaustion of administrative
remedies may be disregarded:
. . . (1) when there is a violation of due process, (2) when the issue
involved is purely a legal question, (3) when the administrative
action is patently illegal amounting to lack or excess of
jurisdiction, (4) when there is estoppel on the part of the
administrative agency concerned, (5) when there is irreparable
injury, (6) when the respondent is a department secretary whose
acts as an alter ego of the President bear the implied and as
_______________
17Id., at pp. 135-136.

18 Sec. 1, Rule 65, 1997 Rules of Civil Procedure.
19 334 Phil. 146; 266 SCRA 167, citations omitted.
240

sumed approval of the latter, (7) when to require exhaustion of

administrative remedies would be unreasonable, (8) when it
would amount to a nullification of a claim, (9) when the subject
matter is a private land in land case proceedings, (10) when the
rule does not provide a plain, speedy and adequate remedy, and
(11) when there are20 circumstances indicating the urgency of

judicial intervention.
The petitioners’ allegations do not bring their case within

the jurisprudentially recognized exceptions to the rule on
exhaustion of administrative remedies. It is noteworthy
that the protest mechanism outlined in R.A. 9184, in
allowing protests
21
of decisions of the BAC “in all stages of
procurement,” reinforces and even institutionalizes the
exhaustion doctrine insofar as public bidding is concerned.
Hence, had petitioners intended to pursue the available
administrative remedies, they could have easily asked for a
reconsideration the moment the BAC determined MPC
eligible to bid, failing which, they could have filed a protest
with the COMELEC en banc itself.
Petitioners did neither. Instead they sat in waiting until
the final hour and now insist that the Court disregard the
rule on exhaustion of administrative remedies on the
puerile reason that there was no opportunity for the protest
mechanism instituted in R.A. 9184 to apply because the
BAC rendered its report and recommendation in open
session on April 15, 2003, the same day and on the same
occasion that the COMELEC issued the assailed Resolution
No. 6074 awarding the Contract to MPC.
The majority opinion posits that it would have been
futile for petitioners to protest/appeal the BAC report to
the COMELEC chair since by the time they could have
made the move the COMELEC had already approved the
report. Not necessarily so. The petitioners could have, or
better still, should have appealed directly to the
COMELEC en banc. After all, matters of this nature have
to be decided by the COMELEC as a collegial body. To
state that the poll body would not act on the appeal is to
uncharitably state that it would disregard its duty 22
to
respond as required by the Code of Ethical Conduct. Thus,
the Court’s statement that the COMELEC
_______________
20Id.,at p. 153.
21 Sec. 55.
22 Pars. (a) & (d) Sec. 5, Code of Conduct and Ethical Standards for
Public Officials and Employees.
241
VOL. 419, JANUARY 13, 2004 241

en banc made it impossible for petitioners to make use of

the administrative remedy is simply baseless.
Be it noted that the petitioners wasted nearly five (5)
months from the time the BAC Report was released on
April 21, 2003 before they filed the instant Petition on
August 6, 2003. The significant time gap precludes the
availability of the exceptions to the exhaustion doctrine.
Specifically, the petitioners cannot successfully claim that
to require exhaustion of administrative remedies would be
unreasonable, or that the rule does not provide a plain,
speedy and adequate remedy, or that judicial intervention
has become urgent because of the circumstances.
Considering the circumstances, it is my view that the
premature invocation of this Court’s judicial power is fatal
to the petitioners’ cause of action.
MPC, the consortium,

participated in the bidding
According to the Court, the first major concern which bears
on the issue of grave abuse of discretion relates to the
identity and existence of the MPC as a bidder. Petitioners
claim that the real bidder was Mega Pacific eSolutions, Inc.
(MPEI). On the other hand, the respondents insist that the
bidder was MPC of which MPEI was the lead member. On
record are the following documents:
1. Letter of MPEI’s President, Willy Yu, dated March 7, 2003,

which states:
March 7, 2003
BIDS AND AWARDS COMMITTEE

Commission On Election
Intramuros, Manila
Sir:
In response to your Invitation to Bid for the COMELEC

Modernization Project corresponding to the various phases which
are as follows:
Phase I : Voters Registration—Voters Validation System
Phase II : Vote Counting and Canvassing—Automated
Counting/Canvassing
242

Phase III : Transmission & Dissemination of Results—

Electronic Transmission/Consolidation & Dissemination of
Result
The following companies listed below have agreed to form a
consortium to bid for the said project;
Mega Pacific eSolutions, Inc.

Election. Com Ltd
EPLDT
SK C & C
We Solv Open Computing, Inc. (Subsidiary of Fujitsu Phils. Inc.)
Oracle System (Philippines) Inc.
Very truly yours,
(Sgd.) WILLY U. YU
President
MEGA PACIFIC eSOLUTIONS, INC.
(Lead Company/Proponent)
For: MEGA PACIFIC CONSORTIUM
2. Agreements among the members of the consortium,

namely:
(a) Memorandum of Agreement between MPEI and

WeSolv Open Computing, Inc. (WeSolv)dated
March 5, 2003 and notarized on March 7, 2003;
(b) Memorandum of Agreement between MPEI and SK
C&C Co. Ltd. (SK C&C) dated March 9, 2003 and
notarized on March 9, 2003;
(c) Teaming Agreement between MPEI and
Election.Com Ltd. (Election.Com) dated March 3,
2003 and notarized on March 9, 2003; and
(d) Agreement between MPEI and ePLDT dated March
3, 2003 and notarized on March 9, 2003.
These documents all bear execution and notarization dates

prior to the submission by MPC of its bid documents on
March 10, 2003.
Contrary to the Court’s assessment, the fair assumption
to make is that the letter of MPEI’s President on behalf of
MPC and the agreements between MPEI and the members
of the consortium had already been submitted to the
COMELEC when the BAC evaluated the bids and the poll
body acted upon the BAC’s recommendation and
accordingly resolved to award the Contract to MPC.
243
VOL. 419, JANUARY 13, 2004 243

On the basis of the bid documents submitted by MPEI on

behalf MPC, including the consortium agreements, the
COMELEC awarded Phase II of the AES (Project) to MPC
per Resolution No. 6074 dated April 15, 2003. The full text
of the Resolution reads, thus:
RESOLUTION NO. 6074
This pertains to the Award of the Contract for Phase II

(Automated Counting Machine) of Modernization Program of the
Commission.
Two (2), out of the three, bidders passed the eligibility
requirements, namely:
1. MEGA Pacific Consortium

2. Total Information Management Corporation (TIM)
In consonance with the mandate of Republic Act No. 8436, the

Commission sought the assistance of Department of Science and
Technology in the technical evaluation on identified key
requirements, outlined in the Request for Proposal (RFP) and
Section 7 of the aforecited law, mainly covering various
parameters pertaining to vote counting accuracy,
consolidation/canvassing accuracy, ballot counting speed, security
features (both hardware and software), and system reliability of
the Automated Counting Machines (ACMs).
Upon receipt of the test results on the ACMs provided by the
two prospective suppliers, the BAC proceeded with the evaluation
of their financial bids, and thereafter made a recommendation to
the Commission while the same was in session on 15 April 2003.
After a thorough deliberation on the matter, the Commission
had solid basis to award the project.
Earlier the Chairman was given authority by the Commission
in Resolution No. 5989 promulgated 27 March 2003 to award to
the winning bidders the three (3) phases of the modernization
program. However, considering the present discussion, with the
members of the BAC in attendance and recommending award of
the project to Mega Pacific, the Chairman have the matter passed
upon by the Commission.
Meantime, Commissioner Mehol K. Sadain submitted a
memorandum stated in this wise:
“xxx xxx xxx

With regard to the Automated Counting Machines award of the

contract, undersigned would have preferred to register his vote, however,
the BAC report which is the basis for the award, has not yet been
submitted to the Commissioners as of this writing.
244

At this juncture, undersigned would just like to inform the bank that, in
case of a vote, he will be voting on the basis of the results of the first test
participated by both bidders as called for under the terms of the bid.”
In view of the foregoing, the Commission RESOLVED, as it

hereby RESOLVES, to award Phase II of the Modernization
Project of the Commission to Mega Pacific Consortium, having
been declared as the bidder that submitted the lowest calculated
responsive bid for the Automated Counting Machines. [Emphasis
supplied]
Yet, the Court disputes the authority of MPEI or its

President to represent the consortium.
In the Memorandum of Agreement (MOA) between
MPEI and WeSolv dated March 5, 2003, which was
reproduced in the Decision, the following stipulations are
found:
2. Mega Pacific shall be responsible for any contract

negotiations and signing with the COMELEC and,
subject to the latter’s approval, agrees to give
WeSolv an opportunity to be present at meetings
with the COMELEC concerning WeSolv’s portion of
the Project.
3. WeSolv shall be jointly and severally liable with
Mega Pacific only for the particular products
and/or services supplied by the former for the
Project. [Emphasis supplied]
The MOA between MPEI and SK C&C dated March 9,

2003, also reproduced in the Decision, contains similar
provisions:
2. Mega Pacific shall have full powers and authority to

represent the Consortium with the Comelec, and to
enter and sign, for and in behalf of its members any
and all agreement/s which maybe required in the
implementation of the Project.
3. Each of the individual members of the Consortium

shall be jointly and severally liable with the Lead
Firm for the particular products and/or services
supplied by such individual member for the project,
in accordance with their respective undertaking or
sphere of responsibility. [Emphasis supplied]
It appears that the Court assumed that the documents

which establish the existence of the consortium were not
with the COMELEC and it had no 23basis for determining
that the consortium had existence during the bidding
process simply because the docu-
_______________
23 Decision, pp. 33 & 34.
245
VOL. 419, JANUARY 13, 2004 245

ments were not included in the “Eligibility Requirements”

24
folder it submitted to the Court on October 9, 2003. With
due respect, let me state nothing is farther from the truth.
The Court required the submission of the documents
bearing on the existence of the consortium only after the
oral arguments on October 7, 2003. The directive is
contained in the Court’s Resolution of even date quoted
below:
In open court, Atty. Lazaro, counsel for private respondent Mega

Pacific eSolutions, Inc., was DIRECTED by the Court to submit
the following documents, a day after the hearing:
(a) contract executed between consortium represented by

Mega Pacific eSolutions, Inc. and COMELEC;
(b) agreement among the consortium members;
(c) financial statements of the members of the consortium;
(d) agreement as to the joint and several liability of the
members of the consortium;
(e) status report of the Department of Science and Technology
(DOST) as to whether the machines are already free of the
eight (8) defects or failing marks it mentioned in a
previous report or if the software has been reprogrammed
successfully to eliminate the defects or failing marks.
Clearly, the directive was addressed to Atty. Alfredo

Lazaro, Jr. So, it was he who had to submit the documents
and he did so on October 10, 2003. The COMELEC was not
required to submit any document. But since the DOST
status report which is among the documents mentioned in
the Resolution was not in the custody of MPEI, the
COMELEC elected to submit it along with the “Eligibility
Requirements” folder.
Obviously to prop up the hypothesis that the COMELEC
was unaware of the consortium agreements during the
bidding process, the majority picked on Commissioner
Florentino Tuason, Jr. and portions of his answers to the
questions asked of him during the oral arguments.
Although he was evidently not the Commissioner assigned
to speak on behalf of the COMELEC but Commissioner
Resureccion Borra, Commissioner Tuason deferred to the
Court and responded to the questions as best as he could.
To put the answers in context, I quote them in full along
with the questions.
_______________
24 Resolution, p. 3.
246

JUSTICE QUISUMBING:
May I know if somebody from the Commission on
Elections who knows the elements of the so-called
verbal agreement on solidary liability of all the parties
of this Mega Pacific, whatever it is?
Do you know anybody from the COMELEC who knows
the elements of this oral agreement if any?
CHIEF JUSTICE:
Yes, would Commissioner Borra be willing to help the
Assistant Sol. Gen.?
ASG RAMOS:
Perhaps Commissioner Tuason could speak to this
Court with regard to that matter.
CHIEF JUSTICE:
Commissioner Tuason.
Yes, Commissioner Tuazon would you be able to

enlighten the Court on the questions profounded (sic)
by Justice Vitug and the request of Justice
Quisumbing?
COMMISSIONER TUASON:
Good morning, Your Honors, I am sorry for my attire
(interrupted)
CHIEF JUSTICE:
It is okay, we did not expect you really to argue but
there seems to be an orderly information for the
enlightenment of the Court.
As far as I know, your Honor, I am not in-charge of
the, I am not In-charge of the phase 2, which is the
Modernization Program, I am here because I am in-
charge of the Legal Department and I oversee the legal
activities of COMELEC.
CHIEF JUSTICE:
Who is in-charge then?
Insofar as a written agreement among the members of
the consortium there is Your Honor, I was privy to the
fact that when we were having conferences with the
legal counsel of the private respondent there is indeed
an agreement among the members of the consortium.
That is my personal knowledge, Your Honor.
CHIEF JUSTICE:
Writing or (interrupted)
247
VOL. 419, JANUARY 13, 2004 247

In writing, Your Honor, because the so-called
agreement amongst the members of the consortium is
of course an internal affair or an internal matter
between the members of the consortium. But I do, I am
aware of the fact that there is indeed a written
agreement, Your Honor. And I am sure that when the
time that the counsel for the private respondent will
argue before this Honorable Court he will be
presenting the written agreement amongst the

members of the consortium.
JUSTICE VITUG:
Are you telling us that the COMELEC did not look
into this matter?
I do think that they did, Your Honor, because I am not
a member of the BAC, I am not the Commissioner-in-
charge of the Phase II but I am aware that there is
such agreement, Your Honor, which will be presented
today and I think that this 25was taken into
consideration (interrupted)
We did Your Honor because we asked the BAC on
whether all these documents including the joint
venture agreement or consortium agreement or
agreement among the parties were taken into
consideration.
JUSTICE PANGANIBAN:
You took the word of the BAC?
Of course, your Honor, because they are the ones
mandated at that particular time, Your Honor, I did
not personally.
JUSTICE PANGANIBAN:
All right, did you also look at the joint and several
undertaking of the consortium members?
The condition under the request for proposal Your
Honor is that manufacturers, suppliers and/or
distributors forming themselves into a joint venture, a
group of two or more manufacturers, suppliers, and or
distributors that intend to be jointly and severally
responsible or liable for a particular contract provided
that Filipino ownership is 60%.
_______________
25 TSN, October 7, 2003, pp. 101-105.
248

In other words, it is not a mandatory requirement that

they be jointly and severally liable, Your Honor.
JUSTICE PANGANIBAN:
Now, That is interesting because you are contracting
with a consortium that does not by itself have an
independent legal personality.
26
Yes, that is right, Your Honor.
The responses of Commissioner Tuason attest to the

existence of the agreement and in essence do not contradict
the provisions thereof. So do the answers of Atty. Lazaro,
counsel27for MPEI, who was queried quite extensively on the
matter.
The consortium agreements were not submitted to the
Court obviously because the Petition did not raise any
question about the joint and several undertaking of the
members of the consortium. It was only during the oral
arguments that the Court saw the need to secure copies of
the documents. Thus, the Court issued the Resolution of
October 7, 2003.
All told, MPEI as lead member of MPC submitted as
part of the bid documents not only the letter dated March
7, 2003 but the following agreements, to wit:
(a) Memorandum of Agreement between MPEI and

WeSolv dated March 5, 2003 and notarized on
March 7, 2003;
(b) Memorandum of Agreement between MPEI and SK
C&Cdated March 9, 2003 and notarized on March
9, 2003;
(c) Teaming Agreement between MPEI and
Election.Com dated March 3, 2003 and notarized on
March 9, 2003; and
(d) Agreement between MPEI and ePLDT dated March
3, 2003 and notarized on March 9, 2003 before the
deadline for submission of bids. Any contrary
conclusion is baseless in fact and founded on pure
conjecture.
The consortium
agreements are sufficient
The majority opinion, nonetheless, insinuates that it is not

sufficient that a joint venture be formed, but that the
members of the
_______________
26 TSN, October 7, 2003, pp. 144-146.

27 TSN, October 7, 2003, pp. 264-278.
249
VOL. 419, JANUARY 13, 2004 249

joint venture all bind themselves jointly and severally

liable for the performance of the Contract. It asserts that
there was no joint venture agreement, much less a joint
and several undertaking, among the members of the
alleged consortium. Thus, the BAC should not have found
MPC eligible to bid.
I cannot subscribe to this position. The RFP specifically
defines a joint venture as a group of two (2) or more
manufacturers, suppliers and/or distributors that intend to
be jointly
28
and severally responsible or liable for the
contract. Nowhere in the RFP is it required that the
members of the joint venture execute a single written
agreement to prove the existence of a joint venture. Indeed,
the intention to be jointly and severally liable may be
evidenced not only by a single joint venture agreement but
by supplementary documents executed by the parties
signifying such intention.
As the respondents pointed out, separate agreements
were entered into by and between MPEI on the one hand
and We Solv, SK C&C, Election.Com,29 and ePLDT on the
other. The Memorandum of Agreement between MPEI and
WeSolv and MPEI and SK C&C set forth the joint and
several undertakings among the 30parties. On the other
hand, the Teaming Agreements between MPEI and
Election.Com and MPEI and ePLDT clarified their
respective roles with regard to the Project, with MPEI
being the “independent contractor” and Election.Com and
ePLDT the “subcontractors.”
The ponencia mistakenly attributes to the respondents
the argument that the phrase “particular contract” in the
RFP should be taken to mean that all the members of the
joint venture need not be solidarity liable for the entire
project, it being sufficient that the lead company and the
member in charge of a “particular contract” or aspect of the

joint venture agree to be solidarily liable. Nowhere in any
of the respondents’ pleadings was this argument ever
raised. If it was, inestimable gain goes to the respondents
because this contention is ultimately logical and coherent.
The RFP itself lays down the organizational structure of
the joint venture and the liability dynamics of the members
thereof. It reads:
_______________
28 Rollo, p. 71.
29Id.,at pp. 2348-2351 and pp. 2352-2354, respectively.
30Id.,at pp. 2355-2363 and pp. 2364-2373, respectively.
250

“d. Manufacturers, suppliers and/or distributors forming

themselves into a joint venture, i.e., a group of two (2) or more
manufacturers, suppliers and/or distributors that intend to be
jointly and severally responsible or reliable for a particular
contract, provided that
31
Filipino ownership thereof shall be at least
sixty percent (60%).” [Emphasis supplied]
So, the RFP adverts to “particular contract.” It does not

speak of “entire Project” or “joint venture,” from which the
phrase “particular contract” should be distinguished. The
clear signification is that all the members of the joint
venture need not be solidarily liable for the entire Project
or joint venture; it is sufficient that the lead company and
the member in charge of a particular contract or aspect of
the joint venture agree to be solidarily
32
liable.
In any case, the Contract incorporates all documents
executed by the consortium members even if the same are
not referred to therein. It provides:
“1.4 Contract Documents

The following documents referred to collectively as the
Contract Documents, are hereby incorporated and made integral
parts of the Contract:
(1) this Contract together with its Appendices;

(2) the Request for Proposal (also known as ‘Terms of
Reference’) issued by the Comelec including the Tender
Inquiries and Bid Bulletins;

(3) Tender Proposal submitted by Mega.
All Contract Documents shall form part of the Contract even if

they or any one of them is (sic) not referred to or mentioned in the
the other shall be considered contained in all, and what is
required by any one shall be as binding as if required by all,
unless one item is a correction of the other.
The intent of the Contract Documents is the proper,
satisfactory and timely execution and completion of the Project, in
necessary for the proper and timely execution and completion
33
of
the Project shall be deemed included in the Contract.” [Emphasis
supplied]
_______________
31Id.,at p. 71.
32Id.,at pp. 2199-2217.
33Id.,at pp. 2200.
251
VOL. 419, JANUARY 13, 2004 251

Clearly, whatever perceived deficiencies there are in the

supplementary contracts entered into by MPEI and the
other members of the consortium as regards their joint and
several undertaking were cured, or better still prevented
from arising, by the above-quoted provisions from which it
can be immediately established that each of the members
of MPC is solidarily liable with the lead company, MPEI,
albeit only for the particular contract or aspect of the joint
venture of which it is in charge.
Moreover, the Contract provides several options which
the COMELEC may take in case of MPC’s breach or non-
performance of the material terms thereof. It provides:
“12.5. In the event of termination of this Contract

pursuant to Article 12.2 hereof, COMELEC may
exercise any or all of the following remedies:
12.5.1 Procure the facilities from another supplier,
charging the amount over an (sic) above the
contract price stipulated in this Contract, if any, to

the account of MEGA;
12.5.2 Impose penalty for late delivery at the rate of 1/10
of 1% (0.001) for everyday of delay of the total value
of the undelivered item(s);
12.5.3 Terminate this Contract;
34
12.5.4 Execute on MEGA’s Performance Security.”
Significantly, MPEI posted a performance

35
bond which
amounts to 20% of the bid offer against which the
COMELEC may execute in case of breach.
COMELEC is protected
under the contract and the
Civil Code
But the Court dismisses the respondents’ use of the
Contract as basis for the enforcement of the claims of
COMELEC against the consortium on the premise that the
36
Contract is between the COMELEC and MPEI, not MPC.
That is so because MPEI, as lead member of the
consortium, is empowered by WeSolv and SK C&C,which
along with MPEI itself, represent 90% of the total
_______________
34Id., at p. 2212.
35Id., at p. 72.
36 Decision, p. 44.
252

consortium interest, to represent

37
them. This is clear from
the stipulations in their MOAs. Thus, as the Contract was
executed by MPEI as the authorized representative of the
key members of the MPC, it is the same as if MPC itself was
the named party thereto.
From the foregoing, it is clear that the absence of a
single formal joint venture agreement among all the
members of the joint venture does not preclude the
COMELEC from enforcing their liability in case of breach.
In any event, the COMELEC may still enforce the liability
of the consortium members under the general provision of
the Civil Code on partnership

38
as correctly pointed out by
the OSG in its Memorandum, thus:
“Respondent COMELEC is not and will not be precluded from

asserting the solidary liability of all consortium members who
represented themselves to be such. In the absence of a joint
venture agreement, and in cadence with [the] rule on partnership
that a partner is considered as the agent of his co-partners and of
the partnership in respect of all partnership transactions (Article
1803, Civil Code), private respondent’s members acted as agents
of each other and are as such solidarily bound by their own and
the other members’ undertaking. Further, the rule is that when a
person, by words spoken or written or by conduct, represents
himself, or consents to another representing him to anyone, as a
partner in an existing partnership or with one or more persons
not actual partners, he is liable to any such persons to whom such
representation has been made, who has, on the faith of such
representation, given credit to the actual or apparent partnership,
and if [he] has made such representation or consented to its being
made in a public manner he is liable to such person, whether the
representation has or has not been made or communicated to such
person so giving credit by or with the knowledge of the apparent
partner making the representation or consenting to its being
made. When a partnership liability results, he is liable as though
he was an actual member of the partnership. (Article 1825, Civil
Code)”
It should be recalled that MPEI, SK C&C, WeSolv,

Election.Com and ePLDT represented themselves and/or
allowed themselves to be represented as partners and
members of MPC for purposes of bidding for the Project.
They are, therefore, liable to the COMELEC to the39 extent
that the latter relied upon such representation. Their
liability as partners is solidary with respect to everything
_______________
37Supra, infra, p. 15.

38Supra, note 28 at p. 2427.
39 Art. 1825, Civil Code.
253
VOL. 419, JANUARY 13, 2004 253

chargeable to the partnership under certain conditions. The

Civil Code provides:
“Art. 1822. Where, by any wrongful act or omission of any partner

acting in the ordinary course of the business of the partnership or
with the authority of his co-partners, loss or injury is caused to
any person, not being a partner in the partnership, or any penalty
is incurred, the partnership is liable therefore to the same extent
as the partner so acting or omitting to act.
Art. 1823. The partnership is bound to make good the loss:
(1) where one partner acting within the scope of his apparent
authority receives money or property of a third person and
misapplies it; and
(2) Where the partnership in the course of its business
receives money or property of a third person and the
money or property so received is misapplied by any
partner while it is in the custody of the partnership.
Art. 1824. All partners are liable solidarily with the

partnership for everything chargeable to the partnership under
Articles 1822 and 1823.” (Emphasis supplied)
Thus, the solidary liability of the members of the

consortium is inescapable, whether by the language of their
own contracts inter se or the provisions of the Civil Code.
The consortium is eligible

The ponencia further echoes the petitioners’ objection to
the BAC’s conclusion, finding MPC eligible to bid
notwithstanding the absence of some financial documents
of its members corporations, particularly MPEI which was
incorporated only on February 27, 2003.
Under the RFP, the bidder shall furnish, as part of its
bid, an eligibility envelope, consisting of legal, technical
and financial documents, which should establish the
bidder’s eligibility to bid and its qualifications to perform
the Contract if its bid is accepted. The documentary
evidence of the bidder’s eligibility to bid shall establish to
the BAC’s satisfaction that the bidder, 40at the time of
submission of its bid, is eligible to bid. The eligibility
envelope
_______________
254

shall include the bidder’s legal, technical and financial

documents, viz:
“(a) Legal Documents which shall include:
(1) Articles of Incorporation issued by the Securities and

Exchange Commission, Business Registration, current
licenses and permits, DTI Certificate of Registration,
Mayor’s Permit, or by appropriate government agencies
and VAT certification, if applicable;
(2) Approval of the Board of Directors for the Bidders to
participate and enter into a contract with the COMELEC;
(3) Waiver of execution by its President under the authority
of its Board that it is submitting to the jurisdiction of the
Philippine government and thereby waives its right to
question the jurisdiction of Philippine courts;
(4) Waiver executed by the President under the authority of
its Board, to seek and obtain writ of injunctions (sic) or
prohibition or restraining order against Purchaser to
prevent and restrain the bidding procedures related
thereto, the holding of bidding and any procedure related
thereto, the negotiating and award of a contract to a
successful bidder, and the carrying out of the awarded
contract;
(5) Certificate issued by bidder’s duly authorized
representative that, it has no record of suspension and
that it is not presently suspended nor blacklisted by any
Philippine government agency or by any international
institution, whether in its individual capacity or as a
member of a Joint Venture/Consortium;
(6) Certificate that the Bidder is licensed by the Bidder’s
country to export the goods to be supplied under the
contract.
(b) Technical Documents which shall contain documentary

evidence to establish to the BAC’s satisfaction the Bidder’s
technical and production capabilities necessary to perform the
Contract. It shall include:
(1) Single sale/lease transaction with a contract value of at

least ONE HUNDRED MILLION PESOS (Php
100,000,000.00) for same and similar type of equipment
for the last three (3) years. Bidder shall be required to
submit contracts and/or certificate/s of acceptance by the

concerned Purchaser indicating therein the contract value;
(2) ISO 9000 Certificate or its equivalent;
(3) Literature and brochures describing the equipment, the
manufacturer’s factory, manufacturing facilities, products
and service centers;
255
VOL. 419, JANUARY 13, 2004 255

(4) Certification from the Environmental Protection Agency

(EPA) or similar government agency of the country of
origin that the product meets the environment protection
requirements therein;
(5) Certificate that if awarded the project, Bidder will submit
a warranty for a minimum of two (2) years from date of
delivery for units found to be imperfect or damaged due to
factory defect.
(c) Financial Documents shall contain documentary evidence to

establish to the BAC’s satisfaction the Bidder’s financial
capability. Such evidence shall include:
(1) audited financial statements of the Bidder’s firm for the

last three (3) calendar years, stamped “RECEIVED” by
the appropriate government agency, to show its capacity
to finance the manufacture and supply of Goods called for
and a statement or record of volume of sales;
(2) Balance Sheet;
(3) Income Statement; and
(4) Statement of Cash Flow.
The bidders shall be evaluated according to their liquidity,

solvency and stability. The company’s current assets should be
more than its current liabilities. Its long term assets should be
more than its long term liabilities. The BAC may disqualify
companies that are having financial difficulty and thus, making
its long term prospects dim. This will eventually affect their
ability to deliver and meet the requirements for the election
automated machines.”
On the other hand, the Bid Envelope 41shall contain the

technical specifications and the bid price.
According to the documents it submitted to substantiate
eligibility, MPEI was incorporated only on February 27,
2003. Thus, it was not able to submit the required financial

documents, i.e., Audited Financial Statements for the last
three (3) years, Balance Sheet, Income Statement and
Statement of Cash Flow.
However, the failure of MPEI to submit its financial
documents due to its newly-acquired corporate personality
should not by itself disqualify MPC. It should be pointed
out that the purpose of the RFP in requiring the
submission of the financial documents of the bidder is to
determine the financial soundness of the latter and its
capacity to perform the Contract if its bid is accepted. This
purpose may well be attained by examining the financial
documents sub-
_______________
41Id., at pp. 76-79.
256

mitted by the other members of the joint venture. In this

regard, the respondents emphasized that SK C&C, ePLDT
and WeSolv submitted the required financial documents.
Moreover, MPEI has a paid in capital of P300,000,000.00,
an amount which is substantially over and above the 10% 42
equity based on the total project cost required by the RFP.
Thus, I cannot subscribe to the majority’s myopic
interpretation of the RFP that each of the members of MPC
must comply with all the requirements
43
thereunder.
InKilosbayan v. Guingona, we defined a joint venture
as “an association of persons or companies jointly
undertaking some commercial enterprise; generally all
contribute assets and share risks. It requires a community
of interest in the performance of the subject matter, a right
to direct and govern the policy in connection therewith, and
duty, which may 44 be altered by agreement to share both in
profit and losses.”
The collective nature of the undertaking of the members
of MPC, their contribution of assets and sharing of risks,
and the community of their interest in the performance of
the Contract all lead to the reasonable conclusion that their
collective qualifications should be the basis for evaluating
their eligibility. Practical wisdom dictates this to be so
because the sheer enormity of the Project renders it
improbable to expect any single entity to be able to comply

with all the eligibility requirements and undertake the
Project by itself. As emphasized by the OSG, the RFP
precisely allowed bids from manufacturers, suppliers
and/or distributors forming themselves into a joint venture
in recognition of the virtual impossibility that a single
entity would be able to respond to the Invitation to Bid.
Further, as pointed out by the COMELEC, the
Implementing
45
Rules and Regulations46 (“IRR”) of R.A. No.
6957, as amended by R.A. No. 7718, is instructive since
proponents of Build-Operate-
_______________
42Id., at p. 72.
43 G.R. No. 113375, May 5, 1994, 232 SCRA 110.
44Id., at p. 144.
45 “An Act Authorizing The Financing, Construction, Operation And
Maintenance Of Infrastructure Projects By The Private Sector And For
Other Purposes.” It is otherwise known as the BOT Law.
46 “An Act Amending Certain Sections Of Republic Act No. 6957,
Entitled “An Act Authorizing The Financing, Construction, Operation And
257
VOL. 419, JANUARY 13, 2004 257

Transfer projects usually form joint ventures or

consortiums. Under said IRR, “[A] joint venture/consortium
proponent shall be evaluated based on the individual or
collective experience of the member-firms of the joint
venture/consortium and47 of the contractor(s) that it has
engaged for the project.”
On another point, the RFP provides that the
documentary evidence of the bidder’s qualifications to
perform the contract if its bid is accepted shall establish to
the satisfaction of the BAC that in case a bidder offering to
supply goods under the contract did not manufacture or
otherwise produce the goods itself, the bidder must show
that it is an established dealer of the goods for at least five
(5) years and shall produce documentary evidence to show
that he has been duly authorized by the goods’
manufacturer 48
or producer to supply the goods to the
Philippines.
The RFP also requires that the documents submitted
shall show that the bidders have the financial, technical
and production capability necessary to perform the

contract. For this purpose, the primary technology
proponent, i.e., the manufacturer of the counting machine
itself, and the creator of the consolidation software, should
have a minimum of five (5) years corporate existence in
good standing, whereas the members of the consortium
providing ancillary services, i.e., project management and
human resources training, should show documentary
evidence that their services have been contracted for at
least one (1) political exercise with at least 20,000,000
voters and their companies have been issued an ISO
certification. Finally, the ACMs should have been used in
at least one (1) 49 political exercise with no less than
20,000,000 voters. 50 51
The Comment of the OSG and Memorandum
submitted by MPC detailed the qualifications and track
record of the members of MPC, viz: SK C&C, the primary
technology proponent and manufacturer of the ACMs, is a
corporation in good standing in South Korea since 1991.
The ACMs have been used in two (2) Korean national
elections with more than 20,000,000 voters. Election.Com,
_______________
Maintenance Of Infrastructure Projects By The Private Sector, And For

Other Purposes.”
47 Sec. 5.4, b (i).
49Id., at pp. 74-75.
50Id., at pp. 384-385.
51Id., at pp. 2598-2599.
258

which shall be responsible for system integration, is a

corporation in good standing in Delaware, U.S.A. since
1991 and has experience with more than 400 elections in
the U.S.A. and Europe. WeSolv, which is responsible for the
rollout, training and maintenance functions of MPC, is a
Philippine corporation in good standing since 1994. Oracle,
which shall provide complete information solutions, is a
Philippine corporation in good standing since 1996. ePLDT,
the provider of computer security and encryption, is a
wholly-owned subsidiary of Philippine Long Distance
Telephone Company. Finally, MPEI, which shall install

and maintain the ACMs, provide system integration
services and project leadership, is a Philippine corporation
incorporated on February 27, 2003. Clearly, all these show
that MPC has the financial, technical and production
capability necessary to perform the Contract.
Noticeably, the petitioners failed to contest the
qualifications of the members of the consortium in any of
their pleadings. The Decision, uncharacteristically silent on
this matter except for its general objection to the inability
of MPEI to submit some of the financial documents
required by the RFP, seemingly concedes that the members
of the consortium are eligible and qualified to perform the
Contract.
In my opinion, these paper requirements should yield to
the reality that, collectively, the members of the
consortium have furnished the COMELEC with sufficient
information to enable it to judiciously gauge MPC’s
eligibility and qualifications. The strict and inflexible
adherence to the bidding requirements by each and every
component of the consortium advanced by the petitioners
would negate the salutary purpose of R.A. 8436 and
frustrate the long-anticipated modernization of the
electoral system.
Counting machines supplied

by MPC meet the features
prescribed by law
Unfortunately, the ponencia’s nitpicking did not stop there.
It asserts that MPC failed the technical evaluation
conducted by the DOST. Hence, the COMELEC should
have disqualified MPC.
It should be recalled that the COMELEC required
prospective suppliers/bidders to submit a certified accuracy
rating for both the vote counting and consolidation system
from the DOST for each model of counting machine and
canvassing system that they intend
259
VOL. 419, JANUARY 13, 2004 259

to offer. The machine must be certified by the DOST that it

will operate properly and accurately under various working
conditions. For this purpose, the COMELEC identified key
requirements for evaluation, namely: vote counting
accuracy, consolidation/canvassing accuracy, ballot

counting speed, security features for52
both the hardware
and software, and system reliability.
In its Report, the BAC noted the results of the
evaluation conducted by its Technical Working Group
(TWG) and by the DOST as follows:
“The BAC further noted that both Mega-Pacific and TIM obtained
some ‘failed marks’ in the technical evaluation. In general, the
‘failed marks’ of Total Information Management as enumerated
above affect the counting machine itself that are material in
nature, constituting noncompliance to (sic)the RFP. On the other
hand, the ‘failed marks’ of Mega-Pacific are mere formalities on
certain documentary requirements, which the BAC may waive, as
clearly indicated in the Invitation to Bid.
In the DOST test, TIM obtained 12 failed marks mostly
attributed to the counting machine itself as stated earlier. These
are requirements of the RFP and therefore the BAC cannot
disregard the same. Mega-Pacific in 8 items however these are
mostly on the software, which can be corrected by reprogramming
53
the software and therefore can be readily corrected.” [Emphasis
supplied]
Parenthetically,
54
in his sponsorship remarks on R.A. No.
8436, Rep. Abueg underscored the salient features which
must be found in the AES. He said:
“a. The system shall utilize appropriate technology for

voting and electronic devices for counting of votes
and canvassing of results;
b. A stand-alone machine that is not hooked to any
centralized computer or other device through which
data may be manipulated. The machine will admit
no data or input source other than from a valid,
official ballot. This feature is different from the
computer networking systems of banks, cellular
phones, radios and from machines employing other
voting systems where keyboards and other devices
are used precisely to input data or modify that
previously inputted;
_______________
52 Report on the Testing and Technical Evaluation of Automated

Counting Machines by the DOST, April 1-3, 2003, p. 1.
53Supra,note 28 at pp. 2431-2432.
54 Sponsorship Remarks of Rep. Abueg at the House of Representatives,
May 20, 1997; TSN, pp. 7-8.
260

c. Utilizes visible light technology that allows the

scanner to read marks similar to the human eye;
d. Can read 150 ballots per minute and accepts only
valid ballots;
e. Provides audit trail;
f. Entails minimal human intervention;
g. To get the result per precinct, the election officer
presses one button on the keypad and the precinct
report is instantly generated. Multiple copies of the
results/report are also available;
h. Accumulation of totals in seconds—At the counting
center, totals are read in seconds, providing
precincts detail reports, cumulative reports, and the
official canvass. Reports may be displayed in
monitors or large screen 55TV for the media,
candidates or general public.”
Accordingly, R.A. 8436 categorized into mandatory and

optional the features which the AES must contain, thus:
“Sec. 7. Features of the System.—The System shall utilize

appropriate technology for voting, and electronic devices for
counting of votes and canvassing of results. For this purpose, the
Commission shall acquire automated counting machines,
computer equipment, devices and materials and adopt new forms
and printing materials. The System shall contain the following
features: (a) use of appropriate ballots, (b) stand-alone machine
which can count votes and an automated system which can
consolidate the results immediately, (c) with provisions for audit
trails, (d) minimum human intervention and (e) adequate
safeguard/security measures. In addition, the System shall as far
as practicable have the following features:
1. It must be user-friendly and need not require computer-

literate operators;
2. The machine security must be built-in and multi-layer
existent on hardware and software with minimum human
intervention using latest technology like encrypted coding
system;
3. The security key control must be embedded inside the
machine sealed against human intervention;
4. The Optical Mark Reader (OMR) must have a built-in

printer for numbering the counted ballots and also for
printing the individual precinct number on the counted
ballots;
5. The ballot paper for the OMR counting machine must be
of the quality that passed the international standard like
ISO-1831, JIS-X 9004 or its equivalent for optical
character recognition;
_______________
55Id., at pp. 10-11.
261
VOL. 419, JANUARY 13, 2004 261

6. The ballot feeder must be automatic;

7. The machine must be able to count from 100 to 150 ballots
per minute;
8. The counting machine must be able to detect fake or
counterfeit ballots and must have a fake ballot rejector;
9. The counting machine must be able to detect and reject
previously counted ballots to prevent duplication;
10. The counting machine must have the capability to
recognize the ballot’s individual precinct and city or
municipality before counting or consolidating the votes;
11. The System must have a printer that has the capacity to
print in one stroke or operation seven (7) copies (original
plus six (6) copies) of the consolidated reports on
carbonless paper;
12. The printer must have at least 128 kilobytes of Random
Access Memory (RAM) to facilitate the expeditious
processing of the printing of the consolidated reports;
13. The machine must have a built-in floppy disk drive in
order to save the processed data on a diskette;
14. The machine must also have a built-in hard disk to store
the counted and consolidated data for future printout and
verification;
15. The machine must be temperature-resistant and rust-
proof;
16. The optical lens of the OMR must have a self-cleaning
device;
17. The machine must not be capable of being connected to

external computer peripherals for the process of vote
consolidation;
18. The machine must have an Uninterrupted Power Supply
(UPS);
19. The machine must be accompanied with operating
manuals that will guide the personnel of the Commission
on the proper use and maintenance of the machine;
20. It must be so designed and built that add-ons may
immediately be incorporated into the System at minimum
expense;
21. It must provide the shortest time needed to complete the
counting of votes and canvassing of the results of the
election;
22. The machine must be able to generate consolidated
reports like the election return, statement of votes and
certificate of votes at different levels; and
23. The accuracy of the count must be guaranteed, the margin
of error must be disclosed and backed by warranty under
such
262

terms and conditions as may be determined by the Commission.

x x x” [Emphasis supplied]
It is well to note that all the 1,991 ACMs supplied by MPC

under the Contract were found to have satisfied the
mandatory requirements of the AES, to wit: 56
(a) use of
appropriate ballots, (b) stand-alone machine which can
count votes and an automated system which can
consolidate the results immediately, (c) with provisions for
audit trails, (d) minimum human intervention and (e)
adequate safeguard/security measures. As stated in the
BAC Report, the failed marks of MPC were mere
formalities in certain documentary requirements. Further,
these failed marks were attributable to the software which
can be readily corrected by reprogramming. The failed
marks, therefore, were not material in nature and57
were, at
worst, mere optional features of the System. The RFP
clearly authorizes the BAC to waive any informality,
nonconformity or irregularity in a bid which does not
constitute a material deviation, provided that such waiver
does not
58
prejudice or affect the relative ranking of any
bidder.
As regards the issue relating to the accuracy rating of
99.9995% mandated for the counting machine by the RFP,
right off I observe that the petitioners made pronounced
changes in their position at every turn. In the Petition, they
simply alleged that the COMELEC had erred when it
“failed to declare a failed bidding and to conduct a re-
bidding of the project despite the failure of the bidders to
pass the technical tests,”
59
including the test on the accuracy
rating of the machine. At the oral arguments, however,
they claimed that
60
the COMELEC had “waived the accuracy
requirement.” Finally, in their Memorandum they accused
the poll body of having “changed the accuracy
61
criteria from
99.9995 percent to only 99.995 percent.”
However, there is no competent evidence on record that
the COMELEC had waived or changed the prescribed
accuracy rating.
_______________
56 During the oral arguments, Com. Borra asserted that the ACMs are
stand alone machines in that they do not have inputs or outputs that
enable them to be networked. TSN, October 7, 2003, pp. 176-179.
57Supra,note 28 at p. 2435.
58Id., at p. 81.
59Id., at pp. 31-33.
60 TSN, October 7, 2003, p. 26.
263
VOL. 419, JANUARY 13, 2004 263

In fact, in the Contract between COMELEC and MPEI, the

same accuracy rating of 99.9995 percent was required. Also
in the letter
62
dated October 24, 2003 of DOST, it clarified its
Report stating that upon further verification, it found that
“except for 1 ACM (with an accuracy rating of 99.998%), all
of the 456 machines (including the retested 9 units) that
were tested by the DOST (as of October 20, 2003) have an
accuracy rating of 100% provided that the ballots are
shaded correctly
63
and fed into the ACMs following the right
orientation.” Notably, the DOST64Report itself states that
the machines are 100% accurate. This official evaluation
has mooted the petitioners’ challenge and rendered the

pursuit thereof an inconsequential exercise.
Harping on the requirement for audit trail, the ponencia
proceeds to conclude that the ACMs are deficient because
of their alleged inability to print the audit trail.
It should
65
be emphasized that Table 6 of the DOST
Report shows that the tested ACM of MPC generates
audit trails which reflect the exact date and time 66
of the
start and end of counting of ballots per precinct. The ACM
was also able to generate hard and soft copies of the audit
trail of the
67
counting machine, with hard copies generated
regularly. Moreover, R.A. 8436 itself merely requires that
the AES shall have “provisions for audit trail,” which the
ACM, as tested, has complied with.
Anent the inability of the machine to detect previously
downloaded data and prevent these from being inputted
again into the system, suffice it to state that this is neither
a mandatory nor an optional feature of the AES under R.A.
8436. In any case, it is deemed satisfied with DOST’s final
favorable evaluation.
In compliance with the Resolution dated December 9,
2003, the COMELEC filed its Partial Compliance and
Manifestation dated December 24, 2003 informing the
Court that 1,991 units of ACMs
_______________
62Supra, note 52.

63Supra, note 28 at pp. 2541-2542, letter from the Executive Director
cum Chairman of the DOST Technical Evaluation Committee, Mr.
Rolando Viloria, addressed to Com. Borra.
65Id., at p. 1257.
66Id., at p. 1258.
67Id., at p. 1264.
264

have already been delivered to the Commission. Of these, a

total of P849,167,697.41, corresponding to 1,973 ACMs
which have passed DOST testing, has been paid to MPC.
The misgivings regarding the alleged deficiencies in the
software are largely explained by the Commission in their
Partial Compliance and Manifestation. According to the
Commission, the Project involved the development of three

(3) types of software for use during the evaluation of
technical bids, testing and acceptance procedures and on
election day.
For purposes of the evaluation of technical bids, the
bidders were asked to develop a “base” software program
that will enable the ACMs to function properly. The base
software is not the actual software to be used on election
day. Hence, the software defects were considered minor in
nature, and accordingly, waived.
On the other hand, for purposes of the technical and
acceptance procedures, a Testing and Acceptance Manual
(Manual) was prepared by the Ad Hoc Technical
Evaluation Committee, which ensured compliance of the
Manual with the Terms of Reference approved by the
COMELEC and the provisions of R.A. 8436. The software
used for the ACMs was reprogrammed to comply with the
Manual. Upon testing, the DOST certified that 681,973 units
passed the technical and acceptance procedures.
Anent the software to be used on election day, additional
elements such as the final certified list of candidates,
project of precincts, official ballot design and security
features, and encryption, digital certificates and digital
signatures have to be integrated into the software.
Understandably, because of the timeline followed with
regard to these additional elements, the software has not
yet been finalized. The ponencia, however, chooses to view
these circumstances with insularity. It even holds suspect
the certifications issued by the DOST declaring that the
ACMs had passed the acceptance tests conducted by the
Department.
It is not amiss to state at this juncture that these
declarations should be accorded full faith and credit there
being no justification
_______________
68 The letter dated December 15, 2003 addressed to Com. Borra from
Rolando T. Viloria, Executive Director and Chairman of the DOST-
Technical Evaluation Committee states that the DOST tested a total of
1,991 ACMs. Of these, 18 units failed the test. Out of the 18 units, only
one (1) unit failed the retest.
265
VOL. 419, JANUARY 13, 2004 265

for a contrary stance. Reckoned from the standpoint of the

established legal presumptions of validity of official acts
and regularity in the performance of official duty, I find it
unjustified to speculate, as the ponencia does, on the good
or bad motives that impelled the COMELEC to award the
Contract to MPC.
Epilogue
In view of the foregoing, the majority’s position that the
COMELEC should have conducted a re-bidding of the
Project is plainly injudicious. The procedure is warranted
only if no bid is received or qualified as the lowest
calculated and responsive bid. It is not amiss to69 mention
again that there were more than 50 bidders for the
Project, out of which MPC was qualified as the lowest
calculated and responsive bid. A re-bidding of the Project
would not serve any further purpose because the bidding
had actually drawn the participation of as many bidders as
realistically possible and that considering the enormity of
the Project, a new bidding would not reasonably attract
new bidders. There is therefore no basis to conclude that
there was a failure of bidding,
70
and the contract should be
re-advertised and re-bid. Remarkably besides, none of the
losing bidders questioned the process undertaken by the
BAC. The logical conclusion is that the losing bidders have
conceded MPC’s eligibility and qualifications and deferred
to the decision of the COMELEC to award the Contract to
MPC.
It is also to the COMELEC’s credit that its award of the
Contract to MPC has resulted in substantial savings for the
government. The paramount objective of public bidding is
to ensure that the government
71
obtains the lowest and best
price in the market. This objective was undoubtedly
attained by the award of the Contract to MPC. As
emphasized in the respondents’72
pleadings and in
newspaper advertisements, MPC’s bid covering nationwide
automation was P49,000,000.00 lower than that submitted
by TIMC,
_______________
69 The Memorandum of the OSG (Rollo, p. 2428) states that there were
more than 50 prospective bidders for the Project.
71 Cobacha and Lucenario, Law on Public Bidding and Government
Contracts, 1960, p. 7.
72 Philippine Daily Inquirer, November 20, 2003.
266

with its coverage73

restricted to Mindanao and the National
Capital Region.
As stated at the outset, the Court has unfailingly
stressed the importance of giving the COMELEC
considerable latitude in adopting means and methods that
will insure the accomplishment of the objective for which it
was created—to promote free, orderly, honest, peaceful and
credible elections—and perforce prudently declined to
interfere with COMELEC’s exercise of its administrative
functions absent any showing of grave abuse of discretion. I
see no justification for the departure from this principle in
the instant case.
Let it be noted that R.A. No. 8436 was precisely
intended as an initial step towards the modernization of
the Philippine electoral system which seeks to ensure free,
orderly, honest, peaceful and credible elections. The
COMELEC must be given enough latitude to bring into
fruition this laudable purpose.
All the challenges, whether factual or legal, to the acts of
COMELEC, to my mind, have been adequately explained
and clarified.
The most crucial point raised against the respondents is
the alleged non-submission of the consortium agreements
before the bidding deadline. The ponencia adverted to it no
less than five times. But the assertion which is one of fact
is debunked by the consortium agreements themselves
which were notarized not later than March 9, 2003, or
before the bidding deadline. To ignore the public character
of the documents is to unfairly ascribe bad faith to
COMELEC.
As for the fact that MPEI was made the party to the
Contract with COMELEC, this was so simply because
MPEI was authorized to sign in behalf of the other
consortium members.
Seemingly, the ultimate resolution of this case has
narrowed down to the question of which prognostication of
the technical performance of the counting machines on
election day is accurate: That of the COMELEC’s or this
Court’s? But that would lead the Court to tread on
unfamiliar waters. More fundamentally, the question was
not raised in the Petition.
_______________
73Supra,note 28 at pp. 2503-2504.
267
VOL. 419, JANUARY 13, 2004 267

In closing, I refer to the definition of “grave abuse of

74
discretion” which the Court made 75in Tanada v. Angara,
cited at the opening of the Decision:
By grave abuse of discretion is meant such capricious and

whimsical exercise of judgment as is equivalent to lack of
jurisdiction. Mere abuse of discretion is not enough. It must be
grave abuse of discretion as when the power is exercised in an
arbitrary or despotic manner by reason of passion or personal
hostility, and must be so patent and so gross as to amount to an
evasion of a positive duty or to a virtual refusal to perform the
duty enjoined or to act at all in contemplation of law. Failure on
the part of the petitioner to show grave abuse of discretion will
result in the dismissal of the petition.
In rendering this Decision, this Court never forgets that the
Senate, whose act is under review, is one of two sovereign houses
of Congress and is thus entitled to great respect in its actions. It
is itself a constitutional body independent and coordinate, and
thus its actions are presumed regular and done in good faith.
Unless convincing proof and persuasive arguments are presented
to overthrow such presumptions, this Court will resolve every
doubt in its favor. Using the foregoing well-accepted definition of
grave abuse of discretion and the presumption of regularity in the
Senate’s processes, this Court cannot find any cogent reason to
impute grave abuse of discretion to the Senate’s exercise of its
power of concurrence in the WTO76Agreement granted it by Sec. 21
of Article VII of the Constitution.
Like the Senate to which the Court graciously deferred in

the cited ruling, I respectfully submit, the COMELEC
deserves the same degree of deferential treatment given its
status as a constitutional body. But quite lamentably, the
Decision would bring disrepute to and even cause havoc on
the COMELEC as an institution. It will never be the same.
I therefore vote to dismiss the instant Petition.
Petition granted, Comelec Resolution No. 6074 null and
void.
Note.—View that under the Constitution, the

jurisdiction of the Supreme Court has been expanded to
determine whether or not there has been a grave abuse of
discretion amounting to lack or
_______________
74 G.R. No. 118295, 272 SCRA 18 (1997).

75 Decision, p. 2.
76Supra, note 77 at pp. 79-80.
268

excess of jurisdiction on the part of any branch or

instrumentality of government. (Civil Service Commission
vs. Dacoycoy, 306 SCRA 425 [1999])
——o0o——
269
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2/10/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 419

VOL. 419, JANUARY 13, 2004 141

INFORMATION TECHNOLOGY FOUNDATION OF THE

Constitutional Law; Powers; Judicial Power;

legal question, (3) when the administrative action is patently

142 SUPREME COURT REPORTS ANNOTATED

Information Technology Foundation of the Philippines

YNARES-SANTIAGO, J.,Concurring Opinion:

Administrative Law; Commission on Elections; Exhaustion of

VOL. 419, JANUARY 13, 2004 143

Information Technology Foundation of the Philippines

mutual right of control. The main distinction cited by most

a partnership contract, it may however engage in a joint venture

SANDOVAL-GUTIERREZ, J.,Concurring Opinion:

Administrative Law; Commission on Elections; Joint Venture;

144 SUPREME COURT REPORTS ANNOTATED

Information Technology Foundation of the Philippines

each of the joint-venturers; (b) Each of the co-venturers would be

DAVIDE, JR., J., Separate Opinion:

Administrative Law; Commission on Elections; Contracts; As

VITUG, J., Separate Opinion:

Constitutional Law; Powers; Judicial Power; Supreme Court;

TINGA, J., Dissenting Opinion:

Actions; Pleadings and Practice; Prohibition; When Available.

tribunal, corporation, board, officer or person, whether exercising

VOL. 419, JANUARY 13, 2004 145

Information Technology Foundation of the Philippines

dent’s jurisdiction or are attended with grave abuse of discretion

functions absent any showing of grave abuse of discretion. As

146 SUPREME COURT REPORTS ANNOTATED

Information Technology Foundation of the Philippines

courts, for reasons of law, comity and convenience, will not

principle. The administrative process is intended to provide less

VOL. 419, JANUARY 13, 2004 147

Information Technology Foundation of the Philippines

Same; Same; Contracts; Joint Venture; Definition.—

equivalent to lack of jurisdiction.—By grave abuse of discretion is

SPECIAL CIVIL ACTION in the Supreme Court.

The facts are stated in the opinion of the Court.

148 SUPREME COURT REPORTS ANNOTATED

There is grave abuse of discretion (1) when an act is done

reckless disregard of its own bidding rules and procedure.

• They failed to achieve the accuracy rating criteria of

Because of the foregoing violations of law and the glaring

1 Republic v. Cocofed, 372 SCRA 462, 493, December 14, 2001.

VOL. 419, JANUARY 13, 2004 149

jurisprudential norms, but have also cast serious doubts

150 SUPREME COURT REPORTS ANNOTATED

the process of voting, counting votes and

7 Section 6 of RA 8436 provides “[i]f in spite of its diligent efforts to

VOL. 419, JANUARY 13, 2004 151

“INVITATION TO APPLY FOR ELIGIBILITY AND TO BID

The Commission on Elections (COMELEC), pursuant to the

a. Duly licensed Filipino citizens/proprietorships;

Bid documents for the three (3) phases may be obtained

Awards Committee (BAC) Secretariat/Office of Commissioner

152 SUPREME COURT REPORTS ANNOTATED

System shall be at the Session Hall, Commission on Elections,

“1.) Open to Filipino and foreign corporation duly registered

a) For counting machines—should have been used in at least

3.) Ten percent (10%) equity requirement shall be based on

RESOLVED moreover, that:

1) A. Due to the decision that the eligibility requirements and