CONCURRING OPINION

SANDOVAL-GUTIERREZ, J.:

Hasty and adventurous schemes are at first view
flattering, in execution difficult, and in the issue
disastrous.¹ ςrνll

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 less confident in the results of elections run on these machines.² ςrνll

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 countrys 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.

On December 22, 1997, Congress enacted Republic Act No. 8436³ 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 (ACM), computer equipment, devices and materials.⁴ ςrνll

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 of the ACM with an estimated budget of P2,500,000,000.00.⁵ ςrνll

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 be jointly and severally responsible or liable for the contract.⁶ ςrνll

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 CeC, ePLDT and Oracle System (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 BACs 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 TWG and the DOST, the BAC submitted a Report⁷ 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 COMELECs 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 CONSORTIUMs 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 mandamus seeking (1) to declare null and void COMELECs Resolution No. 6074; (2) to enjoin the implementation 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. Panganiban 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 of its authority it gravely abuses or exceeds its jurisdiction.⁸ Judicial review may be justified on the grounds of grave abuse of discretion, arbitrary rejection of bids, and lack of freedom of competition among bidders.⁹ In the case at bar, petitioners alleged in their petition that public respondents acted without or in excess of its jurisdiction or with grave abuse of discretion¹⁰ when they awarded the Project to MPEI. Thus, the following pronouncement of this Court in JG Summit Holdings, Inc. v. Court of Appeals ¹¹ deserves reiteration:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

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-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 Mar v. Philippine Amusement and Gaming Corporation ,¹² 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 expected to follow the protest mechanisms outlined in Section 55,¹³ Rule XVII of Republic Act No. 9184¹⁴ 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 would argue that under the subsequent provision, Section 58¹⁵ 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 legal obstacle. In Commission on Elections v. Quijano-Padilla ,¹⁶ 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 and proceed with the judicial determination of the case.¹⁷ 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 the alleged contract involves the disbursement of public funds and the modernization of our countrys 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?chanroblesvirtualawlibrary

At this juncture, it bears stressing that MPEI was incorporated only on February 27, 2003 as evidenced by its Certificate of Incorporation.¹⁸ 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 BACs satisfaction its financial capability which include:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

(1) audited financial statements of the Bidders 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;chanroblesvirtuallawlibrary

(3) Income Statement; andcralawlibrary

(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?chanroblesvirtualawlibrary

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 CeC , 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 was between COMELEC and MPEI, not MP CONSORTIUM.¹⁹ As a matter of fact, there cannot be found in the contract any reference to the MP CONSORTIUM or any member thereof for that matter.²⁰ 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 MPEIs 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] favor. As if to emphasize the absence of joint and several liability to 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 of Agreement between MPEI and SK C & C.²¹ ςrνll

The Teaming Agreement between MPEI and Election.Com²² also negates MPEIs 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 present in the Teaming Agreement between MPEI and ePLDT.²³ ςrνll

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 by agreement to share both in profit and losses.24 In the Philippines, the prevailing school of thought is that a joint venture is a species of partnerships.²⁴ Since joint venture is a species or a special type of partnership, it is said to have the following characteristics of partnership:ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

(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;chanroblesvirtuallawlibrary

(d) Generally, the co-venturers acting on behalf of the joint venture are agents thereof as to bind the joint venture; andcralawlibrary

(e) Death, retirement, insolvency, civil interdiction or dissolution of a co-venturer dissolves the joint venture.²⁵ ςrνll

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 countrys 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 may not be the victim of ill-advised or improvident action.²⁶ 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 public contracts.²⁷ 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.

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) 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.

COMELECs 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 contracts cannot be waived. Presidential Decree No. 1594,²⁸ 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, it may not be used as a shield to a fraudulent award.²⁹ Should this be the case, judicial interference would be justified.

One final note. There is a long history of election irregularities that suggest that vote fraud using voting machines has been occurring. As a matter of fact, many voting security experts agree that voting machines represent a pandoras 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 GRANTthe Petition. COMELEC Resolution No. 6074 is declared NULL and VOID.