16 Information Technology vs. COMELEC

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 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.
142
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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VOL. 419, JANUARY 13, 2004 143

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 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. 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
144

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
146

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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VOL. 419, JANUARY 13, 2004 147

Same; Same; Contracts; Joint Venture; Definition.—InKilosboyan 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 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.
148

PANGANIBAN, J.:
There is grave abuse of discretion (1) when an 1act is done contrary
to the Constitution, the law or jurisprudence; or (2) when it is
executed whimsically, 2capriciously 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, the3Court has no 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).
6
On 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,7 Comelec—in 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 later ordered their manual count
8
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 expenses or
9
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
11
and 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 12of that 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
the strictest scrutiny.” 16
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 matter of public concern and imbued with
18
public interest”; in other words, it is of “paramount public
19 20
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 21
involves “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 to22sue
when there is a claim of “illegal disbursement of public funds,”23 or
if public money is being “deflected to any improper purpose”; or
when petitioners seek to restrain respondent from “wasting public
funds24 through 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 27ad impossible, 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 addressed to Chairman Benjamin
28
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 29
administrative 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 of the assailed Resolution,
31
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 32of delivering 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, 33
SK C&C 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 a written agreement among the “consortium”

34 35
members, 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, he37had never 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 admitted39 that the 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 among40 all the consortium
members, when he subsequently referred to 41 the four (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 were four (4) separate and distinct bilateral
42
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 43
and several 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 is,
45
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
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 device?
particular
_______________
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
Note: This
precincts within it using the encrypted
particular
soft copy of the data generated by the
requirement
counting machine and stored on the
needsfurther
184

removable data storage device? verification

16. Does the City/Municipal √ √
Canvassing System consolidate
Note: This Note: This
results from all precincts within
particular particular
it using the encrypted soft copy
requirement requirement
of the data generated by the
needs needs
counting machine and
further further
transmitted through an
verification verification
electronic transmission media?
17. Does the system output a √ √
Zero City/Municipal Canvass
Report, which is printed on Note: This
election day prior to the conduct particular
of the actual canvass operation, requirement
that shows that all totals for all needs
the votes for all the candidates further
and other information, are in- verification
deed zero or null?
18. Does the system consolidate √ √
results from all precincts in the
Note: This
city/municipality using the data
particular
storage device coming from the
requirement
counting machine?
needs
further
verification
19. Is the machine 100% √ √
accurate
Note: This
particular
requirement
needs
further
verification
20. Is the Program able to detect √ √
previously downloaded precinct
Note: This
results and prevent these from
particular
being inputted again into the
requirement
System?
needs
further
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 stored in a data storage
Note: This
device?
particular
requirement
needs
further
verification
23. Does the system consolidate results √
from all precincts in the
√ Note: This
provincial/district/national using the data
particular
requirement
storage device from different levels of needs
consolidation? 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 results and
Note: This
prevent these from being inputted again
particular
into the System?
requirement
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 device? particular

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
48
Counting 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 qualified technical expert read and analyze
49
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 complied with the
50
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 testing procedures conducted by the MIRDC-
51
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
52
scrutiny 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 nature and
53
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 performs54 dismally and 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, expressed only recently in Macalintal v.

1
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
2
the 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 of a petition for
3
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 technical
4
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
5
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 of the factual and
6
circumstantial settings of a case.
In the past, the principle has been disregarded when (1) there is a
7
violation of due process; (2) the issue involved is purely a legal
8
question; (3) the administrative action is patently illegal amounting
9
to lack or excess of jurisdiction; (4) there is estoppel on the part of
10
the administrative agency concerned; (5) there is irreparable
11
injury; (6) the respondent is a department secretary whose acts, as
an alter ego of the President, bear the implied and assumed approval
12
of the latter; (7) to require exhaustion of administrative remedies
13
would be unreasonable; (8) it would amount to a nullification of a
14
claim; (9) the subject matter is a private land in land case
15
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 intervention, as when public interest is
17
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

18
particular 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 each party exercises equal rights in the conduct of the
19
business.”
InAurbach, et al. v. Sanitary Wares Manufacturing Corporation,
20
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” which

21 22
MPEI 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
23
“Contractor 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 or provision of
25
services to the Contractor, MPEI, and indeed expressly limit the
Subcontractor’s role in the entire project to be merely that of a
26
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”
27
entered 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 the Modernization
28
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 to, is defined as “Mega Pacific

29
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
30
particular 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 existing31under 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
32
Modernization 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
34
act 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 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 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
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 Pacific
35
Solutions, Inc., and Technical Specifications”; “Ballot Counting
36 37
System”; “Canvassing of Votes System/Software”; “Project
38 39
Management Approach”; “Implementation and Roll-Out Plan”;
40 41 42
“Timelines”; “List of Goods”; “List of Documentation”;
43 44
“Training Summary”; “List of Services”; “Schedule of
45
Communication/ Information Dissemination Materials”; and
46
“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 own behalf, and not in behalf of any
47
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 Ltd.,
48
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,
50
accordingly, 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, and in the
1
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 less2
and less 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

3
On December 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 of the ACM with an estimated
5
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 be jointly and severally responsible or
6
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
7
of the 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 of its authority it gravely
8
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 excess of its jurisdiction or with grave abuse of
10
discretion” when they awarded the Project to MPEI. Thus, the
following pronouncement of this Court in JG Summit Holdings, Inc.
11
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

Information Technology Foundation of the Philippines vs. Commission on
Elections
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 vs. Philippine Amusement
12
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 expected to follow the protest
13
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 would
15
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 legal obstacle. In Commission on Elections vs. Quijano-
16
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 and proceed with
17
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 27, 2003 as evidenced by its Certificate of
18
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 was between
19
COMELEC and MPEI, not MP CONSORTIUM. As a matter of
fact, there cannot be found in the contract any reference to the MP
20
CONSORTIUM 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
21
“Memorandum of Agreement” between MPEI and SK C&C.
22
The “Teaming 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 present in the
23
“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
24
altered by agreement to share both in profit and losses. In the
Philippines, the prevailing school of thought is that a joint venture is
25
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 26 or
dissolution 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 may not be the victim of ill-advised or improvident
27
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
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 will TIM
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? (Item TIM*
No. 5, Table 6, DOST Report
Machine can detect previously counted ballots and TIM
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 external TIM
(removable) storage device? (Item No. 7, Table 6,
DOST Report)
Data stored in external media is encrypted? (Item No. TIM
8, Table 6, DOST Report)
CPU speed is at least 400 mHz? (Item No. 10, Table TIM
6, DOST Report)
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 No. 12, Mega TIM

Table 6, DOST Report)
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? (Item No. 15, Table 6, DOST Report)
Does the city/municipality canvassing system Mega TIM*
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/ Municipal TIM*
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 precincts TIM*
in the city/municipality using the data storage device
coming from the counting machine? (Item No. 18,
Is the machine 100% accurate? (Item No. 19, Table 6, TIM*
DOST Report)
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, Table 6, DOST Report)
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 No. 24,
Is the Program able to detect previously
downloaded precinct results and prevent these
from being imported again into the System?
(Item No. 25, 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. 26,
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,
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 29on public
contracts 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 1
and
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 2exceptional 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 3 office 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 involved may be resolved solely on the
4
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
5
points 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, the1 Court has opted
2
to trudge the trail it blazed recently
in the Amari and PIATCO cases. Amarivoided the Manila Bay
3
reclamation project on constitutional grounds and PIATCO struck
down the NAIA Terminal III contract for violations of the
4 5
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
7
plain, 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 and resolve only the specific
8
questions raised by the parties. The Court9
is not a 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 concerned10
with 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 the11sanctity 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 12
functions absent any showing of grave abuse of discretion. As
13
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
14
proposition, 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 not15 be
entertained if superior administrative officers could grant relief. In
16
16
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 prevent unnecessary and premature resort to the
17
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
other18 plain, speedy, 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 are circumstances indicating the
20
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
21
protests 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 disregard22its duty 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
23
had no basis 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” folder it

24
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 was
25
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, counsel
27
for 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
28
to be jointly 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, and ePLDT on the other. The Memorandum of
29
Agreement between MPEI and WeSolv and MPEI and SK C&C set
forth the joint and several undertakings among the parties. On the
30
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 Filipino ownership thereof
31
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 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
33
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 35posted a performance 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 36
the 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 on38partnership 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
39
to the 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 40
the bidder, at 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 shall contain the technical
41
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 4210% 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 thereunder.
43
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 be altered by agreement to share
44
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 Regulations
46
(“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 and of the
47
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’ 48
manufacturer 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 49 at least
one (1) 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
52
features for 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
53
reprogramming the software and therefore can be readily corrected.”
[Emphasis supplied]
54
Parenthetically, 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 55
screen TV 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,
56
to wit: (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 57
nature and 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
58
does not 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
technical59tests,” including the test on the accuracy rating of the
machine. At the oral arguments, however, they claimed that the
60
COMELEC had “waived the accuracy requirement.” Finally, in
their Memorandum they accused the poll body of having “changed
61
the accuracy 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. Also62in the letter
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 DOST Report itself states that the
64
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.
65
It should be emphasized that Table 6 of the DOST Report
shows that the tested ACM of MPC generates audit trails which
reflect the exact date 66
and time 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 67
of the 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 1,973 units passed
68
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 69
not amiss
to 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
70
of bidding, 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 71
the
government 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’ pleadings and in
72
72
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 its73coverage 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

74
abuse of discretion”
which the Court made in Tanada v. Angara, cited at the opening of
75
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 WTO
76
Agreement 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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VOL.

419, JANUARY 13, 2004 141

INFORMATION TECHNOLOGY FOUNDATION OF THE

Constitutional Law; Powers; Judicial Power; Constitutionality; Legal

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 opinions in

SANDOVAL-GUTIERREZ, J.,Concurring Opinion:

Administrative Law; Commission on Elections; Joint Venture; In the

144 SUPREME COURT REPORTS ANNOTATED

Information Technology Foundation of the Philippines

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

DAVIDE, JR., J., Separate Opinion:

Administrative Law; Commission on Elections; Contracts; As the

VITUG, J., Separate Opinion:

Constitutional Law; Powers; Judicial Power; Supreme Court; The

TINGA, J., Dissenting Opinion:

Actions; Pleadings and Practice; Prohibition; When Available.—

VOL. 419, JANUARY 13, 2004 145

Information Technology Foundation of the Philippines

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

146 SUPREME COURT REPORTS ANNOTATED

Information Technology Foundation of the Philippines

VOL. 419, JANUARY 13, 2004 147

Information Technology Foundation of the Philippines

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

SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.

The facts are stated in the opinion of the Court.

148 SUPREME COURT REPORTS ANNOTATED

• They failed to achieve the accuracy rating criteria of 99.9995

Because of the foregoing violations of law and the glaring grave

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

VOL. 419, JANUARY 13, 2004 149

150 SUPREME COURT REPORTS ANNOTATED

the process of voting, counting votes and canvassing/consolidating

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

“INVITATION TO APPLY FOR ELIGIBILITY AND TO BID

The Commission on Elections (COMELEC), pursuant to the mandate of

a. Duly licensed Filipino citizens/proprietorships;

152 SUPREME COURT REPORTS ANNOTATED

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

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

a) For counting machines—should have been used in at least one (1)

RESOLVED moreover, that:

VOL. 419, JANUARY 13, 2004 153

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

2) The aforementioned documents will be available at the following

a) Voters Validation: Ofﬁce of Comm. Javier

“25. Determination of Eligibility of Prospective Bidders

“25.1 The eligibility envelopes of prospective Bidders shall be

154 SUPREME COURT REPORTS ANNOTATED

or ineligible. If the prospective Bidder is rated ‘passed’ for

“26. Bid Examination/Evaluation

27. Comparison of Bids

VOL. 419, JANUARY 13, 2004 155

“29.1 The BAC will determine to its satisfaction whether the

12Id., pp. 21-23 & 80-82.

156 SUPREME COURT REPORTS ANNOTATED

In their Memorandum, petitioners raise the following issues for our

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