DPWH Datumanong Vs Malaga
DPWH Datumanong Vs Malaga
DPWH Datumanong Vs Malaga
June 5, 2017
DECISION
DEL CASTILLO, J.:
Assailed in this Petition for Review on Certiorari are the March 26, 2012 Decision of the Court of
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Appeals (CA) in CA·G.R. CV No. 00889 which set aside the March 23, 2004 Order of the Regional
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Trial Court (RTC) of Iloilo City, Branch 29 in Civil Case No. 27059, and the CA's November 9, 2012
Resolution denying herein petitioners' Motion for Reconsideration.
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Factual Autecedents
Respondent Maria Elena L. Malaga owns B.E. Construction, a private contractor and the lowest
bidder for two concreting projects of the Department of Public Works and Highways (DPWH),
particularly:
The bidding for the above projects was held on November 6, 2001, and was based upon an August
2001 published invitation to bid.
However, it appears that after the publication of the invitation to bid but prior to the scheduled
November 6, 2001 bidding, the road condition of the Mandurriao-San Miguel Road
in Barangay Hibao-an severely deteriorated to an almost impassable state on account of the
prevailing typhoon and monsoon season, prompting calls for immediate repairs and other
appropriate action from local government units (LGUs ), a Member of the House of Representatives,
and concerned private citizens and interest groups. Petitioner Vicente M. Tingson, Jr. (Tingson),
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DPWH Iloilo City District Engineer, thus requested his immediate superior, herein petitioner and
DPWH Region VI Director Wilfredo B. Agustino (Agustino), that the Mandurriao-San Miguel
Road, Barangay Hibao-an Section and Mandurriao-San Miguel Road, Guzman-Jesena Section
projects be implemented by administration, that is, that these projects be undertaken directly and
immediately by the government, on account of urgency, and thus taken out of the list of projects bid
out to private contractors. In turn, Agustino sent an August 23, 2001 1st Indorsement to then DPWH
Secretary Simeon A. Datumanong (Datumanong), reiterating Tingson's request that the said projects
be implemented by administration. 7
On August 23 and 24, 2001, DPWH Undersecretary and herein petitioner Manuel M. Bonoan
(Bonoan) personally inspected the area covered by the proposed projects, and in an August 29,
2001 Memorandum to Datumanong, he recommended that the subject projects be undertaken by
administration.
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Agustino sent an October 23, 2001 letter to Datumanong reiterating his earlier request contained in
the August 23, 2001 1st Indorsement. 9
Since no response was forthcoming from Datumanong, the DPWH Regional Office VI proceeded
with the dropping and opening of bids as scheduled. Thus, respondent won as the lowest bidder for
the above-mentioned projects.
On November 7, 2001, Datumanong issued a Memorandum of even date approving the DPWH
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Regional Office VI request, but only with respect to the Mandurriao-San Miguel
Road, Barangay Hibao-an Section considering the exigent circumstances prevailing. The DPWH
Regional Office VI received a copy of this Memorandum on November 12, 2001.
On November 15, 2001, Lagoc informed respondent that the MandurriaoSan Miguel
Road, Barangay Hibao-an Section project may not be awarded to her, in view ofDatumanong's
November 7, 2001 Memorandum. Respondent replied with formal written demands that the project
be awarded to her in spite of Datumanong' s directive, under pain of civil action and claim for
damages. Lagoc wrote back disavowing any liability and claiming that Datumanong's directive was
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a supervening event that prevented the award of the subject project to respondent, and until it is
nullified or set aside, the Mandurriao-San Miguel Road, Barangay Hibao-an Section project shall be
undertaken by administration as directed. 12
On February 14, 2002, respondent filed Civil Case No. 27059 with the RTC. In her Complaint for
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damages against the herein individual petitioners, respondent claimed that the individual petitioners,
"acting together, in cooperation and collusion with each other, have manipulated things and
circumstances in a manner deliberately intended to deprive and deny her the x x x project even if
she was the lowest and complying bidder thereof;" that individual petitioners' "clear intention has
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been indisputably to implement the project 'by contract' if the bidding is won by any other bidder, and
to implement it 'by administration"' if respondent won; that the real reason behind individual
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implement the project by bid contract than by administration; that individual petitioners are guilty of
malice and bad faith and intentionally delayed the processes relative to the bidding for the said
project in order to defeat her valid claim thereto; and as a result, she was deprived of the said project
and the reasonable profits she would have gained therefrom. Thus, she prayed, as follows:
WHEREFORE, it is most respectfully prayed that judgment be rendered for the plaintiff and against
the defendants, ordering the defendants, jointly and solidarily, to pay the plaintiff the sums of
₱855,000.00 as actual damages; at least ₱200,000.00 as moral damages; ₱200,000.00 as
attorney's fees plus ₱3,000.00 per hearing as appearance fee; ₱50,000.00 as miscellaneous
litigation and other expenses; such amount of exemplary damages this Honorable Court may fix as
just and proper; and to pay the costs.
In their Answer, herein individual petitioners prayed for the dismissal of the case, arguing that
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respondent has no valid cause of action; that the decision to undertake the subject project by
administration was legal and justified, and was not arrived at in bad faith and with malice; that
respondent had no right to the project since under the Implementing Rules and Regulations (IRR) of
Presidential Decree No. 1594, a contractor is not automatically entitled to an award of a project
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subject to bidding by the mere fact that he is the lowest bidder as he must still undergo a mandatory
post-qualification procedure regarding his legal, technical and financial capability and other
qualifications as outlined under said IB 10.5 of the IRR; that under the published Invitation to
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Bid for the subject project, it is particularly stated that government reserved the right to reject any
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or all bids, waive any minor defect therein, and accept the offer most advantageous to it; that
respondent had a mere inchoate right but which does not give her a valid cause of action; that
respondent was awarded the other project she bid for, which indicates lack of bad faith and malice
on their part; and that the case is clearly an unauthorized suit against the State, as no prior consent
to be sued was shown in the complaint.
The parties were directed to file their respective position papers on the issue of whether the case
was one against the State, or one against the individual petitioners in their respective personal
capacities.
On March 23, 2004, the RTC issued an Order dismissing Civil Case No. 27059 on the conclusion
that it was an unauthorized suit against the State. It held, as follows:
The instant case is a suit against the state and therefore dismissible for it cannot be sued without its
consent.
The plaintiff, being the lowest bidder of the San Miguel-Mandurriao Road (Barangay Ribao-an)
Project, has no automatic right to be awarded of [sic] the said project since the plaintiff has still to
undergo post-qualification regarding his legal, technical and financial capability as mandated by law
and the government reserves the right to reject any or all bids, waive any minor defect therein, and
accept the offer most advantageous to it. The rejection of the government to award the project to the
herein plaintiff is well within its prerogative to best serve the interest of the citizenry. It is worth
stressing that when the project was taken 'by administration', it passed thru proper procedures. Due
to public clamor of the unpassable [sic] status of the said San MiguelMandurriao Road, the drivers of
public utility vehicles plying the said route, the Mandurriao Transport Integrated Association, Inc.
(MITAD), and the residents of the said community were howling protest and indignant words against
the office of DPWH. This prompted x x x Tingson x x x to recommend that the said project be
undertaken by administration which was favorably endorsed by x x x Agustino to x x x Datumanong.
Thus, on August 23-24, 2001, x x x Bonoan inspected the said road and submitted a memorandum
to x x x Datumanong, confinning the unbearable and hazardous conditions of the said road and
recommended that the project be undertaken 'by administration'. x x x Datumanong issued a
memorandum to x x x Agustino dated November 12, 2001, directing the implementation of the
concreting ofMandurriao-San Miguel Road (Barangay Ribao-an Section) 'by administration'. Hence,
x xx Lagoc, x x x Jerecia and x x x Gardose, in their capacities as BAC Chairman and members,
respectively, did not conduct the post evaluation/qualification of plaintiff's firm for the said project.
The foregoing acts of the above-named defendants were all committed in the performance of their
official functions and cannot be said to have been tainted with malice and bad faith as it [sic] passed
thru proper procedures as mandated by law.
WHEREFORE, the defendants' affirmative defenses is [sic] granted and this case is hereby
DISMISSED.
SO ORDERED. 22
On March 26, 2012, the CA rendered the assailed Decision, declaring as follows:
An unincorporated government agency such as the DPWH is without any separate juridical
personality of its own and hence enjoys immunity from suit. Even in the exercise of proprietary
functions incidental to its primarily governmental functions, an unincorporated agency still cannot be
sued without its consent.
'While the doctrine appears to prohibit only suits against the state without its consent, it is also
applicable to complaints filed against officials of the state for acts allegedly performed by them in the
discharge of their duties. The rule is that if the judgment against such officials will require the state
itself to perform an affirmative act to satisfy the same, such as the appropriation of the amount
needed to pay the damages awarded against them, the suit must be regarded as against the state
itself although it has not been formally imp leaded.'
It bears emphasis that when the suit is against an officer of the State, enquiry must be made
whether in fact ultimate liability will fall on the officer or on the government. If it is the government
which will ultimately be accountable, the suit must be considered as one against the state itself.
In the case at bench, plaintiff-appellant reasoned that no relief was claimed against the government.
The Complaint showed that the Republic was not impleaded and only the public officers were made
parties thereto. The gist of the initiatory pleading was to ascertain and adjudicate defendants-
appellees' joint and several liability for damages. There was no express mention whatsoever of State
liability. What was explicit was plaintiff-appellant's allegation of bad faith on the part of the public
officers who denied her the award of the project which resultantly deprived her of prospective profits.
On this score, it cannot be concluded that the Complaint was barred by immunity of the State from
suit inasmuch as no appropriation or liability was sought from the government coffer. On the
contrary, liability was directly limited to the public officers as an incident of their alleged wanton and
malicious acts.
'The doctrine of immunity from suit will not apply and may not be invoked where the public official is
being sued in his private and personal capacity as an ordinary citizen. The cloak of protection
afforded the officers and agents of the government is removed the moment they are sued in their
individual capacity. This situation usually arises where the public official acts without authority or in
excess of the powers vested in him. It is a well-settled principle of law that a public official may be
liable in his personal private capacity for whatever damage he may have caused by his act done with
malice and in bad faith, or beyond the scope of his authority or jurisdiction.'
Of primordial significance was the fact that no contract was inked between DPWH and plaintiff-
appellant with respect to the disputed project. In fact, the instant suit was intended to compel the
public officers to compensate plaintiff-appellant for the prospective profits she would have earned
had she been awarded the project as the bidder who submitted the lowest numerical bid.
It was defendants-appellees' contention that the submission of the lowest bid alone does not give the
plaintiff-appellant the right to insist that the contract be awarded to her. Citing IB 10.5 of the
Implementing Rules and Regulations of Presidential Decree No. (P.D.) No. 1594, x x x, defendants-
appellees posited that the bid was still subject to post evaluation and acceptance of the Government
which reserved in the Invitation to Bid (ITB) the right to reject any and all bids that are not deemed
responsive or compliant to its requirements.
Indeed, the executive department is acknowledged to have wide latitude to accept or reject a bid, or
even after an award has been made, to revoke such award. From these options, the court will not
generally interfere with the exercise of discretion by the executive department, unless it is apparent
that the exercise of discretion is used to shield unfairness or injustice.
The Court, the parties, and the public at large are bound to respect the fact that official acts of the
Government, including those performed by governmental agencies such as the DPWH, are clothed
with the presumption of regularity in the performance of official duty and cannot be summarily,
prematurely and capriciously set aside.
However, the presumption that official duty has been regularly performed is among the disputable
presumptions. ‘It is settled that a disputable presumption is a species of evidence that may be
accepted and acted on where there is no other evidence to uphold the contention for which it stands,
or [[one which may be overcome by other evidence. One such disputable/rebuttable presumption is
that an official act or duty has been regularly performed ... ' Such, presumption of regularity of official
acts may be rebutted by affirmative evidence of irregularity or failure to perform a duty.
True, the Government's reservation subjected the bidders to its right to reject, and consequently
accept any and all bids at its discretion. Unless such discretion has been arbitrarily exercised
causing patent injustice, the Court will not supplant its decision to that of the agency or
instrumentality which is presumed to possess the technical expertise on the matters within its
authority.
Yet, it is worthy of consideration that 'Our legal framework allows the pursuit of remedies against
errors of the State or its components available to those entitled by reason of damage or injury
sustained. Such litigation involves demonstration of legal capacity to sue or be sued, an exhaustive
trial on the merits, and adjudication that has basis in duly proven facts and law.'
In this case, in order to properly determine the supposed existence of capricious exercise of
governmental discretion, in the guise of performance of official duty, this Court deemed it best that
the matter of damages be fairly litigated before the trial court. In the process, the plaintiff-appellant
can refute, by way of competent evidence, the presumptive regularity in the performance by
defendants-appellees of official functions.
WHEREFORE, the appeal is GRANTED. Hence, the Order of March 23, 2004 rendered by the
Regional Trial Court, Branch 29, Iloilo City in Civil [Case] No. 27059 is hereby SET ASIDE. Let this
case be remanded to the trial court for proper disposition on its merits.
Petitioners sought to reconsider, but were rebuffed. Hence, the present Petition.
Issues
In a June 22, 2015 Resolution, this Court resolved to give due course to the Petition, which
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I.
THE COURT OF APPEALS ERRED IN SETTING ASIDE THE ORDER OF DISMISSAL BY THE
LOWER COURT BECAUSE THE COMPLAINT WAS A SUIT AGAINST THE STATE TO WHICH IT
HAS NOT GIVEN ITS CONSENT TO BE SUED.
II.
III.
Petitioners' Arguments
In praying that the assailed CA dispositions be set aside and that, instead, Civil Case No. 27059 be
dismissed as ordered by the RTC, petitioners argue in their Petition and Reply that respondent's
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case for damages is actually an unauthorized suit against the State, as the individual petitioners are
being sued in relation to acts committed in the performance of their official duties; that as such,
individual petitioners should be protected by the mantle of state immunity and allowed to perform
their functions without fear of unwarranted lawsuits in order to better serve the public; that
respondent should not be allowed to circumvent the principle of state immunity by the expedient of
impleading the individual petitioners in their private capacities; that the individual petitioners were
indubitably acting within the bounds of their official mandate when they implemented the subject
project by administration instead of awarding the same to respondent; that the decision to undertake
the project by administration was not made capriciously but with utmost consideration and legal
justification; that there is no actionable wrong committed against respondent; that she is not entitled
to relief as her bid was not subjected to the required post-qualification process; that her claim of
being singled out with malice and bad faith is belied by the fact that she was awarded one of the
projects by the petitioners; and that the presumption of regularity in the performance of official duty
should prevail in this case, as against respondent's claims and arguments to the contrary.
Respondent's Arguments
Respondent, on the other hand, counters in her Comment that as the individual petitioners
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conspired in bad faith to deprive her of the subject project and unduly utilized their official functions
to achieve such end, they opened themselves to a damage suit in their respective individual
capacities; that by their actions, individual petitioners waived the cloak or protection afforded by their
office; and that, as correctly held by the CA, the issue of existence of an actionable wrong resulting
from the individual petitioners' acts is for the RTC to determine after trial on the merits, and cannot
be passed upon summarily in the proceedings before the CA or this Court.
Our Ruling
The procurement process basically involves the following steps: (1) pre-procurement conference; (2)
advertisement of the invitation to bid; (3) pre-bid conference; (4) eligibility check of prospective
bidders; (5) submission and receipt of bids; (6) modification and withdrawal of bids; (7) bid opening
and examination; (8) bid evaluation; (9) post qualification; (10) award of contract and notice to
proceed. x x x 28
Thus, before a government project is awarded to the lowest calculated bidder, his bid must undergo
a mandatory post-qualification procedure whereby the "procuring entity verifies, validates, and
ascertains all statements made and documents submitted by the bidder with the lowest calculated or
highest rated bid using a non[-]discretionary criteria as stated in the bidding documents." 29
x x xx
After the preliminary examination stage, the BAC opens, examines, evaluates and ranks all bids and
prepares the Abstract of Bids which contains, among others, the nan1es of the bidders mid their
corresponding calculated bid prices arranged from lowest to highest. The objective of the bid
evaluation is to identify the bid \vi.th the lowest calculated price or the Lowest Calculated Bid. The
Lowest Calculated Bid shall then be subject to post-qualification to determine its responsiveness to
the eligibility and bid requirements. If after post-qualification, the Lowest Calculated Bid is
determined to be post-qualified, it shall be considered the Lowest Calculated Responsive Bid and
the contract shall be awarded to the bidder. (Emphasis supplied)
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In one case, bidders in a government project sought to enjoin the award and implementation thereof,
arguing that as the bidders who submitted the lowest numerical bid, they were entitled to the award.
This Court disagreed, for the reason, among others, that mere submission of the lowest bid did not
automatically entitle them to an award; their bid must still undergo post-qualification/evaluation.
Thus, the Court held in said case that –
In the case at bar, the petitioners pray for the issuance of a writ of preliminary mandatory injunction
to direct public respondent BAC Region VII to award the contract to the Flyover Project to the
petitioners. The petitioners claim that they are entitled to the award as the lowest bidder for the
construction of the said infrastructure project of the Government. In support of their claim, the
petitioners allege fraud and bad faith on the part of public respondent BAC Region VII. They allege
conspiracy, forgery and fraud on the part of the public respondent in awarding the subject contract to
private respondent WTG. These grave allegations were not sufficiently substantiated.
As correctly pointed out by the respondents, the mere submission of the lowest bid does not
automatically entitle the petitioners to the award of the contract. The bid must still undergo
evaluation and post qualification in order to be declared the lowest responsive bid and thereafter be
awarded the contract. As provided in the Invitation to Apply for Eligibility and to Bid, 'the Government
reserve[s] the right to reject any and all bids, waive any minor defect therein, and accept the offer
most advantageous to the Government.' Such reservation subjects the bidders to the right of the
Government to reject, and consequently accept, any and all bids at its discretion. Unless such
discretion has been arbitrarily exercised causing patent injustice, the Court will not supplant its
decision to that of the agency or instrumentality which is presumed to possess the technical
expertise on the matters within its authority.
In the case of the petitioners, while both the technical and financial envelopes were opened in
accordance with the May 28, 2003 Decision of the DPWH Secretary, a post evaluation and
qualification of the said bids is still essential in order to determine whether the lowest bid is
responsive to and in compliance with the requirements of the project, the laws, rules and regulations.
x x x (Emphasis supplied; citations omitted)
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From the foregoing, it must be concluded that since respondent's lowest calculated bid for the
subject project did not undergo the required post-qualification process, then she cannot claim that
the project was awarded to her. And if the project was never awarded to her, then she has no right to
undertake the same. If she has no right to the project, then she cannot demand indemnity for lost
profits or actual damages suffered in the event of failure to carry out the same. Without a formal
award of the project in her favor, such a demand would be premature. Consequently, she has no
right of action against petitioners, and no cause of action in Civil Case No. 27059. Indeed, "only
when there is an invasion of primary rights, not before, does the adjective or remedial law become
operative. Verily, a premature invocation of the court's intervention renders the complaint without a
cause of action and dismissible on such ground." 32
It may be argued that respondent's claim for damages is likewise potentially premised on Article 27
of the Civil Code, which provides that –
Art. 27. Any person suffering material or moral loss because a public servant or employee refuses or
neglects, without just cause, to perform his official duty may file an action for damages and other
relief against the latter, without prejudice to any disciplinary administrative action that may be taken.
In this case, respondent may claim that individual petitioners' refusal or neglect to award the project
to her is the cause of her injury. However, this Court still finds that respondent has no cause of
action. Individual petitioners could not have awarded the project to her precisely for the reason that
her bid still had to undergo a post-qualification procedure required under the law. However, such
post-qualification was overtaken by events, particularly Datumanong's November 7, 2001
Memorandum.
In short, respondent's causes of action solely and primarily based on a supposed award, actual or
potential, do not exist. This is so for the precise reason that such an award and the whole bidding
1a\^/phi1
process for that matter, no longer exist, as they were mooted and superseded by the DPWH's
decision to undertake the subject project by administration, as well as by the reservation contained
in the Invitation to Bid that at any time during the procurement process, government has the right to
reject any or all bids.
The proper remedy for respondent should have been to seek reconsideration or the setting aside of
Datumanong's November 7, 2001 Memorandum, and then a reinstatement of the bidding or post-
qualification process with a view to securing an award of the contract and notice to proceed
therewith. After all, said Memorandum enjoys the same presumption of regularity that is attached to
all official acts of government.
With the foregoing disquisition, the Court finds no need to resolve the other issues and arguments
raised by the parties.
WHEREFORE, the Petition is GRANTED. The March 26, 2012 Decision and November 9, 2012
Resolution of the Court of Appeals in CA-G.R. CV No. 00889 are REVERSED and SET ASIDE. Civil
Case No. 27059 before the Regional Trial Court of Iloilo City, Branch 29 is ordered DISMISSED.
SO ORDERED.
WE CONCUR:
CERTIFICATION
Pursuant to the Section 13, Article VIII of the Constitution, I certify that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the writer of the opinion
of the Court’s Division.
1
Rollo, pp. 15-52.
Id. at 54··70; penned by Associate Justice Eduardo B. Peralta, Jr. and concurred in by
2
3
Id. at 85-86; penned by Judge Rene B. Honrado.
Id. at 72-73; penned by Associate Justice Gabri1.il T. Ingles and concurred in by Associate
4
5
Id. at 74-84.
6
Id. at 118-121, 122-123.
7
Id. at 117.
8
Id. at 122.
9
Id. at 125.
10
Id. at 126-127.
11
Id. at 183-184.
12
Id. at 185.
13
Id. at 129-136.
14
Id. at l31.
15
Id. at 132.
16
Id. at 133.
17
Id. at 135.
18
Id.at 87-113.
20
IB 10.5 - Postqualification of Contractor with the Lowest Calculated Bid.
21
Rollo, pp. 114-116.
Id. at 85-86.
22
Id. at 66-69.
23
Id. at 297-298.
24
Id. at 36-37.
25
Id. at 288-295.
26
Id. at 283-285.
27
Querubin v. Commission on Elections En Banc~ G.R. No. 218787, December 8, 2015, 776
29
SCRA 715, 769, citing Sec. 34.3 of the Revised Implementing Rules and Regulations of
Republic Act No. 9184 (RA 9184), the Government Procurement Reform Act, which took
effect on January 26, 2003 and repealed PD 1594. While the post-qualification procedure
under the new law, RA 9184, may have been amended, both laws nonetheless require the
conduct of such a procedure before the project may be awarded to a successful bidder.
Commission on Audit v. Link Worth International, Inc., 600 Phil. 547, 555-556, 559 (2009).
30
WT Construction, Inc. v. Department of Public Works and Highways, 555 Phil. 642, 649-
31
650 (2007).