Information Technology Foundation of the Philippines vs COMELEC

Facts: Congress enacted an Act authorizing COMELEC to use an automated election system (AES) for the voting and 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. COMELEC adopted in its Resolution a modernization program for the 2004 elections. It resolved to conduct biddings for the three (3) phases of its AES; namely, a. Voter Registration and Validation System; b. Automated Counting and Canvassing System; and c. Electronic Transmission. On January 24, 2003, PGMA issued an EO which allocated the fund the AES for the May 10, 2004 elections. On January 28, 2003, the Commission issued an “Invitation to Apply for Eligibility and to Bid” COMELEC provided all the qualifications necessary before a bidder may participate.

For the automation of the counting and canvassing of the ballots in the 2004 elections, COMELEC awarded the Contract to “Mega Pacific Consortium” (MPC) 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. Infotech, one of the bidders, now file a petition seeking to declare the award null and void alleging that COMELEC gravely abused its discretion in arbitrarily failing to observe its own rules, policies and guidelines with respect to bidding process.

Issue: W/N COMELEC, 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 2nd phase of the comprehensive AES.

Ruling: Yes.

The public bidding system designed by COMELEC mandated the use of two—envelope, two—stage system. A bidder’s first 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. In the instant case, no such instrument was submitted to COMELEC during the bidding process. 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 the firms. Had the proponent MPC 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. 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.

COMELEC failed to perform properly, legally, and prudently it legal mandate to implement the transition from manual to automated elections. 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. As a necessary consequence of such nullity and illegality, the purchase of the machines and payments made 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 accountable for the electoral mess wrought by their grave abuse of discretion in the performance of their functions.

Petition is GRANTED. The Court hereby declares NULL and VOID COMELEC awarding the contract for Phase II of the CAES to MPC.