Privatization Management Office v. Strategic Alliance Development
REITERATIONFacts
The Antecedents: The Privatization and Management Office (PMO), then operating as the Asset Privatization Trust (APT), conducted a public bidding on October 30, 2000, for the sale of Philippine National Construction Corporation (PNCC) properties. The Asset Specific Bidding Rules (ASBR) stipulated that the indicative price would be announced on the day of the bidding, the highest compliant bidder would win, PMO reserved the right to reject any or all bids, and delivery of financial information did not constitute a warranty. Strategic Alliance Development Corporation (SADC) participated and accepted these terms. Procedural History: On the day of the bidding, the indicative price was announced at ₱7,000,000,000. No bidder met this threshold, and SADC's bid of ₱1,228,888,800, though the highest, was rejected by PMO. SADC protested and filed a Complaint for Declaration of Right to a Notice of Award and/or Damages before the Regional Trial Court (RTC). The RTC ruled in favor of SADC, holding that PMO's failure to explain the basis of the indicative price constituted grave abuse of discretion and a violation of the public's right to information, warranting the issuance of a notice of award. The Court of Appeals (CA) affirmed the RTC's decision. PMO filed a Petition for Review on Certiorari before the Supreme Court (G.R. No. 200402). Subsequently, the CA, in its Amended Decision dated February 13, 2013, and Resolution dated July 12, 2013, reversed its original decision, holding that PMO could not be compelled to accept a grossly disadvantageous offer and that its right to reject bids was validly exercised without unfairness or grave abuse. Meanwhile, Philippine Estate Corporation (PHES), as successor of SADC, filed its own Petition for Review (G.R. No. 208127). The Petition: These consolidated cases involve a Motion for Reconsideration in G.R. No. 200402 and a Petition for Review in G.R. No. 208127, both filed by PHES (representing SADC), seeking to compel PMO to issue a notice of award for the PNCC properties. The issues raised by PHES are that the late announcement of the indicative price constituted fraud and that the valuation of the indicative price was erroneous, violating the public's right to information.
Issue(s)
Whether the late announcement of the indicative price constituted fraud on the part of PMO. Whether the valuation of the indicative price was erroneous and violated the public's right to information, warranting the issuance of a notice of award. Whether a notice of award is tantamount to a sale. Whether the Supreme Court's Decision dated June 13, 2013, is moot given the CA's amended rulings.
Ruling
The Supreme Court denied the Motion for Reconsideration in G.R. No. 200402 and the Petition for Review in G.R. No. 208127 for lack of merit. It reiterated its Decision dated June 13, 2013, which reversed the RTC and the initial CA decision, and affirmed the CA's Amended Decision dated February 13, 2013, and Resolution dated July 12, 2013.
Ratio Decidendi
On the issue of fraud and late announcement of indicative price: The Court held that PMO timely announced the indicative price on the day of the bidding as per the ASBR. Absent clear and convincing evidence of fraud, and given PMO's adherence to protocol, fraud could not be presumed. The acceptance of the ASBR terms by SADC further negated any claim of fraud. On the issue of erroneous valuation and violation of the public's right to information: The Court reiterated that bids are mere offers, and advertisements for bidders are invitations to make proposals, not binding commitments to accept the highest or lowest bidder, unless otherwise stipulated. Article 1326 of the Civil Code supports this principle. The ASBR explicitly stated that PMO reserved the right to reject any or all bids. Furthermore, the right to information under the Constitution grants access to public records but does not create a positive right to obtain an award of government properties. Therefore, allegations of erroneous valuation and violation of the right to information were irrelevant to the issuance of a notice of award. On whether a notice of award is tantamount to a sale: The Court found no substantial argument in this claim, acknowledging that the issuance of a notice of award is indeed an initial step towards the perfection of a contract of sale. However, this did not compel PMO to issue such a notice when the bid was rightfully rejected. On the mootness of the Court's prior decision: The Court found this argument flawed. Since the CA's amended rulings were the subject of the appeal in G.R. No. 208127, these rulings could not be considered final and executory to the extent that they would vacate the earlier CA decision that was already under review by the Supreme Court. Therefore, the Court's prior decision remained relevant and was not rendered moot.
Main Doctrine
The announcement of an indicative price on the day of the bidding, as per the Asset Specific Bidding Rules (ASBR), does not constitute fraud, especially when the bidder accepts these terms. Furthermore, the right to information does not create a positive right to an award of properties, and bids are merely offers that may be rejected by the advertiser, particularly when they are grossly disadvantageous to the government.