Customs v. Gallegos
REITERATIONFacts
The Antecedents: The case concerns the procurement process for Phase Two of the Philippines' National Single Window (PNSW 2) project, an information technology initiative aimed at integrating existing customs systems for a fully electronic, paperless processing of transactions. The project, funded by the General Appropriations Act for 2010 and 2012, was initiated by the Bureau of Customs (BOC) through the Department of Budget and Management-Procurement Service (DBM-PS). Among the bidders for the P650 Million project was the joint venture of Omniprime Marketing, Inc. and Intrasoft International, Inc. (private respondent). A competing bid involved a major shareholder of the BOC Commissioner. Procedural History: Following the issuance of a Request for Expression of Interest and subsequent shortlisting of eligible consultants, the DBM-PS Bids and Awards Committee (BAC) issued a Notice of Highest Rated Bid and an Invitation to Negotiate to the private respondent. Negotiations commenced, but on April 23, 2015, Alberto D. Lina was appointed BOC Commissioner. Commissioner Lina, citing Section 41(c) of Republic Act No. 9184, requested the discontinuance of the procurement process. Consequently, the DBM-PS Executive Director issued a Notice of Cancellation on May 7, 2015. The private respondent's motion for reconsideration was denied. This led the private respondent to file a Petition for Certiorari and Mandamus with the Regional Trial Court (RTC) of Manila, Branch 47, seeking to annul the cancellation and compel the continuation of the bidding process. The RTC issued a Temporary Restraining Order and subsequently an Omnibus Order granting the private respondent's application for a Writ of Preliminary Injunction, enjoining the cancellation and ordering the continuation of the procurement process. The Petition: The Bureau of Customs (BOC) and the DBM-PS, represented by Commissioner Alberto D. Lina and Executive Director Jose Tomas C. Syquia respectively, filed this petition for certiorari under Rule 65 of the Rules of Court. They assail the Omnibus Order dated August 24, 2015, issued by the RTC of Manila, Branch 47, which granted a preliminary injunction against the cancellation of the PNSW 2 project's bidding process. The petitioners argue that the RTC gravely abused its discretion in issuing the order and the injunctive writ. They contend that the RTC should not have entertained the petition directly without a prior motion for reconsideration and that the RTC's issuance of the injunction was improper, particularly in light of Republic Act No. 8975, which generally prohibits lower courts from issuing injunctions in government infrastructure projects. The petition seeks to have the RTC's Omnibus Order annulled and set aside.
Issue(s)
Whether the RTC gravely abused its discretion in issuing the Omnibus Order and the injunctive writ. Whether the petition for certiorari is procedurally infirm for failure to file a motion for reconsideration and for direct resort to the Supreme Court. Whether R.A. No. 8975 applies to the procurement of the PNSW 2 project. Whether the cancellation of the public bidding was justified under R.A. No. 9184 and its Implementing Rules and Regulations (IRR).
Ruling
The petition is DISMISSED. The Omnibus Order dated August 24, 2015, of the Regional Trial Court of the City of Manila, Branch 47, is AFFIRMED in toto. The case is REMANDED to the RTC for the immediate resolution of the main petition in Civil Case No. 15-134333.
Ratio Decidendi
On the RTC's alleged grave abuse of discretion and the issuance of the preliminary injunction: The Supreme Court concluded that the respondent Judge did not act with grave abuse of discretion. The issuance of the injunctive writ was based on the finding that the cancellation of the bidding lacked legal and factual bases, causing unfairness and injustice. The Court reiterated that while courts generally do not interfere with the discretion of government agencies in awarding contracts, they may intervene when such discretion is used as a shield for fraudulent award, unfairness, injustice, or grave abuse of jurisdiction. The circumstances of the case fell under this exception, justifying the RTC's intervention. The Court affirmed the RTC's issuance of the preliminary injunction. It stated that the purpose of such a writ is to preserve the status quo and prevent irreparable injury. The private respondent, as the highest bidder, had a right under R.A. No. 9184 to be awarded the contract. The Court highlighted that Section 38 of R.A. No. 9184 provides a three-month period for action on procurement activities, after which the contract is deemed approved if no action is taken. In this case, more than three months had elapsed since the opening of bids, and the DBM-PS failed to act, allowing Commissioner Lina to cancel the bidding. The arbitrary cancellation violated the private respondent's rights and necessitated the preservation of the status quo. The Court also considered the delay in the Philippines' commitment to the ASEAN Single Window Agreement. On the procedural infirmity of the petition: The Supreme Court held that the petition for certiorari was procedurally infirm. It emphasized that a motion for reconsideration is a prerequisite to filing a petition for certiorari under Rule 65, as it provides an opportunity for the court to correct its mistakes. The petitioners failed to show any concrete, compelling, or valid reason to dispense with this requirement. Their bare allegation that the petition raises purely questions of law was insufficient justification. Furthermore, the Court reiterated the doctrine of hierarchy of courts, stating that direct resort to the Supreme Court is only allowed under special, extraordinary, or compelling circumstances, which were not demonstrated by the petitioners in this case. The Court stressed that the observance of the hierarchy of courts is crucial to prevent frivolous cases and allow the Supreme Court to focus on fundamental legal tasks. On the applicability of R.A. No. 8975: The Supreme Court ruled that R.A. No. 8975, which prohibits lower courts from issuing temporary restraining orders, preliminary injunctions, or preliminary mandatory injunctions in government infrastructure projects, does not apply to the procurement of the PNSW 2 project. The Court agreed with the RTC that the PNSW 2 project, being an information technology project involving consulting services for design, implementation, operation, and maintenance, does not fall under the definition of an "infrastructure project" as contemplated by R.A. No. 8975. The Court cited jurisprudence distinguishing between the civil works component of IT projects and non-civil works components, classifying the latter as acquisition of goods or consulting services. On the justification for cancellation of the bidding: The Supreme Court found that the cancellation of the public bidding for the PNSW 2 project was not justified and constituted grave abuse of discretion. The Court explained that the right to reject bids under Section 41(c) of R.A. No. 9184 must be based on "justifiable and reasonable grounds" as defined in Section 41.1 of its IRR. Commissioner Lina's stated reason for cancellation – to conduct a "thorough review" of the project details – was deemed insufficient. Similarly, Director Syquia's bare statement that the project was no longer feasible lacked proof. The Court noted that the project had been in development for years and that the appointment of a new commissioner did not inherently render the project unnecessary or infeasible. The cancellation was found to be arbitrary, causing unfairness and injustice to the private respondent, the highest bidder.
Main Doctrine
A petition for certiorari under Rule 65 is procedurally infirm if a motion for reconsideration of the assailed order was not filed, absent any special, extraordinary, or compelling reason. Furthermore, the issuance of a preliminary injunction by the RTC was not tainted with grave abuse of discretion as the cancellation of the public bidding lacked justifiable and reasonable grounds under R.A. No. 9184 and its IRR, causing unfairness and injustice to the highest bidder.