De Guzman v Office of the Ombudsman

Doctrine: Public biddings are held for the best protection of the public and to give the public the best possible advantages by means of
open competition among the bidders, and to change them without complying with the bidding requirement would be against public
policy.

Facts:
(1) National Printing Office Bids and Awards Committee (NPO-BAC) conducted competitive public biddings for, among others, the
printing of accountable forms of LTO. Respondent Bestforms Inc. and Readyforms Inc (RFI) secured the awards in the said public
biddings. Bestforms (April 17 bidding) and RFI (April 25 bidding) accordingly issued their respective Notices of Award.
(2) However, prior to the issuance of a Notice of Award to Bestforms for the April 12 bidding, NPO discovered that Bestforms violated
NPO rules on security printing based on an inspection conducted by NPO Accreditation Committee and NPO-BAC at its printing
facilities. LTO also called the attention of NPO regarding the substandard paperstock used by Bestforms for the printing of LTO
Certificates of Registration.
(3) Consequently, the NPO issued 2 Show Cause Letters to Bestforms to enable it to explain the findings of the NPO Accreditation
Committee. Thereafter, the Committee revoked Bestforms’ accreditation as a private security printer of NPO. Thus, Bestforms was
disqualified to participate in any bidding conducted by the NPO and its ongoing printing transactions were likewise cancelled.
(4) Bestforms did not appeal the decision of the Accreditation Committee revoking its accreditation. Thus, the contracts awarded to
Bestforms were subjected to a rebidding through Limited Source Bidding. RFI won in these biddings and subsequently secured 2
Notices of Award for the contracts. Aside from the 2 awards, the NPO also awarded RFI the supply of LTO forms since these
contracts awarded to Bestforms were cancelled and RFI submitted the same bid price as that of respondent.
(5) Subsequently, Bestforms instituted an administrative complaint against NPO officer-in-charge and members of NPO-BAC, alleging
that NPO officers and RFI conspired with each other to manipulate the award of the printing contracts to the latter.
a. PS. De Guzman was sales and promotion supervisor of NPO and chairman of NPO-BAC
(6) Omb: De Guzman and correspondents guilty of grave misconduct. Ordered DISMISSED from service with forfeiture of benefits and
prejudice to reemployment in the government.
a. Based its judgment on failure of the NPO-BAC to observe the procedures laid down in RA 9184 for the Limited Source
Biddings and in entering into a Negotiated Procurement with RFI.
(7) CA: Affirmed Omb decision.
a. Procedures for competitive bidding laid down in the law should be observed in Limited Source Bidding, esp sec. 13.
b. NPO-BAC failed to invite the COA or its representatives and observers from a duly recognized private group in a sector or
discipline relevant to the procurement.
c. NPO-BAC failed to sufficiently justify why it resorted to Negotiated Procurement with RFI instead of competitive public
bidding.
(8) De Guzman: NPO-BAC complied with all the requirements of the law when it resorted to alternative modes of procurement in
questioned procurements.
a. Due to necessity of prior accreditation of private security printers (as required by Memo Order No. 8), and bec
government accountable forms are not ordinary printing materials, NPO utilizes limited-source bidding in the
procurement of printing services.
b. CA erred in holding NPO-BAC violated the law when it failed to send out direct invitations to all suppliers in the
preselected list and compliance with procedure for competitive bidding bec the requirements were not yet in existence
when the limited source biddings were conducted in 2006.
c. RA 9184 and IRRs clearly allow BAC to resort to a negotiated procurement in case of takeover of a previously awarded
contract (to Bestforms herein, due to revocation of the its accreditation), contrary to the CA’s conclusion that prior two-
failed biddings is a sine qua non.

Issue: W/N De Guzman and correspondents committed grave misconduct when they failed to strictly observe the two-failed bidding
rule in negotiated procurement under RA 9184 for limited-source bidding and negotiated procurement (i.e. the award of the second set
of LTO accountable forms). (YES)

Held:
(1) Sec. 10, Art. 4 in relation to Sec. 5(a) and (o) of Art. 1 of RA 9184 mandates that ALL acquisition of goods, consulting services, and
contracting for infrastructure projects by any branch, department, office, agency, or instrumentality of the government, including
state universities, colleges, GOCCs, LGUs shall be done through competitive bidding.
a. This is to promote transparency in the procurement process, implementation of procurement contracts, and
competitiveness by extending equal opportunity to enable private contracting parties, eligible and qualified, to
participate.
b. Aims to protect public interest by giving the public the best possible advantage through open competition; Avoid
favoritism and anomalies.
(2) However, alternative methods of procurement including Limited Source Bidding and Negotiated Procurement are allowed under
RA 9184 which would enable dispensing with the requirement of open, public, and competitive bidding, but only in highly
exceptional cases and under conditions set forth in Art. 16. (pertinent provisions below)
 Sec. 49 Limited Source Bidding may be resorted to only in ff conditions:
(a) Procurement of highly specialized types of goods xxx which are obtainable only from a limited number of
sources
 Sec. 53 Negotiated Procurement shall be allowed only in the ff instances:
(c) Take-over of contracts, which have been rescinded or terminated for causes provided in the contract and
existing laws, where immediate action is necessary to prevent damage to or loss of life or property, or to
restore vital public services, infrastructure facilities, and other public utilities

Corollary thereto, the IRR-A expounds the definition of Limited Source Bidding and Negotiated Procurement
 Sec. 49 Limited Source Bidding— Otherwise known as selective bidding, is a method of procurement of goods and
consulting services that involves direct invitation to bid by the concerned procuring entity from a set of preselected
suppliers or consultants with known experience and proven capability on the reqs of the particular contract. Xxx
Limited source bidding may be employed by concerned procuring entities under any of the ff conditions:
(a) Procurement of highly specialized types of goods (e.g., sophisticated defense equipment, complex air
navigation systems, coal) and consulting services where only a few suppliers or consultants are known to be
available, such that resorting to the public bidding method will not likely result in any additional suppliers or
consultants participating in the bidding; or xxx
 Sec. 53 Negotiated Procurement—is a method of procurement of goods, infrastructure projects and consulting
services, whereby the procuring entity directly negotiates a contract with a technically, legally and financially
capable supplier, contractor or consultant only in the following cases: xxx

(3) In alternative modes of procurement, the requirements of a pre-bid conference, written invitation to observers, and posting of the
IAEB must still be followed in compliance with pertinent provisions under RA 9184.
a. Sec. 13, Art. 5 of RA 9184 and Sec. 13, Rule 5 of IRR-A underscore that written invitations should be sent to a COA
representative and to at least 2 other observers to sit in its proceedings, in all stages of the procurement.
b. Sec. 20 and 22 of Art. 7 of RA 9184 mandate the BOC to hold a pre-procurement and pre-bid conference on each and
every procurement, without making any qualifications nor exceptions as to which mode of procurement these
requirements are applicable to.
c. Sec. 20, IRR-A instructs the advertisement or publication of the IAEB in a newspaper of gen circ may be dispensed with.
But IAEB shall still be posted at a conspicuous place in the premises of the procuring entity concerned.

(4) In the case at bar, NPO-BAC failed to comply with the procedural requirements for Limited Source Bidding and Negotiated
Procurement. The language of the law and IRR-A is clear: such requirements MUST be followed in any and all types of
procurement. Regardless of whether the June biddings were just a rebid of the March and April biddings, it was incumbent upon
NPO-BAC to observe the aforesaid procedural requirements.
a. De Guzman’s claims that reqs under law were met (i.e. written invitations were sent) were all unsubstantiated. She could
have refuted allegations by presenting certification of the head of the BAC Secretariat attesting to the fact of posting of
the IAEB or copy of the written invitations sent. No official documents were shown.
b. There is nothing in the law that allows the procuring entity to directly award a contract to a participating bidder, even
one who offered the best bid, whenever there is a failure of bidding. Rather, IRR-A specifically directs that procuring
entity must negotiate first with the 2 nd and 3rd lowest calculated bidders, and in the event that negotiations fail, the
procuring entity must produce a list of 3 eligible contractors to negotiate with. These were not complied with.

Fallo: Petition for review DENIED.

Other Notes: Before the Court delved into the substantial issues, it ruled that De Guzman was correct that it is the IRR-A which took
effect in 2003 that applies in this case as the questioned actions were committed in 2006. Nevertheless, it still denied the petition.