379 Phil. 833
GONZAGA-REYES, J.:
- MIAA shall not implement the termination of Lanting’s security services by August 31, 1996 and instead shall extend as it hereby extends such, services by a period of ten (10) months beginning 01 September 1996 to 30 June 1997. For this purpose, MIAA and Lanting shall execute the necessary Extension Contract.
- To effect the above extension, MIAA shall allow Lanting to redeploy a total of 274 guards within the NAIA Complex which shall be inclusive of the currently deployed 114 Lanting guards effective not later than midnight of August 28, 1996.
- Upon execution hereof, MIAA shall be free to engage immediately the services of other security agencies, including that of Philippine Aviation Security Services Corp. (PASSCOR), to meet the security needs at the NAIA Complex, also for a period of ten (10) months beginning 01 September 1996 up to 30 June 1997.
- Subject to paragraph 6 hereof, Lanting shall withdraw as it hereby withdraws its instant complaint.
- The parties shall jointly move as they so move and pray for this Honorable Court to lift the writ of preliminary injunction dated September 15, 1995 which it issued in the above-captioned case.
- Further, the parties shall jointly move as they respectfully move and pray for the Honorable Court to resolve the following residual issues:
6.1 Whether or not the 160 Lanting security guards whose services phased-out effective July 31, 1996 are entitled to back wages for the period during the month of August 1996 when they were not deployed at the NAIA Complex; 6.2 Whether or not MIAA has the option, under existing laws, rules and regulations, to contract security services by negotiation of through public bidding.
On the issue defined in 6.2 above, which was left to the Court for resolution, the court ruled as follows:
- Finally, MIAA undertakes to effect compliance with the trial court’s order on paragraph 6.1 in the event said issue is resolved in favor of payment of the security guard’s backwages, within seven (7) days from receipt of said order of the trial court. MIAA may however opt to appeal any adverse resolution on paragraph 6.2 hereof."[1]
"With respect to 6.2 in the Compromise Agreement, the court rules that under the laws and regulations, it is necessary for the defendant to contract for security services through public bidding."
"PETITIONER MIAA HAS THE OPTION TO RESORT TO NEGOTIATED CONTRACT OR PUBLIC BIDDING.Petitioners allege that the "only issue to be resolved in this petition refers to the right of MIAA to award security services through negotiated contract or public bidding". Petitioners submit that the option to make such award is addressed to the exclusive and sole discretion of the MIAA, and the awarding of the contract to PASSCOR cannot be branded as highly irregular despite the fact that no public bidding was conducted. The petitioners point out that the Philippines is a signatory to the convention for international civil aviation, and the selection of an airport security agency is of paramount importance involving as it does national security and safety.
SECTION 62, CHAPTER 13, BOOK IV OF THE ADMINISTRATIVE CODE OF 1987 HAS NO APPLICATION TO THE CASE AT BAR."[2]
"SEC. 68. Service Contracts. Departments, bureaus, offices or agencies of the National Government are hereby authorized to enter into contracts with other government agencies, private firms or individuals and non-governmental organizations for services related or incidental to their respective functions and operations, through public bidding or negotiated contracts whenever it is impractical or more expensive for the government to directly undertake such functions and operations, subject to pertinent accounting and auditing rules and regulations: PROVIDED, That the execution of the service contracts shall not operate to automatically abolish or render vacant any existing occupied position in the contracting office or agency."Petitioners’ position that the above-quoted section gives the government agency concerned the sole option to resort to public bidding or to negotiated contract whenever it is impractical or more expensive for the government to directly undertake a certain function or operation, is not tenable. There is nothing in said provision which does away with the general requirement of public bidding in the award of government contract. This was the ruling in National Food Authority vs. Court of Appeals,[3] involving the award of a contract for security services by the National Food Authority wherein the said government agency relied on Section 31 of Republic Act No.7645, which is the counterpart provision of Section 78 of Republic Act No.7845. This Court held:
"Petitioners’ manifest reluctance to hold a public bidding and award a contract to the winning bidder smacks of favoritism and partiality toward the security agencies to whom it awarded the negotiated contracts and cannot be countenanced. A competitive public bidding aims to protect the public interest by giving the public the best possible advantages thru open competition. It is a mechanism that enables the government agency to avoid or preclude anomalies in the execution of public contracts.Indeed, public bidding in government contracts has been observed in this jurisdiction since the time of the Philippine Commission:
The General Appropriations Act (GAA) of 1993 cannot be used by petitioners to justify their actuations. An appropriations acts is primarily a special type of legislation whose content is limited to specified sums of money dedicated to a specific purpose or a separate fiscal unit. Section 31 on the General Provisions of the GAA of 1993 merely authorizes the heads of departments, bureaus, offices or agencies of the national government to hire, through public bidding or negotiated contracts, contractual personnel to perform specific activities or services related or incidental to their functions. This law specifically authorizes expenditures for the hiring of these personnel. It is not the governing law on the award of the service contracts by government agencies nor does it do away with the general requirement of public bidding."
"Bidding was introduced in the Philippines by the American Laws on Public Bidding until finally Act No.22 (1900) of the Philippine Commission was enacted which became the first law on public bidding in this jurisdiction. This was followed by several related Acts such as Act Nos. 74(1901), 82 (1901) and 83 (1901) culminating in the promulgation by President Quezon on February 3, 1936, of Executive Order No.16 declaring as a general policy that public bidding must be the means adopted in the purchase of supplies, materials and equipment except on very extraordinary cases and with his prior approval. These Acts and Executive Order as well as the rules and regulations promulgated pertinent thereto were later incorporated in the Administrative Code and in subsequent Public Works Acts, although with slight modifications. Up to the present, this policy and medium still hold both in procurement and construction contracts of the government, and the latest enactment relative thereto is Presidential Decree No.1594 (1978) and its Implementing Rules and Regulations."[4]As early as 1936, then President Quezon declared as a matter of general policy that Government contracts for public service or for furnishing supplies, materials and equipment to the Government should be subjected to public bidding.[5] There were a number of amendments,[6] the latest of which, Executive Order No. 40 dated June l, 1963 of President Diosdado Macapagal, reiterated the directive that no government contract for public service or for furnishing supplies, materials and equipments to the government or any of its branches, agencies or instrumentalities, shall be entered into without public bidding except for very extraordinary reasons to be determined by a Committee constituted thereunder. Of more recent date is Executive Order No. 301, S. 1987, issued by President Corazon Aquino, which prescribed the guidelines for decentralization of negotiated contracts. Section 1 of this issuance reiterated the legal requirement of public bidding for the award of contracts for public services and for furnishing supplies, materials and equipment to the government, and expressly specified the exceptions thereto.