DOJ Declines to Issue Opinion on New Iloilo Airport Bidding Process

Tuesday, February 10, 2004

DOJ Declines to Issue Opinion on Airport Bidding
Process
Sun Star, Philippines

A RULING by the Department of Justice (DOJ) declined
to draw the line in connection with the bidding
process for the P6.2-billion New Iloilo Airport
Development Project (NIADP) -- a multi-billion
government project which is being partly funded by the
Japan Bank for International Cooperation (JBIC). 

In a six-page legal opinion, Justice Sec. Ma.
Merceditas Gutierrez informed Transportation Sec.
Leandro Mendoza that a ruling on the matter would be
inappropriate, but said the government seems to have
the authority to enter into a contract under the new
procurement law. 

The controversy arose after a House inquiry into the
alleged irregularities in the contract awarding came
about. 

The justice department's legal opinion is supposed to
serve as the basis for the Department of
Transportation and Communication (DOTC) on whether to
proceed or not with the awarding of the contract to
Japanese consortium Taisei Corp.-Shimizu Corp. (not
Shimitzu as earlier reported). 

The awarding and signing of the contract was supposed
to take place February 6 as announced by President
Arroyo when she launched the construction of the
airport of international standards during her visit to
Iloilo last January 25. 

The project will cover 10 barangays in the towns of
Sta. Barbara and Cabatuan, covering 186 hectares. 

Out of 28 applicant contractors who responded to the
invitation for prequalification, three contractors
pre-qualified. 

The Pre-qualification, Bids and Awards Committee
(PBAC) rejected the bid documents of one of the
contractors, Taisei-Shimizu-Kajima joint venture,
after Kajima Corp. withdrew from the joint venture at
the time of the submission of bids. 

This was after Kajima was found to have been involved
in a bribery case in Japan. 

The JBIC, however, expressed its disapproval of the
PBAC's action and advised the DOTC to rebid the
project. 

Advised to resubmit their bids, the three
pre-qualified bidders, which include Taisei
Corp.-Shimizu Corp. Joint Venture, submitted their
bids in Aug. 25, 2003. 

Sanlakas Rep. JV Bautista, in a privilege speech that
month, however, questioned DOTC's decision to include
Taisei-Shimizu, prompting the House committee on
transportation and communication to conduct an
investigation on the procurement process issue. 

The committee, headed by Negros Oriental Rep. Jerome
Paras pointed out that the DOTC's decision to conduct
a resubmission of bids is legally flawed. 

It insists that the DOTC should have continued the
bidding process without Taisei-Shimizu. 

Bautista, a member of the House committee on
transportation and communication, earlier said that if
DOTC pushes through with awarding of the contract, his
group will question the action before the Supreme
Court. 

The congressman said they will ask the Supreme Court
to nullify the contract. 

He said the High Court is "very strict" on big
contracts entered into by the government. Based on its
decisions on Piatco (on the airport terminal) and the
Comelec (on the automated counting machines), Bautista
said he is "quite sure" that the "same principle will
apply" for the Iloilo aiport. 

'Cannot be bound' 

In declining to rule on the matter, the DOJ said the
issue affects the substantive rights of private
parties, the contractors involved in the case which
cannot be bound by the department's opinion. 

"This department does not render an opinion or give
legal advice on a matter that is justiciable or which
may be the subject of a judicial controversy," DOJ's
Gutierrez said. 

"Resolving the issue would not serve a useful purpose
or have practical value, because the department's
opinion cannot bind the JBIC, whose determination of
compliance or non-compliance with its procurement
guidelines is crucial in view of the guidelines for
procurement under JBIC loans," she pointed out. 

The agency chief, however, noted that under the
fledgling Government Procurement Reform Act (RA 9184),
it is assumed that the officials who act for the
Philippine government have the authority to execute
the agreements and that they have acted within the
scope of their authority. 

Under the loan agreement drafted in August 2000, the
JBIC has agreed to lend the Philippine government
Y14.724 billion. 
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