Case Digest: PLACIDO O. URBANES, JR., doing business under the name and style of LAGING QLEAN JANITORIAL SERVICES v. LOCAL WATER UTILITIES ADMINISTRATION, et al.

PLACIDO O. URBANES, JR., doing business under the name and style of LAGING QLEAN JANITORIAL SERVICES v. LOCAL WATER UTILITIES ADMINISTRATION, et al.

500 SCRA 52 (2006)

Government as advertiser makes its choice in rejecting any or all bids, the losing bidder has no cause to complain nor right to dispute that choice, unless an unfairness or injustice is shown, hence he has no ground of action to compel the Government to award the contract in his favor, nor to compel it to accept his bid.

Petitioner Laging Qlean Janitorial Services (Qlean) and respondent Local Water Utilities Administration (LWUA) entered into a contract wherein the former will render janitorial services for latter for one year which after the lapse of said period, the contract was renewed on a monthly basis. Subsequently, LWUA through its In-House Procurement Bidding Committee (IHPBC) conducted a public bidding for Janitorial Services for a period of one (1) year. Qlean ranked sixth among the lowest bidders.

Pending the completion of the bids, LWUA extended its contract with QLEAN twice which accepted the first request for extension but did not grant the second extension of contract. Consequently, LWUA entered into a one year janitorial service contract with Fast Manpower Services, the lowest bidder, prompting Qlean to file a complaint against LWUA et al. alleging that the bids of the first five lowest bidders should have been rejected for not being in conformity with the Minimum Wage Law and that Qlean‘s one-year contract of janitorial maintenance services was the lowest complying bid and most advantageous to the government, hence, the contract should have been awarded to it.

Qlean filed a complaint before the Regional Trial Court (RTC) of Quezon City against LWUA but it dismissed the complaint. Qlean then appealed to the Court of Appeals but it affirmed the RTC decision.

ISSUE:

Whether or not Qlean may compel LWUA to award the contract in its favor

HELD:

LWUA made a reservation to reject bids as the Invitation to Prequalify and Bid published in the Philippine Daily Inquirer shows: ―LWUA reserves the right to reject any or all the bids.‖
The discourse in his ―A TREATISE ON GOVERNMENT CONTRACTS UNDER PHILIPPINE LAW‖ of former Commissioner of the Commission on Audit Bartolome C. Fernandez, Jr. is enlightening: ―Government as advertiser, availing itself of that right, makes its choice in rejecting any or all bids, the losing bidder has no cause to complain nor right to dispute that choice, unless an unfairness or injustice is shown. Accordingly, he has no ground of action to compel the Government to award the contract in his favor, nor to compel it to accept his bid. x x x Verily, a reservation in the advertisement for bids of the right to reject any bid generally vests in the authorities a wide discretion as to who is the best and most advantageous bidder.‖

The exercise of such discretion involves inquiry, investigation, comparison, deliberation and decision, which are quasi-judicial functions, and when honestly performed, may not be reviewed by the courts. In such cases, there is no binding obligation to award the contract to any bidder and in the exercise of such discretion the award may be made validly to whoever among the participating bidders has submitted the most advantageous bid.