G.R. No. L-30477 March 21, 1975
ERNESTO S. MATA, as Secretary of National Defense, ALEJANDRO MELCHOR, as Undersecretary of National Defense, NORBERTO A. ENCISCO, RODOLFO C. YAN, and IRINEO J. DE GUIA, as members of the AFP Bid and Award Committee, and DOROTEO DE LEON, JR. and JUANA P. DE LEON, petitioners, vs. HON. LOURDES P. SAN DIEGO, as Judge of the Court of First Instance of Rizal, Branch IX, stationed in Quezon City, and VIRGINIA F. ESPIRITU, respondents.

FACTS

The Armed Forces of the Philippines (AFP) invited bids for the supply of khaki cloth. Among the bidders were petitioners-spouses Doroteo de Leon, Jr. and Juana F. de Leon, and respondent Virginia F. Espiritu. The AFP Bid and Award Committee awarded the contract to the de Leon spouses, finding their bid to be the lowest complying with specifications and most advantageous to the government. This determination was based on technical evaluations, including a report from the National Institute of Science and Technology which found the de Leons’ sample cloth superior in serviceability and durability compared to Espiritu’s. A contract was subsequently executed.
Instead of exhausting her administrative remedies by filing a protest with the Secretary of National Defense as required, Espiritu filed a court action for injunction, prohibition, and/or mandamus. She alleged the award was void, claiming the de Leons were not authorized distributors and had tendered unresponsive bids. The trial court initially denied her application for a preliminary injunction. However, upon Espiritu’s subsequent “Urgent Ex-Parte Motion,” which cited the AFP’s approval of a change in the de Leons’ specified manufacturer, respondent Judge San Diego granted a writ of preliminary injunction, reasoning that this change substantiated Espiritu’s original allegations.

ISSUE

Whether the respondent judge acted with grave abuse of discretion in granting the writ of preliminary injunction and in assuming jurisdiction over the case.

RULING

Yes. The Supreme Court granted the petition for certiorari, set aside the challenged orders, and made permanent its own preliminary injunction. The Court ruled that the respondent judge committed grave abuse of discretion. First, Espiritu failed to exhaust administrative remedies by not filing a protest with the Secretary of National Defense as mandated by the bidding rules. This failure barred her judicial action. Second, the award of a government contract involves the exercise of quasi-judicial discretion by the responsible officers. Courts cannot control or review the honest exercise of such discretion absent a showing of grave abuse, fraud, or collusion, which was not present here. The Committee’s decision was based on objective criteria, including a lower bid price and superior product quality.
The change in manufacturer cited by the lower court did not invalidate the award, as the invitation to bid reserved the government’s right to waive technical defects. Espiritu’s mandamus action to compel the award in her favor had no legal basis, as she failed to prove her bid was the best and most advantageous to the government. Her higher-priced bid, coupled with an inferior product sample, negated any claim of a clear legal right to the award. The Court emphasized that a losing bidder has no cause to complain against the government’s choice unless unfairness or injustice is demonstrated.