G.R. No. 101678 February 3, 1992
BUREAU VERITAS, represented by THEODOR H. HUNERMANN, petitioner, vs. OFFICE OF THE PRESIDENT, SECRETARY OF FINANCE, SECRETARY OF TRADE AND INDUSTRY, and GOVERNOR OF THE CENTRAL BANK OF THE PHILIPPINES (as Chairman and members of the COMMITTEE ON IMPORT SUPERVISION SCHEME), COMMISSIONER OF CUSTOMS, FINANCE UNDERSECRETARY TOMAS V. APACIBLE, CUSTOMS DEPUTY COMMISSIONER TITUS VILLANUEVA; BUREAU OF IMPORT SERVICES DIRECTOR LEOPOLDO ABAD, JR., and CBP DIRECTOR JUAN BAUTISTA (as Chairman and Members of the CISS-SUBCOMMITTEE), and SOCIETE GENERALE DE SURVEILLANCE S.A. (SGS), respondents.

FACTS

The government, through the Committee on Import Supervision Scheme (CISS), invited bids for a pre-shipment inspection services contract. Petitioner Bureau Veritas and respondent SGS were among four pre-qualified bidders. The bid documents required fees to be quoted inclusive of Philippine taxes. In its original bid, Bureau Veritas did not specify a tax rate but referenced a BIR ruling claiming tax exemption. SGS explicitly quoted its fees inclusive of a 35% income tax. During post-bid clarifications, the CISS Subcommittee, faced with unequal tax assumptions, requested all bidders to agree to have their bids evaluated on a “net of taxes” basis to ensure a level comparison.
All bidders, including Bureau Veritas, agreed. However, Bureau Veritas subsequently submitted a revised bid with significantly lower fees, claiming it was now deducting imputed taxes from its original bid to arrive at a net figure. The other bidders protested this revision as a substantive alteration of the original bid. The CISS Subcommittee evaluated the original bids, disregarded the quantified tax components in the bids that specified them (like SGS’s 35%), and awarded the contract to SGS. Bureau Veritas challenged this award, arguing its revised lower net bid should have been considered and that the award to SGS was disadvantageous to the government.

ISSUE

Did the CISS Subcommittee commit grave abuse of discretion in evaluating the bids and awarding the contract to SGS?

RULING

No. The Supreme Court found no grave abuse of discretion. The legal logic centers on the discretion of the bidding committee and the integrity of the bidding process. First, the committee validly exercised its discretion in evaluating the original bids as submitted. Bureau Veritas’s attempt to revise its financial bid after submission was correctly rejected, as it constituted a substantive alteration not permitted under the rules governing sealed public bidding, which aims to ensure fairness and prevent bid manipulation. The committee’s method of evaluating the “net” cost to the government by deducting the explicitly stated tax components from the bids that quantified them (like SGS’s) was a reasonable exercise of its prerogative to determine the most advantageous offer.
The Court emphasized that it will not interfere with the factual and technical determinations of the bidding committee absent a clear showing of grave abuse—such as arbitrariness, fraud, or collusion—which was not present. The committee’s conclusion that SGS’s bid, offering global coverage and additional concessions like training and computerization, represented the least cost and most advantage to the government was within its competence. The Court lacks the expertise to recalculate or second-guess these technical assessments and found no capricious or whimsical exercise of judgment warranting judicial overturn. The petition was dismissed.