GR 33426 35014; (April, 1973) (Digest)
G.R. No. L-33426 and L-35014 April 30, 1973
CESAR VIRATA, et al., petitioners, vs. JUAN L. BOCAR, et al., and E. RAZON, INC., respondents.
FACTS
The Bureau of Customs entered into a Revised Management Contract with E. Razon, Inc. for arrastre services at Manila South Harbor, effective May 1, 1966, for five years. Paragraph LXII of the contract stipulated that within one year before its expiration, the Bureau would decide whether to take over the service, call for new bidding, or allow the contractor to continue. In a 1969 letter, the Secretary of Finance indicated a willingness to consider renewal, contingent on satisfactory performance and future discussions. However, no formal renewal proposal was finalized by E. Razon, Inc. Subsequently, on March 9, 1971, the Bureau informed E. Razon, Inc. and another contractor, Guacods, Inc., of its decision to conduct a new public bidding upon the contract’s expiration on April 30, 1971. E. Razon, Inc. participated in this bidding.
The bidding was held, and E. Razon, Inc. emerged as the highest bidder. However, the Bureau of Customs, through the Arrastre Service Bidding Committee, refused to make a final award, prompting E. Razon, Inc. to file a petition for mandamus in the Court of First Instance. The trial court granted the writ, ordering the award of the contract to E. Razon, Inc. The government officials, including the Secretary of Finance and the Commissioner of Customs, elevated the case to the Supreme Court, arguing that the award was discretionary and not subject to mandamus.
ISSUE
Whether a writ of mandamus may compel the awarding of a government contract to the highest bidder in a public bidding.
RULING
Yes, the Supreme Court affirmed the lower court’s grant of the writ of mandamus. The legal logic is grounded in the nature of a public bidding and the consequent obligation it creates. When the government, through its authorized agency, conducts a public bidding and establishes clear terms and guidelines, it creates a corresponding duty to award the contract to the bidder who fully complies with the prescribed conditions and submits the most advantageous offer. This duty is ministerial, not discretionary, once the bidding rules are set and a qualified bidder meets all requirements.
The Court held that the Bureau of Customs, by conducting the bidding, effectively bound itself to its own announced procedures. E. Razon, Inc., as the undisputed highest and best bidder, acquired a vested right to the award. The government’s refusal to act, based on a claim of discretionary power, was unjustified after it had initiated the bidding process. Mandamus is the proper remedy to compel the performance of this ministerial duty. The Court emphasized that allowing officials to arbitrarily reject the highest bidder would undermine the integrity of the public bidding system, cause prejudice to the government and the public interest, and violate the basic principles of fairness and transparency in government transactions. The directive to make the final award was therefore upheld.