DPWH v. MALAGA

Department of Public Works and Highways (DPWH) Secretary Simeon A. Datumanong, et al. Vs. Maria Elena L. Malaga

G.R. No. 204906

June 5, 2017

FACTS:

Respondent Maria Elena L. Malaga owns B.E. Construction, a private contractor and the lowest bidder for two concreting projects of the Department of Public Works and Highways (DPWH), particularly: a. Mandurriao-San Miguel Road, Barangay Hibao-an Section in Iloilo City; and b. Mandurriao-San Miguel Road, Guzman-Jesena Section in Iloilo City as well. The bidding for the above projects was held on November 6, 2001, and was based upon an August 2001 published invitation to bid. However, it appears that after the publication of the invitation to bid but prior to the scheduled November 6, 2001 bidding, the condition of the above-mentioned roads are severely deteriorated to an almost impassable state on account of the prevailing typhoon and monsoon season. There have been an urgent call for immediate repair from concerned citizens. Petitioner Vicente Tingson Jr., requested DPWH Region VI Director Wilfredo B. Augustino that road projects be implemented immediately by the administration and thus taken out of the list of projects bid out to private contractors. In turn, Augustino sent an August 23, 2001 1st endorsement to then DPWH Secretary Simeon A. Datumanong, reiterating their intent to let the administration handle the repair. On August 29, 2001, DPWH Undersecretary Manuel Bonoan wrote a Memorandum to Datumanong recommending that the subject projects be undertaken by the administration. This then becomes the 2nd endorsement. Apparently, after the two endorsements, no response from DPWH Secretary came. So the DPWH Regional Office VI pursued with the scheduled bidding. On November 7, 2001, Datumanong issued a Memorandum approving the DPWH Regional Office VI request but only with respect to the Mandurriao-San Miguel Road, Barangay Hibao-an Section only. Pursuant to Datumanong's November 7, 2001 Memorandum, herein petitioners Ruby P. Lagoc , Mavi V. Jerecia and Elizabeth Gardose, Bids and Awards Committee members, conducted the post evaluation/qualification of respondent's firm, but only for the Mandurriao-San Miguel Road, Guzman-Jesena Section project. Respondent was declared post-qualified for the project, and the same was awarded to her. November 15, 2001, Lagoc informed respondent that the Mandurriao San Miguel Road, Barangay Hibao-an Section project may not be awarded to her, in view of Datumanong's November 7, 2001 Memorandum. Respondent replied with formal written demands that the project be awarded to her in spite of Datumanong' s directive. Datumanong's directive was a supervening event that prevented the award of the subject project to respondent. On February 14, 2002, respondent filed Civil Case No. 27059 with the RTC. In her Complaint for damages against the herein individual petitioners, respondent claimed that the individual petitioners, "acting together, in cooperation and collusion with each other, have manipulated things and circumstances in a manner deliberately intended to deprive and deny her the project. However, the RTC issued an Order to Dismiss the Civil Case 27059 conclusion that it was an unauthorized suit against the State. On the other hand, the Court of Appeals granted the appeal of Malaga for the CA have seen that defense of respondent is meritorious. 

ISSUE:

Whether or not the respondent is entitled with the indemnity of damages. 

HELD: 

Petitioners argue in their Petition and Reply that respondent's case for damages is actually an unauthorized suit against the State, as the individual petitioners are being sued in relation to acts committed in the performance of their official duties; that as such, individual petitioners should be protected by the mantle of state immunity and allowed to perform their functions without fear of unwarranted lawsuits in order to better serve the public; that the decision to undertake the project by administration was not made capriciously but with utmost consideration and legal justification; that there is no actionable wrong committed against respondent. Thus, before a government project is awarded to the lowest calculated bidder, his bid must undergo a mandatory post-qualification procedure whereby the "procuring entity verifies, validates, and ascertains all statements made and documents submitted by the bidder with the lowest calculated or highest rated bid using a non-discretionary criteria as stated in the bidding documents". Respondent's causes of action solely and primarily based on a supposed award, actual or potential, do not exist. The project was never awarded to her, then she has no right to undertake the same. If she has no right to the project, then she cannot demand indemnity for lost profits or actual damages suffered in the event of failure to carry out the same. Without a formal award of the project in her favor, such a demand would be premature. Consequently, she has no right of action against petitioners, and no cause of action in Civil Case No. 27059. This is so for the precise reason that such an award and the whole bidding process for that matter, no longer exist, as they were mooted and superseded by the DPWH's decision to undertake the subject project by administration, as well as by the reservation contained in the Invitation to Bid that at any time during the procurement process, government has the right to reject any or all bids. WHEREFORE, the Petition is GRANTED. The March 26, 2012 Decision and November 9, 2012 Resolution of the Court of Appeals in CA-G.R. CV No. 00889 are REVERSED and SET ASIDE. Civil Case No. 27059 before the Regional Trial Court of Iloilo City, Branch 29 is ordered DISMISSED.