PCOS Meets Minimum Capabilities Standards

Antecedents    Procedural Grounds    Substantive Issues   Ruling

RULING

Pilot Testing Not A Pre-condition to Full Automation

PCOS Meets Minimum Capabilities Standards

No Abdication of Comelec’s Mandate and Responsibility

PCOS Meets Minimum Capabilities Standards 

         

          As another ground for the nullification of the automation contract, petitioners posit the view that the PCOS machines do not satisfy the minimum system capabilities prescribed by RA 8436, as amended. To a specific point, they suggest that the PCOS system offered and accepted lacks the features that would assure accuracy in the recording and reading of votes, as well as in the tabulation, consolidation/canvassing, electronic transmission, storage results and accurate ballot counting.^[75]  In this particular regard, petitioners allege that, based on Smartmatic’s website, the PCOS has a margin of error of from 2% to 10%, way beyond that of the required 99.99% accuracy in the counting of votes.^[76]

The minimum system capabilities provision cited is Sec. 7 of RA 8436, as amended, and the missing features referred to by petitioners are pars. (b) and (j).  In full, Sec. 7 of RA 8436, as amended, reads:   

 SEC. 6. Minimum System Capabilities. - The automated election system must at least have the following functional capabilities:

(a)    Adequate security against unauthorized access;

(b)   Accuracy in recording and reading of votes as well as in the tabulation, consolidation/canvassing, electronic transmission, and storage of results;

(c)    Error recovery in case of non-catastrophic failure of device;

(d)   System integrity which ensures physical stability and functioning of the vote recording and counting process;

(e)    Provision for voter verified paper audit trail;

(f)    System auditability which provides supporting documentation for verifying the correctness of reported election results;

(g)   An election management system for preparing ballots and programs for use in the casting and counting of votes and to consolidate, report and display election result in the shortest time possible;

(h)   Accessibility to illiterates and disabled voters;

(i)     Vote tabulating program for election, referendum or plebiscite;

(j)     Accurate ballot counters;

(k)   Data retention provision;

(l)     Provide for the safekeeping, storing and archiving of physical or paper resource used in the election process;

(m)  Utilize or generate official ballots as herein defined;

(a)    Provide the voter a system of verification to find out whether or not the machine has registered his choice; and

 (o) Configure access control for sensitive system data and function.

            In the procurement of this system, the Commission shall develop and adopt an evaluation system to ascertain that the above minimum system capabilities are met.  The evaluation system shall be developed with the assistance of an advisory council.     

           

          From the records before us, the Court is fairly satisfied that the Comelec has adopted a rigid technical evaluation mechanism, a set of 26-item/check list criteria, as will be enumerated shortly, to ensure compliance with the above minimum systems capabilities.  

          The SBAC Memorandum^[77] of June 03, 2009, as approved by Comelec Res. 8608,^[78] categorically stated that the SBAC-TWG submitted its report that TIM/Smartmatic’s proposed systems and machines PASSED all the end-to-end demo tests using the aforementioned 26-item criteria, inclusive of the accuracy rating test of at least 99.955%.  As appearing in the SBAC-TWG report, the corresponding answers/remarks to each of the 26 individual items are as herein indicated:^[79]

ITEM	REQUIREMENT	REMARK/DESCRIPTION
1	Does the system allow manual feeding of a ballot into the PCOS machine?	Yes.  The proposed PCOS machine accepted the test ballots which were manually fed one at a time.
2	Does the system scan a ballot sheet at the speed of at least 2.75 inches per second?	Yes.  A 30-inch ballot was used in this test.  Scanning the 30-inch ballot took 2.7 seconds, which translated to 11.11inches per second.
3	Is the system able to capture and store in an encrypted format the digital images of the ballot for at least 2,000 ballot sides (1,000 ballots, with back to back printing)?	Yes the system captured the images of the 1,000 ballots in encrypted format. Each of the 1,000 images files contained the images of the front and back sides of the ballot, totaling to 2,000 ballot side. To verify the captured ballot images, decrypted copies of the encrypted files were also provided. The same were found to be digitized representations of the ballots cast.
4	Is the system a fully integrated single device as described in item no. 4 of Component 1-B?	Yes. The proposed PCOS is a fully integrated single device, with built-in printer and built-in data communications ports (Ethernet and USB).
5	Does the system have a scanning resolution of at least 200 dpi?	Yes. A portion of a filled up marked oval was blown up using image editor software to reveal the number of dots per inch. The sample image showed 200 dpi. File properties of the decrypted image file also revealed 200 dpi.
6	Does the system scan in grayscale?	Yes. 30 shades of gray were scanned in the test PCOS machine, 20 of which were required, exceeding the required 4-bit/16 levels of gray as specified in the Bid Bulletin No. 19.
7	Does the system require authorization and authentication of all operators, such as, but not limited to, usernames and passwords, with multiple user access levels?	Yes. The system required the use of a security key with different sets of           passwords/PINs for Administrator and Operator users.
8	Does the system have an electronic display?	Yes. The PCOS machine makes use of an LCD display to show information: ·                  if a ballot may be inserted into the machine; ·                  if a ballot is being processed; if a ballot is being rejected; ·                  on other instructions and information to the voter/operator.
9	Does the system employ error handling procedures, including, but not limited to, the use of error prompts and other related instructions?	Yes. The PCOS showed error messages on its screen whenever a ballot is   rejected by the machine and gives instructions to the voter on what to do next, or when there was a ballot jam error.
10	Does the system count the voter’s vote as marked on the ballot with an accuracy rating of at least 99.995%?	Yes. The two rounds of tests were conducted for this test using only valid marks/shades on the ballots. 20,000 marks were required to complete this test, with only one (1) allowable reading error. 625 ballots with 32 marks each were used for this test. During the comparison of the PCOS-generated results with the manually prepared/predetermined results, it was found out that there were seven (7) marks which were inadvertently missed out during ballot preparation by the TWG. Although the PCOS-generated results turned out to be 100% accurate, the 20,000-mark was not met thereby requiring the test to be repeated. To prepare for other possible missed out marks,650 ballots with (20,800 marks) were used for the next round of test, which also yielded 100% accuracy.
11	Does the system detect and reject fake or spurious, and previously scanned ballots?	Yes. This test made use of one (1) photocopied ballot and one (1) “re-created” ballot. Both were rejected by the PCOS.
12	Does the system scan both sides of a ballot and in any orientation in one pass?	Yes. Four (4) ballots with valid marks were fed into the PCOS machine in the four (4)  portrait orientations specified in Bid Bulletin No. 4 (either back or front, upside down or right side up), and all were accurately captured.
13	Does the system have necessary safeguards to determine the authenticity of a ballot, such as, but not limited to, the use of bar codes, holograms, color shifting ink, micro printing, to be provided on the ballot, which can be recognized by the system?	Yes. The system was able to recognize if the security features on the ballot are “missing”. Aside from the test on the fake or spurious ballots (Item No. 11), three (3) test ballots with tampered bar codes  and timing marks were used and were all rejected by the PCOS machine. The photocopied ballot in the test for Item No. 11 was not able to replicate the UV ink pattern on top portion of the ballot causing the rejection of the ballot.
14	Are the names of the candidates pre-printed on the ballot?	Yes. The Two sample test ballots of different lengths were provided: one (1) was 14 inches long while the other was 30 inches long. Both were 8.5 inches wide. The first showed 108 pre-printed candidate names for the fourteen (14) contests/positions, including two (2) survey questions on gender and age group, and a plebiscite question. The other showed 609 pre-printed candidate names, also for fourteen (14) positions  including three (3) survey questions.
15	Does each side of the ballot sheet accommodate at least 300 names of candidates with a minimum font size of 10, in addition to other mandatory information required by law?	Yes. The 30-inch ballot, which was used to test Item No. 2, contained 309 names for the national positions and 300 names for local positions. The total pre-printed names on the ballot totaled 609.          This type of test ballot was also used for test voting by the public, including members of the media. Arial Narrow, font size 10, was used in the printing of the candidate names.
16	Does the system recognize full shade marks on the appropriate space on the ballot opposite the name of the candidate to be voted for?	Yes. The ballots used for the accuracy test (Item No. 10), which made use of full shade marks, were also used in this test and were accurately recognized by the PCOS machine.
17	Does the system recognize partial shade marks on the appropriate space on the ballot opposite the name of the candidate to be voted for?	Yes. Four (4) test ballots were used with one (1) mark each per ballot showing the following pencil marks: ·   top half shade; ·   bottom half shade; ·   left half shade; and ·   right half shade These partial shade marks were all recognized by the PCOS machine
18	Does the system recognize check (ü)marks on the appropriate space on the ballot opposite the name of the candidate to be voted for?	Yes. One (1) test ballot with one check (ü) mark, using a pencil, was used for this test.       The mark was recognized successfully.
19	Does the system recognize x marks on the appropriate space on the ballot opposite the name of the candidate to be voted for?	Yes. One (1) test ballot with one x mark, using a pencil, was used for this test. The mark was recognized successfully.
20	Does the system recognize both pencil and ink marks on the ballot?	Yes. The 1000 ballots used in the accuracy test (Item No. 10) were marked using the proposed marking pen by the bidder. A separate ballot with one (1) pencil mark was also tested. This mark was also recognized by the PCOS  machine. Moreover, the tests for Items No. 17, 18 and 19 were made using pencil marks on the ballots.
21	In a simulation of a system shut down, does the system have error recovery features?	Yes. Five (5) ballots were used in this test. The power cord was pulled from the PCOS while the 3rd ballot was in the middle of the scanning procedure, such that it was left “hanging” in the ballot reader. After resumption of regular power supply, the PCOS machine was able to restart successfully with notification to the operator that there were two (2) ballots already cast in the machine. The “hanging” 3rd ballot was returned to the operator and was able to be re-fed into the PCOS machine. The marks on all five (5) were all accurately recognized.
22	Does the system have transmission and   consolidation/canvassing capabilities?	Yes. The PCOS was able to transmit to the CCS during the end-to-end demonstration using GLOBE prepaid Internet kit.
23	Does the system generate a backup copy of the generated reports, in a removable data storage device?	Yes. The PCOS saves a backup copy of the ERs, ballot images, statistical report and audit log into a Compact Flash (CF) Card.
24	Does the system have alternative power sources, which will enable it to fully operate for at least 12 hours?	Yes. A 12 bolt 18AH battery lead acid was used in this test. The initial test had to be repeated due to a short circuit, after seven (7) hours from start-up without ballot scanning. This was explained by TIM-Smartmatic to be caused by non-compatible wiring of the battery to the PCOS. A smaller wire than what is required was inadvertently used, likening the situation to incorrect wiring of a car battery. Two (2) COMELEC electricians were called to confirm TIM-Smartmatic’s explanation. The PCOS machine was connected to regular power and started successfully. The following day, the “re-test” was completed in 12 hours and 40 minutes xxx 984 ballots were fed into the machine. The ER, as generated by the PCOS was compared with predetermined result, showed 100% accuracy.
25	Is the system capable of generating and printing reports?	Yes. The PCOS prints reports via its built-in printer which includes: 1. Initialization Report; 2. Election Returns (ER); 3. PCOS Statistical Report; 4. Audit Log.
26	Did the bidder successfully demonstrate EMS, voting counting, consolidation/canvassing and transmission?	Yes. An end-to-end demonstration of all proposed systems was presented covering: importing of election data into the EMS; creation of election configuration data for the PCOS and the CCS using EMS; creation of ballot faces using EMS; configuring the PCOS and the CCS using the EMS-generated election configuration file; initialization, operation, generation of reports and backup using the PCOS; electronic transmission of results to the: [1] from the PCOS to city/municipal CCS and the central server. [2] from the city/municipal CCS to the provincial CCS. [3] from the provincial CCS to the national CCS; receipt and canvass of transmitted results: [1] by the city/municipal CCS from the PCOS. [2] by the provincial CCS from the city/municipal CCS. [3] by the national CCS from the provincial CCS; receipt of the transmittal results by the central server from the PCOS.

Given the foregoing and absent empirical evidence to the contrary, the Court, presuming regularity in the performance of regular duties, takes the demo-testing thus conducted by SBAC-TWG as a reflection of the capability of the PCOS machines, although the tests, as Comelec admits,^[80] were done literally in the Palacio del Governador building, where a room therein simulated a town, the adjoining room a city, etc.  Perusing the RFP, however, the real worth of the PCOS system and the machines will of course come after they shall have been subjected to the gamut of acceptance tests expressly specified in the RFP, namely, the lab test, field test, mock election test, transmission test and, lastly, the final test and sealing procedure of all PCOS and CCS units using the actual Election Day machine configuration.^[81]

 Apropos the counting-accuracy feature of the PCOS machines, petitioners no less impliedly admit that the web page they appended to their petition, showing a 2% to 10% failing rate, is no longer current.^[82]  And if they bothered to examine the current website of Smartmatic specifically dealing with its SAES 1800, the PCOS system it offered, they would have readily seen that the advertised accuracy rating is over “99.99999%.”^[83]  Moreover, a careful scrutiny of the old webpage of Smarmatic reveals that the 2% to 10% failure rate applied to “optical scanners” and not to SAES.  Yet the same page discloses that the SAES has “100%” accuracy.  Clearly, the alleged 2% to 10% failing rate is now irrelevant and the Court need not belabor this and the equally irrelevant estoppel principle petitioners impose on us.

Intervenor Cuadra’s concern relates to the auditability of the election results.  In this regard, it may suffice to point out that PCOS, being a paper-based technology, affords audit since the voter would be able, if need be, to verify if the machine had scanned, recorded and counted his vote properly.  Moreover, it should also be noted that the PCOS machine contains an LCD screen, one that can be programmed or configured to display to the voter his votes as read by the machine. ^[84] 

RULING:

Pilot Testing Not A Pre-condition to Full Automation

PCOS Meets Minimum Capabilities Standards

No Abdication of Comelec’s Mandate and Responsibility

Antecedents    Procedural Grounds    Substantive Issues   Ruling

Roque et al vs COMELEC et al. [2]

Antecedents    Procedural Grounds    Substantive Issues   Ruling

PROCEDURAL GROUNDS

  The Court is not disposed to dismiss the petition on procedural grounds advanced by respondents.

Locus Standi and Prematurity

It is true, as postulated, that to have standing, one must, as a rule, establish having suffered some actual or threatened injury as a result of the alleged illegal government conduct; that the injury is fairly traceable to the challenged action; and that the injury is likely to be redressed by a favorable action.^[38]  The prescription on standing, however, is a matter of procedure.  Hence, it may be relaxed, as the Court has often relaxed the rule for non-traditional plaintiffs, like ordinary citizens and taxpayers, when the public interest so requires, such as when the matter is of transcendental importance, of overreaching significance to society, or of paramount public interest.^[39]  As we wrote in Chavez v. PCGG,^[40] where issues of public importance are presented, there is no necessity to show that the suitor has experienced or is in actual danger of suffering direct and personal injury as the requisite injury is assumed.

Petitioners’ counsel, when queried, hedged on what specific constitutional proscriptions or concepts had been infringed by the award of the subject automation project to Smartmatic TIM Corporation, although he was heard to say that “our objection to the system is anchored on the Constitution itself a violation [sic] of secrecy of voting and the sanctity of the ballot.”^[41]  Petitioners also depicted the covering automation contract as constituting an abdication by the Comelec of its election-related mandate under the Constitution, which is to enforce and administer all laws relative to the conduct of elections. Worse still, according to the petitioners, the abdication, with its anti-dummy dimension, is in favor of a foreign corporation that will be providing the hardware and software requirements.^[42]  And when pressed further, petitioners came out with the observation that, owing in part to the sheer length of the ballot, the PCOS would not comply with Art. V, Sec. 2 of the Constitution^[43] prescribing secrecy of voting and sanctity of the ballot.^[44]

There is no doubt in our mind, however, about the compelling significance and the transcending public importance of the one issue underpinning this petition: the success––and the far-reaching grim implications of the failure––of the nationwide automation project that will be implemented via the challenged automation contract.

The doctrinal formulation may vary, but the bottom line is that the Court may except a particular case from the operations of its rules when the demands of justice so require.^[45]  Put a bit differently, rules of procedure are merely tools designed to facilitate the attainment of justice.^[46]  Accordingly, technicalities and procedural barriers should not be allowed to stand in the way, if the ends of justice would not be subserved by a rigid adherence to the rules of procedure.^[47]  This postulate on procedural technicalities applies to matters of locus standi and the presently invoked principle of hierarchy of courts, which discourages direct resort to the Court if the desired redress is within the competence of lower courts to grant. The policy on the hierarchy of courts, which petitioners indeed failed to observe, is not an iron-clad rule. For indeed the Court has full discretionary power to take cognizance and assume jurisdiction of special civil actions for certiorari and mandamus filed directly with it for exceptionally compelling reasons^[48] or if warranted by the nature of the issues clearly and specifically raised in the petition.^[49]

The exceptions that justify a deviation from the policy on hierarchy appear to obtain under the premises. The Court will for the nonce thus turn a blind eye to the judicial structure intended, first and foremost, to provide an orderly dispensation of justice. 

Hierarchy of Courts

At this stage, we shall dispose of another peripheral issue before plunging into the core substantive issues tendered in this petition.

Respondents contend that petitioners should have availed themselves of the otherwise mandatory protest mechanism set forth in Sections 55 and 58 of the procurement law (RA 9184) and the counterpart provisions found in its Implementing Rules and Regulations (IRR)-A before seeking judicial remedy.  Insofar as relevant, Sec. 55 of RA 9184 provides that decisions of the bids and awards committee (BAC) in all stages of procurement may be protested, via a “verified position paper,” to the head of the procuring agency.  On the other hand, the succeeding Sec. 58 states that court action may be resorted to only after the protest contemplated in Sec. 55 shall have been completed.  Petitioners except.  As argued, the requirement to comply with the protest mechanism, contrary to what may have been suggested in Infotech, is imposed on the bidders.^[50]  

Petitioners’ position is correct. As a matter of common sense, only a  bidder is entitled to receive a notice of the protested BAC action. Only a losing bidder would be aggrieved by, and ergo would have the personality to challenge, such action. This conclusion finds adequate support from the ensuing provisions of the aforesaid IRR-A:

   55.2. The verified position paper shall contain the following documents:

a)      The name of bidder;

b)      The office address of the bidder x x x.

                          

         Antecedents    Procedural Grounds    Substantive Issues   Ruling

G.R. No. 188456

Antecedents    Procedural Grounds    Substantive Issues   Ruling

Republic of the Philippines
SUPREME COURT
Manila

EN BANC

 G.R. No. 188456
(September 10, 2009)

H. HARRY L. ROQUE, JR., JOEL R. BUTUYAN, ROMEL R. BAGARES, ALLAN JONES F. LARDIZABAL, GILBERT T. ANDRES, IMMACULADA D. GARCIA, ERLINDA T. MERCADO, FRANCISCO A. ALCUAZ, MA. AZUCENA P. MACEDA, and ALVIN A. PETERS,  Petitioners, - versus - COMMISSION ON ELECTIONS,          Represented by HON. CHAIRMAN JOSE MELO, COMELEC SPECIAL BIDS and AWARDS COMMITTEE, represented by its CHAIRMAN HON. FERDINAND RAFANAN, DEPARTMENT OF BUDGET and MANAGEMENT, represented by HON. ROLANDO ANDAYA, TOTAL INFORMATION MANAGEMENT CORPORATION and SMARTMATIC INTERNATIONAL CORPORATION, Respondents. PETE QUIRINO-QUADRA, Petitioner-in-Intervention. SENATE OF THE PHILIPPINES, represented by its President, JUAN PONCE ENRILE, Movant-Intervenor.

Present: PUNO, C.J., QUISUMBING,  YNARES-SANTIAGO, CARPIO, CORONA, CARPIO MORALES, CHICO-NAZARIO, VELASCO, JR., NACHURA, LEONARDO-DE CASTRO, BRION, PERALTA, BERSAMIN, DEL CASTILLO, and ABAD, JJ.

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D E C I S I O N

VELASCO, JR., J.:

In a democratic system of government, the people’s voice is sovereign. Corollarily, choosing through the ballots the men and women who are to govern the country is perhaps the highest exercise of democracy.  It is thus the interest of the state to insure honest, credible and peaceful elections, where the sanctity of the votes and the secrecy of the ballots are safeguarded, where the will of the electorate is not frustrated or undermined.  For when the popular will itself is subverted by election irregularities, then the insidious seeds of doubt are sown and the ideal of a peaceful and smooth transition of power is placed in jeopardy.  To automate, thus breaking away from a manual system of election, has been viewed as a significant step towards clean and credible elections, unfettered by the travails of the long wait and cheating that have marked many of our electoral exercises.

The Commission on Elections (Comelec), private respondents, the National Computer Center and other computer wizards are confident that nationwide automated elections can be successfully implemented. Petitioners and some skeptics in the information technology (IT) industry have, however, their reservations, which is quite understandable.  To them, the automated election system and the untested technology Comelec has chosen and set in motion are pregnant with risks and could lead to a disastrous failure of elections. Comelec, they allege, would not be up to the challenge. Cheating on a massive scale, but this time facilitated by a machine, is perceived to be a real possibility.

  

In this petition for certiorari, prohibition and mandamus with prayer for a restraining order and/or preliminary injunction, petitioners H. Harry L. Roque, Jr., et al., suing as taxpayers and concerned citizens, seek to nullify respondent Comelec’s award of the 2010 Elections Automation Project (automation project) to the joint venture of Total Information Management Corporation (TIM) and Smartmatic International Corporation (Smartmatic)^[1] and to permanently prohibit the Comelec, TIM and Smartmatic from signing and/or implementing the corresponding contract-award.

By Resolution^[2] of July 14, 2009, the Court directed the respondents as well as the University of the Philippines (UP) Computer Center, National Computer Center (NCC) and Information Technology Foundation of the Philippines (Infotech, hereinafter) to submit their collective or separate comments to the petition on or before July 24, 2009.  Before any of the comments could actually be filed, Atty. Pete Quirino-Quadra sought leave to intervene. In another resolution, the Court allowed the intervention and admitted the corresponding petition-in-intervention.^[3]

On July 29, 2009, the Court heard the principal parties in oral arguments which was followed by the submission of their and the resource persons’ instructive, albeit clashing, memoranda. The Senate, through the Senate President, would later join the fray via a Motion for Leave to Intervene. In a Resolution of August 25, 2009, the Court admitted the Senate’s comment-in-intervention.

From the petition, the separate comments thereon, with their respective annexes, and other pleadings, as well as from admissions during the oral arguments, the Court gathers the following facts:

On December 22, 1997, Congress enacted Republic Act No. (RA) 8436 authorizing the adoption of an automated election system (AES) in the May 11, 1998 national and local elections and onwards.  The 1998, 2001, and 2004 national and local polls, however, came and went but purely manual elections were still the order of the day. On January 23, 2007, the amendatory RA 9369^[4] was passed authorizing anew the Comelec to use an AES. Of particular relevance are Sections 6 and 10 of RA 9369––originally Secs. 5 and 8, respectively of RA 8436, as amended––each defining Comelec’s specific mandates insofar as automated elections are concerned. The AES was not utilized in the May 10, 2000 elections, as funds were not appropriated for that purpose by Congress and due to time constraints.

 RA 9369 calls for the creation of the Comelec Advisory Council^[5] (CAC). CAC is to recommend, among other functions, the most appropriate, applicable and cost-effective technology to be applied to the AES.^[6]  To be created by Comelec too is the Technical Evaluation Committee (TEC)^[7] which is tasked to certify, through an established international certification committee, not later than three months before the elections, by categorically stating that the AES, inclusive of its hardware and software components, is operating properly and accurately based on defined and documented standards.^[8]  

          In August 2008, Comelec managed to automate the regional polls in the Autonomous Region of Muslim Mindanao^[9](ARMM), using direct recording electronics (DRE) technology^[10] in the province of Maguindanao; and the optical mark reader/recording (OMR) system, particularly the Central Count Optical Scan (CCOS),^[11] in the rest of ARMM.^[12]  What scores hailed as successful automated ARMM 2008 elections paved the way for Comelec, with some prodding from senators,^[13] to prepare for a nationwide computerized run for the 2010 national/local polls, with the many lessons learned from the ARMM experience influencing, according to the NCC, the technology selection for the 2010 automated elections.^[14]

Accordingly, in early March 2009, the Comelec released the Request for Proposal (RFP), also known as Terms of Reference(TOR), for the nationwide automation of the voting, counting, transmission, consolidation and canvassing of votes for the May 10, 2010 Synchronized National and Local Elections. What is referred to also in the RFP and other contract documents as the 2010 Elections Automation Project (Automation Project) consists of three elaborate components, as follows:

          Component 1: Paper-Based AES.^[15] 1-A. Election Management System (EMS); 1-B Precinct-Count Optic Scan (PCOS)^[16] System and 1-C. Consolidation/Canvassing System (CCS);

          Component 2: Provision for Electronic Transmission of Election Results using Public Telecommunications Network; and

Component 3: Overall Project Management

 And obviously to address the possibility of systems failure, the RFP required interested bidders to submit, among other things:  a continuity plan^[17] and a back-up plan. ^[18]

Under the two-envelope system designed under the RFP,^[19] each participating bidder shall submit, as part of its bid, an Eligibility Envelope^[20] that should inter alia establish the bidder’s eligibility to bid. On the other hand, the second envelope, or the Bid Envelope itself, shall contain two envelopes that, in turn, shall contain the technical proposal and the financial proposal, respectively.^[21]

Subsequently, the Comelec Special Bids and Awards Committee (SBAC), earlier constituted purposely for the aforesaid project, caused the publication in different newspapers of the Invitation to Apply for Eligibility and to Bid^[22] for the procurement of goods and services to be used in the automation project.^[23]  Meanwhile, Congress enacted RA 9525 appropriating some PhP 11.3 billion as supplemental budget for the May 10, 2010 automated national and local elections.  

Of the ten (10) invitation-responding consortia which obtained the bid documents, only seven (7) submitted sealed applications for eligibility and bids^[24] which, per Bid Bulletin No. 24, were to be opened on a pre-set date, following the convening of the pre-bid conference.  Under the RFP, among those eligible to participate in the bidding are manufacturers, suppliers and/or distributors forming themselves into a joint venture.   A joint venture is defined as a group of two or more manufacturers, suppliers and/or distributors that intend to be jointly and severally responsible or liable for a particular contract.^[25] 

 Among the submitted bids was that of the joint venture (JV) of TIM and Smartmatic, the former incorporated under the Corporation Code of the Philippines. Smartmatic, on the other hand, was organized under the laws of Barbados.^[26]  For a stated amount, said JV proposed to undertake the whole automation project, inclusive of the delivery of 82,200 PCOS machines.  After the conclusion of the eligibility evaluation process, only three consortia^[27] were found and thus declared as eligible.  Further on, following the opening of the passing bidders’ Bid Envelope and evaluating the technical and financial proposals therein contained, the SBAC, per its Res. No. 09-001, s.-2009, declared the above-stated bid of the JV of TIM-Smartmatic as the single complying calculated bid.^[28]   As required by the RFP, the bid envelope contained an outline of the joint venture’s back-up and continuity or contingency plans,^[29] in case of a systems breakdown or any such eventuality which shall result in the delay, obstruction or nonperformance of the electoral process.

After declaring TIM-Smartmatic as the best complying bidder, the SBAC then directed the joint venture to undertake post-qualification screening, and its PCOS prototype machines––the Smarmatic Auditable Electronic System (SAES) 1800––to undergo end-to-end^[30] testing to determine compliance with the pre-set criteria.

 In its Memorandum of June 01, 2009, on the Subject: Systems Evaluation Consolidated Report and Status Report on the Post-Qualification Evaluation Procedures, the SBAC Technical Working Group (TWG) stated that it was undertaking a 4-day (May 27 to May 30, 2009) test evaluation of TIM and Smartmatic’s proposed PCOS project machines.  Its conclusion: “The demo systems presented PASSED all tests as required in the 26-item criteria specified in the [RFP]” with 100% accuracy rating.^[31]  The TWG also validated the eligibility, and technical and financial qualifications of the TIM-Smartmatic joint venture.

On June 9, 2009, Comelec, upon the recommendation of its SBAC, the CAC and other stakeholders, issued Resolution No. (Res.) 8608^[32] authorizing the SBAC to issue, subject to well-defined conditions, the notice of award and notice to proceed in favor of the winning joint venture.

Soon after, TIM wrote Comelec expressing its desire to quit the JV partnership.  In time, however, the parties were able to patch up what TIM earlier described as irreconcilable differences between partners.

What followed was that TIM and Smartmatic, pursuant to the Joint Venture Agreement (JVA),^[33] caused the incorporation of a joint venture corporation (JVC) that would enter into a contract with the Comelec.  On July 8, 2009, the Securities and Exchange Commission issued a certificate of incorporation in favor of Smartmatic TIM Corporation.  Two days after, or on July 10, 2009, Comelec and Smartmatic TIM Corporation, as provider, executed a contract^[34] for the lease of goods and services under the contract for the contract amount of PhP 7,191,484,739.48, payable as the “Goods and Services are delivered and/or progress is made in accordance [with pre-set] Schedule of Payments.”^[35]   On the same date, a Notice to Proceed^[36] was sent to, and received by, Smartmatic TIM Corporation.

Meanwhile, or on July 9, 2009, petitioners interposed the instant recourse which, for all intents and purposes, impugns the validity and seeks to nullify the July 10, 2009 Comelec-Smartmatic-TIM Corporation automation contract adverted to.  Among others, petitioners pray that respondents be permanently enjoined from implementing the automation project on the submission that:

            PUBLIC RESPONDENTS COMELEC AND COMELEC-SBAC COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN AWARDING THE 2010 ELECTIONS AUTOMATION PROJECT TO PRIVATE RESPONDENTS TIM AND SMARTMATIC FOR THE FOLLOWING REASONS:

                                                                       

x x x COMELEC DID NOT CONDUCT ANY PILOT TESTING OF THE x x x PCOS MACHINES OFFERED BY PRIVATE RESPONDENTS SMARTMATIC AND TIM, IN VIOLATION OF [RA] 8436 (AS AMENDED BY [RA] 9369)

                                                       

THE [PCOS] MACHINES [THUS] OFFERED BY PRIVATE RESPONDENTS x x x DO NOT SATISFY THE MINIMUM SYSTEM CAPABILITIES SET BY [RA] NO. 8436 (AS AMENDED BY [RA] 9369).

                                         

PRIVATE RESPONDENTS x x x DID NOT SUBMIT THE REQUIRED DOCUMENTS DURING THE BIDDING PROCESS THAT SHOULD ESTABLISH THE DUE EXISTENCE, COMPOSITION, AND SCOPE OF THEIR JOINT VENTURE, IN VIOLATION OF THE SUPREME COURT’S HOLDING IN INFORMATION TECHNOLOGY FOUNDATION OF THE PHILIPPINES, vs. COMELEC (G.R. No. 159139, Jan. 13, 2004).

                                                     

THERE WAS NO VALID JOINT VENTURE AGREEMENT [JVA] BETWEEN PRIVATE RESPONDENTS SMARTMATIC AND TIM DURING THE BIDDING, IN VIOLATION OF THE SUPREME COURT’S HOLDING IN INFORMATION TECHNOLOGY FOUNDATION OF THE PHILIPPINES vs. COMELEC x x x WHICH REQUIRES A JOINT VENTURE TO INCLUDE A COPY OF ITS [JVA] DURING THE BIDDING.

                                                     

THE ALLEGED JOINT VENTURE COMPOSED OF PRIVATE RESPONDENTS SMARTMATIC AND TIM, DOES NOT SATISFY THE SUPREME COURT’S DEFINITION OF A “JOINT VENTURE” IN INFORMATION TECHNOLOGY FOUNDATION OF THE PHILIPPINES vs. COMELEC x x x WHICH “REQUIRES A COMMUNITY OF INTEREST IN THE PERFORMANCE OF THE SUBJECT MATTER.”

Filed as it was before contract signing, the petition understandably did not implead Smartmatic TIM Corporation, doubtless an indispensable party to these proceedings, an incident that did not escape Comelec’s notice.^[37]

As a preliminary counterpoint, either or both public and private respondents question the legal standing or locus standi of petitioners, noting in this regard that the petition did not even raise an issue of transcendental importance, let alone a constitutional question.

As an additional point, respondents also urge the dismissal of the petition on the ground of prematurity, petitioners having failed to avail themselves of the otherwise mandatory built-in grievance mechanism under Sec. 55 in relation to Sec. 58 of RA 9184, also known as the Government Procurement Reform Act, as shall be discussed shortly.

Antecedents    Procedural Grounds    Substantive Issues   Ruling