Roque et al vs COMELEC et al [3]

Antecedents | Procedural Grounds | Substantive Issues | Ruling
                                   

SUBSTANTIVE ISSUES

We now turn to the central issues tendered in the petition which, in terms of subject matter, revolved around two concerns, viz: (1) the Joint Venture Agreement (JVA) of Smartmatic and TIM; and (2) the PCOS machines to be used. Petitioners veritably introduced another issue during the oral arguments, as amplified in their memorandum, i.e. the constitutionality and statutory flaw of the automation contract itself.   The petition-in-intervention confined itself to certain features of the PCOS machines.

The Joint Venture Agreement: Its Existence and Submission

The issue respecting the existence and submission of the TIM-Smartmatic JVA does not require an extended disquisition, as repairing to the records would readily provide a satisfactory answer. We note in fact that the petitioners do not appear to be earnestly pressing the said issue anymore, as demonstrated by their counsel’s practically cavalier discussion thereof during the oral argument.  When reminded, for instance, of private respondents’ insistence on having in fact submitted their JVA dated April 23, 2009, petitioners’ counsel responded as follows: “We knew your honor that there was, in fact, a joint venture agreement filed. However, because of the belated discovery that [there] were irreconcilable differences, we then made a view that this joint venture agreement was a sham, at best pro forma because it did not contain all the required stipulations in order to evidence unity of interest x x x.”^[51]

Indeed, the records belie petitioners’ initial posture that TIM and Smartmatic, as joint venture partners, did not include in their submitted eligibility envelope a copy of their JVA.  The SBAC’s Post Qualification Evaluation Report (Eligibility) on TIM-Smartmatic, on page 10, shows the following entry: “Valid Joint Venture Agreement, stating among things, that the members are jointly and severally liable for the whole obligation, in case of joint venture – Documents verified compliance.”^[52]

 Contrary to what the petitioners posit, the duly notarized JVA, as couched, explained the nature and the limited purpose^[53] of the joint venture and expressly defined, among other things, the composition, scope, and the 60-40 capital structure of the aggroupment.^[54]  The JVA also contains provisions on the management^[55] and division of profits.^[56]  Article 3^[57] of the JVA delineates the respective participations and responsibilities of the joint venture partners in the automation project.

Given the foregoing perspective, the Court is at a loss to understand how petitioners can assert that the Smartmatic-TIM consortium has failed to prove its joint venture existence and/or to submit evidence as would enable the Comelec to know such items as who it is dealing with, which between the partners has control over the decision-making process, the amount of investment to be contributed by each partner, the parties’ shares in the profits and like details. Had petitioners only bothered to undertake the usual due diligence that comes with good judgment and examined the eligibility envelope of the Smartmatic-TIM joint venture, they would have discovered that their challenge to and arguments against the joint venture and its JVA have really no factual basis.  

It may be, as petitioners observed, that the TIM-Smartmatic joint venture remained an unincorporated aggroupment during the bid-opening and evaluation stages.  It ought to be stressed, however, that the fact of non-incorporation was without a vitiating effect on the validity of the tender offers. For the bidding ground rules, as spelled out primarily in the RFP and the clarificatory bid bulletins, does not require, for bidding purposes, that there be an incorporation of the bidding joint ventures or consortiums. In fact, Bid Bulletin Nos. 19 and 20 recognize the existence and the acceptability of proposals of unincorporated joint ventures.  In response to a poser, for example, regarding the 60% Filipino ownership requirement in a joint venture arrangement, the SBAC, in its Bid Bulletin No. 22, stated: “In an unincorporated joint venture, determination of the required Filipino participation may be made by examining the terms and conditions of the  [JVA] and other supporting financial documents submitted by the joint venture.” (Emphasis ours.)   Petitioners, to be sure, have not shown that incorporation is part of the pass/fail criteria used in determining eligibility.

Petitioners have made much of the Court’s ruling in Information Technology Foundation of the Philippines [Infotech] v. Comelec,^[58] arguing in relation thereto that the partnership of Smartmatic and TIM does not meet the Court’s definition of a joint venture which requires “community of interest in the performance of the subject matter.” 

          Petitioners’ invocation of Infotech is utterly misplaced. Albeit Infotech and this case are both about modernizing the election process and bidding joint ventures, the relevant parallelism ends there. Cast as they are against dissimilar factual milieu, one cannot plausibly set Infotech side with and contextually apply to this case the ratio of Infotech. Suffice it to delve on the most glaring of differences.  In Infotech, the winning bid pertained to the consortium of Mega Pacific, a purported joint venture.  Extant records, however, do not show the formation of such joint venture, let alone its composition.  To borrow from the ponencia of then Justice, later Chief Justice, Artemio Panganiban, “there is no sign whatsoever of any [JVA], consortium agreement [or] memorandum agreement  x x x  executed among the members of the purported consortium.”^[59]  There was in fine no evidence to show that the alleged joint venture partners agreed to constitute themselves into a single entity solidarily responsible for the entirety of the automation contract.  Unlike the purported Mega Pacific consortium in Infotech, the existence in this case of the bidding joint venture of Smartmatic and TIM is properly documented and spread all over the bid documents.  And to stress, TIM and Smartmatic, in their JVA, unequivocally agreed between themselves to perform their respective undertakings.  And over and beyond their commitments to each other, they undertook to incorporate, if called for by the bidding results, a JVC that shall be solidarily liable with them for any actionable breach of the automation contract.

            In Infotech, the Court chastised the Comelec for dealing with an entity, the full identity of which the poll body knew nothing about.  Taking a cue from this holding, petitioners tag the TIM-Smartmatic JVA as flawed and as one that would leave the Comelec “hanging” for the non-inclusion, as members of the joint venture, of three IT providers.  The three referred to are Jarltech International, Inc. (Jarltech), a subsidiary of Smartmatic that manufactures the Smartmatic voting machines; Dominion Voting Systems (Domino), the inventor of said PCOS machines; and 2GO Transportation System Corporation (2GO), the subcontractor responsible for the distribution of the PCOS machines throughout the country.

            Petitioners’ beef against the TIM-Smartmatic JVA is untenable.  First off, the Comelec knows the very entities whom they are dealing with, which it can hold solidary liable under the automation contract, should there be contract violation.  Secondly, there is no requirement under either RA 8436, as amended, or the RFP, that all the suppliers, manufacturers or distributors involved in the transaction should be part of the joint venture.  On the contrary, the Instruction to Bidders––as petitioners themselves admit^[60]––allows the bidder to subcontract portions of the goods or services under the automation project.^[61]

          To digress a bit, petitioners have insisted on the non-existence of a bona fide JVA between TIM and Smartmatic.  Failing to gain traction for their indefensible posture, they would thrust on the Court the notion of an invalid joint venture due to the non-inclusion of more companies in the existing TIM-Smartmatic joint venture.  The irony is not lost on the Court.

         

This brings us to the twin technical issues tendered herein bearing on the PCOS machines of Smartmatic.

At its most basic, the petition ascribes grave abuse of discretion to the Comelec for, among other things, awarding the automation project in violation of RA 8436, as amended.  Following their line, no pilot test of the PCOS technology Smartmatic-TIM offered has been undertaken; hence, the Comelec cannot conduct a nationwide automation of the 2010 polls using the machines thus offered.  Hence, the contract award to Smartmatic-TIM with their untested PCOS machines violated RA 8436, as amended by RA 9369, which mandates that with respect to the May 2010 elections and onwards, the system procured must have been piloted in at least 12 areas referred to in Sec. 6 of RA 8436, as amended.  What is more, petitioners assert, private respondents’ PCOS machines do not satisfy the minimum system capabilities set by the same law envisaged to ensure transparent and credible voting, counting and canvassing of votes.  And as earlier narrated, petitioners would subsequently add the abdication angle in their bid to nullify the automation contract.

Pilot Testing Not Necessary

Disagreeing, as to be expected, private respondents maintain that there is nothing in the applicable law requiring, as a pre-requisite for the 2010 election automation project award, that the prevailing bidder’s automation system, the PCOS in this case, be subjected to pilot testing.   Comelec echoes its co-respondents’ stance on pilot testing, with the added observation that nowhere in the statutory provision relied upon are the words “pilot testing” used.^[62]  The Senate’s position and its supporting arguments match those of private respondents.

The respondents’ thesis on pilot testing and the logic holding it together are well taken.  There can be no argument about the phrase “pilot test” not being found in the law.  But does it necessarily follow that a pilot test is absolutely not contemplated in the law?  We repair to the statutory provision petitioners cited as requiring a pilot run, referring to Sec. 6 of RA 8436, as amended by RA 9369, reading as follows:  

Sec. 5.  Authority to use an Automated Election System.- To carry out the above stated-policy, the [Comelec], x x x is hereby authorized to use an automated election system or systems in the same election in different provinces, whether paper-based or a direct recording electronic election system as it may deem appropriate and practical for the process of voting, counting of votes and canvassing/consolidation and transmittal of results of electoral exercises: Provided, that for the regular national and local elections, which shall be held immediately after the effectivity of this Act, the AES shall be used in at least two highly urbanized cities and two provinces each in Luzon, Visayas, and Mindanao to be chosen by the [Comelec]: Provided, further, That local government units whose officials have been the subject of administrative charges within sixteen (16) month prior to the May 14, 2007 elections shall not be chosen.  Provided, finally, That no area shall be chosen without the consent of the Sanggunian of the local government unit concerned.  The term local government unit as used in this provision shall refer to a highly urbanized city or province.  In succeeding regular national or local elections, the AES shall be implemented. (Emphasis and underscoring added.)

RA 9369, which envisages an AES, be it paper-based or direct-recording electronic, took effect in the second week of February 2007 or thereabout.^[63]  The “regular national and local elections” referred to after the “effectivity of this Act” can be no other than the May 2007 regular elections, during which time the AES shall, as the law is worded, be used in at least two highly urbanized cities and provinces in Luzon, Visayas and Mindanao.  The Court takes judicial notice that the May 2007 elections did not deploy AES, evidently due to the mix of time and funding constraints.

To the petitioners, the underscored portion of the aforequoted Sec. 6 of RA 8436 is the pilot-testing provision that Comelec failed to observe.

We are not persuaded.

READ ON  

Antecedents | Procedural Grounds | Substantive Issues | Ruling

Roque et al vs COMELEC et al [4]

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

From the practical viewpoint, the pilot testing of the technology in question in an actual, scheduled electoral exercise under harsh conditions would have been the ideal norm in computerized system implementation.  The underscored proviso of Sec. 6 of RA 8436 is not, however, an authority for the proposition that the pilot testing of the PCOS in the 2007 national elections in the areas thus specified is an absolute must for the machines’ use in the 2010 national/local elections.  The Court can concede that said proviso, with respect to the May 2007 elections, commands the Comelec to automate in at least 12 defined areas of the country.  But the bottom line is that the required 2007 automation, be it viewed in the concept of a pilot test or not, is not a mandatory requirement for the choice of system in, or a prerequisite for, the full automation of the May 2010 elections. 

As may be noted, Sec. 6 of RA 8436 may be broken into three essential parts, the first partaking of the nature of a general policy declaration: that Comelec is authorized to automate the entire elections.  The second part states that for the regular national and local elections that shall be held in May 2007, Comelec shall use the AES, with an option, however, to undertake automation, regardless of the technology to be selected, in a limited area or, to be more precise, in at least two highly urbanized cities and two provinces each in Luzon, Visayas, and Mindanao to be chosen by the Comelec.  On the other hand, the last part, phrased sans reference to the May 2007 elections, commands thus:  “[I]n succeeding regular national or local elections, the [automated election system] shall be implemented.”  Taken in its proper context, the last part is indicative of the legislative intent for the May 2010 electoral exercise to be fully automated, regardless of whether or not pilot testing was run in the 2007 polls.

To argue that pilot testing is a condition precedent to a full automation in 2010 would doubtless undermine the purpose of RA 9369.  For, as aptly observed during the oral arguments, if there was no political exercise in May 2007, the country would theoretically be barred forever from having full automation.

Sec. 6 of the amended RA 8436, as couched, therefore, unmistakably conveys the idea of unconditional full automation in the 2010 elections.  A construal making pilot testing of the AES a prerequisite or condition sine qua non to putting the system in operation in the 2010 elections is tantamount to reading into said section something beyond the clear intention of Congress, as expressed in the provision itself.  We reproduce with approval the following excerpts from the comment of the Senate itself:

The plain wordings of RA 9369 (that amended RA 8436) commands that the 2010 elections shall be fully automated, and such full automation is not conditioned on “pilot testing” in the May 2007 elections.  Congress merely gave COMELEC the flexibility to partially use the AES in some parts of the country for the May 2007 elections.^[64]

Lest it be overlooked, an AES is not synonymous to and ought not to be confused with the PCOS.  Sec. 2(a) of RA 8436, as amended, defines an AES as “a system using appropriate technology which has been demonstrated in the voting, counting, consolidating, canvassing and transmission of election results, and other electoral processes.”  On the other hand, PCOS refers to a technology wherein an optical ballot scanner, into which optical scan paper ballots marked by hand by the voter are inserted to be counted.^[65]  What may reasonably be deduced from these definitions is that PCOS is merely one of several automated voting, counting or canvassing technologies coming within the term AES, implying in turn that the automated election system or technology that the Comelec shall adopt in future elections need not, as a matter of mandatory arrangement, be piloted in the adverted two highly urbanized cities and provinces.

  In perspective, what may be taken as mandatory prerequisite for the full automation of the 2010 regular national/ local elections is that the system to be procured for that exercise be a technology tested either here or abroad.  The ensuing Section 8 of RA 8436, as amended, says so.     

SEC 12. Procurement of Equipment and Materials.– To achieve the purpose of this Act, the Commission is authorized to procure, xxx, by purchase, lease, rent or other forms of acquisition, supplies, equipment, materials, software, facilities, and other services, from local or foreign sources xxx. With respect to the May 10, 2010 elections and succeeding electoral exercises, the system procured must have demonstrated capability and been successfully used in prior electoral exercise here or abroad.  Participation in the 2007 pilot exercise shall not be conclusive of the system’s fitness.  (Emphasis supplied).    

          While the underscored portion makes reference to a “2007 pilot exercise,” what it really exacts is that, for the automation of the May 2010 and subsequent elections, the PCOS or any AES to be procured must have demonstrated its capability and success in either a local or a foreign electoral exercise.  And as expressly declared by the provision, participation in the 2007 electoral exercise is not a guarantee nor is it conclusive of the system’s fitness.  In this regard, the Court is inclined to agree with private respondents’ interpretation of the underscored portion in question:  “The provision clearly conveys that the [AES] to be used in the 2010 elections need not have been used in the 2007 elections, and that the demonstration of its capability need not be in a previous Philippine election.  Demonstration of the success and capability of the PCOS may be in an electoral exercise in a foreign jurisdiction.”^[66]  As determined by the Comelec, the PCOS system had been successfully deployed in previous electoral exercises in foreign countries, such as Ontario, Canada; and New York, USA,^[67] albeit Smartmatic was not necessarily the system provider.  But then, RA 9369 does not call for the winning bidder of the 2010 automation project and the deploying entity/provider in the foreign electoral exercise to be one and the same entity.  Neither does the law incidentally require that the system be first used in an archipelagic country or with a topography or a voting population similar to or approximating that of the Philippines.

At any event, any lingering doubt on the issue of whether or not full automation of the 2010 regular elections can validly proceed without a pilot run of the AES should be put to rest with the enactment in March 2009 of RA 9525,^[68] in which Congress appropriated PhP 11.301 billion to automate the 2010 elections, subject to compliance with the transparency and accuracy requirements in selecting the relevant technology of the machines, thus:

         

          Sec. 2.  Use of Funds.– x x x  Provided, however, That disbursement of the amounts herein appropriated or any part thereof shall be authorized only in strict compliance with the Constitution, the provisions of [RA] No. 9369 and other election laws incorporated in said Act as to ensure the conduct of a free, orderly, clean, honest and credible election and shall adopt such measures that will guaranty transparency and accuracy in the selection of the relevant technology of the machines to be used on May 10, 2010 automated national and local elections. (Emphasis added.)  

          It may safely be assumed that Congress approved the bill that eventually became RA 9525, fully aware that the system using the PCOS machines were not piloted in the 2007 electoral exercise.  The enactment of RA 9525 is to us a compelling indication that it was never Congress’ intent to make the pilot testing of a particular automated election system in the 2007 elections a condition precedent to its use or award of the 2010 Automation Project.  The comment-in-intervention of the Senate says as much.  

Further, the highly charged issue of whether or not the 2008 ARMM elections––covering, as NCC observed, three conflict-ridden island provinces––may be treated as substantial compliance with the “pilot test” requirement must be answered in the affirmative.  No less than Senator Richard J. Gordon himself, the author of the law, said that “the system has been tried and tested in the ARMM elections last year, so we have to proceed with the total implementation of the law.”^[69]

We note, though, the conflicting views of the NCC^[70] and ITFP^[71] on the matter.   Suffice it to state at this juncture that the system used in the 2008 ARMM election exercise bears, as petitioners to an extent grudgingly admit, ^[72] a similarity with the PCOS.  The following, lifted from the Comelec’s comment, is to us a fair description of how the two systems (PCOS and CCOS) work and where the difference lies:

         

          xxx the elections in the [ARMM] utilized the Counting Center Optical Scan (CCOS), a system which uses the Optical Mark Reader (OMR), the same technology as the PCOS.

Under the CCOS, the voters cast their votes by shading or marking the circles in the paper ballots which corresponded to the names of their chosen candidates [like in PCOS].  Thereafter, the ballot boxes were brought to the counting centers where they were scanned, counted and canvassed. 

                   xxx Under the PCOS, the counting, consolidation and canvassing of the votes are done at the precinct level.  The election results at the precincts are then electronically transmitted to the next level, and so on.  xxx PCOS dispenses with the physical transportation of ballot boxes from the precincts to the counting centers.^[73]

          Moreover, it has been proposed that a partial automation be implemented for the May 2010 elections in accordance with Section 5 of RA 8436, as amended by RA 9369 instead of full automation.  The Court cannot agree as such proposition has no basis in law.  Section 5, as worded, does not allow for partial automation.  In fact, Section 5 clearly states that “the AES shall be implemented nationwide.”^[74]  It behooves this Court to follow the letter and intent of the law for full automation in the May 2010 elections. 

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

No Abdication of COMELEC's Mandate and Responsibility

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

No Abdication of Comelec’s Mandate and Responsibility

As a final main point, petitioners would have the Comelec-Smartmatic-TIM Corporation automation contract nullified since, in violation of the Constitution, it constitutes a wholesale abdication of the poll body’s constitutional mandate for election law enforcement.  On top of this perceived aberration, the mechanism of the PCOS machines would infringe the constitutional right of the people to the secrecy of the ballot which, according to the petitioners, is provided in Sec. 2, Art. V of the Constitution.^[85]

  

          The above contention is not well taken.

        The first function of the Comelec under the Constitution^[86]––and the Omnibus Election Code for that matter––relates to the enforcement and administration of all laws and regulations relating to the conduct of elections to public office to ensure a free, orderly and honest electoral exercise.  And how did petitioners come to their conclusion about their abdication theory? By acceding to Art. 3.3 of the automation contract, Comelec relinquished, so petitioners claim, supervision and control of the system to be used for the automated elections.  To a more specific point, the loss of control, as may be deduced from the ensuing exchanges, arose from the fact that Comelec would not be holding possession of what in IT jargon are the public and private keys pair. 

         

CHIEF JUSTICE:  Well, more specifically are you saying that the main course of this lost of control is the fact that SMARTMATIC holds the public and private keys to the sanctity of this system?

ATTY. ROQUE:  Yes, Your Honor, as well as the fact that they control the program embedded in the key cost that will read their votes by which the electorate may verify that their votes were counted.

CHIEF JUSTICE:  You are saying that SMARTMATIC and not its partner TIM who hold these public and private keys? 

ATTY. ROQUE:  Yes, Your Honor. 

                    

          The Court is not convinced.  There is to us nothing in Art 3.3 of the automation contract, even if read separately from other stipulations and the provisions of the bid documents and the Constitution itself, to support the simplistic conclusion of abdication of control pressed on the Court.  Insofar as pertinent, Art 3.3 reads:

              3.3 The PROVIDER shall be liable for all its obligations under this Project and the performance of portions thereof by other persons or entities not parties to this Contract shall not relieve the PROVIDER of said obligations and concomitant liabilities.

                  SMARTMATIC, as the joint venture partner with the greater track record in automated elections, shall be in charge of the technical aspects of the counting and canvassing software and hardware, including transmission configuration and system integration. SMARTMATIC shall also be primarily responsible for preventing and troubleshooting technical problems that may arise during the elections. (Emphasis added.)

The proviso designating Smartmatic as the joint venture partner in charge of the technical aspect of the counting and canvassing wares does not to us translate, without more, to ceding control of the electoral process to Smartmatic.    It bears to stress that the aforesaid designation of Smartmatic was not plucked from thin air, as it was in fact an eligibility requirement imposed, should the bidder be a joint venture.  Part 5, par. 5.4 (e) of the Instruction to Bidders on the subject Eligible Bidders, whence the second paragraph of aforequoted Art. 3.3 came from, reads:

5.4  A JV of two or more firms as partners shall comply with the following requirements.

x x x x

(e) The JV member with a greater track record in automated elections, shall be in-charge of the technical aspects of the counting and canvassing software and hardware, including transmission configuration and system integration

 And lest it be overlooked, the RFP, which forms an integral part of the automation contract,^[87] has put all prospective bidders on notice of Comelec’s intent to automate and to accept bids that would meet several needs, among which is “a complete solutions provider… which can provide… effective overall nationwide project management service… under COMELEC supervision and control, to ensure effective and successful implementation of the [automation] Project.”^[88] Complementing this RFP advisory as to control of the election process is Art. 6.7 of the automation contract, providing:

6.7 Subject to the provisions of the General Instructions to be issued by the Commission En Banc, the entire processes of voting, counting, transmission, consolidation and canvassing of votes shall be conducted by COMELEC’s personnel and officials, and their performance, completion and final results according to specifications and within the specified periods shall be the shared responsibility of COMELEC and the PROVIDER. (Emphasis added.)  

          But not one to let an opportunity to score points pass by, petitioners rhetorically ask: “Where does Public Respondent Comelec intend to get this large number of professionals, many of whom are already gainfully employed abroad?”^[89]  The Comelec, citing Sec. 3^[90] and Sec. 5 of RA 8436,^[91] as amended, aptly answered this poser in the following wise:

          x x x [P]ublic respondent COMELEC, in the implementation of the automated project, will forge partnerships with various entities in different fields to bring about the success of the 2010 automated elections.

 Public respondent COMELEC will partner with Smartmatic TIM Corporation for the training and hiring of the IT personnel as well as for the massive voter-education campaign. There is in fact a budget allocation x x x for these undertakings. x x x

            As regards the requirement of RA 9369 that IT-capable personnel shall be deputized as a member of the BEI and that another IT-capable person shall assist the BOC, public respondent COMELEC shall partner with DOST and other agencies and instrumentalities of the government.

In not so many words during the oral arguments and in their respective Memoranda, public and private respondents categorically rejected outright allegations of abdication by the Comelec of its constitutional duty.  The petitioners, to stress, are strangers to the automation contract.  Not one   participated in the bidding conference or the bidding proper or even perhaps examined the bidding documents and, therefore, none really knows the real intention of the parties.  As case law tells us, the court has to ferret out the real intent of the parties.   What is fairly clear in this case, however, is that petitioners who are not even privy to the bidding process foist upon the Court their own view on the stipulations of the automation contract and present to the Court what they think are the parties’ true intention.   It is a study of outsiders appearing to know more than the parties do, but actually speculating what the parties intended.  The following is self-explanatory:

CHIEF JUSTICE: Why did you say that it did not, did you talk with the Chairman and Commissioners of COMELEC that they failed to perform this duty, they did not exercise this power of control?

ATTY. ROQUE : Your Honor, I based it on the fact that it was the COMELEC in fact that entered into this contract ….

CHIEF JUSTICE : Yes, but my question is – did you confront the COMELEC officials that they forfeited their power of control in over our election process?

ATTY. ROQUE : We did not confront, your Honor. We impugned their acts, Your Honor.^[92]

            Just as they do on the issue of control over the electoral process, petitioners also anchor on speculative reasoning their claim that Smartmatic has possession and control over the public and private keys pair that will operate the PCOS machines. Consider: Petitioners’ counsel was at the start cocksure about Smartmatic’s control of these keys and, with its control, of the electoral process.^[93]

Several questions later, his answers had a qualifying tone:

JUSTICE NACHURA: And can COMELEC under the contract not demand that it have access, that it be given access to and in fact generate its own keys independently with SMARTMATIC so that it would be COMELEC and not SMARTMATIC that would have full control of the technology insofar as the keys are concerned xxx?

ATTY. ROQUE: I do not know if COMELEC will be in a position to generate these keys, xxx. ^[94]

And subsequently, the speculative nature of petitioners’ position as to who would have possession and control of the keys became apparent.

CHIEF JUSTICE:  Yes, but did you check with the COMELEC who will be holding these two keys x x x did you check with COMELEC whether this system is correct?

ATTY.ROQUE: We have not had occasion to do so, x x x Your Honor.

x x x x

CHIEF JUSTICE: Why do you make that poor conclusion against the COMELEC x x x May not the COMELEC hire the services of experts in order for the institution to be able to discharge its constitutional functions?

ATTY. ROQUE: That is true, but x x x there is too much reliance on individuals who do not have the same kind of accountability as public officers x x x

CHIEF JUSTICE: Are you saying that the COMELEC did not consult with available I.T. experts in the country before it made the bidding rules before it conducted the bidding and make the other policy judgments?

ATTY. ROQUE: Your Honor, what I am sure is that they did not confer with the I.T. Foundation x x x.

CHIEF JUSTICE: But is that foundation the only expert, does it have a monopoly of knowledge?^[95]

The Court, to be sure, recognizes the importance of the vote-security issue revolving around the issuance of the public and private keys pair to the Board of Election Inspectors, including the digital signatures. The NCC comment on the matter deserves mention, appearing to hew as it does to what appear on the records.  The NCC wrote:

The RFP/TOR used in the recent bidding for the AES to be used in the 2010 elections specifically mandated the use of public key cryptography. However, it was left to the discretion of the bidder to propose an acceptable manner of utilization for approval/acceptance of the Comelec. Nowhere in the RFP/TOR was it indicated that COMELEC would delegate to the winning bidder the full discretion, supervision and control over the manner of PKI [Public Key Infrastructure] utilization.

With the view we take of the automation contract, the role of Smartmatic TIM Corporation is basically to supply the goods necessary for the automation project, such as but not limited to the PCOS machines, PCs, electronic transmission devices and related equipment, both hardware and software, and the technical services pertaining to their  operation.  As lessees of the goods and the back-up equipment, the corporation and its operators would provide assistance with respect to the machines to be used by the Comelec which, at the end of the day, will be conducting the election thru its personnel and whoever it deputizes.

And if only to emphasize a point, Comelec’s contract is with Smartmatic TIM Corporation of which Smartmatic is a 40% minority owner, per the JVA of TIM and Smartmatic and the Articles of Incorporation of Smartmatic TIM Corporation.  Accordingly, any decision on the part or on behalf of Smartmatic will not be binding on Comelec.  As a necessary corollary, the board room voting arrangement that Smartmatic and TIM may have agreed upon as joint venture partners, inclusive of the veto vote that one may have power over the other, should really be the least concern of the Comelec.

Parenthetically, the contention that the PCOS would infringe on the secrecy and sanctity of the ballot because, as petitioners would put it, the voter would be confronted with a “three feet” long ballot,^[96] does not commend itself for concurrence.  Surely, the Comelec can put up such infrastructure as to insure that the voter can write his preference in relative privacy.  And as demonstrated during the oral arguments, the voter himself will personally feed the ballot into the machine.  A voter, if so minded to preserve the secrecy of his ballot, will always devise a way to do so.  By the same token, one with least regard for secrecy will likewise have a way to make his vote known.

During the oral arguments, the notion of a possible violation of the Anti-Dummy Law cropped up, given the RFP requirement of a joint venture bidder to be at least be 60% Filipino. On the other hand, the winning bidder, TIM-Smartmatic joint venture, has Smartmatic, a foreign corporation, owning 40% of the equity in, first, the joint venture partnership, and then in Smartmatic TIM Corporation.

The Anti-Dummy Law^[97] pertinently states:

Section 1.  Penalty.  In all cases in which any constitutional or legal provision requires Philippine or any other specific citizenship as a requisite for the exercise or enjoyment of a right, franchise or privilege, any citizen of the Philippines or of any other specific country who allows his name or citizenship to be used for the purpose of evading such provision, and any alien or foreigner profiting thereby, shall be punished by imprisonment xxx and by a fine xxx.

SECTION 2. Simulation of minimum capital stock – In all cases in which a constitutional or legal provision requires that a corporation or association may exercise or enjoy  a right, franchise or privilege, not less than a certain per centum of its capital must be owned by citizens of the Philippines or  any other specific country, it shall be unlawful to falsely simulate the existence of such minimum stock or capital as owned by such citizen for the purpose of evading such provision. xxx

SECTION 2-A. Unlawful use, Exploitation or Enjoyment.    Any person, corporation, or association which, having in its name or under its control, a right, franchise, privilege, property or business, the exercise or enjoyment of which is expressly reserved by the Constitution or the laws to citizens of the Philippines or of any other specific country, or to corporations or associations at least sixty per centum of the capital of which is owned by such citizens, permits or allows the use, exploitation or enjoyment thereof by a person, corporation, or association not possessing the requisites prescribed by the Constitution or the laws of the Philippines; or leases, or in any other way, transfers or conveys said right, franchise, privilege, property or business to a person, corporation or association not otherwise qualified under the Constitution xxx shall be punished by imprisonment xxx (Emphasis added.)

The Anti-Dummy Law has been enacted to limit the enjoyment of certain economic activities to Filipino citizens or corporations. For liability for violation of the law to attach, it must be established that there is a law limiting or reserving the enjoyment or exercise of a right, franchise, privilege, or business to citizens of the Philippines or to corporations or associations at least 60 per centum of the capital of which is owned by such citizens. In the case at bench, the Court is not aware of any constitutional or statutory provision classifying as a nationalized activity the lease or provision of goods and technical services for the automation of an election. In fact, Sec. 8 of RA 8436, as amended, vests the Comelec with specific authority to acquire AES from foreign sources, thus:

SEC 12. Procurement of Equipment and Materials.– To achieve the purpose of this Act, the Commission is authorized to procure, xxx, by purchase, lease, rent or other forms of acquisition, supplies, equipment, materials, software, facilities, and other services, from local or foreign  sources xxx. (Emphasis added.)

Petitioners cite Executive Order No. (EO) 584,^[98] Series of 2006, purportedly limiting “contracts for the supply of materials, goods and commodities to government-owned or controlled corporation, company, agency or municipal corporation” to corporations that are 60% Filipino. We do not quite see the governing relevance of EO 584. For let alone the fact that RA 9369 is, in relation to EO 584, a subsequent enactment and, therefore, enjoys primacy over the executive issuance, the Comelec does fall under the category of a government-owned and controlled corporation, an agency or a municipal corporation contemplated in the executive order.

A view has been advanced regarding the susceptibility of the AES to hacking, just like the voting machines used in certain precincts in Florida, USA in the Gore-Bush presidential contests. However, an analysis of post-election reports on the voting system thus used in the US during the period material and the AES to be utilized in the 2010 automation project seems to suggest stark differences between the two systems. The first relates to the Source Code, defined in RA 9369 as “human readable instructions that define what the computer equipment will do.”^[99]  The Source Code for the 2010 AES shall be available and opened for review by political parties, candidates and the citizens’ arms or their representatives;^[100] whereas in the US precincts aforementioned, the Source Code was alleged to have been kept secret by the machine manufacture company, thus keeping the American public in the dark as to how exactly the machines counted their votes.  And secondly, in the AES, the PCOS machines found in the precincts will also be the same device that would tabulate and canvass the votes; whereas in the US, the machines in the precincts did not count the votes. Instead the votes cast appeared to have been stored in a memory card that was brought to a counting center at the end of the day. As a result, the hacking and cheating may have possibly occurred at the counting center.

Additionally, with the AES, the possibility of system hacking is very slim. The PCOS machines are only online when they transmit the results, which would only take around one to two minutes. In order to hack the system during this tiny span of vulnerability, a super computer would be required. Noteworthy also is the fact that the memory card to be used during the elections is encrypted and read-only––meaning no illicit program can be executed or introduced into the memory card.

Therefore, even though the AES has its flaws, Comelec and Smartmatic have seen to it that the system is well-protected with sufficient security measures in order to ensure honest elections.

And as indicated earlier, the joint venture provider has formulated and put in place a continuity and back-up plans that would address the understandable apprehension of a failure of elections in case the machines falter during the actual election.  This over-all fall-back strategy includes the provisions for 2,000 spare PCOS machines on top of the 80,000 units assigned to an equal number precincts throughout the country.  The continuity and back-up plans seek to address the following eventualities: (1) The PCOS fails to scan ballots; (2) The PCOS scans the ballots, but fails to print election returns (ERs); and/or (3) The PCOS prints but fails to transmit the ERs. In the event item #1 occurs, a spare PCOS, if available, will be brought in or, if not available, the PCOS of another precinct (PCOS 2 for clarity), after observing certain defined requirements,^[101] shall be used. Should all the PCOS machines in the entire municipality/city fail, manual counting of the paper ballots and the manual accomplishment of ERs shall be resorted to in accordance with Comelec promulgated rules on appreciation of automated ballots.^[102]  In the event item #2 occurs where the PCOS machines fail to print ERs, the use of spare PCOS and the transfer of PCOS-2 shall be effected.   Manual counting of ERs shall be resorted to also if all PCOS fails in the entire municipality. And should eventuality #3 transpire, the following back-up options, among others, may be availed of:  bringing PCOS-1 to the nearest precinct or polling center which has a functioning transmission facility; inserting transmission cable of functioning transmission line to PCOS-1 and transmitting stored data from PCOS-1 using functioning transmission facility.

The disruption of the election process due to machine breakdown or malfunction may be limited to a precinct only or could affect an entire municipal/city. The worst case scenario of course would be the wholesale breakdown of the 82,000 PCOS machines. Nonetheless, even in this most extreme case, failure of all the machines would not necessarily translate into failure of elections.  Manual count tabulation and transmission, as earlier stated, can be done, PCOS being a paper-ballot technology. If the machine fails for whatever reason, the paper ballots would still be there for the hand counting of the votes, manual tabulation and transmission of the ERs.  Failure of elections consequent to voting machines failure would, in fine, be a very remote possibility. 

A final consideration. 

The first step is always difficult. Hardly anything works, let alone ends up perfectly the first time around. As has often been said, if one looks hard enough, he will in all likelihood find a glitch in any new system.  It is no wonder some IT specialists and practitioners have considered the PCOS as unsafe, not the most appropriate technology for Philippine elections, and “easily hackable,” even. And the worst fear expressed is that disaster is just waiting to happen, that PCOS would not work on election day.

Congress has chosen the May 2010 elections to be the maiden run for full automation.  And judging from what the Court has heard and read in the course of these proceedings, the choice of PCOS by Comelec was not a spur-of-moment affair, but the product of honest-to-goodness studies, consultations with CAC, and lessons learned from the ARMM 2008 automated elections. With the backing of Congress by way of budgetary support, the poll body has taken this historic, if not ambitious, first step. It started with the preparation of the RFP/TOR, with a list of voluminous annexes embodying in specific detail the bidding rules and expectations from the bidders. And after a hotly contested and, by most accounts, a highly transparent public bidding exercise, the joint venture of a Filipino and foreign corporation won and, after its machine hurdled the end-to-end demonstration test, was eventually awarded the contract to undertake the automation project.  Not one of the losing or disqualified bidders questioned, at least not before the courts, the bona fides of the bidding procedures and the outcome of the bidding itself.

Assayed against the provisions of the Constitution, the enabling automation law, RA 8436, as amended by RA 9369, the RFP and even the Anti-Dummy Law, which petitioners invoked as an afterthought, the Court finds the project award to have complied with legal prescriptions, and the terms and conditions of the corresponding automation contract in question to be valid. No grave abuse of discretion, therefore, can be laid on the doorsteps of respondent Comelec. And surely, the winning joint venture should not be faulted for having a foreign company as partner.  

The Comelec is an independent constitutional body with a distinct and pivotal role in our scheme of government. In the discharge of its awesome functions as overseer of fair elections, administrator and lead implementor of laws relative to the conduct of elections, it should not be stymied with restrictions that would perhaps be justified in the case of an organization of lesser responsibility.^[103]  It should be afforded ample elbow room and enough wherewithal in devising means and initiatives that would enable it to accomplish the great objective for which it was created––to promote free, orderly, honest and peaceful elections.  This is as it should be for, too often, Comelec has to make decisions under difficult conditions to address unforeseen events to preserve the integrity of the election and in the process the voice of the people.  Thus, in the past, the Court has steered away from interfering with the Comelec’s exercise of its power which, by law and by the nature of its office properly pertain to it.  Absent, therefore, a clear showing of grave abuse of discretion on Comelec’s part, as here, the Court should refrain from utilizing the corrective hand of certiorari to review, let alone nullify, the acts of that body.   This gem, while not on all fours with, is lifted from, the Court’s holding in an old but oft-cited case:

x x x We may not agree fully with [the Comelec’s] choice of means, but unless these are clearly illegal or constitute gross abuse of discretion, this court should not interfere.  Politics is a practical matter, and political questions must be dealt with realistically––not from the standpoint of pure theory [or speculation]. x x x

x x x x

There are no ready-made formulas for solving public problems. Time and experience are necessary to evolve patterns that will serve the ends of good government. In the matter of the administration of the laws relative to the conduct of elections, x x x we must not by any excessive zeal take away from the [Comelec] the initiative which by constitutional and legal mandates properly belongs to it. Due regard to the independent character of the Commission x x x requires that the power of this court to review the acts of that body should, as a general proposition, be used sparingly, but firmly in appropriate cases.^[104] x x x

         

The Court, however, will not indulge in the presumption that nothing would go wrong, that a successful automation election unmarred by fraud, violence, and like irregularities would be the order of the moment on May 10, 2010.  Neither will it guarantee, as it cannot guarantee, the effectiveness of the voting machines and the integrity of the counting and consolidation software embedded in them.  That task belongs at the first instance to Comelec, as part of its mandate to ensure clean and peaceful elections.  This independent constitutional commission, it is true, possesses extraordinary powers and enjoys a considerable latitude in the discharge of its functions.  The road, however, towards successful 2010 automation elections would certainly be rough and bumpy.  The Comelec is laboring under very tight timelines. It would accordingly need the help of all advocates of orderly and honest elections, of all men and women of goodwill, to smoothen the way and assist Comelec personnel address the fears expressed about the integrity of the system. Like anyone else, the Court would like and wish automated elections to succeed, credibly.

WHEREFORE, the instant petition is hereby DENIED.

SO ORDERED.

PRESBITERO J. VELASCO, JR.

Associate Justice

WE CONCUR:

REYNATO S. PUNO

Chief Justice

(On official leave) LEONARDO A. QUISUMBING Associate Justice	CONSUELO YNARES-SANTIAGO Associate Justice
ANTONIO T. CARPIO Associate Justice	RENATO C. CORONA Associate Justice
CONCHITA CARPIO MORALES Associate Justice	MINITA V. CHICO-NAZARIO Associate Justice
ANTONIO EDUARDO B. NACHURA Associate Justice	TERESITA J. LEONARDO-DE CASTRO Associate Justice
ARTURO D. BRION Associate Justice	DIOSDADO M. PERALTA Associate Justice
LUCAS P. BERSAMIN Associate Justice	MARIANO C. DEL CASTILLO Associate Justice
ROBERTO A. ABAD Associate Justice

C E R T I F I C A T I O N

          Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court.

REYNATO S. PUNO

Chief Justice

---

                ^* On official leave.

^[1] Both corporations are also referred to in the petition and other pleadings as Total Information Management, Inc. and Smartmatic International, Inc.

^[2] Rollo, pp. 87-A and 87-B.

^[3] Id. at 576-A. Dated July 28, 2009.

^[4] An Act Amending [RA] 8436, entitled “An Act Authorizing the [Comelec] to Use Automated Election System in the May 11, 1998 National or Local Elections and in Subsequent National or Local Electoral Exercises, to Encourage Transparency, Credibility, Fairness and Accuracy of Elections, Amending for the Purpose Batas Pambansa Blg. 881, as Amended, [RA] 7166 and Other Related Election Laws, Providing Funds Therefor and For Other Purposes.”

^[5] Composed of, among others, the Chairperson of the Commission on Information and Communications Technology (CICT), one member each from the Dept. of Education and the Dept. of Science and Technology and three members representing ICT professional organizations.

^[6] Sec. 9.

^[7] It shall be composed of a representative each from the Commission, CITC and DOST. 
^[8] Sec. 11. 
^[9] Composed of the cities and municipalities in the provinces of Isabela (except Isabela City), Sulu, Tawi-Tawi, Maguindanao (except Cotabato City) and Lanao del Sur.
^[10] DRE is a technology wherein a vote is cast directly on a machine by the use of a touch screen, touchpad, keypad or other device and the machine records the individual votes and calculates the total votes electronically.  
^[11] CCOS means a technology wherein an optical ballot scanner, into which optical scan paper ballots marked by hand by the voter are inserted to be counted, is located in every voting center.  
^[12] Rollo, p. 874. Public Respondents’ Memorandum. 
^[13] Senate Resolutions 96 and 567, s. of 2008, authored by Senators Gordon and Villar, respectively; see Annexes 8 and 9 of private respondents’ Memorandum.  
^[14] Memorandum of the NCC, p. 23.  
^[15] Sec. 2 of RA 9369 defines “paper-based election system” as a type of automated election system that uses paper ballots; records and counts votes; and tabulates, consolidates/canvasses and transmits electronically the results of the vote counts. 
^[16] The Glossary of Terms of the RFP defines PCOS as referring  to a technology wherein an optical ballot scanner, into which optical scan paper ballots marked by hand by the voter are inserted to be counted, is located in every precinct. 
^[17] Sec. 2 (10) of RA 8436, as amended, defines “continuity plan” as a “list of contingency measures and the policies for activation of such, that are put in place to ensure continuous operation of the AES.”  
^[18] The formulation of a continuity plan is a requirement under Sec. 9 of RA 8436, the activation of which shall be undertaken in the presence of political parties’ representatives and the citizens arm of the Comelec.  
^[19] Terms, Conditions and Instruction to Bidders, pp. 45-50 of the RFP.  
^[20] Contains what the RFP refers to as Class “A” documents, referring to legal, technical and financial documents; and Class “B” documents, among which is a valid JVA, in case of joint venture. 
^[21] Item IX, par. 3.3 of the RFP.  
^[22] Rollo, p. 399. Per Certification of the Director of the Comelec’s Education & Information Department, Annex “4” of public respondents’ Comment.  
^[23] Published on March 14-16, 2009.  
^[24] Rollo, p. 295. Public respondents’ Comment on the Petition, p. 7.  
^[25] Par. 2.2.4. of Part IX (B) of the RFP.  
^[26] Smartmatic is a subsidiary of Smartmatic International Holding, B.V. of Netherlands. 
^[27] TIM-Smartmatic, Indra Consortium and Gilat Consortium.  
^[28] Rollo, pp. 417-431. Omnibus SBAC Res. 09-001, Annex “6,” public respondents’ Comment. 
^[29] Id. at 844-848. Annex “10” of private respondents’ Memorandum. 
^[30] Testing of the entire system in an actual simulated election.  
^[31] Annex “3,” TIM-Smartmatic Comment.  
^[32] Rollo, p. 468. Annex “10,” public respondents’ Comment.  
^[33] Id. at 263-281. Annex “2,” Smartmatic TIM Corp.’s Comment.  
^[34] Denominated as the Contract for the Provision of an Automated Election System for the May 10, 2010 Synchronized National and Local Elections.  
^[35] Par. 4.1.  
^[36] Rollo, p. 548. Annex “14,” public respondents’ Comment.  
^[37] Id. at 887. Memorandum of public respondents, p. 23. 
^[38]  Gonzales v. Narvasa, G.R. No. 140835, August 14, 2000, 337 SCRA 733, 740.  
^[39] Tatad v. Secretary of the Department of Energy, G.R. Nos. 124360 & 127867, November 5, 1997, 281 SCRA 330, 349; De Guia v. COMELEC, G.R. No. 104712, May 6, 1992, 208 SCRA 420, 422.  
^[40] G.R. No. 130716, December 9, 1998, 299 SCRA 744, cited in Chavez v. NHA, infra. 
^[41] TSN of the oral arguments, p. 202.  
^[42] Id. at 209.  
^[43] Sec. 2. The Congress shall provide a system for securing the secrecy and sanctity of the ballot x x x.  
^[44] TSN of the oral arguments, p. 76.  
^[45] Chuidian v. Sandiganbayan, G.R. Nos. 156383 & 160723, July 31, 2006, 497 SCRA 327; citing Ginete v. CA, G.R. No. 127596, September 24, 1998, 296 SCRA 38.  


^[46] Redeña v. Court of Appeals, G.R. No. 146611, February 6, 2007, 514 SCRA 389.  
^[47] Marabur v. Comelec, G.R. No. 169513, February 26, 2007, 516 SCRA 696.  
^[48] Chavez v. National Housing Authority, G.R. No. 164527, August 15, 2007, 530 SCRA 235. 
^[49] Cabarles v. Maceda, G.R. No. 161330, February 20, 2007, 516 SCRA 303.  
^[50] TSN, p. 38.  
^[51] TSN of Oral Arguments,Vol. I, p. 64.  
^[52] Rollo, pp. 436-467. Annex “8,” public respondents’ Comment.  
^[53] The 5th and 6th preambulatory clauses of the JVA respectively provide:

                WHEREAS, Tim and Smartmatic have agreed to jointly and severally submit, as an incorporated joint venture, a bid to the COMELEC for the automation Project pursuant to the rules and terms set forth in the Request for Proposal;

                WHEREAS, in the event that the bid submitted by TIM and SMARTMATIC is declared to be the winning bid, TIM and SMARTMATIC have agreed to cause the incorporation of a joint venture corporation (the “JVC”) which will enter into a contract  with the COMELEC for the Automation Project.  

^[54] 2.1 In the event that COMELEC declares the bid tendered by TIM and SMARTMATIC to be the winning bid for the Automation Project, the parties hereto shall incorporate or cause to be incorporated, the JVC which shall be named  “TIM  SMARTMATIC CORPRATION” or any other acceptable name … which may be allowed by the SEC.

2.2. The JVC shall be the corporate vehicle through which the joint venture … shall be carried out xxxx. The JVC shall be the entity which shall enter into a contract with the COMELEC for the Automation Project of the 2010 National Elections.

2.3 The purpose of the JVC shall be to carry out and perform jointly, severally and solidarily the obligations of TIM and SMARTMATIC arising from being declared the winning bidder in the public bidding for the Automation Project which obligations are spelled out in the [RFP] xxx  
2.4 The authorized capital stock of the JVC is initially fixed herein at xxx PHP1,300,000,000.00 divided into  Pesos: One Billion and Three Hundred Million shares xxx; Provided that the authorized capital stock of the JVC may be increased  when so warranted xxx. 2.5 The capital contributions of the parties hereto to the JVC shall be as follows: a. TIM by itself or thorough its Philippine subsidiary – sixty percent (60%) of the shares to be issued by the JVC; b. SMATMATIC,  by itself or through its Philippine subsidiary – forty percent (40%) of the shares to be issued by the JVC. xxx
^[55] 4.1 For as long as TIM, either by itself or through its subsidiary, owns and holds 60% of the outstanding capital stock of the JVC and entitled to vote, TIM shall be entitled to nominate and elect 60% of the Board of Directors of the JVC. For as long as SMARTMATIC,  either by itself or through its Philippine subsidiary, owns and holds 40% of the outstanding capital stock of the JVC and entitled to vote, SMARTMATIC  shall be entitled to nominate and elect 40% of the Board of Directors of the JVC

^[56] 7.1 The JVC will distribute its profits to the Shareholders to the extent determined by the Board of Directors xxx after taking into account the financial requirements of the JVC with respect to the working capital. xxx

^[57] 3.1 For purposes of the Automation Project, TIM may contribute to the JVC and shall be responsible for the following: a. the value-added services pertaining or related to canvassing units, systems integration, transmission and such other services as required by the Automation Project and as indicated in the [RFP]; b. services pertaining or related to logistics, deployment and manpower; c. hardware, software, ballot paper, consumables and such other services as may be requested by SMARTMATIC; and d. local support staff as may be required under the circumstances;

     3.2   For purposes of the Automation Project, SMARTMATIC shall  contribute to the JVC and shall be responsible for the following: a. the development, manufacture and/or supply of EVMs, other machines and equipment, software, technology and systems; b. overall project management as required by the Automation Project and as indicated in the [RFP] and c. any other activity not expressly written in this Agreement or assigned to TIM;

                x x x x

   3.4 In the event the [financial and capital contribution] sources mentioned in the preceding Article 3,3 (b) or (c) are insufficient to meet the financial requirements of the JVC, the parties shall bear the responsibility of supporting or securing such financial requirements in proportion to their respective shareholdings xxx.

^[58] G.R. No. 159139, January 13, 2004, 419 SCRA 146.  
^[59] Id. at 167.  
^[60] TSN of the oral arguments, p. 119.  
^[61] Sec. 7.1 of the ITB reads: “The bidder shall specify in its Bid all portions of the Goods and Services that will be subcontracted, if any, including the entities to whom each portion will be subcontracted to xxx. Subcontracting of any portion shall not relieve the Bidder from any liability or obligation that may arise from its performance.”  
^[62] Rollo, p. 310. Public respondents’ Comment, p. 22.  
^[63] Approved on January 23, 2007, RA 9369 provides in its Sec. 47 that it shall take effect 15 days after its publication in a newspaper of general circulation.   
^[64] The Senate’s Comment-in-Intervention, p. 4.  
^[65] Annex “A” [Glossary of Terms] of the RFP.  
^[66] Rollo, 174-175. Private respondents’ Comment on Petition, pp. 27-28.  
^[67] Memorandum, Report/Recommendation on the 2010 Automation Election Project Procurement, Annex “9,” Comment on Petition of Public Respondents.  
^[68] Entitled “An Act Appropriating the Sum of Eleven Billion Three Hundred One Million Seven Hundred Ninety Thousand Pesos (P11,301,790,000.00) as Supplemental Budget for an [AES] and for Other Purposes.”  
^[69] Rollo, p. 1341.  
^[70] On page 3 of its Comment, NCC, thru its Dir. Gen. Angelo Timoteo M. Diaz de Rivera, states: “We believe that the successful deployment of the paper-based election system in 5 of the 6 provinces of ARMM and the concurrent deployment of the direct-recording-electronic election system in Maguindanao province, is substantial compliance of the spirit of this law, given the underlying circumstances.”  
^[71] Mr. Amado A. Malacaman, signing as secretary of the ITFP, states: “The ARMM election in August 2008 was not a valid pilot run for two reasons: (1) It did not cover two highly urbanized cities and two provinces each in Luzon, Visayas, and Mindanao, and (2) PCOS was not used in that electoral exercise.”  
^[72] Atty. Roque said: “The PCOS stage is similar to OMR because they also have to shade the oval for the candidate that they want to vote.  The difference is that in the OMR they collate all the ballots xxx where in PCOS you don’t put it in a ballot, you feed it into the machines.”  
^[73] Public respondents’ Comment, pp. 27-28.

                ^[74] Section 5, RA 8436, as amended.

                ^[75] Petition, p. 30.

                ^[76] Id. at 31.

                ^[77] Annex “9,” public respondents’ Comment.

                ^[78] See Note No. 33.

                ^[79] Annex “8,” Comment of public respondents.

                ^[80] TSN, pp. 315-316

                ^[81] The final test shall be conducted at least three days before election after which the PCOS and CCS shall be sealed for election day use (Part V, item no. 13, RFP).

                ^[82] TSN, p. 89.

                ^[83] http:// www. com/solutions automated-elections-system-view/article/voting machine.

                ^[84] TSN, Oral Arguments, pp. 455-456, 490.

                ^[85] Rollo, pp. 1062-1063. Petitioners’ Memorandum, pp. 12-13.

                ^[86] Sec. 2, Art. IX-C; SECTION 2. The [Comelec] shall exercise the following powers and functions: (1) Enforce and administer all laws and regulations relative to the conduct of an election, plebiscite, initiative, referendum and recall; xxx (4) Deputize xxx law enforcement agencies xxx for the exclusive purpose of ensuring free, orderly, honest peaceful and credible elections. 

                ^[87] 21.1. “Contract documents” refers to the following documents and they are hereby incorporated and made an integral part of this Contract: x x x Annex “O” Request for Proposal/Terms of Reference.

                ^[88] Part II, RFP.

                ^[89] Rollo, p. 1094. Petitioners’ Memorandum, p. 44.

              ^[90] SECTION 3.  Section 3 of [RA] 8436 is hereby amended to read as follows: “SEC. 3 Board of Election of Inspectors. – Where AES shall be adopted, at least one member of the Board of Election Inspectors shall be an [IT]-capable person, who is trained or certified by the DOST to use such AES. Such certification shall be issued by the DOST, free of charge.”

^[91] SECTION 5. Section 5 of [RA] 8436 is hereby amended to read as follows: “SEC. 4 Information Technology Support for the Board of Canvassers.- To implement the AES, each board of canvasser shall be assisted by an [IT]-capable person authorized to operate the equipment adopted for the elections. The Commission shall deputize [IT] personnel from among agencies and instrumentalities of the government, including government-owned and controlled corporations. x x x”

                ^[92] TSN, Oral Arguments, pp. 203-206.

                ^[93] Id. at 50-51.

                ^[94] Id. at 158-59.

                ^[95] Id. at 195-200.

                ^[96] Id. at 17.

                ^[97] CA 108, as amended by PD 715.

                ^[98] Promulgating the 7^th Regular Foreign Investment Negative List.

                ^[99]  Sec. 2. of RA 9369.

                ^[100] Sec. 10 of RA 8436, as amended, states that “once an AES technology is selected for implementation, the Commission shall promptly make the source code available and open to any interested party or groups which may conduct their own review thereof.”

              ^[101]  These include bringing PCOS-2 to the precinct assigned to PCOS-1; breaking seal of PCOS-1 to get  precinct configuration; and breaking seal of PCOS-2 to remove precinct configuration card.

                ^[102] Rollo, p. 845.

.

                ^[103] Leyaley v. Comelec, G.R. No. 160061, October 11, 2006, 504 SCRA 217.

                ^[104] Sumulong v. Comelec, 73 Phil. 288, 294-296 (1941).

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