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Hutchison Ports Philippines Limited (HPPL) v Subic Bay Metropolitan Authority

Facts

• Petition to suspend or hold in abeyance the conduct of SBMA of a rebidding.

• SBMA advertised an invitation offering to the private sector the opportunity to develop and
operate a modern marine container terminal within Subic Bay Freeport Zone.

• Out of 7 bidders, 3 were declared as qualified: 1) ICTSI 2) RPSI and 3) HPPL

• SBMA-PBAC first awarded to HPPL. However, ICTSI filed an appeal with SBMA and also
before the Office of the President.

• In a memorandum, the President ordered SBMA Chairman Gordon to revaluate the


financial bids together with the COA.

• Again, the SBMA Board issued another reso declaring that HPPL is selected as winner,
since it has a realistic business plan offering the greatest financial return to SBMA and the
most advantageous to the government.

• Nothwithstanding the SBMA’s board recommendations, then Exec Sec Reuben Torres
submitted a memorandum to the Office of President recommending another rebidding.
Consequently, the Office of Pres. Issued a memorandum to conduct a rebidding.

• On July 7, 1997, HPPL filed a complaint against SBMA before the RTC and alleged that a
binding and legally enforeceable contract had been established between HPPL and SBMA
under Article 1305 of the civil code, considering that SBMA had repeatedly declared and
confirmed that HPPL was the winning bidder.

• During the pre-trial hearing, one of the issues raised and submitted for reso was whether
or not the Office of the President can set aside the award made by SBMA in favor of HPPL
and if so, can the Office of the President direct the SBMA to conduct re-bidding of the
proposed project.

Issue: Can the President set aside the award made by SBMA in favor of HPPL? If so, can
the Office of the President direct SBMA to conduct rebidding of the proposed
project?

Held:

• Yes

• HPPL has not sufficiently shown that it a has a clear and unmistakable right to be declared
the winning bidder. Though SBMA Board of Directors may have declared them as winner,
said award is not final and unassailable.

• The SBMA Board of Directors are subject to the control and supervision of the President.
All projects undertaken by SBMA require the approval of the President under Letters of
Instruction No. 620
• Letters of Instruction No. 620 mandates that the approval of the President is required in all
contracts of the national government offices, agencies and instrumentalities including
GOCCS involving P2M and above, awarded through public bidding or negotiation.

• The President may, within his authority, overturn or reverse any award made by the SBMA
Board of Directors for justifiable reasons.

• When the President issued the memorandum setting a side the award previously declared
by SBMA in favor of HPPL, the same was within authority of the President and was a valid
exercise of his prerogative.

• The petition is dismissed for lack of merit.

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