Voting 3-2, the Supreme Court maintained that the unsolicited proposal of SM Land, Inc. (SMLI) to develop the 33.1-hectare government property in Bonifacio South in Taguig City for P25.9 billion should be subjected to competitive challenge, or “Swiss Challenge,” and not competitive bidding.
In a 13-page decision released to the media on Friday, the high court’s special Third Division through Associate Justice Presbitero Velasco dismissed the second motion for reconsideration filed by the Bases Conversion Development Authority (BCDA) which seeks to allow them to terminate the Swiss Challenge process for the development of the property.
A “Swiss Challenge” is a form of public procurement of a property or services which requires the government to publish the unsolicited proposal and invite third parties to match or exceed it.
The high court also dismissed the motions for intervention jointly filed by the Department of National Defense (DND) and the Armed Forces of the Philippines (AFP) which sought to reverse the high court’s Aug. 13, 2014 decision and resolution dated March 18, 2015 denying BCDA’s motion.
The decision also denied BCDA’s bid to elevate the case to the high court’s en banc and set it for oral argument.
The high court pointed out that there exists a valid contract between the government and SM Land Inc.
Under the agreement and the National Economic Development Authority Joint Venture Guidelines, the BCDA is duty-bound to proceed with and complete the “Swiss challenge.”
Failure to honor such a valid agreement, the high court said, is “to allow the government to trample on the very rules it itself issued and to renege on its contractual and legal obligations by invoking the all too familiar mantra of public interest, at any time it pleases, will only result in uncertainty in the application of laws, a trait inimical to the Rule of Law.”
“In holding respondent-movants accountable for the representations they made during the long drawn-out negotiation process and during the times the competitive challege repeatedly encountered roadblocks in the form of constant delays and postponements, the Court endeavors to concretize into a norm the government’s strict adherence to its statutory enactments, and its fulfilment in good faith of the commitments it made and of the covenants it entered into.”
The Court added that its ruling which granted SMLI’s petition was intended to send a strong message that “this is the conduct that the public should reasonably expect of the government.”
The high court added that the government also failed to provide evidence that granting a second motion for reconsideration which is, as a general is a prohibited pleading under the rules would be “in the higher interest of justice.”
It likewise did not give weight to the claim of DND and AFP that being the beneficiaries of the proceeds from the conversion, development and disposal of the camps transferred to BCDA, which include the subject property, their military’s modernization program stand to suffer if the ruling is not reversed
But, the Court states: “This ‘right to the proceeds’ is far from actual as it veritably rests on the success of the bidding process, such that there will be no proceeds that will accrue to their benefit to speak of if the project does not push through.”
“Consequently, the said right does not constitute sufficient legal interest that would qualify the DND and AFP, in this case, to intervene,” it added.
Concurring with the ruling were Associate Justices Diosdado Peralta and Jose Catral Mendoza while Associate Justice Martin Villarama Jr. and Marvic Leonen dissented.
In its ruling last March 18, the high court affirmed with finality its August 13, 2014 decision directing the BCDA to subject to Swiss challenge the unsolicited proposal of SM Land Inc. (SMLI).