Interpretation of Certain Provisions of R.A. No. 9184, as amended, and Its IRR

DOJ OPINION NO. 037, s. 2015 May 8, 2015 Dr. Noel G. Pasion, MD, MPH, CESE Chairperson, Bids and Awards Committee Regional Office IV-A CALABARZON Department of Health QMMC Compound, Project 4 Quezon City Dear Dr. Pasion : This refers to your request for legal opinion, referred to this Department by the Office of the Solicitor General (OSG), on issues primarily concerning the interpretation of certain provisions of Republic Act (R.A.) No. 9184, 1 as amended, and its Implementing Rules and Regulations (IRR), particularly, the participation and qualification of prospective bidders of the infrastructure projects of your agency Department of Health (DOH) Regional Office IV-A, the protest mechanism with regards to disqualified bids, and the implication of the withholding tax of a participating bidder. Specifically, you inquired on: 1) whether it is correct to state that Miclover has been paying the right taxes (withholding tax) even if they were charged and credited to a Taxpayer Identification Number (TIN) other than that of the registered owner of the business; 2) whether Virgilio Collado can use the financial documents of his wife, Lorna Collado, for bidding purposes; 3) whether under a Joint Venture Agreement (JVA), Lorna Collado's Miclover Marketing could enter into a JVA with Virgilio Collado's Miclover General Construction and Iron Works (Miclover); and 4) whether in the event Miclover will file a protest on its rejected bid before the head of the procuring entity, it can be legally permitted to be banned or prevented from participating in the succeeding biddings in your agency so it could not influence or prejudice the outcome of the decision of its anticipated protest. Your request, it appears, is centered on Miclover General Construction & Iron Works ( Miclover, for brevity ), a sole proprietorship then registered with the Department of Trade and Industry (DTI) and Bureau of Internal Revenue (BIR) under the name of Lorna Collado, which you state is a perennial participant and a winning contractor in several biddings involving infrastructure projects of your agency. You further state that in 2009, the use of the business name of Miclover was transferred to Virgilio Collado, husband of Lorna, who subsequently operated, and did business under the business name of Miclover, however, the withholding taxes for taxable transactions of Miclover were still charged and credited to Lorna Collado's TIN 170-359-257-000. You likewise posit that it was only in April 2014 when Virgilio's TIN 179-581-312-000 was transferred under Miclover, and since then that he started using his TIN for its business transactions, specifically, its participation in your agency's biddings. You likewise mention that Miclover's financial documents were never an issue during its participation in your agency's biddings until the time when the Government Procurement Policy Board (GPPB) under R.A. No. 9184 passed Resolution No. 20-2013, which, among others, amended paragraph A(v), Section 23 of the law's IRR, requiring that in computing the Net Financial Contracting Capacity (NFCC), a commitment from a Universal or Commercial Bank to extend a credit line in favor of the prospective bidder if awarded the contract to be bid (CLC), shall no longer be accepted as an alternative, hence, the BAC and the Technical Working Group (TWG) will have to rely on the financial documents of the bidder alone. It appears in your query that as a consequence of the aforementioned GPPB Resolution, the TWG declared Miclover's bid for the Construction of HPEP Project in Trece Martirez City "Non-responsive" due to the absence of Virgilio's financial documents for Miclover since what he submitted then were those of Lorna's financial documents, and thus, the failure to compute the NFCC. Miclover thereafter requested a reconsideration claiming among others, that since Virgilio and Lorna are spouses their properties are conjugal in nature under the provisions of the Family Code, and in that case, Virgilio may use Lorna's financial documents for Miclover in the bidding where Miclover under Virgilio is the participating bidder. The BAC subsequently denied the said request, and spouses Collado now intimated to file a protest before the head of the procuring entity. Moreover, you likewise surmise that in the event the Collado's protest materializes, notwithstanding, Miclover will still be participating in the succeeding biddings of your agency, and submitting the same set of documents that were previously considered and declared "Non-responsive" by the BAC, which issue will eventually be the subject for resolution under the said expected protest. You further express the concern of the implications of allowing Miclover to participate in the biddings while its speculated protest, assuming filed, will be under consideration. With that apprehension in mind, you state that the BAC is contemplating of temporarily banning Miclover from participating in the succeeding biddings of your agency pending the resolution of the issues that the Collado couple may raise in their anticipated protest. With regret, we are constrained to decline to render the opinion requested. At the outset, we stress that pursuant to law and established precedents, the Secretary of Justice, as Attorney General, renders opinion and gives legal advice only for and upon request of national government functionaries, such as heads of departments and chiefs of bureaus and offices of equivalent rank , and then only on specific legal questions/issues arising in the performance of their respective powers and functions, Accordingly, he has, in practice, consistently decline to render opinion or give legal advice to other government officials and to private individuals and entities . 2 Evidently, your queries relate on the interpretation and application of the provisions of the Government Procurement and Reform Act (R.A. No. 9184), as amended, and its Implementing Rules and Regulations (IRR), which fall within the mandate of the government Procurement Policy Board (GPPB), The law gave GPPB a broad legal mandate to "protect national interest in all matters affecting public procurement" ( Sec. 63[a], R.A. No. 9184 ). Vested with rule-making power ( Sec. 63[b], supra ), the GPPB has the competence and primary jurisdiction to apply and interpret the rules in resolving the issue, taking into account the policy repercussions of addressing the question involved. 3 Moreover, the issues you raised herein involve the substantive rights of private parties, in this case, the Collado's, as registered owners of the business name Miclover. Since the opinion of the Secretary of Justice is merely advisory in nature, such opinion would not be binding upon the private parties who may be adversely affected thereby and who may, in all probability, take issue therewith and contest the same before the courts. 4 Similarly, we reiterate our consistent view that the Secretary of Justice has always adhered to the policy that subordinate officials, instead of seeking the aid of this Department, may, on matters confronting them in the exercise of their official duties, as a matter of official courtesy and sound administrative practice, consult their chief or head of office who may competently resolve the issue without seeking assistance from another office. 5 It appears that the said remedy is wanting in this case. Please be guided accordingly. Very truly yours, (SGD.) LEILA M. DE LIMA Secretary Footnotes 1. Otherwise known as the "Government Procurement Reform Act". 2. Sec. of Justice Op. No. 28 & 4, s. 2012; No. 57, 38 & 15, s. 2011. 3. Sec. of Justice Op. Nos. 55, 24, 16 & 2, s. 2013. 4. Sec. of Justice Op. Nos. 15, 9, 7, 5, 4 & 3, s. 2012. 5. Sec. of Justice Op. Nos. 76, 74, 43, 42 & 10, s. 2013.