University of the Philippines College of Law

Topic
Case No. G.R. No 109113 January 25, 1995
Case Name Concerned Officials of MWSS v. Ombudsman
Ponente Justice Cuevas
Digester Jake Jacinto

RELEVANT FACTS
 The MWSS launched the Angast Water Supply Optimization Project which was funded by loans
from the Overseas Economic Cooperation Fund of Japan. The project would consist of two
phases APM-01 and APM-02.

 Under Clause IB-34 of the contract document, only certain alternative pipe materials for the
projects were listed.

 On August 30, 1991 the MWSS published the Inviation for Pre-Qualification and Bids for the
two projects. The advertisement and invitation to prospective bidders announced that goods and
services to be supplied under (the) contract must have their origin from countries defined in the
Guidelines for Procurement of Goods under OECF loans encouraged joint ventures between
foreign and domestic firms.

 On November 20, 1991 it was deemed only 11 contractors were pre-qualified to bid for the
scheduled bidding on March 31, 1992.

 In the meantime, Philippine Large Diameter Pipes Manufacturer’s Association sent seven letters
from January 13 to March 23, 1992 regarding the design and structural integrity of the materials
to be used for the pipes. In response then Administrator Luis Sison issued six addenda to the
bidding comments based on the letters of PLDPPMA.

 During the bidding the lowest bidders for APM-01 Joint Venture and Engineering Equipment
Inc. proposed the use of fiberglass pipes. APM-02 Engineering Equipment Inc. and F.F. Cruz
also proposed to use fiberglass pipes.

 On May 27, 1992 a meeting was held by the MWSS Pre-qualification, Bids and Awards
Committee for Construction Services and Technical Equipment (PBAC-CSTE) with three
members calling for the rejection of all bids for APM-01 on the grounds:

a. Ambiguity of Addendum No. 6 - The Addendum is subject to different interpretations

because there was no illustrations provided. Further, it could also be said that some
contractors did not use the FRP because said Addendum was not clearly explained.

b. There was no provision for maintenance/repair materials for bidders who opted to use FRP
which is relatively new pipe to be used in the country. It was suggested that a 5% to 10%
allowance be provided for maintenance purposes.
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c. Further review of pipe design should be made by the Consultant (NJS) in order to
accommodate the load to be carried in the Umiray-Angat Loop.

 On May 29, 1992 PBAC-CSTE met again to discuss and evaluate the bids for APM-02 again the
same members recommended the rejection of all bids and rebidding.

 On June 2, 1992 PBAC-CSTE submitted its report rejecting Joint Venture’s bid for APM-01 due
to its failure to acknowledge Addendum No. 6. It thus awarded the contract to F.F. Cruz & Co.,
Inc. subject to the latter's manifestation that it would only hire key personnel with experience in
the installation of fiberglass pressure pipes. This was confirmed on June 3, 1992.

 On April 7, 1992 PLDPPMA filed a letter of protest with the Ombudsman regarding the public
biding for APM-01 and APM-02 detailing charges of a plan by the MWSS to favor suppliers of
fiberglass pipes, and urging the Ombudsman to conduct an investigation thereon and to hold in
abeyance the award of the contracts.

 On September 14, 1992 the Fact-Finding Report of the Ombudsman was released pursuant to its
powers as stated in Section 15 of RA 6770. It set aside the recommendation of the PBAC-CSTE
and called for the re-awarding of the contract to a compliant and responsive bidder under the
provisions of PD1594.

 The trial court ruled in favor of the Ombudsman. A subsequent motion for reconsideration was
denied on March 1, 1993.

ISSUE/S
 W/N There was a denial of due process?
 W/N the Ombudsman has jurisdiction to take cognizance of PLDPPMA’s complaint?
 W/N the Ombudsman has the jurisdiction to set aside the MWSS’ decision?

RATIO DECIDENDI

Issue Ratio
W/N there was a denial of No.
due process?
1. The Supreme Court reiterated that the essence of due process was
the opportunity to be heard. In this instance, the facts of the case
show that the MWSS had replied to the letter-comment of the
PLDPPMA.

2. The fact the petitioners filed a rejoinder and a motion for

reconsideration also showed they had been given the opportunity to
be heard.
 University of the Philippines College of Law

W/N the Ombudsman had YES.

the jurisdiction to hear
PLDPPMA’s complaint?
W/N the Ombudsman can NO.
change the decision of the
MWSS .
1. The Supreme Court held that the OSG’s contention that the
Ombudsman could accept and investigate the complaint was
correct. This was due to the mandate granted to the Ombudsman
in Article XI Section 13 of the Constitution and Sections 13, 15
and 26 of R.A. 6770 which allows it to investigate any regularities
against any subdivision, agency or instrumentality of the
government and its members.
2. The Court affirmed that the Ombudsman has investigatory power;
prosecutor power; public assistance. Functions; Authority to
Inquire and Obtain Information; and Function to Adopt, Institute
and Implement Preventive Measures. The case at bar being part
of the Ombudsman investigatory powers.
3. It was correct for the Ombusman as there was an evident attempt
by Sison to favor .F. Cruz & Co. Inc. by placing stringent
standards on metal pipes and signs of communication between
Sison and Cruz.
1. The Court held that the judgement made by the Ombudsman was
an undue interference with the adjudicative responsibility of the
MWSS.
2. The MWSS is the agency created by law charged with
construction, maintenance and operation of water work system
to insure an uninterrupted and adequate supply and distribution
of potable water. Thus it is the agency in the best position to
evaluate and oversee the bidding process for the project.

3. Thus the Ombudsman must defer to the expertise and technical

knowledge of the MWSS in the overseeing of the bidding absent
any signs of faultiness in the following of the rules.

4. The Court held that basic technical matters deserve to be

disentangled from undue interference from courts and so from
the Ombudsman as well.

RULING

WHEREFORE, the petition is GRANTED. The questioned 19 October 1992 Order

of the Ombudsman as well as its 01 March 1993 Order are hereby ANNULLED
and SET ASIDE. No costs. SO ORDERED.
SEPARATE OPINIONS

NOTES