CALAX: Gov’t sacrificing P8.45 B to clerical error

The aim of any public bidding is for government to get the best offer. Failure to get it means failure of bidding. High officials need reminding of such basic point, due to the CALAX controversy.

CALAX is the Cavite-Laguna Expressway that would link the Manila-Cavite Tollway (Cavitex) to the South Luzon Expressway (SLEX). With four lanes of 47 km, the Dept. of Public Works and Highways (DPWH) estimates it at P35.42 billion. A private contactor is to finance, design, pave, operate, and maintain it for 35 years.

Four conglomerates had submitted premium offers for the project. On June 11, two days before bid opening, DPWH disqualified giant San Miguel Corp.’s construction unit for a defective submission. The validity of SMC’s security supposedly was four days short of the required 180 days. SMC’s bankroller ANZ previously had certified that its bond was from June 2 to Nov. 29, 2014, a full 180 days, not the mistyped Nov. 25. Still, DPWH said rules were rules, and that’s that. It didn’t matter that the next day was no-work Independence Day, leaving SMC no more chance to plead for reason, before sealed bids were opened on Friday the 13th.

Of the three remaining bidders, Ayala-Aboitiz venture emerged with the highest premium: P11.65 billion outright to the government. The rest had bid only P11.35 billion and P922 million.

Unprecedentedly, SMC publicly announced its far superior offer of P20.1 billion – or P8.45 billion more to the government. So what, DPWH retorted? SMC’s sealed bid wasn’t opened anyway, so it’s out.

 So what, critics of DPWH yelled? You just blew P8.45 billion on a clerical error, and you have the temerity to smirk so what?

One such critic, anti-graft crusader Marcelo L. Tecson, has been e-mailing high officials to correct the mistake. DPWH erred big in ditching SMC on mere technicality, Tecson says. It should have had the common sense to either ignore the typo or let SMC correct it. After all, it’s inconceivable that a 124-year-old, P990-billion institution would be shortchanging the government a mere four days of bond duration. This, while also accepting a P35.42-billion work, plus P20.1-billion premium.

There would have been no damage had DPWH done what Tecson says. If SMC’s bid turned out to be lower than Ayala-Aboitiz’s, then it would have walked away to bid another day. But since it was P8.45 billion better, there is clear damage not only to SMC but also the government.

DPWH may say Tecson is talking from hindsight. But the latter has three options for DPWH to reconsider. Time is of essence. For, SMC already is preparing lawsuits to stop the contract award. Court cases would delay the infrastructure for years. CALAX would be yet another of the Aquino admin’s Private-Public Partnerships (PPP) that ended up as nothing more than a PowerPoint Presentation. Meanwhile, DPWH officials likely would go to jail for graft – in a transaction grossly and manifestly disadvantageous to the government.

For DPWH to lean on, Tecson cites the case of the state firm Philippine National Oil Co. ignoring a superior offer (G.R. No. 85285 July 28, 1989). Instead of joining biddings for the oil tanker that PNOC was selling, a shipping line had waited for the declaration of a winner. After which it announced to top the winning bid by a cool $1 million. PNOC derided the unusual offer, saying that, if it accepted, it would lose credibility in future biddings. The Supreme Court and the Commission on Audit disagreed, and even suspected PNOC officials of corruption. If the SC and COA had upheld the shipping firm’s plus-$1 million then, what more SMC’s plus-P8.45 billion today?

DPWH also could invoke authority over technicalities, Tecson says. Government agencies routinely do so in public biddings. He cites bidding ads of the Bangko Sentral ng Pilipinas, the Social Security System, and the provincial capitol of Lanao del Norte. The ads state that they reserve the usual right to decide questions on gray areas, like minor defects in bidders’ submissions. Such defects are so different from the blatant conflicts of interest or unqualified parties that have made the Dept. of Transportation so notorious in 14 recent biddings.

If DPWH finds the courage to right its wrong, the Ayala-Aboitiz might in turn sue. In which case, Tecson says, the agency can still declare a failure of bidding by unfocused officials. It can then set a rebidding – but with different terms of reference. Instead of asking for the highest premium to the government, the agency should instead ask for the lowest charge to the public. This, Tecson says, would implement the Constitution’s requirement for the government to break down monopolies, and encourage brisker economy through movement of people and goods.

DPWH Sec. Rogelio Singson is touted to be a good manager. Before joining the Aquino team, he was CEO of the state’s Bases Conversion and Development Authority during the Arroyo tenure. And before that, he was head of Maynilad, the water concessionaire under the Lopez Group. As far back as management school, he would have learned that inflexibility is only for mismanagers.

As the Tagalog saying goes, “Kung nais, may paraan; kung ayaw, may dahilan (The willing has ways; the unwilling, excuses).”

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