G.R. No. 216098, April 21, 2015BISHOP BRODERICK S. PABILLO, DD, PABLO R. MANALASAS, !R., PHD, MARIA CORA"ON AKOL,CONCEPCIONB. REGALADO, HECORA. BARRIOS, LEO#. $%ER%BIN, A%G%SOC. LAGMAN,&ELI' P. M%GA, II, PHD, A#. GREGORIO . &ABROS, E(IA L. !IMENE", AND !AIME DL CARO,PHD, Petitioners,vs.COMMISSION ON ELECIONS, EN BANC, REPRESENED B# ACINGCHAIRPERSON CHRISIAN ROBER S. LIM, AND SMARMAIC)IM CORPORAION, REPRESENEDB# SMARMAIC ASIA)PACI&IC PRESIDEN CESAR &LORES, Respondents.PERLAS)BERNABE, J.*Procurement of electoral services and goods constitutes a major part of the organisation of elections interms of planning, costs and implementation (purchasing and distribution). Integrity and transparency isthus essential; lack of integrity in the purchasing system may put the legitimacy of the hole electorale!ercise at risk."1Before this Court are consolidated petitions for certiorari and prohibition2 assailing respondent theCommission on Elections (C!E"EC# Resolution $o. %%22& dated 'ecember 2&, 2(1), *hich approved) adirect contractingarrangement *ithrespondent +martmatic,-.!Corporation(+martmatic,-.!# for thediagnostics, maintenance, repair, and replacement of the C!E"ECs Precinct Count ptical +can (PC+#machines, as *ell as the resulting contract thereof, the E/tended 0arrant1 Contract (Program 1#2 dated3anuar1 &(, 2(12.+, &-./0.n1%%4, Congress enactedRepublic5ct $o. (R5# 6)&7,7 *hichauthori8edtheC!E"EC9touseanautomated election s1stem :(5E+#; / // for the process of voting, counting of votes andcanvassinguent national and local electoral e/ercises. -o achieve this purpose, the C!E"EC *as 9to procureb1 purchase, lease or other*ise an1 supplies, e>uipment, materials:,; and services needed for the holdingof theelectionsb1ane/peditedprocessof publicbiddingof vendors, suppliersorlessors.=6 R56)&7further provided that the 5E+ 9shall be under the e/clusive supervision and control of the :C!E"EC;.=%R5 %&7%,1( signed into la* on 3anuar1 2&, 2((4, later amended R5 6)&7 and *as passed 9to encouragetransparenc1, credibilit1, fairness, and accurac1 of elections.= -hereunder, 9the mandate and authorit1 ofthe:C!E"EC; toprescribetheadoptionanduseof themost suitabletechnolog1of demonstratedcapabilit1 ta?ing into account the situationprevailinginthe area andthe funds available for thepurpose=11 *ere e/plicitl1 recogni8ed. R5 %&7% authori8ed the C!E"EC 9to use an :5E+; or s1stems in thesame election in di@erent provinces, *hether paper,based or a direct recording electronic election s1stemas it ma1 deemappropriate and practical for the process of voting, counting of votes:,; andcanvassinguisition, supplies,e>uipment, materials, soft*are, facilities:,;andotherservices, fromlocal orforeignsourcesfreefromta/es and import duties, subAect to accounting and auditing rules and regulations.=1&n !arch 16, 2((%, the C!E"EC published a Re>uest for Proposal (RBP#1) for the public bidding of thelease *ith option to purchase of an 5E+ to be used in the !a1 1(, 2(1( 5utomated +1nchroni8ed $ationaland "ocal Elections.12 .tem $o. 16, Part C17 of the 2((% RBP states that 9:t;he *inning bidder shall assurethe availabilit1 of parts, labor, and technical support and maintenance to the C!E"EC for the duration ofthis :p;roAect and for the ne/t ten (1(# 1ears should the C!E"EC opt to purchase the s1stem after thelease period.=14n 3une %, 2((%, the C!E"EC #n $anc, in Resolution $o. 67(6,16 resolved to approve thereportuiring repair, if an1, *as 1et to be determined.24 -he same *as said of the replacement servers andnet*or? e>uipment, as *ell as of the need to update the !-'26 modem Drm*are, *hich *ere 1et to beevaluated.2% Binall1, the C!E"ECs "a* 'epartment dre* attention to .tem $o. 6, Part C of the 2((% RBP,*hichprovidesthat all proposalsfor the5E+procurement proAect re>uireane/tensivetrainingandeducation programon the preparation of election s1stems, counting and canvassing s1stems andtransmissions1stems for technical personnel, as *ell as for repair, troubleshooting, tuningupandmaintenance of machines and electronic transmission facilit1.7( .n this regard, the C!E"ECs "a*'epartment stated that since the 5E+ procurement proAect must necessaril1 form part of the 2((% 5E+Contract, +martmatic,-.!must traintheC!E"ECstechnical personnel speciDcall1ontheforegoingrespects.71-hese not*ithstanding, the C!E"EC #n $anc, in its R,0ol4/io5 No. 9922726-/,6 D,.,78,r 23, 20191R,0ol4/io5No. 99222, approvedProgram1of +martmatic,-.!sPC+E/tended0arrant1Proposalamounting to P&((,(((,(((.((, e/clusive of Calue,5dded -a/ (C5-#, through direct contracting, in vie* ofthe follo*ing reasonsHBirst, time is of the essence in the preparation for the !a1 %, 2(17 $ational and "ocal Elections such thatthe Commission and the Bids and 5*ards Committee are constrained b1 the tight time schedule if publicbiddingaretobeconductedintherefurbishment anduirements of public and competitive bidding under the GPR5, andthat thesupposed9tight timeschedule=inthepreparationfor the!a1%, 2(17$ational and"ocalElections is not a ground to dispense *ith the conduct of public bidding under the la*.62n!arch2), 2(12, theCourt issueda-RenAoiningtheimplementationof theE/tended0arrant1Contract (Program 1#, pending resolution of the cases at hand.67+, I004,0 B,>or, /+, Co4r/-he decisive issue in these cases is *hether or not the C!E"EC gravel1 abused its discretion in issuingResolution $o. %%22 and in subse>uentl1 entering into the E/tended 0arrant1 Contract (Program 1# *ith+martmatic,-.!. -o determine the e/istence of grave abuse of discretion, the follo*ing sub,issues are to beresolvedH (a# *hether or not the conditions for direct contracting stated under +ection 2(, 5rticle OC. of theGPR5 *ere complied *ithI (b# *hether or not direct contracting ma1 be resorted to under +ection 22 (h# ofthe mnibus Election CodeI and (c# *hether or not the E/tended 0arrant1 Contract (Program 1#, being apart of the 2((% 5E+ Contract, even re>uired public bidding.64+, Co4r/?0 R4li5=-he petitions are meritorious.I.5t theoutset, respondents invo?evarious procedural grounds, *hich*ouldsupposedl1*arrant theconsolidated petitions outright dismissal. -he1 claim that petitioners66 did not have the legal standing toinstitutetheir correspondingpetitionsI6% that certiorari andprohibitionarenot theproper remedies toassail the validit1 of Resolution $o. %%22 and the E/tended 0arrant1 Contract (Program 1#I%( that directresort to the Court violated the doctrine of hierarch1 of courtsI%1 and that nonetheless the petitions *ereDled out of time.%2-he propositions are reAected.-heCourt, ta?ingcuefromits rulingin %apalla, *hich, as mentioned, involvedthelegalit1of theC!E"ECs e/ercise of its -P under the 2((% 5E+ Contract, despite the e/tended period therefor, brushesaside an1 of the foregoing procedural barriers in vie* of the compelling signiDcance and transcendentalpublic importance of the matter at hand. .n %apalla, the Court ruledH5t theoutset, *ebrushasidetheprocedural barriers (i.e., locus standi of petitioners andthenon,observance of the hierarch1 of courts# that supposedl1 prevent the Court fromentertaining theconsolidated petitions. 5s *e held in )uingona, *r. v. :%&'#(#%,7&) Phil. 217, 22% (2(1(#;H-here can be no doubt that the coming 1( !a1 2(1( :in this case, !a1 2(17; elections is a matter of greatpublic concern. n election da1, the countr1s registered voters *ill come out to e/ercise the sacred rightof su@rage. $ot onl1 is it an e/ercise that ensures the preservation of our democrac1, the coming electionsalso embodies our peoples last ounceof hope for a better future..tis the Dnalopportunit1,patientl1a*aited b1 our people, for the peaceful transition of po*er to the ne/t chosen leaders of our countr1. .fthere is an1thing capable of directl1 a@ecting the lives of ordinar1 Bilipinos so as to come *ithin the ambitof a public concern, it is the coming elections, more so *ith the alarming turn of events that continue tounfold. -he*anton*astageof publicfundsbroughtabout b1onebungledcontract afteranother, instaggering amounts, is in itself a matter of grave public concern.-hus, in vie* of the compelling signiDcance and transcending public importance of the issues raised b1petitioners, the technicalities raised b1 respondents should not be allo*ed to stand in the *a1, if the endsof Austice *ould not be subserved b1 a rigid adherence to the rules of procedure.%&Corollaril1, in +o,ue, *r. v. %&'#(#%, %) it *as held thatH:-he; bottom line is that the Court ma1 e/cept a particular case from the operations of its rules *hen thedemandsof Austicesore>uire. Put abit di@erentl1, rulesof procedurearemerel1toolsdesignedtofacilitatetheattainment of Austice. 5ccordingl1, technicalities andprocedural barriers shouldnot beallo*ed to stand in the *a1, if the ends of Austice *ould not be subserved b1 a rigid adherence to the rulesof procedure.%2.ndeed, the conduct of the upcoming 2(17 Elections is dependent on the functional state of the e/istingPC+ machines purchased b1 the C!E"EC. PC+ means 9a technolog1 *herein an optical ballot scanner,into *hich optical scan paper ballots mar?ed b1 hand b1 the voter are inserted to be counted, is located inever1 precinct.=%7 5s the 5E+s ground*or? mechanism, it is imperative that the PC+ machines, comeelection da1, are of optimal utilit1. Bollo*ing the C5Cs recommendation to re,use the e/isting technolog1for the said elections,%4 the C!E"EC proceeded to procure services for the repair and refurbishment ofthe PC+ machines. -he C!E"EC, ho*ever, through its Resolution $o. %%22, decided to pursue a directcontracting arrangement *ith +martmatic,-.!, *hich has no* resulted in the e/ecution of the E/tended0arrant1 Contract (Program 1#. Petitioners assail the validit1 of the foregoing courses of action mainl1 forviolating the GPR5. -hus, if onl1 to ensure that the upcoming elections is not mired *ith illegalit1 at thisbasic, initial front, this Court, pursuant to its un1ielding dut1 as Dnal arbiter of the la*s, deems it proper tothresh out the above,stated substantive issues, reasonabl1 unfettered b1 the rigors of procedure.II.-he resolution of the substantive aspect of this case is predicated Drst on a basic understanding of thefundamentals of public bidding..n this Aurisdiction, public bidding is the established procedure in the grant of governmentcontracts.%6+ection &, 5rticle . of the GPR5 E the standing procurement la* approved on 3anuar1 1(, 2((& Estates that 9:a;ll procurement of the national government, its departments, bureaus, oKces and agencies,including state universities and colleges, government,o*ned andual opportunit1 to enable private contracting parties *ho are eligibleand >ualiDed to participate in public bidding.(c# +treamlinedprocurement process that *ill uniforml1 appl1 to all government procurement. -heprocurement process shall be simple and made adaptable to advances in modern technolog1 in order toensure an e@ective and eKcient method.(d# +1stemof accountabilit1 *here both the public oKcials directl1 or indirectl1 involved in theprocurement process as *ell as in the implementation of procurement contracts and the private partiesthat deal *ith government are, *hen *arranted b1 circumstances, investigated and held liable for theiractions relative thereto.(e# Public monitoring of the procurement process and the implementation of a*arded contracts *ith theend in vie* of guaranteeing that these contracts are a*arded pursuant to the provisions of this 5ct and itsimplementingrules andregulations, andthat all thesecontractsareperformedstrictl1accordingtospeciDcations.=%ommission on -udit v. (ink .orth International, Inc.%% s1nthesi8es these principles as suchHPublic biddingas amethod of governmentprocurementis governed b1 the principles oftransparenc1,competitiveness, simplicit1andaccountabilit1. -heseprinciplespermeatetheprovisionsof :theGPR5;from the procurement process to the implementation of a*arded contracts. / / /1((B1 its ver1 nature, public bidding aims to protect public interest b1 giving the public the best possibleadvantagesthroughopencompetition.1(1 Pnder +ection2(e#, 5rticle. of theGPR5, publicbiddingisreferredtoas9CompetitiveBidding,=*hichisdeDnedas9amethodofprocurement*hichisopentoparticipation b1 an1 interested part1 and *hich consists of the follo*ing processesH advertisement, pre,bidconference, eligibilit1 screening of prospective bidders, receipt and opening of bids, evaluations of bids,post,>ualiDcation, anda*ardof contract, thespeciDcre>uirementsandmechanicsof *hichshall bedeDned in the :GPR5s.mplementing Rules and Regulations (.RR#;.=1(2Case la* states that competition re>uires not onl1 bidding upon a common standard, a common basis,upon the same thing, the same subAect matter, and the same underta?ing, but also that it be legitimate,fair and honest and not designed to inAure or defraud the government.1(& -he essence of competition inpublic bidding is that the bidders are placed on e>ual footing *hich means that all >ualiDed bidders havean e>ual chance of *inning the auction through their bids.1() 5nother self,evident purpose of competitivebidding is to avoid or preclude suspicion of favoritism and anomalies in the e/ecution of public contracts.1(2III..t is an established public polic1,1(7 as *ell as a statutor1 mandate1(4 that all governmentprocurement1(6 shall be done through competitive public bidding. Jo*ever, as an e/ception, 5rticle OC. ofthe GPR5 sanctions a resort to alternative methods of procurement, among others, via direct contractingH5R-.C"E OC.5"-ER$5-.CE !E-J'+ B PRCPRE!E$-+ection )6.5lternative !ethods. , S48@,./ /o /+, prior -pproA-l o> /+, H,-6 o> /+, Pro.4ri5= E5/i/uisites of approval of the Jead of theProcuring Entit1, promotion of econom1 and eKcienc1, and most advantageous price to the governmentare e>uall1 complied *ith#, respondents are insistent that all of the foregoing conditions attend in thesecases. -he Court, thus, e/amines these claims, determinative as the1 are of the validit1 of Resolution $o.%%22 and the E/tended 0arrant1 Contract (Program 1#.(.Pnder +ection 2( (a#, 5rticle OC. of the GPR5, direct contracting ma1 be allo*ed *hen the procurementinvolves =oo60 o> propri,/-r< 5-/4r,, C+i.+ .-5 8, o8/-i5,6 o5l< >ro7 /+, propri,/-r< 0o4r., Ethat is, *hen patents, trade secrets, and cop1rights prohibit others from manufacturing the same item. -heapplicabilit1 of said condition *as e/plicated in the GPPB !anual as follo*sH-his is applicable *hen the goods or services being procured are covered b1 a patent, trade secret orcop1right dul1 ac>uired under the la*. Pnder the .ntellectual Propert1 Code of the Philippines (R.5. $o.62%, theregisteredo*ner of apatent, acop1right or an1other formof intellectual propert1hase/clusive rights over the product, design or process covered b1 such patent, cop1right or registration. +uche/clusive right includes the right to use, manufacture, sell, or other*ise to derive economic beneDt fromthe item, design or process.111Petitioners contend that the 9goods= sought to be procured in these cases refer to the refurbishment,maintenance, diagnostics, and repair of the PC+ machines, *hich are not protected b1 patents, tradesecrets, and cop1rights o*ned b1 +martmatic,-.!. -hus, the1 ma1 be contracted out from other serviceproviders.112n the other hand, respondents maintain that the goods sought to be procured b1 the C!E"EC are ofproprietar1 nature *hich ma1 onl1 be obtained from the proprietar1 source, in this case +martmatic,-.!,*hich o*ns the intellectual propert1 rights over such goods.11&-he Court agrees *ith petitioners.Goods areconsideredtobeof 9proprietar1nature= *henthe1areo*nedb1aperson*hohas aprotectable interest in them or an interest protected b1 intellectual propert1 la*s.11)Jere, it has not been seriousl1 disputed that +martmatic,-.! has intellectual propert1 rights over the +5E+16(( 5E+, comprised of the PC+ machines, as *ell as the soft*are program used to run the technolog1..n support thereof, +martmatic,-.!has dra*n attention to Pnited +tates (P+# Patent 5pplicationPublication $o. P+ 2(12uipment, furniture,stationer1, materials for construction, or personal propert1of an1?ind, i5.l46i5=5o5)p,r0o5-l or.o5/r-./4-l 0,rAi.,0 04.+ -0 /+, r,p-ir -56 7-i5/,5-5., o> ,G4ip7,5/ -56 >4r5i/4r,, -0 C,ll-0 /r4.Fi5=, +-4li5=, @-5i/ori-l, 0,.4ri/ 7-/,ri-l0 -56 04ppli,0 proAi6,6 8< /+, JPKro.4ri5= JEK5/i/< or 04.+ 0,rAi.,0.(#mphasis supplied#5perusal of the aforementioned patent12( andcop1right121 documents reveals that +martmatic,-.!se/isting intellectual propert1 rights do not cover the services subAect of these cases. $o evidence has beenpresentedtosho*that it possessedintellectual propert1rights over themethod, process, s1stem,program,or*or?of servicingthesaidPC+machinesfor theirrepairand refurbishment. 5ccordingl1,+martmatic,-.!cannot besaidtobetheservices proprietar1source, thus, negatingits purportede/clusivit1 as the C!E"EC claims.5t an1 rate, even if it is assumed that +martmatic,-.! is the proprietar1 source of the services or that theintendedrepair andrefurbishment *ouldnecessaril1entail amodiDcationof thePC+hard*areandsoft*are of *hich its e/isting intellectual propert1 rights cover, the C!E"EC is still not bound to engage+martmatic,-.! on an e/clusive basis. Based on the 2((% 5E+ Contract, +martmatic,-.! *ould grant theC!E"EC a perpetual, but non,e/clusive li.,50, /o 40,, 7o6i>, >or-ll >4/4r,,l,./io50, *hen the latter e/ercises its optionto purchase (*hich it eventuall1 did#, *ith certainlimitations as hereunder statedHARICLE 9SO&;ARE AND LICENSE S%PPOR%.1 -he PRC.'ER shall furnish all s1stems and soft*are provided in Components 1, 2 and &, and theiraccompan1inglicensesandgranttoC!E"ECaone,timenon,transferablerightorlicensetousethesoft*are, s1stem and other goods at the voting centers, canvassing< consolidation centers, central servers,bac?up< redundanc1 servers, and in such other locations as C!E"EC ma1 choose.%.2 +hould C!E"EC e/ercise its option to purchase, it shall have perpetual, but non,e/clusive license touse said s1stems and soft*are and ma1 have them modiDed at C!E"ECs e/pense or customi8ed1228or -ll >4/4r, ,l,./io50 -0 +,r,8< C-rr-5/,6 8< /+, PRO(IDER, -0 p,r /+, li.,50,-=r,,7,5/. 5ccordingl1, the PRC.'ER shall furnish C!E"EC the soft*are in such format as *ill allo*C!E"EC to pursue the same.%.&.COMELEC -=r,,0 /+-/ i/ 0+-ll 5o/*1-2/r-50>,r /+, 0o>/C-r, -56 r,l-/,6 7-/,ri-l0 /o -5< /+ir6 p-r/< or /r-507i/ /+, 0o>/C-r, i5 -5< >or7 or8< -5< 7,-50 >or -5< p4rpo0, o/+,r /+-5 >or /+i0 Pro@,./, 45l,00 COMELEC +-0 p4r.+-0,6 i/ >orP+ilippi5, ,l,./io50I or1.2 40, -5< 0o>/C-r, -.G4ir,6 +,r,456,r >or -5< p4rpo0, o/+,r /+-5 /+, op,r-/io5 o> Ao/i5=,.o45/i5=, -56 .-5A-00i5=L .o50oli6-/io5 o> Ao/,0./ ///%.2 / //./ ///A>/,rp4r.+-0,, COMELEC0+-ll 8,-4/+oriB,6/o40,/+,0o>/C-r,0or /+, prop,r40, o> /+, 0o>/C-r, 0,roro/+,rCi0,.o5A,/C-r,/o-5 r,p-ir i0 pr,7-/4r, considering that the units re>uiring repair, if an1, is 1et tobe determined. -he same can be said for the replacement of servers and net*or? e>uipment *hich has1et to be evaluated.!ost note*orth1 of all is that as of the time of such proposal, even to this *riting,/+, ID +-0 MD 7o6,7 Dr7C-r, 4p=r-6,0 -r, ,00,5/i-l -56 5,.,00-r< considering that underthe current set,up, the PC+ machines, as *ell as the *hole 5utomated Elections +1stem *ere able tosuccessfull1 function for the !a1 1(, 2(1( 5utomated +1nchroni8ed $ational and "ocal Elections as *ell asinthe!a11&, 2(1&5utomated+1nchroni8ed$ational, "ocal and5R!!Elections.1)1 (#mphasesandunderscoring supplied#5nd lastly, even if the foregoing *ere to be discounted, +martmatic,-.!s e/clusive engagement cannotbe considered as a condition precedent to guarantee the performance of its *arranties under the 2((% 5E+Contract or the 2(12 'eed of +ale.5lbeit undeDned in our local statutes, a *arrant1 has been ordinaril1 considered as an agreement to beresponsible for all damages that arise from the falsit1 of a statement or assurance of fact. .n other *ords, a*arrant1 promises indemnit1 against defects in an article sold.1)2 .n -ng v. %-,1)& a *arrant1 *as deDnedas 9a statement or representation made b1 the seller of goods, contemporaneousl1 and as part of thecontract of sale, having reference to the character, >ualit1 or title of the goods, and b1 *hich he promisesor underta?es to insure that certain facts are or shall be as he then represents them.=1))-here are t*o *arranties under the 2((% 5E+ Contract, *hich *ere all e/plicitl1 incorporated and madepart of the 2(12 'eed of +ale. 1)2-heDrst is foundin Ar/i.l,0 9.31)7-568.91)4 of the2((%5E+Contract, bothof *hichpertaintoaC-rr-5/< o5 7-54>-./4ri5= 6,>,./0 of supplies and e>uipment.5rticle ).& of the 2((% 5E+ Contract states that once the C!E"EC e/ercises the -P, it is re>uired that+martmatic,-.!*arrantsthat manufacturingdefectsshall becorrected, anduipment (such as the PC+ machines#, after performance of the contractH).& P-.$ - PPRCJ5+E.n the event C!E"EC e/ercises its option to purchase the Goods as listed in 5nne/ 9"=, C!E"EC shall pa1thePRC.'ERanadditional amountof -*oBillionneJundred-hirt1!illion+i/Jundred-hirt1Bive-housandBort1EightPesosandBifteenCentavos(Php2,1&(,7&2,()6.12#ascontainedintheBinancialProposal of the Aoint venture partners , +!5R-!5-.C and -.!..n caseC!E"ECshoulde/erciseitsoptionto purchase, - C-rr-5/< 0+-ll 8, r,G4ir,6 i5 or6,r /o-004r, /+-/* 1-2 7-54>-./4ri5= 6,>,./0 0+-ll 8, .orr,./,6I -56Lor 182 r,pl-.,7,5/0 0+-ll 8,7-6, 8< /+, PRO(IDER, for a minimum period of three ( months, in the case of supplies, -56 o5, 112 ,G4ip7,5/, ->/,r p,r>or7-5., o> /+i0 Co5/r-./. -he obligation for the *arrant1shall be covered b1 retention mone1 of ten percent (1(L# of ever1 option to purchase pa1ment made./ // /1)6 (#mphases and underscoring supplied#.n similar light, 5rticle 6.) of the 2((% 5E+ Contract readsH6.) +, PRO(IDER 0+-ll, -/ i/0 0ol, ,:p,50,, r,p-ir or r,pl-., -5< EG4ip7,5/ >o456 /o .o5/-i57-54>-./4ri5=6,>,./0 -56i/ 0+-ll 8,r,/4r5,6/o/+,PRO(IDER?0 pr,7i0,0 -/ i/0 0ol,,:p,50,. 5ll costs of handling, transportation and labor relative to the return of the repaired or replacedE>uipmenttoC!E"ECsdesignated+itesshall alsobeatthePRC.'ERse/pense.1)% (#mphasisandunderscoring supplied#-he limitations to the *arrant1 on manufacturing defects, *hich *as also carried over in the 2(12 'eed of+ale, are stated in 5rticle 6.2 of the 2((% 5E+ ContractH6.2 "imitations of 0arranties. -he *arrant1 obligation of the PRC.'ER shall not e/tend toH(a# E>uipment the serial number, model number or an1 other identiDcation, mar?ing, and securit1 seal of*hichhasbeenremovedorrenderedillegibleb1C!E"ECpersonnel, *ithoutan1authorit1fromthePRC.'ER or its technical personnel.(b# E>uipment that has been damaged b1 malicious misuse, accident or force majeure.(c# E>uipment the selected component of *hich has been opened *ithout the PRC.'ERs prior *rittenapprovalI or(d# E>uipment *herein C!E"EC or its agents have made changes to its ph1sical, mechanical, electrical,soft*are or interconnection components *ithout *ritten authori8ation of the PRC.'ER.12(-oput it simpl1, theseprovisionsstatethat +martmatic,-.!had*arrantedthat thePC+machinespurchasedb1 the C!E"EC arefree from manufacturing defectsI other*ise, it *illrepair or replace, ifirreparable, an1 defective machines at its o*n e/pense for as long asH (a# the defect occurs *ithin the*arrant1 period, i.e., three ( months, in the case of supplies, and one (1# 1ear, in the case of e>uipment,rec?oned from !arch &(, 2(12, i.e., the date on *hich the -P *as e/ercised and the corresponding 2(12'eed of +ale *as e/ecutedI and (8# none of the *arrant1 limitations are breached.-he foregoing *arrant1 on manufacturing defects is separate and distinct from the second *arrant1 foundin 5rticle 6.6 of the 2((% 5E+ Contract, to *itH6.6 .f C!E"EC opts to purchase the PC+ and Consolidation and Canvassing +1stem (CC+#, the follo*ing*arrant1 provisions indicated in the RBP shall form part of the purchase contractH1# Bor PC+, +!5R-!5-.C shall *arrant the -A-il-8ili/< o> p-r/0, l-8or -56 /,.+5i.-l 04ppor/ -567-i5/,5-5., /o COMELEC >or /,5 1102 p4r.+-0,6(.tem 16, Part C of the RBP#, 8,=i55i5=M-< 10, 2010. 5n1 purchase of parts, labor and technical support and maintenance not covered under5rticle).&aboveshall besubAecttotheprevailingmar?etpricesatthetimeandatsuchtermsandconditions as ma1 be agreed upon.121/ /// (#mphases supplied#Pnder 5rticle 6.6, +martmatic,-.! *arrants that its parts, labor and technical support and maintenance *illbeavailable tothe C!E"EC, if it sodecides to purchasesuch parts, labor and technicalsupport andmaintenance services, *ithin the *arrant1 period stated, i.e., ten (1(# 1ears for the PC+, rec?oned from!a1 1(, 2(1(, or until !a1 1(, 2(2(. Ar/i.l, 8.8 s?e*s from the ordinar1 concept of *arrant1 since it is amere C-rr-5/< o5 -A-il-8ili/uent purchase contract,122 founded upon a ne*consideration, the costs of *hich (unli?e in the Drst *arrant1# are still to be paid. 0ith 5rticle 6.6 in place,the C!E"ECis assured that it *ould al*a1s have access to a capable parts/+,proAi0io50 thatthe*arrant1limitations under 5rticle 6.2 (*hich, in essence, prohibits unauthori8ed tampering b1 the C!E"EC anduentl1 situated 5rticle 6.6 (i.e., *arrant1 on availabilit1 of parts, laborand technical support and maintenance#. n the other hand, 5rticle 6.2 logicall1 follo*s 5rticle 6.) ( i.e.,*arrant1 on manufacturing defects#, evincing that it (5rticle 6.2# constitutes a limitation to the provisionpreceding it (5rticle 6.)#ISecond, and more substantiall1, the Court Dnds no discernible reason to void a *arrant1 on availabilit1 onaccount of previous tampering. 5s mentioned, under 5rticle 6.6, the C!E"EC *ould still have to engage+martmatic,-.! in a subse>uent purchase contract, founded upon a ne* consideration altogether, and,thus, pa1thecostsof thepartsandservicesprocured. -hefactthatthegoodshadbeenpreviousl1tampered *ith is immaterial to +martmatic,-.!s future engagement as the *arrant1 *ould not be voidedif a di@erent service contractor has been engaged b1 the C!E"EC to conduct repair and refurbishment*or?s. n other hand, it is reasonable E as it is usuall1 the case E that a *arrant1 on manufacturing defects*ould be voided if the goods had alread1 been tampered *ithI in such an instance, it is diKcult, if not,improbable, to ascertain the cause of the malfunction, and, hence, determine if the manufacturing defects*ere attributable to the sellers fault. 5ccordingl1, the seller (+martmatic,-.!# should not repair or replacethe defective goods *ithout the bu1er (the C!E"EC# shouldering the costs.+impl1 put, the variance is that 5rticle 6.6 onl1 *arrants access to the purchase of parts and services,*hereas 5rticle 6.) (in relation to 5rticle ). *arrants the functionalit1 of the machines themselves. .nfact, the direct contracting arrangement subAect of these cases is the ver1 manifestation of 5rticle 6.6senforcementH the C!E"ECengaged+martmatic,-.!for the repair andrefurbishment of thePC+machines and, no*, has to pa1 a distinct purchase price therefor. .n so doing, the records are bereft of an1sho*ing that the limitations under 5rticle 6.2 *ere relevant in enforcing the *arrant1 found in 5rticle 6.6.-he C!E"EC could ver1 *ell enforce E as it did enforce E the *arrant1 on availabilit1 not*ithstanding abreach of 5rticle 6.2 as the latter limits onl1 the enforcement of the *arrant1 on manufacturing defectsfoundin5rticle6.)inrelationto5rticle).&, *hich, ho*ever, *asstipulatedtolastonl1forthree(months, in the case of supplies, and o5, 112 ,G4ip7,5/, r,.Fo5,6 >ro7 M-r.+30, 2012 1i.e., M-r.+ 30, 20132 and as such, had alread1 lapsed *a1 before Resolution $o. %%22 *aspassed on 'ecember 2&, 2(1). +martmatic,-.!, in fact, admits this in its Comment to the Pabillo PetitionH&.14( -he original responsibilit1 of :+martmatic,-.!; on the *arrant1 of the PC+ machines *as onl1 until2(1).12& :+martmatic,-.!; *asnot obligated to diagnose,repair, and refurbish the PC+ machinesthat*ouldbe usedforthe2(17Elections.+,r, i0 5o o8li=-/io5 o5 /+, p-r/ o> JS7-r/7-/i.)IMK /o>4lDll /+, C-rr-5/< proAi0io5 o> /+, D,,6 o> S-l, C+,5 /+, 0-7, +-0 -lr,-6< ,:pir,6. .n fact, the0arrant1 Procedure of the 2(12 'eed of +ale states that if the e>uipment is no longer in *arrant1, thentheclient:(theC!E"EC#; *ill bechargedforthediagnosticandrepairof themachine. 0ithouttheE/tended 0arrant1 5greement, the C!E"EC *ould have to incur additional e/penses to pa1 :+martmatic,-.!;, or an1 other entit1, for the repair and refurbishment of the same.12) (#mphasis supplied#Jence, *iththe*arrant1onmanufacturingdefects havinglost itse@ect, thereis no*a1that theC!E"ECs engagement of another service contractor *ould constitute a breach of that *arrant1.-hat the E/tended 0arrant1 Contract (Program 1# e/cludes from the scope of *or? those PC+ machines,*here persons or entities other than +martmatic,-.! authori8ed representative, performed maintenance orrepair services, as a result of *hich, further repair or maintenance is re>uired to be done b1 a +martmatic,-.!authori8edrepresentativetorestorethemachinestogood*or?ingcondition122 doesnotcall foradi@erent conclusion. +aid e/clusion *as inserted as part of the E/tended 0arrant1 Contract (Program 1#that *as -=r,,64po5o5l/,r /+,,:pir-/io5o> /+,ori=i5-l C-rr-5/-./4ri5=6,>,./0. .n other *ords, the e/clusion *as onl1 part of +martmatic,-.!s o@er for a ne* contract, *hichthe C!E"EC accepted onl1 after the *arrant1 on manufacturing defects had lapsed..n Dne, the procurement of the repair and refurbishment services from +martmatic,-.! cannot be deemedas a .o56i/io5 pr,.,6,5/ to hold it to an1 of its ,:i0/i5= C-rr-5/i,0 as prescribed b1 +ection 2( (b# ofthe GPR5.5s a last instance, direct contracting ma1 be legall1 rationali8ed under +ection 2( (c#, 5rticle OC. of theGPR5 *hen *hat is involved is the procurement of goods sold b1 an e/clusive dealer or manufacturer,*hichdoesnot havesub,dealerssellingat lo*er pricesandfor *hichnosuitablesubstitutecanbeobtained at more advantageous terms to the Government. -he GPPB !anual, once more, illustratesH-his condition anticipates a situation *here the goods are sold b1 an e/clusive dealer or distributor, ordirectl1 sold b1 the manufacturer. .n this instance, it is highl1 unli?el1 that sub,dealers can sell the same atlo*er prices. Burther, the Procuring Entit1 has not identiDed a suitable substitute for the product that canbe procured at terms more advantageous to the government.127PetitionersarguethattheC!E"ECfailedtoestablishthattherepairandrefurbishmentof thePC+machines ma1 be done e/clusivel1 b1 +martmatic,-.!. -hus, it cannot be said that no suitable substitutecan be obtained at more advantageous terms to the government.124ntheother hand, respondents insist that since+martmatic,-.!is thee/clusivemanufacturer anddistributor of the +5E+ 16(( PC+ machines in the Philippines, it is the onl1 certiDed entit1 to performrepair and refurbishment *or?s on the same.126 -o support their claim, the1 presented a document entitled9CertiDcates of .ntellectualPropert1Rights *nership and 'istributorship=12% dated $ovember 22,2(1)signed b1 Bilipinas rdoRo for +martmatic .nternational Corporation and 5lastair 0ells for +martmatic,-.!Corporation, *hich readsH0e hereb1 certif1 that the undersigned +martmatic .nternational Corporation is the e/clusive intellectualpropert1rightso*nerof the+5E+16((5utomatedElection+1stem(5E+#, comprisingamongstotheritems, the Precinct Count ptical +can (PC+# machines ac>uired b1 C!E"EC in !arch 2(12, including itsspare parts and critical accessories such as -ransmission !odem, +ecured !emor1 Cartridgesuall1capableserviceprovidersat moreadvantageoustermstothegovernment. 0ith this, the Court concludes that the third condition E similar to the previous t*o conditionsE *hich *ould Austif1 a resort to direct contracting under +ection 2(, 5rticle OC. of the GPR5 had not beencomplied *ith.(I.$on,compliance *ith the foregoing GPR5 re>uisites not*ithstanding, the C!E"EC, nevertheless, AustiDesitse/clusiveengagementof +martmatic,-.!onaccountof +ection22(h# of BP661, orthemnibusElection Code, *hich, in its vie*, has not been repealed b1 the GPR5H1715R-.C"E C..-JE C!!.++.$ $ E"EC-.$++ec. 22. Poers and functions of the %ommission on #lections. , .n addition to the po*ers and functionsconferred upon it b1 the Constitution, the Commission shall have e/clusive charge of the enforcement andadministration of all la*s relative to the conduct of elections for the purpose of ensuring free, orderl1 andhonest elections, and shallH/ ///(h# Procure an1 supplies, e>uipment, materials or services needed for the holding of the election b1 publicbiddingH Provided, -hat, if it Dndsthere>uirementsof publicbiddingimpractical toobserve, thenb1negotiations or sealed bids, and in both cases, the accredited parties shall be dul1 notiDed..nvo?ingthisprovision, theC!E"ECassertsthat ittoo?intoaccount variousadvantagesof directl1contracting*ith+martmatic,-.!, suchasthepricethereof. .t claimsthat statutor1, as*ell asdail1operational constraints and budgetar1 limitations, preclude it from bidding the subAect services.172 .t furtherpoints out that its .-' personnel are not capable of performing the re>uired services.17&Bor their part, petitioners submit that the bidding process can be shortened depending on the C!E"ECseKcienc1, andthattheperiodforrefurbishmentismerel1anappro/imation, *hichmeansthatpublicbidding is ver1 much feasible.17) -he1 also propound that since t*o (2# automated elections have beenheld, the C!E"ECs .-' should have ac>uired the necessar1 ?no*ledge and e/pertise in performing basicmaintenance and repair on the PC+ machines.172Birst, onthela*sapplicabilit1, +ection22(h# of BP661basicall1allo*stheC!E"ECtoengageinnegotiations or sealed bids if it Dnds the re>uirements of public bidding impractical to observe. BP 661 *aspassed *a1 bac? in 1%62, before the advent of both the GPR5 (signed into la* on 3anuar1 1(, 2(( andthe automated election la* (R5 6)&7, as amended b1 R5 %&7%, signed into la* on 'ecember 22, 1%%4#. BP661s datedness not*ithstanding, the Court deems that said provision remains valid and e@ective, absentits e/press repeal. .ndeed, 9:b;asic is the principle in statutor1 construction that interpreting andharmoni8ing la*s is the best method of interpretation in order to form a uniform, complete, coherent, andintelligible s1stem of Aurisprudence, in accordance *ith the legal ma/im interpretare etconcordarelegeslegibusestoptimusinterpretandi modus.177Si7pl< 8,.-40, - l-/,r 0/-/4/, r,l-/,0 /o -0i7il-r 048@,./ 7-//,r -0 /+-/ o> -5 ,-rli,r 0/-/4/, 6o,0 5o/ r,04l/ i5 -5 i7pli,6 r,p,-l o> /+,l-//,r.N174.n order to harmoni8e the provisions of the pertinent la*s, the C!E"ECs e/ercise of its po*er to conductnegotiations and sealed bids based on the standard of 9impracticalit1= under +ection 22 (h# of BP 661shouldbereadinconAunction*iththeGPR5, thelatterbeingthespecial la*currentl1governingallmatters of government procurement. $otabl1, the approach is called for b1 +ection 47, 5rticle OOC of theGPR5, *hichprovidesthat9:a;n1otherla*, presidential decreeorissuance, e/ecutiveorder, letterofinstruction, administrative order, proclamation, charter, rule or regulation anduisition, supplies, e>uipment, materials, soft*are, facilities, and other services, from localor foreignsources free from ta/es and import duties, subAect to accounting and auditing rules and regulation / //,=176 and that 9:t;he provision of Batas PambansaBlg. 661, as amended, other*ise ?no*n as the FmnibusElection Code of the Philippines, and other election la*s 5o/ i5.o50i0/,5/ Ci/+ /+i0 A./ 0+-ll -ppl Oi7pr-./i.-li/ue e/perience and e/pertise to deliver the re>uiredserviceI or,e. +ubAect totheguidelines speciDedinthe.RR, purchases of Goods fromanother agenc1of thegovernment, such as the Procurement +ervice of the 'B!, *hich is tas?ed *ith a centrali8ed procurementof commonl1usedGoodsfor thegovernment inaccordance*ith"ettersof .nstruction$o. 422andE/ecutive rder $o. &2%, series of 1%6%.-he same goes for the alternative procurement methods of "imited +ource Bidding,Repeat rder, and+hopping respectivel1 governed b1 +ections )%, 21, and 22, 5rticle OC. of the GPR5HS,.. 99.Li7i/,6So4r.,Bi66i5=. , "imited+ourceBiddingma1beresortedtoonl1inan1of thefollo*ing conditionsHa. Procurement of highl1speciali8edt1pesof GoodsandConsulting+ervices*hichare?no*ntobeobtainable onl1 from a limited number of sourcesI orb. Procurement of maAor plant components *here it is deemed advantageous to limit the bidding to ?no*neligible bidders in order to maintain an optimum and uniform level of >ualit1 and performance of the plantas a *hole./ ///S,.. 51.R,p,-/Or6,r. , 0henprovidedfor inthe5nnual Procurement Plan, Repeat rder ma1beallo*ed *herein the Procuring Entit1 directl1 procures Goods from the previous *inning bidder *heneverthere arises a need to replenish goods procured under a contract previousl1 a*arded through CompetitiveBidding, subAect to post,>ualiDcation process prescribed in the Bidding 'ocuments and provided allthefollo*ing conditions are presentHa. -he unit price must be e>ual to or lo*er than that provided in the original contractIb. -he repeat order does not result in splitting of re>uisitions or purchase ordersIc. E/cept in special circumstances deDned in the .RR the repeat order shall be availed of onl1 *ithin si/ (7#months from the date of the $otice to Proceed arising from the original contractI and,d. -he repeat order shall not e/ceed t*ent1,Dve percent (22L# of the >uantit1 of each item of the originalcontract.S,.. 52.S+oppi5=. , shopping ma1 be resorted to under an1 of the follo*ing instancesHa. 0hen there is an unforeseen contingenc1 re>uiring immediate purchaseH Provided, ho*ever, -hat theamount shall not e/ceed Bift1 thousand pesos (P2(,(((#I orb. Procurementof ordinar1orregularoKcesuppliesande>uipmentnotavailableintheProcurement+erviceinvolvinganamount not e/ceeding-*ohundredDft1thousandpesos (P22(,(((#H Provided,ho*ever, -hat the Procurement does not result in +plitting of ContractsH Provided, further, -hat at leastthree ( price >uotations from bona Dde suppliers shall be obtained.-he above amounts shall be subAect to a period revie* b1 the GPPB. Bor this purpose, the GPPB shall beauthori8ed to increase or decrease the said amount in order to reSect changes in economic conditions andfor other AustiDable reasons.0hen dissected to their core, these conditions are, in truth, 0p,.iD. 7-5i>,0/-/io50 o> i7pr-./i.-li/-il4r, C+i.+ i0 A,r< liF,l< /o +-pp,5..t is glaringl1 evident that the remaining period of about si/t1 da1s before the !arch target date is terribl1insuKcient for the conduct of the t*o,stage bidding for the refurbishment anduired, and *ould onl1 further dela1 theschedule.!oreover, there is onl1 one B5C tas?ed to handle all procurement activities related to the election. -heseinclude the +angguniangTabataan procurement scheduled for Bebruar1 2(12 and the regular procurementaside from and the procurement of the 'RE, the additional!R and allother election propaganda for2(17. -he bidding for the refurbishment anduiredcompletemonopol1over an1subse>uent needthegovernment*ould have in relation to the PC+ machines for a period of ten (1(# 1ears is a notion this Court, underthese circumstances, cannot accept.Besides, thereisaninaccurateportra1al of theE/tended0arrant1Contract (Program1# asamere9*arrant1 e/tension.=5ne/tended*arrant1givesaprolonged*arrant1toconsumerstoprovidetheadditional serviceofreplacingor repairinggoods, /+,6,>,./0o> C+i.+-r,6ir,./l-./4r,6.1%)A0 -5 O,:/,50io5,N /+, 6,>,./ /o 8, r,p-ir,6 0+o4l6 o..4r Ci/+i5 /+, ,:/,56,6p,rio6 .oA,r,6 i5 /+, -=r,,7,5/.1%2.n these cases, the *arrant1 period for manufacturing defects had, as above,discussed, lapsed a long timeago, orlast!arch&(, 2(1&, *hichfollo*stheone(1#1ear*arrant1periodforthePC+machines,rec?oned from !arch &(, 2(12 *hen the 2(12 'eed of +ale *as e/ecuted. Jence, there *as nothing morethat could be e/tended. 5s +martmatic,-.! itself admitsH&.14( -he original responsibilit1 of :+martmatic,-.!; on the *arrant1 of the PC+ machines *as onl1 until2(1).1%7 :+martmatic,-.!; *asnot obligated to diagnose,repair, and refurbish the PC+ machinesthat*ouldbe usedforthe2(17Elections.+,r, i0 5o o8li=-/io5 o5 /+, p-r/ o> JS7-r/7-/i.)IMK /o>4lDll /+, C-rr-5/< proAi0io5 o> /+, D,,6 o> S-l, C+,5 /+, 0-7, +-0 -lr,-6< ,:pir,6. / // .1%4(#mphasis supplied#Based on said admission,1%6 the e/piration of the aforestated *arrant1 period becomes an established fact*hich therefore renders 5rticle 6.1 of the E/tended 0arrant1 Contract (Program 1# false insofar as it statesthat 9:t;he*arranties agreeduponunder 5rticles)and6of the2((%5E+contract, includingthelimitations on *arranties under 5rticle 6.2, shall continue to remain in full force and e@ect.= Clearl1, the*arrant1 on manufacturing defects contained under 5rticles ).& in relation to 5rticles 6.) and 6.2 of the2((% 5E+ Contract is alread1 defunct and thus, cannot 9continue to remain in full force and e@ect.= Bor thesamereason, theseprovisionscannotbe9incorporatedhereinb1*a1of reference.=1%% !ean*hile, theparties could not have contemplated the e/tension of 5rticle 6.6 of the 2((% 5E+ Contract sinceH ( a# theE/tended 0arrant1 Contract (Program 1# alread1 provides for the actual performance of *or?, and thusdoes not e/tend a *arrant1 on the mere availabilit1 of parts, labor, and technical support andmaintenanceI and (b# the *arrant1 on availabilit1 still subsists, i.e., ten (1(# 1ears for the PC+, rec?onedfrom !a1 1(, 2(1(, or until !a1 1(, 2(2(.5t best, onecanconstruetheE/tended0arrant1Contract (Program1# asarevival, rather thanane/tension. Jo*ever, if the Court *ere to condone this *a1 of thin?ing, then the bidding for an1 servicerelated to the PC+, or an1 government proAect for that matter, *ould never be needed at all. 5lltheProcuring Entit1 has to do is simpl1 revive the provisions of a dead contract and perpetuall1 hold itself tothe original contract a*ardee. Clearl1, this undermines the ver1 core of the procurement la* E it eliminatescompetition, deprives the government of the opportunit1 to receive o@ers *ith more advantageous terms,and, more signiDcantl1, erodes the publics faith b1 rousing suspicions of favoritism and anomal1I perforce,the C!E"ECs 9e/tended *arrant1 mode= cannot E as it should not E be sanctioned.n another front, the C!E"EC invo?es the Courts ruling in %apalla to Austif1 its position.Jo*ever,%apalla is not on all fours *ith the present casesI hence, the stare decisis doctrine (to adhere toprecedents and not to unsettle things *hich are established# is inapplicable.%apalla essentiall1 validated the C!E"ECs e/ercise of the e/tended -P, *hich characteri8ation as anoption contract *as never in doubt. +, op/io5 -7o45/ C-0 -lr,-6< p-r/ o> /+, ori=i5-l -7o45/8i66,64po5i52009>or/+,AESCo5/r-./, thereb1negatingtheneedfor another competitivebiddingHne.+martmatic,-.!*as not grantedadditional right that *as not previousl1availabletotheotherbidders. / //. +ection ).& thereof gives the Comelec the -P the goods agreed upon. -he same provisionstates the conditions in e/ercising the option,i5.l46i5= /+, -66i/io5-l -7o45/ /+-/ /+, Co7,l,. i0r,G4ir,6 /o p-< 0+o4l6 i/ ,:,r.i0, 04.+ ri=+/. .t is, therefore, undisputed that this grant of option isrecogni8ed b1 both parties and is alread1 a part of the principal contract of lease. Javing been included inthe RBP and the bid bulletins, this right given to the Comelec to e/ercise the option *as ?no*n to all thebidders and *as considered in preparing their bids. / //.-*o. -he amendment of the 5E+ contract is not substantial. -he approved budget for the contract *asP11,22&,716,)((.((27chargedagainstthesupplemental appropriationsforelectionmoderni8ation.Bids*ere, therefore, accepted provided that the1 did not e/ceed saidamount.5fter the competitivepublicbidding, +martmatic,-.! emerged as *inner and the 5E+ contract *as thereafter e/ecuted. 5s repeatedl1stated above, the 5E+ contract is a contract of lease *ith -P giving the Comelec the right to purchase thegoods agreed upon if it decides to do so. +, AES .o5/r-./ 5o/ o5l< i56i.-/,6 /+, .o5/r-./ pri., >or/+, l,-0, o> =oo60 -56 p4r.+-0, o> 0,rAi.,0 C+i.+ i0 PQ,191,989,Q39.98, 84/ -l0o 0/-/,6 /+,-66i/io5-l -7o45/ /+-/ /+, Co7,l,. +-0 /o p-< i> i/ 6,.i6,0 /o ,:,r.i0, /+, op/io5 C+i.+ i0P2,130,635,098.15. E/cept for the period *ithin *hich the Comelec could e/ercise the -P, the termsandconditionsforsuche/ercisearemaintainedandrespected. 5dmittedl1, theadditional amounttheComelec needed to pa1 *as maintained (less the amount alread1 paid *hen it purchased %2( units ofPC+machines*ithcorrespondingCC+for thespecial electionsincertainareasintheprovincesofBasilan, "anao del +ur and Bulacan# subAect to the *arranties originall1 agreed upon in the 5E+ contract.-hecontractamountnot onl1included thatfor the contract of lease but also for the -P.Jence, thecompetitive public bidding conducted for the 5E+ contract *as suKcient. 5 ne* public bidding *ould be asuperSuit1.+, Soli.i/or G,5,r-l +i70,l> .l-riD,6 64ri5= /+, or-l -r=47,5/0 /+-/ /+, p4r.+-0, pri., o> /+,r,7-i5i5= PCOS 7-.+i5,0 0/-/,6 i5 /+, -00-il,6 D,,6 o> S-l, C-0 /+, pri., 0/-/,6 i5 Ar/i.l,9.3 o> /+, AES .o5/r-./. +,r,>or,, /+, 0-i6 -7o45/ C-0 -lr,-6< p-r/ o> /+, ori=i5-l -7o45/8i66,64po5 i5 2009 >or/+, AES .o5/r-./C+i.+5,=-/,0/+, 5,,6>or -5o/+,r .o7p,/i/iA,8i66i5=.2(((#mphases supplied#.n star? contrast, the E/tended 0arrant1 Contract (Program 1#, despite its titular denomination, is actuall1a separate service contract for the repair and refurbishment of the PC+ machines, to be accomplished*ithinaDve(2#,monthperiod. +inceite/tendsnosubsisting*arrant1, itisreall1nodi@erentfromacontract for the servicing of appliances, automobiles and the li?e, b1 *hich a routine chec?,up and repairs,if need be, are made b1 the service contractor. .n other *ords, it is a 6i0/i5./ .o5/r-./, >o456,6 4po5 -5,C oH,r -56 - 5,C .o50i6,r-/io5, and for *hich a 5,C p-uentnegotiations b1 the partiesH0JERE5+, after negotiations b1 the parties, the Contract 5mount *as reduced to Philippine Pesos -*oJundred Bort1 !illion (Php2)(,(((,(((.((#, e/clusive of C5-.2(2.n fact, if onl1 to highlight its individualit1, +martmatic,-.!s ctober 2), 2(1) proposal reveals that theE/tended 0arrant1 Contract (Program 1# *as formulated as part of a full service program pac?age, i.e.,from bringing bac? the PC+ machines to its *or?ing condition to the upgrading of the di@erent hard*areand soft*are components, that subsists on its o*nH 2(&C. Proposal Elements-heproposal consistsof threemaAor programs, *hichcover thevariouselements*hich+martmaticsuggest are re>uired to ensure the PC+ are in pea? condition for 2(17.-heDrst programcoversthee/tensionof the*arrant1tobringthePC+bac?to*or?ingconditionfollo*ing a prolonged storage and lac? of preventive maintenance for over t*o 1ears.-he second program covers the refurbishment of the machines to change ph1sical components at the endof life and as precautionar1 measures to eliminate potential ris?. .t also includes the repair of machinesthrough 2(12, 2(17 pre,election preparation and 2(17 post,election repair, Drm*are upgrades to the !-'!oderns and return to storage preparation.Bor the third program, +martmatic has revie*ed the re>uirements of the current installed platform andidentiDed a range of improvements to the di@erent hard*are and soft*are components of the solution toma?e it e>uivalent of an1 technolog1 available in the mar?et toda1.Jence, di@erent from the character of the -P, it *ould be absurd to conclude that the E/tended 0arrant1Contract (Program 1# *as a mere 9*arrant1 e/tension= that could mas>uerade as an adAunct of the 2((%5E+ Contract if onl1 to evade the procurement la*. Bor the same reasons, it cannot even pass as a mereamendment. $eedless to state, the true nature of ever1 contract is ascertained through Audicialdetermination, undergirded b1 principles of la*. .t is never *hat the parties deemit to be.2()-ostretchtheargument further, neither shouldtheprincipleof autonom1of contracts precludetheE/tended 0arrant1 Contracts (Program 1#scrutin1.-heprincipleis not a safehaven to Austleave theparties to their agreement E it bears a sharp limitation that although parties ma1 agree to stipulations,clauses, terms and conditions as the1 ma1 deem appropriate, the1 should not be contrar1 to la*, morals,goodcustoms, publicorderorpublicpolic1I2(2 hence, theCourt, afterascertainingthecontractstruenature, shouldproceedtoassessif ittransgressesthislimitation. .ronicall1, %apalla itself e/hortsthat9:g;overnment contracts shall be void, as against the la* and public polic1, *here a statutor1 re>uirementof opencompetitivebiddinghasbeenignored. 5sacorollar1, agreementsdirectl1tendingtopreventbidding for covered government contracts ma1 violate public polic1.=2(7 -he e/hortation holds true *ithrespect to the E/tended 0arrant1 Contract (Program 1#, *hich is un>uestionabl1 a government contractimbued *ith public interest.5s a Dnal point, it is note*orth1 that %apalla upheld the amendment of the 2((% 5E+ Contract (i.e., the-Pse/tension#sincethe-Pse/ercise*as, intheCourtsappreciation, moreadvantageoustotheC!E"EC and the public. .t *as observed that the P4,1%1,)6),4&%.)6 rentals paid for the lease of goodsand purchase of services under the 2((% 5E+ Contract *as alread1 considered as part of the purchaseprice, andthatfortheC!E"ECtoo*nthesubAectgoods, it*asre>uiredtopa1onl1anadditionalP2,1&(,7&2,()6.12. n the other hand, if the C!E"EC did not e/ercise the option, the rentals alread1paid *ould Aust be one of the government e/penses for the past election and, in e@ect, *ould be of no useto future electionsH-hird. !ore importantl1, the amendment of the 5E+ contract is more advantageous to the Comelec and thepublic./ ///;,-=r,,Ci/+r,0po56,5/0/+-/ /+,,:,r.i0,o> /+,op/io5i07or,-6A-5/-=,o40/o/+,Co7,l,., 8,.-40, /+, PQ,191,989,Q39.98 r,5/-l0 p-i6 >or /+, l,-0, o> =oo60 -56 p4r.+-0, o>0,rAi.,0 456,r /+, AES .o5/r-./ C-0 .o50i6,r,6 p-r/ o> /+, p4r.+-0, pri.,. &or /+, Co7,l,. /ooC5 /+, 048@,./ =oo60, i/ C-0 r,G4ir,6 /o p-< o5l< P2,130,635,098.15. I> /+, Co7,l,. 6i6 5o/,:,r.i0, /+, op/io5, /+, r,5/-l0 -lr,-6< p-i6 Co4l6 @40/ 8, o5, o> /+, =oA,r57,5/ ,:p,50,0>or /+, p-0/ ,l,./io5 -56 Co4l6 8, o> 5o 40, /o >4/4r, ,l,./io50. 5ssuming that the e/ercise of theoptionisnulliDed, theComelec*ouldagainconductanotherpublicbiddingforthe5E+forthe2(1&elections *ith its available budget of P4 billion. Considering that the said amount is the available fund forthe *hole election process, the amount for the purchase or lease of ne* 5E+ *ill deDnitel1 be less than P4billion. !oreover, it is possible that +martmatic,-.! *ould again participate in the public bidding and could*in at a possibl1 higher price. -he Comelec might end up ac>uiring the same PC+ machines but no* at ahigher price.2(4 (#mphases and underscoring supplied#-hesamecannotbesaidof theE/tended0arrant1Contract(Program1#*hereb1theC!E"EChadagreed to pa1 a distinct purchase price of P2)(,(((,(((.(( in order to procure +martmatic,-.!s services..n fact, it appears that it *ould be more advantageous for the government if the C!E"ECs o*n in,housepersonnel hadunderta?enthediagnostics, preventivemaintenance, andeventheactual repair andrefurbishment of the machines. .t could have held +martmatic,-.! to its training obligation under .tem $o.6.2.), Part C of the RBP, as incorporated in the 2((% 5E+ Contract, as above,mentioned. .f such *ere thecase, then onl1 the necessar1 tools and replacement parts, after the C!E"ECs o*n e/amination of theactual number of defective machines and the e/tent of the defects, *ould be needed to be procured. -hiscourse of action *ould seem to be cheaper than the *holesale engagement of +martmatic,-.! under theE/tended0arrant1 Contract (Program 1#. Butthen again,the C!E"ECs reasons as to*h1 it did notproceed as such can onl1 be second,guessed.5t an1 rate, it is plainl1 unclear to this Court that the P2)(,(((,(((.(( purchase price gives the best priceadvantage to the government. -he C!E"EC mentions in its Comment that the said price, coupled *iththe )L ma/imum replacement threshold, translates into the cost of P1&1.27 per PC+ machine for theirinspection, diagnosis, and repair, including the cost for the parts and components.2(6 Jo*ever, as alread1pointed out, the Court has not been assured that no other service contractor is capable of providing moresuitabletermstothegovernment. 5ndmoreso, theC!E"ECsperceivedpriceadvantageunderthe+martmatic,-.! deal assumes that all PC+ machines have to be repaired. -his assumption ma1 ver1 *ellend up to be false after the initial diagnostics of the PC+ machines, again a course of action that theC!E"EC should have preliminaril1 ta?en. -herefore, as a *orst case, the government ma1 end up shellingout P2)(,(((,(((.(( for the mere diagnostics and C, p40+ /+ro4=+ Ci/+ /+, 8i66i5= 5oC, C, Cill +-A, 23,000 1OMR2 7-.+i5,0. So C, .-5 6oi/. I/ .-5 8, 6o5,. I/?0 r,-ll< @40/ - G4,0/io5 o> +oC /+, +i=+ .o4r/ r4l,0 -=-i50/ PCOS, 3imene8 said Comelec is stillnot giving up on computeri8ed elections in 2(17. -he poll bod1 had used less units in past automatedelections nation*ide.5ccordingto3imene8, Comelec*ill adopt theCentral Count ptical +can(CC+# s1stemif the!Rmachines *ill be used.Jesaidtheadoptionof CC+isalread1beingdiscussed, includingthepossiblenumber of countingcenters./ // /2(%-he Court has not even gone to this e/treme and prohibited the re,use of the PC+ machines. Met, theC!E"ECs o*n spo?esperson has conceded that *hen push comes to shove, automated elections are stillpossible.-here areno >ualms aboutthe tas?of having the PC+ machinesrepaired and refurbished.Jo*ever,there are serious and unignorable legal Sa*s about ho* the C!E"EC intends to pursue this underta?ing.Bluntl1, the C!E"EC has failed to Austif1 its reasons for directl1 contracting *ith +martmatic,-.!H it hadnot sho*nthat an1of theconditionsunder +ection2(, 5rticleOC. of theGPR5e/istsI itsclaimsofimpracticalit1 *ere not supported b1 independentl1 veriDed and competent dataI and lastl1, its perceived9*arrant1 e/tension= is, in realit1, Aust a circumvention of the procurement la*. Bor all these counts, theconclusion thus reached is that the C!E"EC had committed grave abuse of discretion amounting to lac?or e/cessof Aurisdiction.21( 5saresult, itsResolution$o. %%22andtheE/tended0arrant1Contract(Program 1# should be stric?en do*n, and necessaril1, all amounts paid to +martmatic,-.! pursuant to thesaidcontract, if an1, beingpublicfundssourcedfromta/pa1ers mone1, shouldbereturnedtothegovernment in accordance *ith the procedures contained in e/isting rules and regulations. $ote that thedisposition ofthesecasesdoes not prohibitthe C!E"EC from resorting to directcontracting ane* orotheralternativemethodof procurement *ithan1servicecontractor, subAect tocompliance*iththeconditions provided in the GPR5 and all the pertinent rules and procedures.0hile this Court recogni8es that the C!E"ECshould be given suKcient lee*a1 in e/ercising itsconstitutional mandate to enforce and administer all election la*s, it demands e>ual recognition that it istheCourtsconstitutional dut1toseetoitthatall governmental actionsarelegall1permissible. .nsodoing, the Court decides not onl1 *ith pragmatism in mind, but pragmatism *ithin the fair bounds of la*.+uch is the case in e/amining the C!E"ECs apprehensions under the lens of the procurement la*, *ithheightened considerations of public accountabilit1 and transparenc1 put to the fore. 0ith due deference tothe C!E"EC, it should be made to understand that this Court does not stand to th*art the conduct ofautomated electionsI but onl1 steps in to preserve its sanctit1. 5fter all, in a democrac1, nothing is morevital than an unimpaired vote.;HERE&ORE, the petitions are GRANED. 5ccordingl1, C!E"EC Resolution $o. %%22 and the E/tended0arrant1 Contract (Program1# are hereb1 declared N%LL and (OID. -his 'ecision is immediatel1e/ecutor1 in vie* of the time considerations attendant herein.211SO ORDERED.