G.R. No. 203655 - Separate Opinion




SM Land, Inc. v. Bases Conversion Development Authority and Arnel Paciano D. Casanova, Esq., G.R. No. 203655, August 13, 2014 ♦ Decision, Velasco, Jr. [J] ♦ Dissenting Opinion, Leonen [J] Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 203655 August 13, 2014 SM LAND, INC., Petitioner, vs. BASES CONVERSION AND DEVELOPMENT AUTHORITY and ARNEL PACIANO D. CASANOVA, ESQ., in his official capacity as President and CEO of BCDA, Respondents. DISSENTING OPINION LEONEN, J.: SM Land, Inc. (SMLI) offered to pay the Bases Conversion and Development Authority (BCDA) ₱38,500.00 per square meter for the development of BCDA's· 33.1-hectare BNS/PMC/ASCOM/SSU properties in Fort Bonifacio.1 BCDA claimed that SMLI's offer would be "prejudicial to government's interest for ... it will not yield the best value for the govemment."2 BCDA estimates that it could get a minimum bid of ₱40,000.00 per square meter through public bidding.3 This case arose from BCDA's issuance of Supplemental Notice No. 05,4 which terminated the competitive challenge for the selection of BCD A's joint venture partner for the development of a portion of Fort Bonifacio. A pertinent portion of BCD A's Supplemental Order No. 05 reads: Supplemental Notice No.05 06 August 2012 This Supplemental Notice No. 05 is issued to inform the Private Sector Entities (PSEs) that the Competitive Challenge for the Selection of BCDA's Private Sector Partner for the Privatization and Development of the approximately 33.1-hectare BNS/PMC/ ASCOM/SSU Properties in Bonifacio South is hereby tenninated. BCDA shall not dispose the property through Competitive Challenge. Article VIII. Qualifications and Waivers of the Terms of Reference provides that BCDA reserves the right to call off this disposition prior to acceptance of the proposal(s) and call for a new disposition process under amended rules and without any liability whatsoever to any or all the PSEs, except the obligation to return the Proposal Security. BCDA will notify and invite interested Proponents to the next scheduled selection process for BCDA's partner for the privatization and development of the subject property.5 SMLI now challenges the supplemental order through a petition6 for certiorari, prohibition, and mandamus. Its main argument is that BCDA's unilateral termination of the competitive challenge is a violation of SMLI's rights as an original proponent and constitutes abandonment of BCDA's contractual obligations based on BCDA's acceptance of petitioner's unsolicited proposal, the certification of successful negotiation, the terms of reference, and the National Economic and Development Authority Joint Venture Guidelines and Procedures (Joint Venture Guidelines).7 The issue here is not whether the Joint Venture Guidelines should apply. Rather, the issue is whether the government is contractually bound to complete the competitive challenge initiated by its acceptance of SMLI' s unsolicited proposal. I dissent from the conclusion of the majority. The government is not clearly contractually bound to a specific selection and disposition process. In a situation where there can be many possible bidders, competitive challenge where the first offer is lower than the potential floor for open competitive bidding may be disadvantageous to the public's interest. I BCDA did not consent to a provision that limits the selection process to competitive challenge SMLI' s arguments arise from the premise that there was a contract between the parties, providing that the selection process should be restricted to competitive challenge. Neither BCDA's acceptance of SMLI's unsolicited proposal, its , issuance of the certification of successful negotiation, nor the terms of reference did create a contract that could give rise to a right on the part of SMLI and an obligation on the part of BCDA to adhere to a specific selection process. Article 1318 of the Civil Code provides the requisites of a contract: Art. 1318. There is no contract unless the following requisites concur: (1) Consent of the contracting parties; (2) Object certain which is the subject matter of the contract; (3) Cause of the obligation which is established. The documents used by SMLI as bases for its alleged right to a completed competitive challenge do not show that the parties· had a clear meeting of the minds to give SMLI a right to a completed competitive challenge or to restrict the selection process to competitive challenge. BCDA's acceptance of SMLI's unsolicited proposal shows no commitment on the part of BCDA to restrict its options for the selection process. Based on BCDA's letter8 dated May 12, 2010, the acceptance contained only a declaration that SMLI' s proposal was accepted for purposes of subjecting it to a procedure.9 BCDA did not make a binding commitment on any matter, including the completion of the procedure, in favor of any person. Pertinent provisions in the acceptance letter are reproduced as follows: 12 May 2010 . . . . We are pleased to inform you that the Bases Conversion and Development Authority (BCDA) has, after initial evaluation, decided to accept your proposal, finding it substantially compliant and responsive to the plans and requirements of BCDA, for the purpose of subjecting the same to Competitive Challenge Procedure (Annex "C") of the 2008 Guidelines and Procedures for Entering into Joint Venture Agreements issued by the National Economic and Development Authority (NEDA) on 02 May 2008. Please note that this acceptance shall mean only that authorization is given to proceed with detailed negotiations on the terms and conditions of the JV activity and shall not bind BCDA to enter into a JV agreement, nor to the terms of your unsolicited proposal.10 (Emphasis supplied) Meanwhile, the certification of successful negotiation merely stated that SMLI and BCDA had reached an agreement as to the terms and conditions of the joint venture activity11 and that SMLI was eligible to enter into a joint venture· activity with BCDA.12 It does not contain a commitment on the part of BCDA a) to enter into a joint venture activity; b) to subject SMLI's proposal to a completed competitive challenge; or c) to limit BCDA 's options of the selection process to competitive cha}lenge only. Neither does it vest the right upon SMLI to the award of the joint venture agreement.· The terms agreed upon are merely drafts of what would be the joint venture agreement terms. These are documents preparatory to the joint venture agreement. Pertinent provisions of the certification are quoted as follows: Certification of Successful Negotiation WHEREAS, under Republic Act No. 7227, the Bases Conversion and Development Authority (BCDA) is mandated to accelerate the sound and balanced conversion into alternative productive uses of the Clark and Subic military reservations and their extensions, to raise funds by the sale of portions of Metro Manila military camps, and to apply said funds for the development and conversion to productive civilian use of the said military base lands; . . . . WHEREAS, after evaluation of the unsolicited proposal submitted by SMLI in accordance with the provisions of Annex "C" of the JV Guidelines, the Joint Venture Selection Committee (JV-SC) created by BCDA for the selection of a private partner for the BNS/PMC/ ASCOM/SSU Property recommended to the BCDA Board, and the BCDA Board approved, per Board Resolution NO. 2010-05-100, the acceptance of the unsolicited proposal, subject to the condition that such acceptance shall not bind BCDA to enter into a JV activity, but shall mean that authorization is given to proceed with detailed negotiations ·on the terms and conditions of the JV activity; . . . . NOW THEREFORE, for and in consideration of the foregoing, BCDA and SMLI have, after successful negotiations pursuant to Stage Jj of Annex C - Detailed Guidelines for Competitive Challenge Procedure for Public-Private Joint Ventures of the NEDA JV Guidelines, reached an agreement on the purpose., terms and conditions. on the JV development of the subject property, which shall become the terms for the Competitive Challenge 1 pursuant to Annex C of the JV Guidelines, as follows: . . . . FURTHERMORE, BCDA hereby declares SMLI eligible to enter into the proposed JV activity. Based on the eligibility documents submitted by SMLI, BCDA determined that SMLI (i) is a duly registered and existing corporation with Filipino ownership of more than sixty (60%) and is authorized by Philippine laws to own, hold or develop lands in the Philippines; (ii) it has completed within a period of ten ( 10) years from the date of submission of and receipt of its Proposal a similar or related development Project with a total cost of at least, fifty percent (50%) of the minimum investment requirement, which in this case is ₱18.7 billion; and (iii) it has the financial capability to undertake the Project. BCDA and SMLI have agreed to subject SMLI's Original Proposal to Competitive Challenge pursuant to Annex C - Detailed Guidelines for Competitive Challenge Procedure for PublicPrivate 'Joint Ventures of the NEDA JV Guidelines, which competitive challenge process shall be immediately implemented following the Terms of Reference (TOR) Volumes 1 and 2. BCDA shall, thus, commence the activities for the solicitatfon for comparative proposals, with the publication of the Invitation to Apply for Eligibility and to Submit Comparative Proposals (IAESCP) thrice for two (2) consecutive weeks in three (3) major newspapers starting on 10 August 2010, on which date SMLI shall post the required Proposal Security as stated above. Pursuant to Annex C of the NEDA JV Guidelines, if, after solicitation of comparative proposals, BCDA determines that an offer by a comparative PSE is found to be superior to SMLI's Original Proposal, SMLI shall be given the right to match such superior offer within the period prescribed in the attached TOR Volumes 1 and 2. If SMLI is able to match such superior offer, SMLI shall be issued the Notice of Award, subject to Item No. 19 above. In the event, however, that SMLI is unable to match the superior offer, the comparative PSE which submitted such superior offer shall be awarded the contract, subject to Item No. 19 above.13 (Emphasis supplied) Similarly, the terms of reference only described the procedural aspects of the competitive challenge. It contained no provision limiting BCDA's selection process options to competitive challenge, thus: TERMS OF REFERENCE for the Competitive Challenge for the Selection of BCDA's Joint Venture Partner for the Privatization and Development of the Approximately 33.1-Hectare NS/PMC/ASCOM/SSU Properties in Bonifacio South Volume 1: Eligibility Documents These Terms of Reference (TOR) describe the procedures that shall be followed in connection with the disposition of tht:; approximately . . . 33.1-hectare Bonifacio Naval Station (BNS)/Philippine Marine Corps (PMC)/Army Support Command (ASCOM)/Service Support Unit (SSU) Properties in Bonifacio South (the "Property"), located along Lawton Avenue, Fort Bonifacio, Taguig City, Metro Manila, Philippines. These TOR are issued in two (2) volumes: Volume 1 - Eligibility Documents; and Volume 2 - Tender Documents. This first volume details the requirements for eligibility to qualify as a Private Sector Entity (PSE) that may submit Technical and Financial Proposals for the Joint Venture (JV) Privatization and Development of subject Property, and the procedures involved in the entire Competitive Challenge procedure. Private sector entities (PSEs) which shall be declared eligible shall be issued the second volume of the TOR which details the requirements and procedures for the submission of Technical and Financial Proposals, with the endview of determining a Winning PSE for subject JV development. BCDA reserves the right to amend ·or supplement Volume 1 of these TOR at any time prior to the submission of the Eligibility Documents/ These TOR shall be administered by the Joint Venture Selection Committee (JV-SC) that has been duly constituted for the purpose pursuant to BCDA Board Resolution No. 2010-03-057. Any decision of and/or action taken by the JV-SC is recommendatory,; and is subject to the approval/ratification/confirmation of the BCDA Board. Prior to BCDA's execution of the Joint Venture Agreement (JVA) with the Winning PSE, the Office .of the Government Corporate Counsel (OGCC), as BCDA's statutory counsel, shall issue the corresponding Counsel's Opinion. I. PROJECT RA TIO NALE 1. Under Republic Act No. 7227, BCDA is mandated to accelerate the sound and balanced conversion into alternative productive uses of the Clark and Subic military reservations and their extensions, to raise funds by the sale of portions of Metro Manila camps, and to apply said funds for the development and conversion to productive civilian use of said military base lands. 2. The overall legal basis and framew.ork for the selection of BCDA's joint venture partner for the privatization and development of the Property are R.A. 7227, as amended by R.A: 7917, Executive Order No. 40, the NEDA JV Guidelines issued pursuant to E.O. No. 423 s. 2005, R.A. 9184 and its Implementing Rules and Regulations to the extent applicable, and other relevant laws, Executive Orders, and rules and regulations to the extent applicable. 3. On 04 May 2010, BCDA received from SM Land, Inc. (SMLI) an unsolicited proposal for the development of the said Property. The "Guidelines and Procedures for Entering into P Joint Venture (JV) Agreements Between Government and Private Entities" (JV Guidelines), issued by the National Economic and Development Authority (NEDA) in consultation with the Government Procurement Policy Board (GPPB) and the OGCC pursuant to Executive Order No. 423 s. 2005, were published last 17 April 2008 (Philippine Star) and had taken full force and effect on 02 May 2008. Annex C thereof, or the "Detailed Guidelines for Competitive Challenge Procedure for Public-Private Joint Ventures", provides the bases for BCD A's consideration of the unsolicited proposal of SMLI. . . . . 4. Hence, in accordance with Annex C of the JV Guidelines, BCDA proceeded with the consideration of the unsolicited proposal submitted by SMLI. Upon recommendation by the BCDA JV-SC, the BCDA Board approved, per Board Resolution No. 2010-05-100, the acceptance of the unsolicited proposal. Subject to the condition that such acceptance shall not bind BCDA to enter into a JV activity, but shall mean that authorization is given to proceed with detailed negotiations on the terms and conditions of the JV activity, BCDA went into detailed negotiations with SMLI. The JV-SC ascertained the eligibility of SMLI, in accordance with Article III.2 of Annex C of the JV Guidelines, and reached an agreement with the same on the purpose, terms and conditions of the JV development of subject Property on __ 2010. Therefore, BCDA, under Stage 3 of the Annex C Guidelines on Competitive Challenge, is now seeking comparative proposals from PSEs for the JV privatization and development of the Property, located along Lawton Avenue, Fort Bonifacio, Taguig City, on an "AS-IS, WHERE-IS" basis, to challenge the SMLI proposal. . . . . III. GENERAL INFORMATION 1. Applicable Laws. All laws governing the operation and implementation of these TOR shall be deemed to be those of the Republic of the Philippines, such as, but not limited to, Republic Act No. 7227, as amended by Republic Act No. 7917, and the "Guidelines and Procedures for Entering into Joint Venture Agreements Between Government and Private Entities" issued by the NEDA pursuant to Executive Order No. 423, which took effect on 02 May 2008, as well as Executive Order No. 62 and Republic Act No. 9184, its Implementing Rules and Regulations and its amendments, to the extent applicable, where applicable. 2. Publication of Invitation for Comparative Proposals. BCDA shall publish in three (3) newspapers of general nationwide circulation. . . the "Invitation to Apply for Eligibility and to Submit a Comparative Proposal" (IAESCP). This shall serve to inform and to invite prospective PSEs to the Competitive Challenge procedure at hand .... 3. Joint Venture Arrangement. As laid out in Article 1 above, the ultimate objective of BCDA in qualifying prospective PSEs to be eligible to submit Technical and Financial Proposals is to select a partner in the unincorporated/contractual joint venture (JV) for the privatization and development of the subject Property .... . . . . 4. Amendment of these TOR. The information and/or procedures contained in these TOR may be amended or' replaced at any time, at the discretion of the JV-SC, subject to the approval/confirmation of the BCDA Board, without giving prior notice or providing for any reason. Should any of the information and/or procedures contained in these TOR be amended or replaced, the JV-SC shall inform and send Supplemental Notices to all PSEs .... VIII. QUALIFICATIONS AND WAIVERS . . . . 3. BCDA further reserves the right to call off this disposition prior to acceptance of the proposal(s) and call for a new disposition process under amended rules, and without any liability whatsoever to any or all the PSEs, except the obligation to return the Proposal Security . . . . .14 (Emphasis supplied) The inclusion of Article III.4 and Article VIII.3 in the terms of reference cmnfirms BCDA's authority to reconsider the selection process. These sections confirm BCDA' s power to unilaterally terminate the selection procedure. Article III.4 provides for unilateral amendment of the information and proced.ures. This is a window for BCDA to alter the procedures to adopt other selection processes. Meanwhile, Article VIII.3 expressly bestows upon BCDA the power to terminate the disposition process without incurring any liability to the private sector entities. II BCDA cannot consent to a provision ·that limits the selection process to competitive challenge Not only is it unclear from the above documents that BCDA consented to restricting. its choice of selection process to ·competitive challenge; it would also be grave abuse of discretion on the part of BCDA to agree to that restriction. This is because the law requires that it adhere to certain policy considerations. When the terms admit different interpretations, the Civil Code requires the use of an interpretation "bearing that import which is most adequate to render it effectual."15 When the government enters into agreements or terms, it does so only in accordance with the law and to carry out the policies and purposes of the law. These laws and the corresponding policies are incorporated in terms entered into by the government. The presumption when terms are ambiguous, therefore, should be that which is consistent with the law, government policies, and its purposes. That would be the import that is "most adequate to render [the terms of a government ideal or understanding] effectual."16 Section 2 of Republic Act No. 722717 provides for the government's policy to enhance the benefits from the conversion of BCDA-administered properties, thus: Sec. 2. Declaration of Policies. - It is hereby declared the policy of the Government to accelerate the sound and balanced conversion into alternative productive uses of the Clark and Subic military reservations and their extension (John Hay Station, Wallace Air Station, O'Donnell Transmitter ·Station, San Miguel Naval Communications Station and Capas Relay Station), to raise funds by the sale of portions of Metro Manila military camps, and to apply said funds as provided herein for the development and conversion to productive civilian use of the lands covered under the 1947 Military Bases Agreement between the Philippines and the Unit~d States of America, as amended. It is likewise the declared policy of the Government to enhance the benefits to be derived from said properties in order to promote the economic and social development of Central Luzon in particular and the country in general. (Emphasis supplied) Executive Order No. 6218 provides for BCDA's duty to ensure maximized use of Metro Manila military camps. It also provides that public bidding is the general rule in determining the privatization process to be used. Other processes may be considered only when the exigencies demand it and In accordance with national interest, thus: SEC. 1. POLICY FRAMEWOR;K The BCDA shall be guided by the following policy framework in its conversion program: . . . . 1.4 The BCDA shall plan and implement fund generating projects which will maximize the use of the military camps in Metro Manila that shal.l be sold pursuant to Section 8 of the Act with the funds generated therefrom to be strictly utilized as provided for in the Act; and 1.5 Conversiort projects must be financially self-sustaining in the long term and should contribute significantly to national economic development. . . . . SEC. 4. PRIVATIZATION. The BCDA hereby adopts the following policy guidelines in pursuing privatization, commercialization or divestment projects: 4.1 Privatization shall be the basic thrust of the conversion and development of the baselands. Privatization modes shall include, among others, leasing, joint ventures, management contract, buildoperate-transfer (BOT) and its variants; . . . . 4.3 As a general rule, the privatization process should be conducted through public bidding. However, in the exigency of public service and national interest, and consonant with existing laws, rules and regulations on negotiated contracts, simplified bidding through sealed canvass of at least three (3) pre-qualified investors, or direct negotiation, may be resorted to. The process of selecting the prospective lessees and private investors shall be transparent, where procedures and selection processes adapted are made public through newspaper advertisements and similar other means; .... (Emphasis supplied) BCDA issued Supplemental Notice No. 05 only after finding that the competitive challenge would be disadvantageous to the government and, therefore, against national interest. Unless BCDA was determined in deviating from government policies, it had no choice but to recommend to the President who had control and supervision over BCDA on policy matters19 that the privatization be done through public bidding. As opposed to competitive challenge, public bidding- allows the government to set the minimum contract price and set contract terms known to and appfied to all interested private entities. It is the more transparent and competitive mode of awarding government contracts because no one is given a preferred status. Competitive challenge may only be applicable should there be no interested party or there is need to entice interest among other private sector entities. Certainly, it should not be availed to give advantage to any party without any clear basis. In this case, petitioner has not shown why competitive challenge is more advantageous from the public policy standpoint. Competitive challenge is the exception. Open competitive bidding is the general rule. Our laws abide by the principles of transparency and competitiveness in awarding government contracts. Republic Act No. 9184,20 for example, provides: Sec. 3. Governing Principles on Government Procurement. -All procurement of the national government, its departments, bureaus,. offices and agencies, including state universities and colleges, government-owned and/or -controlled corporations, government financial institutions and local government units, shall, in all cases, be governed by these principles: (a) Transparency in the procurement process and in the implementation of procurement contracts. (b) Competitiveness by extending equal opportunity to enable private contracting parties who are eligible and qualified to participate in public bidding. .... (Emphasis supplied) Section 8 of Executive Order No. 42321 provides that guidelines issued by the National Economic and Development Authority regarding joint venture agreements with private entities should adhere to the objective of "promoting transparency and competitiveness," thus: Sec. 8. Joint Venture Agreements.-The NEDA, in consultation with the GPPB, shall issue guidelines regarding joint yenture agreements with private entities with the objective of promoting transparency, competitiveness, and accountability in government transactions, and, where applicable, complying with the requirements of an open and competitive public bidding. (Emphasis supplied) Because of the level of transparency and competitiveness in public bidding, it is considered the preferred mode of awarding government contracts. Section 2 of Executive Order No. 4022 states: Sec. 2. Statement of Policy. It is the policy of the government that procurement shall be competitive and transparent and therefore shall be through public bidding, except as otherwise provided in this Executive Order. Republic Act No. 9184 provides: Sec. 10. Competitive Bidding. - All Procurement shall be done through Competitive Bidding, except as provided for in Article XVI of this Act. Executive Order No. 423 confirmed public bidding's preferred status as a mode of awarding government contracts: Sec. 1. Policy Requiring Public Bidding. It is the policy of this Administration that all Government contracts of Government Agencies shall be awarded through open and competitive public bidding, save in exceptional cases provided by law and applicable rules and regulations .... BCDA's acceptance of SMLI's unsolicited proposal, the issuance of the certificate of successful negotiations, and terms of reference, should be read in light of the preference given to public bidding, the policy in favor of maximized use of propeqies, and national interest. Any person who deals with the government also accepts the condition that the government is not bound by any provision or interpretation that is against the law, government policies, and national interest. The government may not agree to contract stipulations that are disadvantageous to it. These are conditions that are deemed incorporated in dealings with BCDA. In this case, the government policies· and purposes are best served through public bidding. Public bidding provides more transparency, competitiveness, and benefit to the government. The ponencia is correct in reading the word "shall" in Stage Three of Annex C of the applicable Joint Venture Guidelines23 as mandatory: Stage Three - Once the negotiations have been successfully completed, the JV activity shall be subjected to a competitive challenge, as follows: 1. The Government Entity shall prepare the tender documents pursuant to Section II (Selection/Tender Documents) of Annex A hereof.1âwphi1 The eligibility criteria used in determining the eligibility of the private sector entity shall be the same as those stated in the tender documents. Proprietary information shall, however, be respected and protected, and treated with confidentiality. As such, it shall not form part of the tender and related documents. The Head of the Government Entity shall approve all tender documents including the draft contract before the publication of the invitation for comparative proposals. 2. Within seven (7) calendar days ·from the issuance of the Certification of a successful negotiation referred to in Stage Two above, the JV-SC shall publish the invitation for comparative proposals in accordance with Section III.2. (Publication of Invitation to Apply for Eligibility and to Submit Proposal) under Annex A hereof. 3. The private sector entity shall post the proposal security at the date of the first day of the publication of the invitation for comparative proposals in the amount and form stated in the tender documents 4. The procedure· for the determination of eligibility of comparative proponents/private sector participants, issuance of supplemental competitive selection bulletins and pre-selection conferences, submission and receipt of proposals, opening and evaluation of proposals shall follow the procedure stipulated under Annex A hereof. In the evaluation of proposals, the best offer shall be determined to include the original proposal of the private sector entity. If the Government Entity determines that an offer made by a comparative private sector participant other than the original proponent is superior or more advantageous to the government than the original proposal, the private sector entity who submitted the original proposal shall be given the right to match such superior or more advantageous offer within thirty (30) calendar days from receipt of notification from the Government Entity of the results of the competitive selection. Should no matching offer be received within the stated period, the JV activity shall be awarded' to the comparative private sector participant submitting the most advantageous proposal. If a matching offer is received within the prescribed period, the JV activity shall be awarded to the original proponent. If no comparative proposal is received by the Government Entity, the JV activity shall be immediately awarded to the original private sector proponent. 5. Within seven (7) calendar days from the date of completion of the Competitive Challenge, the JV-SC shall submit the recommendation of award to the Head of the Government Entity. Succeeding activities shall be in accordance with Sections VIII. (Award and Approval of Contract) and X (Final Approval) of Annex A hereof. However, this only applies when the parties have contractually agreed to abide by the procedure outlined in Annex C of the Joint Venture Guidelines. The procedure in Annex C are guidelines. They do not have the same standing as law. It may be modified by the parties in their contract, provided that the modifications are consistent with the law. The rights of the· parties are determined by a valid agreement or, in this case, by Annex C, if it was agreed upon and only so long as it is still consistent with the law. In that case, private sector entities may expect that the competitive challenge be done in accordance with it. Hence, contrary to what was stated in the ponencia, the word, "shall," in "Stage Three - Once the negotiations have been successfully completed, the JV activity shall be subjected to a competitive challenge ... " should not be interpreted to vest upon private sector entities the right to proceed to the competitive challenge after the completion of Stages One and Two, once it is determined that proceeding with competitive challenge would be against the law and government policy. First, the Joint Venture Guidelines does not vest upon the original proporient "[t]he right to the conduct and completion of a competitive challenge."24 Based on the Joint Venture Guidelines and the terms of reference, the extent of protection given to an original proponent is limited to the right to match the proposals of comparative private sector entities or PSEs. It becomes effective only upon submission of proposals from other PSEs, thus: TERMS OF REFERENCE for the Competitive Challenge for the Selection of BCD A's Joint Venture Partner for the Privatization and Development of the Approximately 33.1-Hectare NS/PMC/ASCOM/SSU Properties in Bonifacio South Volume 1: Eligibility Documents . . . . II. DEFINITION OF TERMS . . . . Competitive Challenge means an alternative selection process, as defined under the "Guidelines and Procedures for Entering into Joint Venture Agreements Between Government and Private Entities" issued by the NEDA, wherein third parties shall be invited to submit comparative proposals to an unsolicited proposal; the PSE that submitted the unsolicited proposal is accorded the right to match any superior offers given by a comparative PSE.25 Annex C of the National Economic and Development Authority Joint Venture Guidelines reads as follows: . . . . Stage Three – . . . . . . . 4. The procedure for the determination of eligibility of comparative proponents/private sector participants, issuance of supplemental competitive selection bulletins and pre-selection conferences, submission and receipt of proposals, opening and evaluation of proposals shall follow the procedure stipulated under Annex A hereof. In the evaluation of proposals, the best offer shall be determined to include the original proposal of the private sector entity. If the Government Entity determines that an offer made by a comparative private sector participant other than the original proponent is superior or more advantageous to the government than the original proposal, the private sector entity who submitted the original proposal shall be given the right to match such superior or more advantageous offer within thirty (30) calendar days from receipt of notification from the Government Entity of the results of the competitive selection. Should no matching offer be received within the stated period, the JV activity shall be awarded to the comparative private sector participant submitting the most advantageous proposal. If a matching offer is received within the prescribed period, the JV activity shall be awarded to the original proponent. If no comparative proposal is received by the Government Entity, the JV activity shall be immediately awarded to the original private sector proponent. (Emphasis supplied) Second, if Stage Three is read in conjunction with Executive Order No. 62 and other laws, it is not the completion of Stages 1 and 2 of the competitive challerige procedure under Annex C of the Joint Venture Guidelines that gives private sector entities rights. Whatever rights that may have accrued to private sector entities under Annex C of the Joint Venture Guidelines exist only as long as competitive challenge remains the operating process for· the selection of a joint venture partner. Commencement of the procedures under Annex C of the Joint Venture Guidelines cannot be interpreted as binding the government to adhere to a specific selection process, regardless of policy and national interest considerations. The documents issued by BCDA, therefore, should be considered as effective only if the choice of selection process is competitive challenge. At Jany time prior to the execution of the joint venture agreement and after finding that national interest and government policies should be best served through other processes, BCDA and the government should not be limited in their choice of selection process for a joint venture partner. It is for this reason that BCDA is not prohibited from aborting the entire process. Contrary to the ponencia's position, there is no vested right to impair. Neither is there an obligation to renege on. Thus, any issue that may have arisen regarding the interpretation of the term "disposition" in Section VIII.3 of the terms of reference is rendered immaterial.26 For clarity, however, the term "disposition" cannot be interpreted as anything other than the entire competitive challenge process.27 The terms of reference define "privatization' as "the disposition of the Property through joint venture."28 In the context of SMLI and BCDA's dealings, the object of disposition is always the 33.1-hectare property of BCDA in Fort Bonifacio, and the disposition of that property is privatization. Privatization is an entire process that starts from selection and ends with the actual transfer of ownership of property.1âwphi1 This is not to say that the government may at any time renege on its contractual obligations. In this instance, however, there is no contractual obligation to speak of that limits BCDA 's power to change the selection process because it is not allowed to consent ·to such a provision. The documents used by SMLI to support its argument that BCDA has the obligation to complete the competitive challenge contain no provision to that effect. However, granting that there is such provision, that provision should be considered void because BCDA has no authority to agree to it. For this reason alone, BCDA did not gravely abuse its discretion in issuing Supplemental Notice No. 05. Finally, there would be no unjust enrichment on the part of BCDA or injustice on the part of SMLI if the competitive challenge is terminated. BCDA offered to return the value of SMLI's security plus interest and admitted its obligation to return it upon terpiination of the process.29 As shown in the letter dated August 15, 2012, BCDA even "invite[d] SMLI to participate in the bidding for the subject property."30 SMLI is, therefore, not precluded from participating in the subsequent disposition process that may be selected by BCDA. SMLI will be given an equal opportunity and chance to become BCDA's partner. Any advantage given to SMLI now, arising from ambiguous terms and from an erroneous interpretation of the Joint Venture Guidelines, may have unnecessary and undesirable effects. It is partiality in favor of one company that has deterred investors. Fairness and transparency have always been an expectation for those who would wish to participate in our economy. Accordingly, I vote to deny the petition. MARVIC MARIO VICTOR F. LEONEN Associate Justice Footnotes 1 Rollo, p. 416. 2 Id. at 494. 3 Id. at 857-858. 4 Id. at 63. 5 Id. 6 Id. at 3-62. 7 Id. at 25-56. 8 Id. at 351-352. 9 Id. at 351. 10 Id. 11 Id. at 65. 12 Id. at 70. 13 Id. at 64-71. 14 Id. at 74-87. 15 CIVIL CODE, art. 1373. 16 CIVIL CODE, art. 1373. 17 Bases Conversion and Qevelopment Act of 1992. 18 Prescribing Policies and Guidelines to Implement Republic Act No. 7227 (1993). 19 Rep. Act No. 7227 (1992), sec. 17. 20 Government Procurement Reform Act (2002). 21 Repealing Exec. Order No. I 09-A dated September 18, 2003 Prescribing the Rules and Procedures on the Review and Approval of All Government Contracts to Conform with Republic Act No. 9184, Otherwise Known as "The Government Procurement Reform Act" (2005). 22 Exec. Order No. 40, Csmsolidating Procurement Rules and Procedures for All National Government Agencies, Government-owned or -controlled Corporations and Government Financial Institutions, and Requiring the Use of the Government Electronic Procurement System (2001). 23 Guidelines and Procedures for Entering Into Joint Venture (JV) Agreements Between Government and Private Entities (2008). 24 Cf. Ponencia, p. 10. 25 Rollo, pp. 74-75. 26 Cf. Ponencia, p. 18. 27 Cf Ponencia, pp. 14 and 18. 28 Rollo, p. 77. 29 Id. at 510. 30 Id. at 118. The Lawphil Project - Arellano Law Foundation