Special Report: NEA bid winner cries foul

Click here to read Part I

(Conclusion)

Nerwin Industries Corp.’s woes began after Pacific Synergy, a local agent of losing bidder Tri-State Pole and Piling, alleged in a letter to the National Electrification Administration (NEA) that Nerwin submitted spurious financial statements.

Reacting on the allegation, former NEA Administrator Manuel Luis Sanchez formed a panel to look into it, instead of tossing the issue to the pre-qualification and bidding award committee (PBAC), which a year ago recommended the award of the IPB-80 contract to Nerwin.

Ironically, Sanchez appeared to have forgotten that he was a member of the PBAC which conducted the bidding for the project under the watch of then NEA chief Conrado Estrella III.

The fact-finding committee formed by Sanchez completed its inquiry in March and ruled that "the benefits of the Nerwin bid price to the overall success of the rural electrification project in the amount of P151,487,736 cannot be ignored by any well-meaning bidding committee in any government office."

However, the new NEA board under the Arroyo administration ignored the committee report and passed instead on March 26 a resolution reversing its decision on Dec. 19, 2000 to approve and award the contract to Nerwin.

To make matters worse for Nerwin, it was permanently banned from doing business with the NEA because of alleged misrepresentation in the bidding process.

It was ironic that two and a half years later, the new NEA board would cancel the bidding result notwithstanding the fact that the PBAC headed by Leonardo Olano unanimously ruled that Nerwin won fair and square in the bidding held on Feb. 14, 2000.

The controversial decision also expediently brushed aside an opinion by the Office of the Government Corporate Counsel (OGCC) issued on May 4, saying that the award of contract to Nerwin on Dec. 19 last year was "legal and valid," hence reverting it would be illegal.

The OGCC opinion, signed by Justice Amado Valdez, also emphasized that ignoring the P151.48 million the government stands to save in the Nerwin bid would be grossly disadvantageous to the state.

Apart from submitting the lowest responsive bid, Nerwin won because it bid for all four components of the project. Its rivals — Tri-State, Koppers Timber Corp. and Goldpine Industries — bid for only one, two or three of the components.

Nerwin also passed the pre-award ocular inspection of the manufacturing plant and facilities of its Malaysian partner, Aktimas Sdn. Bhd., based in Kuching, Sarawak. The inspectors made an aerial survey of the firm’s tree plantation by chartering a helicopter at Nerwin’s expense.

Subsequently, Estrella approved the award of the contract to Nerwin, albeit scaled down to only 50 percent of the project which was deemed illegal as under the law, the allowable reduction is only 15 percent.

In favoring the award of the contract to Nerwin, the OGCC also noted that the bidders were subjected to several months of pre-qualification and verification of their eligibility, and that the bidding committee’s findings "binds the NEA."

You can’t do that, OGCC tells NEA

The OGCC said any post-bidding review is illegal and cannot affect the result of the completed bidding. "More so that such review was made not by the PBAC," it added.

The OGCC also ruled that the NEA had no authority to review Nerwin’s qualifications more than one year after the bidding process has been completed.

It pointed out that under the implementing rules and regulations of Executive Order 262, the NEA has 30 days to award the contract to the winning bidder.

The OGCC warned that to do otherwise is to invite charges of having acted in bad faith to favor a losing bidder.

The government lawyers also said the NEA did not have the authority to adjudicate the complaint, more so since it was filed long after the bidding had been successfully completed.

The OGCC indicated that entertaining the belated complaint would only undermine the integrity of the bidding, adding that the rules set a time frame for the review of the bidding process.

"Even in its most extended version, such review cannot extend beyond the post-qualification review of the bidders prior to recommendation of the award by the PBAC."

However, a top official of the justice department reportedly remarked that the OGCC "has no business issuing an opinion on the controversy."

But legal pundits told The STAR that if the OGCC was barred from rendering an opinion on issues affecting the government, the NEA officials including lawyer Eliseo Alampay and Energy Secretary Vincent Perez as chairman were "stupid" enough to seek the OGCC opinion if it were "immaterial and irrelevant."

"Why was the OGCC created in the first place?" they asked.

Yes, you can, DOH tells NEA

Unhappy with the OGCC opinion, the NEA tried another tack, and approached the Department of Justice in an apparent attempt to get a more favorable legal advice. But Justice Secretary Hernando Perez was noncommittal. He simply said the NEA "may or may not" give credence to the OGCC opinion.

"Aha, that’s forum-shopping," Nerwin snapped.

Taking exception to charges that it filed bogus documents to the PBAC, Nerwin asserted that it has nothing to do with the questioned documents.

"These documents adverted as falsified, however, were never submitted by Nerwin to NEA. Rather, the original documents submitted by Nerwin to NEA were substituted without its knowledge by falsified ones to create the scenario that will justify the investigation and the reopening of the completed bidding," Nerwin stated in its complaint before the Ombudsman.

The complainant also alleged that apart from having submitted the highest bid, the Tri-State and Pacific Synergy team-up was merely a "fly-by-night shell corporation which has not been in operation since its incorporation."

Nerwin officials also pointed out that it was highly irregular that Alampay’s law firm, the Alampay Gatchalian Mawis and Alampay, should do the study on the closure of IPB-80 because respondent Alampay was a member of the NEA board of administrators.

In its complaint, Nerwin cited a litany of alleged violations of the Anti-Graft Law by the NEA executives insofar as the IPB-80 project is concerned.