In a particular university in the Philippines they conducted a direct contracting instead of a public bidding for the reason in their board meeting which is posted in the web that there are no other bidder is capable of offering such items (without trying public bidding first) which is approved by their board of regents. However, upon the conduct of our market study for the same similar projects there are three (3) bidders who are capable of conducting such. Thus, can the Procuring Entity conduct a direct contracting instead of public bidding as the first choice of bidding knowing that there are other bidders capable of doing such project? Thank you.
The Procuring Entity through the BAC can always resort to Direct Contracting instead of Public Bidding, but that does not mean they are correct.
The case of Pabillo v. Comelec (G.R. No. 216098, 21 April 2015) should be a warning for those who choose Direct Contracting. In the said case, the Supreme Court declared VOID the contract entered into by Comelec and Smartmatic TIM under Direct Contracting for being non-compliant with the conditions, and for the absence of market study prior to procurement.
The enduser must justify based on market study/survey prior to commencement of the procurement, the necessity for an item that may only be procured through Direct Contracting, and it must be able to prove that there is no suitable substitute in the market that can be obtained at more advantageous terms. Absence of these requirements/conditions will render resort to direct contracting unjustified.