Article 6 Section 29

Fiscal Powers of Congress

COMELEC v. Hon. Quijano
G.R. No. 151992 September 18, 2002

Point of the case:

With respect to government contracts, statutes take precedence over the public officers' freedom to
contract. The contracting prerogative of public officers is circumscribed with a heavy burden of
responsibility. They must exercise utmost caution and observe the law in order to protect the public
from unjust and inequitable government contracts.

Facts:
In 1996, the Philippine Congress passed RA 8189, otherwise known as the "Voter's Registration Act of
1996," providing for the modernization and computerization of the voters' registration list and the
appropriate of funds therefor "in order to establish a clean, complete, permanent and updated list of
voters."
Pursuant thereto, the COMELEC promulgated a Resolution approving in principle the Voter's
Registration and Identification System Project. The VRIS Project envisions a computerized database
system for the May 2004 Elections. The COMELEC then, issued invitations to pre-qualify and bid for the
supply and services for its VRIS Project. Private respondent Photokina Corp. is one of the bidders. After
the public bidding, PHOTOKINA's bid is P6.5B which garnered the highest total weighted score and was
declared the winning bidder. Thus, the COMELEC award the project to PHOTOKINA, which, in turn,
immediately accepted the same. However, the budget appropriated by Congress for the COMELEC's
modernization project was only P1 Billion and that the actual available funds under the Certificate of
Availability of Funds issued by the Chief Accountant of the COMELEC was only P1.2B.

Issue: Whether or not a successful bidder compels a government agency to formalize a contract with it
notwithstanding that its bid exceeds the amount appropriated by Congress for the project.

Held:
No. PHOTOKINA, though the winning bidder, cannot compel the COMELEC to formalize the contract.
Since PHOTOKINA’s bid is beyond the amount appropriated by Congress for the VRIS Project, the
proposed contract is not binding upon the COMELEC and is considered void.
Section 46 of the Administrative Code of 1987 states that “No contract involving the expenditure of
public funds shall be entered into unless there is an appropriation therefor, the unexpended balance of
which, free of other obligations, is sufficient to cover the proposed expenditure” while Section 47 states
“no contract involving the expenditure of public funds by any government agency shall be entered into or
authorized unless the proper accounting official of the agency concerned shall have certified to the officer
entering into the obligation that funds have been duly appropriated for the purpose and that the amount
necessary to cover the proposed contract for the current calendar year is available for expenditure on
account thereof, subject to verification by the auditor concerned” (not complete provision. Just the pertinent
parts)
It is quite evident from the tenor of the language of the law that the existence of appropriations and
the availability of funds are indispensable pre-requisites to or conditions sine qua non for the execution
of government contracts.