A small typo might just cost San Miguel a Php 20 billion project

san miguel typo error

The multi-billion typo.


Updated 6/19/14 11:42 a.m. with comments about the bidding disclosure.

Typos are annoying. But in a world where almost all forms of messages are delivered digitally, they simply cannot be avoided. Sure, people hate it when you spell their name wrong, but most typos are harmless. Even magazines and newspapers, which employ legions of proofreaders, still get the occasional mix-up.

But in the case of San Miguel Corporation, one specific typo might just haunt them for a long, long time, not to mention could cost them a multi-billion peso project.

As part of President Aquino’s flagship program for improving infrastructure, the government has been bidding out Public-Private Partnership projects. These projects often involve big-ticket infrastructure development such as the Cebu-Mactan Airport or the NAIA Expressway.

And with all government projects, the winner is decided through a bidding process. One particular feature of the bidding process is a requirement called a bid security. The bid security is a document that guarantees the owner (the government) that the winning bidder will be able to pay the entire amount stipulated in its bid. The bid security is issued and guaranteed by a bank.

In the bidding for the Cavite-Laguna Expressway Project, a subsidiary of San Miguel Corporation, Optimal Infrastructure Development Inc., submitted a bid for Php 20.105 billion. It was the highest bidder by a huge margin — the next highest bid was over Php 11 billion lower.

In what would seem like a straightforward win-win for both Optimal Infrastructure and the national government, a strange twist happened.

Apparently, somewhere along the way, somebody made a multi-billion typo.

In its bid security, Optimal Infrastructure submitted a bid security that was valid five days shorter than required. As part of the bidding requirements, the bid security was supposed to last 180 days, or until Nov. 29, 2014. Optimal Infrastructure’s bid security, which was backed by the Australia and New Zealand Banking Group (ANZ) only lasted until Nov. 25, 2014.

It is unclear whether it was the ANZ that ultimately got the numbers mixed-up, or whether Optimal Infrastructure made the error. No news of any firings over the error have been reported, either.

The typo, from 29 to 25, meant that Optimal Infrastructure’s bid was declared defective, and they were disqualified from the process.

Optimal Infrastructure has filed motions to have their bid reinstated, even asking Malacanang to intervene in the dispute. The next highest bidder, a consortium between Ayala Corporation and Aboitiz Equity Ventures, Inc., has also requested to participate in the probe.

Updated: A source with knowledge of the bids but was not allowed to publicly comment on the matter added this:

“There is no way to verify the amount or the actual contents of the disqualified bid from Optimal Infrastructure because the DPWH prohibits the bidders from opening the bid boxes. The amount stated by Optimal Infrastructure was revealed in their own press conference outside DPWH premises.”

  • maldita effect

    Doubt that it was a typo. Ang daming beses sa isang bid doc na may reference sa date. Ang layo naman ng 25 sa 29? Most likely, someone didn’t know how to count 180 days, made a mistake, then everyone just went along without checking first.

    Anyway this is just a tiny technicality. Why not just amend/extend the bid security with ANZ, kahit pagbayarin sila ng konting extra na premium (Optimal can afford it) tutal 4 days lang naman idadagdag, then submit the amended security to the approving authority? Substantial compliance na rin yun and wala namang mada-damage nyan. Pag dinisallow yan, do you think San Miguel will take it sitting down? No, they’ll argue all the way to the highest authority. Eh di lalong hahaba ang proseso at made-delay ang project. Kung pinayagan na lang yung amendment, eh di ongoing na ang awarding instead of everyone wasting time and energy over a simple mistake.

    In fact, kung di nila i-allow yang amendment, lalong magiging open ang bidding process to allegations of favoritism, corruption, lack of healthy competition, etc. Worse, baka mag-fail na naman ang bidding, and then the government will have to do a negotiated contract with the other bidder, whose bid is admittedly not as good as Optimal’s.