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Smartmatic contract voided

THE Supreme Court on Tuesday junked the government’s P268.8 million contract with Smartmatic-TIM to repair and refurbish vote counting machines to be used in next year’s elections, saying the Commission on Elections (Comelec) failed to justify negotiating a deal in lieu of holding a public bidding.

The decision leaves the poll body with less than a year to find and commission a new service provider to repair about 80,000 precinct count optical scan (PCOS) machines before the May 9, 2016 elections.

During its en banc session in Baguio City, the justices voted unanimously to grant the consolidated petitions filed by poll watchdog Automated Elections System (AES) Watch led by Auxilliary Bishop of Manila Broderick Pabillo and Integrated Bar of the Philippines (IBP).

The Court agreed with the petitioners that the Comelec committed a grave abuse of discretion in approving the deal, which was signed by chairman Sixto Brillantes Jr. just before he retired in February.

The Court said the Comelec failed to justify why it resorted to direct contracting instead of holding a public bidding as required by the Government Procurement Reform Act.

The justices also said the Comelec’s claims that a bidding was impratical were “not supported by independently verifiable data” and that the warranty extension was “in reality a circumvention of the procurement law,” said Supreme Court spokesman Theodore Te.

As a result of the ruling, all amounts paid to Smartmatic-TIM under the contract should be returned to the government, Te said.

He said the ruling would take effect immediately.

In their consolidated petitions, AES and IBP argued that the award of the contract to Smartmatic violated the procurement law because the Comelec did not conduct a public bidding as required.

They argued too that the refurbishment and repair of PCOS machines fall under the definition of the term “procurement” under the law, and that the direct contracting method chosen by Comelec was not justified under the same law.

In opting to approve Smartmatic’s extended warrant proposal, the Comelec said it did not have enough time before the 2016 elections to conduct a public bidding.

The Comelec also said it was too risky to give the contract to a third party, given the “highly technical nature of the refurbishment and repairs of the machines.”

But the petitioners argued that the tight schedule in the run-up to next year’s elections was no reason to dispense with the conduct of a public bidding under the law. The justices of the Supreme Court agreed.

A Palace spokesperson declined to comment on the Supreme Court ruling.

“We defer to Comelec for comment on that issue,” said deputy presidential spokesperson Abigail Valte, during a press briefing.

The president of Smartmatic, Cesar Flores, said his company would file a motion for reconsideration, and said the negotiated contract was the best deal for the country.

“We find it significant that the honorable court is of the opinion that direct contracting as a manner of procurement is not instrinsically unconstitutional. We note with encouragement that the Court merely takes issues with procedural matters which we are confident the procuring entity, Comelec, can easily remedy,” Flores said in his statement.

Comelec spokesman James Jimenez declined to comment until he had seen the entire text of the Court decision.

He said, however, that the poll body has been prepared for a negative ruling and has been putting contingency measures in place. He did not elaborate.

In a separate interview, former Comelec commissioner Gregorio Larrazabal said that the Comelec should now re-evaluate their timeline. – With Sandy Araneta and Sara Susanne D. Fabunan

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