The Commission on Audit (COA) has flagged anew the Land Transportation Office (LTO) for “undue payment” given to its foreign information technology (IT) contractor, Dermalog, despite the incomplete turnover of deliverables for the P3.19 billion Road IT Infrastructure Project.
In its 2021 consolidated annual audit report (CAAR) for the Department of Transportation (DOTr), the COA said LTO’s “acceptance of customized core applications with missing processes had caused undue payment to the vendor, which is disadvantageous to the government.”
These core applications involved the Driver’s Licensing System (DLS) and the Motor Vehicle Inspection and Registration System (MVIRS), which were included in Component A of the IT project also known as the Land Transportation Management System (LTMS).
According to the COA, the DLS and MVIRS have unresolved issues as of December 2021, and their functionalities and processes were not yet fully configured, causing disruptions in the operations of various LTO sites.
In the Quezon City Licensing Center, for example, the LTMS automatically rejects transactions of all motorists aged 65 years old and above, and has inadequate examination terminals to cater to large volume of applicants.
Some LTO officers revealed that LTMS programs have been constantly experiencing glitches, affecting the turnaround time and credibility of the transactions. In some cases, the LTMS cannot detect fake driver’s licenses and documents and cannot handle a client’s multiple transactions.
A few months ago, the LTMS experienced a system bog down as confirmed by a Facebook post of an LTO NCR branch. This caused long queues at certain LTO branches nationwide, as well as interruption of services.
The new IT system has also caused massive delays in motor vehicle registration in LTO Baguio as reported by a local news channel Regional News Channel – RNG Luzon on its Facebook page last May 5, 2022.
According to the report, LTO clients are lining up early in the morning in the hopes of getting the documents they need, only to be told to return the other day.
The LTO Baguio chief admitted that the delays in transactions were due to the rollout of LTMS, which requires more processes, and other factors such as slow internet connection.
The new LTO chief, Teofilo Guadiz, in a media interview, acknowledged that the glitches of LTMS were causing massive delays in LTO transactions nationwide.
Guadiz revealed that the driver’s license application and motor vehicle registration now take up to five days compared to the usual turnaround time of only two hours.
In 2018, the LTO awarded the said IT project to the Joint Venture Agreement (JVA) of a German tech firm, Dermalog, and three other local companies. Many of the significant deliverables of LTMS, notably those
related to the 24 pilot sites, were supposed to have been delivered to LTO and the transacting public more than three years ago, in December 2018.
However, in another COA report published in 2020, the auditing agency noted that the LTO has extended the deadline of submissions in favor of its foreign contractor “without proof of due diligence,” which caused disadvantage to the government and unnecessary burden to its clients.
The same audit report also noted that the imposition of penalties was not implemented. It is noteworthy to recall that Republic Act (RA) 9184, otherwise known as the Procurement Act of the Philippine government, provides and allows imposition of 0.1 percent for every day of delay in the delivery of government direct procurement contracts.
The COA has advised the LTO to amend the schedule of requirements of LTMS to correct the computation of the remaining deliverables to ensure that the government will not pay additional fees.