Comelec lease deal faces House scrutiny

Sara Susanne Fabunan

A MEMBER of the Makabayan Bloc on Saturday sought a congressional probe of the new deal struck by the Commission on Elections (Comelec) with Smartmatic-Total Information Management (TIM) Corp. involving the lease of 93,977 new optical mark reader (OMR) machines for possible breach of election laws.

Kabataan party-list Rep. Terry Ridon also stressed the need for Congress to revisit Republic Act 9369 or the Automated Election System Law that is apparently tied to and dependent on the Smartmatic-TIM.

“It has been clearly reported that Comelec will lease new machines from Smartmatic. But we need to ask – are these machines compliant with existing election laws, especially the provision in Section 10 of RA 9369 which states that systems used for elections should first be tested successfully in either a local or foreign elections?” Ridon asked.

Rep. Terry Ridon
Smartmatic, on the other hand, said it should not be blamed for the situation because the refurbishment was delayed by all the legal cases and Comelec’s own actions or inaction.

Smartmatic President Cesar Flores said Smartmatic had been proposing the refurbishment of the PCOS machines since 2013 and they had been vigorously recommending the option as a means for the government to save money and to maximize its investment.

Ridon, however, said the new OMR machines may not possess the exact specifications and software as those previously used in past Philippine elections, thereby needing to undergo renewed evaluation, as provided under RA 9369.

Section 10 of RA 9369 amended the provision on procurement of election equipment of RA 8436 to read as follows, “To achieve the purpose of this Act, the Commission is authorized to procure, in accordance with existing laws, by purchase, lease, rent or other forms of acquisition, supplies, equipment, materials, software, facilities and other services, from local or foreign sources free from taxes and import duties, subject to accounting and auditing rules and regulations.

“With respect to the May 10, 2010 elections and succeeding electoral exercises, the system procured must have demonstrated capability and been successfully used in a prior electoral exercise here or abroad. Participation in the 2007 pilot exercise shall not be conclusive of the system’s fitness.”

Ridon also expressed concern with the revelation that Comelec’s hands were practically tied when it came to deciding which election equipment will be used in the upcoming polls.

“The old PCOS machines, numbering 81,896, will now be useless scraps of metal. By approving the new lease deal, Comelec just wasted P10 billion worth of taxpayers’ money, excluding costs for storage and maintenance,” Ridon said.

“Despite this fact, Comelec still decided to proceed with the new lease agreement, apparently under duress,” the lawmaker stressed, referring to Commissioners Rowena Guanzon and Sheriff Abas’ recent statements which reveal that Comelec was practically “pushed to the edge” by Smartmatic to select the lease deal.

In a statement, Commissioner Guanzon said one of the primary reasons why Comelec resorted to the lease deal was Smartmatic’s refusal to join the bidding for the refurbishment of old PCOS machines.

“It is now revealed to the public that Smartmatic-TIM practically coerced Comelec to enter the new lease contract. Smartmatic now practically has a monopoly over the Philippine electoral system – and such monopoly may jeopardize the integrity of the upcoming elections,” Ridon said.

Ridon’s statement was echoed by Joint Venture Stone of David, Avante and Dermalog, which entered a bid to refurbish the old PCOS machines.

Although it said that it accepts and respects the decision of the Commission en banc, Dermalog Identification Systems CEO Gunther Mull lamented why the government allowed a particular company to monopolize all projects that would automate the May 2016 polls.

“I think for sure, the vendor in this position is trying to monopolize. And I think it is quite obvious... Maybe the Comelec would also appreciate in the future to have more choices. Because monopoly means it’s more expensive and less service,” Mull said in a press conference a day after the Comelec announced its final decision.

Mull said their participation in the recent  public bidding was an “unfortunate incident” given that there was an apparent monopoly in terms of automating the election  system in the country following the recent decision of Comelec entering a deal with Smartmatic - TIM supplying the 93,977 OMR machines.

“I think if we want to get into this market, we are not happy about the monopoly. I don’t know how the Philippines feels about it. But monopoly, in normal life, means I have to pay more, and I get less service and less quality. That is normally the consequence of monopoly for sure,” Mull said

The Joint Venture Stone of David, Avante and Dermalog has participated in the public bidding for the refurbishment of 81,896 Precinct Count Optical Scan (PCOS) machines, which was used and procured thereafter in 2010 and 2013 elections.

But during the second bidding, the joint venture was the lone bidder and the Special Bids and Awards Committee 2 (SBAC 2)  found Dermalog to be “ineligible”, thus declaring e refurbishment public bidding a “failure of bidding”.

Dermalog then filed a motion for reconsideration but was likewise denied by the SBAC 2.

Avante Tech International Technologies CEO Kevin Chung said that the joint venture have the expertise and capability to refurbish the PCOS machines and have it ready for operational  and functional use in two months.

Chung said they can complete the refurbishment and upgrade project by December 2015.

“If all the arguments have been done by, for example, September 15, then we can have the 80,000 delivered by December,” Chung said.

Chung also said that the refurbishment project will also help the Comelec from saving at least P5-billion against  leasing new OMR machines.

Avante Tech International Technologies operations director Linda Lim, meanwhile, said that it would have been  much cheaper if the Comelec had opted for the  refurbishment contract noting that most of their factories are located in the Philippines.

However, despite its unfortunate experience here, Mull said that Dermalog is not thinking of filing a petition against Comelec’s decision.

“Let me say both of our companies are engineering companies. We are not lawyer companies. And we are not interested in court cases. So if anybody still would have interest in some refurbishment, we would be more than happy to do this. If there’s less interest or no interest in this, we will also accept this,” Mull said.

“We will accept any decision of the Comelec. 100 percent sure, I can tell you, we will not do what some other competitors in our market do – to go to court. We won’t do this,” he added.

Mull said that although they did not get the refurbishment contract, their joint venture will participate in 2019 senatorial elections when Comelec opens its public bidding to refurbish the old PCOs machines.

“We are not looking only at this (2016) elections. We are also looking at the future, and see how we can establish our presence here and contribute to the elections,” he said.

He added that during their meeting with Comelec chairman Andres Bautista last Friday morning, Dermalog has already expressed their intention to participate in the next bid since the poll body has earlier announced that the old 81,896 PCOS machines will still be refurbished to be used for 2019 midterm elections.

Meanwhile, in the wake of this new development,  a Palace official called on the public to be more vigilant about any factors that may affect a clean and honest elections in 2016

Presidential deputy spokesperson Abigail Valte said that despite the controversies involving the new deal with Smartmatic, the Aquino administration believes in the credibility of the winning technical provider.

“Yes, given the Smartmatic is a company, because of the 2010 elections and their engagements in the PCOS (Precinct Count Optical Scan) machines and their share of controversy...have made people more aware and have made people more vigilant about any factor that may affect a clean and honest elections, as it should be naman,” Valte said over a state-run Radyo ng Bayan.

She added that the Comelec has the freedom to decide whatever they deem is right for the betterment of the coming local and national elections and as long as the process is legal.

Valte said that the public should understand the decision since the Comelec has a timetable to follow.

“There are deliverables that they need to be able to do at certain points in time. So we should allow them the freedom to do that,” she stressed.

In other developments, the Comelec assured the public that it was not inclined to purchase the new Optical Mark Reader (OMR) machines.

The Comelec said in a resolution that they will not purchase the OMR units contrary to what their predecessors did when it purchased the 81,000 PCOs machines.

Based on Comelec Resolution No. 9980, the Comelec en banc said the lease of the 70,977 OMR units excludes the “option to purchase” clause present in the original Terms of Reference (TOR).

This means that the project won by Smartmatic – Total Information Management (TIM) Corporation will only be for the lease of the 70,977 OMR machines for P6.286 billion. The “option to purchase” clause costs another P1.576 billion in the Smartmatic-TIM bid.

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