THE Senate Blue Ribbon Committee has compelled the German information technology company handling the Land Transportation Office’s Land Transportation Management System (LTO-LTMS) to attend the next committee hearing on issues hounding the agency’s IT system.
Panel chairman Sen. Francis Tolentino and several senators were dismayed after officials of Dermalog Identification Systems (Dermalog) failed to show up during the first committee hearing last June 8.
Tolentino warned Dermalog’s legal counsel that he will be cited in contempt if his client fails to attend the next hearing.
Aside from the principal officers of Dermalog, the Blue Ribbon Committee also subpoenaed the representatives of Holy Family Printing Corp., Microgenesis, and former key LTO personnel to attend the next hearing, which has yet to be scheduled.
Dermalog’s legal counsel, who was present during the hearing, told the panel that officials of Dermalog are based in Germany and have not flown into the country at the time the hearing was held.
Sen. Grace Poe, Committee on Public Services chairman, said the attendance of Dermalog’s representatives during the next hearing should give the IT company the chance to clarify matters amid reports that aside from the LTO-LTMS, some of its projects in Indonesia, Angola, and Haiti are also facing problems.
The hearing stemmed from two separate resolutions filed by Senate minority leader Aquilino Pimentel III and Sen. Imee Marcos in August 2022 and December 2022, respectively.
Pimentel, in his Senate Resolution No. 147 based on a Commission on Audit (COA) report, questioned LTO’s alleged payments to Dermalog and its joint venture with Holy Family Printing Corp., Microgenesis, and Verzontal Builders, Inc. despite the foreign IT firm’s failure to submit deliverables on the P3.14 billion Road IT Infrastructure project that was awarded in May 2018.
Pimentel revealed that despite having more than 70 unresolved issues involving the core applications of the LTMS, the LTO has accepted the submission of Dermalog and has been paying the foreign IT firm.
In addition, a COA representative told the committee that the LTO started paying maintenance fees to the foreign IT company in 2019 even before the project was fully completed and turned over.
Sen. Joseph Victor Ejercito questioned the LTO for being overly “generous” by amending the payment scheme at least 12 times in favor of Dermalog.
The Department of Transportation (DOTr) reported that the government has since paid P2.31 billion to Dermalog, adding the payment was required in the contract based on certain milestones.
Verzontal Builders, Inc., one of the local joint venture agreement (JVA) partners of Dermalog, revealed that it has a pending petition with the Court of Appeals (CA) to uphold the warrants of arrest released by a Quezon City Regional Trial Court Branch 224 against four Dermalog officials in line with an estafa case filed against them in September 2021.
Verzontal alleged that it did not receive the full payment from Dermalog despite the completion of its responsibilities under the JVA.
The hearing also tackled Marcos’ Senate Resolution No. 348, which alleged the LTO violated RA 9184 or the Government Procurement Reform Act when the P8.2 billion automation project for LTO’s internal and external functions were divided into two components (Component A and B) without the approval of the National Economic Development Authority — Investment Coordination Committee (NEDA-ICC).
The COA Information Technical Audit Office is currently conducting an audit of the LTMS contract to determine if the issues they raised in the 2021 audit report have been resolved.
The report is expected to be completed this month.
