THE Supreme Court has been asked to nullify the P3.19 billion information technology contract between the Land Transportation Office (LTO) and the joint venture of German firm Dermalog for the development of the agency’s Land Transportation Management System (LTMS).
The LTMS is a web-based system that will replace the old IT system of LTO, including the establishment and operationalization of an exclusive on-premises private cloud, network, operations center and technical support and help desk centers.
Among other functions, it is designed to integrate all LTO services, such as the issuance of driver’s licenses, registration of motor vehicles, and the issuance of transport permits, into a single database and digital platform.
Petitioners lawyer Carlito Montenegro and Gerald Domingo, said there is a need for the SC to intervene on the issue amid accusations of connivance between the LTO and Dermalog joint venture composed of Dermalog, Holy Family Printing Corp. and Microgenesis Business Systems.
The crux of the issue is the LTO’s award of the multi-billion-peso contract to the German firm on May 17, 2018 and its subsequent signing 11 days later.
Under the contract, Dermalog is supposed to deliver the receivables for the LTMS for pilot testing in 24 sites and complete the project within 26 weeks.
But the petitioners said that a month after the contract was signed, the LTO issued orders that allowed 13 extensions to Dermalog until 2021.
The petitioners asked the High Court to order the LTO to rescind the contract with Dermalog and enjoin the government agency from further using the LTMS and paying Dermalog.
“There is a necessity to immediately resolve the issues at hand to prevent further disbursement and wastage of public funds. Worthy to mention that the assailed contracts are already expiring which might render the issues raised herein moot,” the petitioners said.
The petitioners alleged “the contract between LTO and Dermalog was incomplete, flawed, infirm, and defective, thus, should be declared null and void.”
They cited a previous finding of the Commission on Audit (COA) that the project was flawed from inception and was put up for bidding despite lacking requirements and specifications.
The petitioners also said that the design of the core systems created by Dermalog did not include all of the functionalities and connectivity required by the LTO.
Despite this, however, they lamented that the Department of Transportation (DOTr) did not raise a question and the LTO accepted and used the LTMS.
They added that the LTO likewise did not impose any damage or fine as required under the contract and the Government Procurement Reform Act.
With this, the petitioners asked the High Court to order the LTO to file administrative and criminal cases against its officials and employees involved in the implementation of the project.
“Here, the facts are abundant and daylight clear, that despite the numerous delays and still undelivered aspects of the LTO IT Project Component A, the responsible officers of respondent LTO have repeatedly turned a blind eye to the patent repeated breaches of Dermalog Joint Venture,” the petition said.
Likewise, the petitioners asked the SC to order the LTO to penalize and blacklist Dermalog from participating in any bidding process involving projects with the agency.
The petitioners also said the SC should issue a temporary restraining order enjoining the LTO from paying Dermalog for maintenance fees, change orders and other receivables and from further operating the LTMS.
They added Dermalog should also be compelled to return the amount paid by the government for the “null and void” contract and to pay damages to the government amounting to not less than P319 million.
“If the instant issues, which have nationwide scope and effect on road transportation and usage, are not addressed by this Honorable Court, the continued contract with Dermalog JV and usage of the defective LTMS will keep threatening national security, wasting public funds, prejudicing the government, causing unquantifiable damage and inconvenience to the public, due to delayed and inefficient processing of LTO transactions and lack of effective LTO control over the system,” the petitioners stressed.
NOT TERMINATED
In a statement issued over the weekend, Transportation Secretary Jaime Bautista denied that the government has terminated the LTO-Dermalog contract for the LTMS.
“No Dermalog contract was terminated. (The) LTMS, developed by Dermalog, is owned by the government,” Bautista said.
On the other hand, LTO chief Assistant Secretary Vigor Mendoza II also denied that the agency would terminate the contract.
Mendoza said the LTO is focused on solving all the challenges in the agency to deliver fast and convenient services to its clients across the country.
“Our hands are full in terms of further improving our services and in delivering what needs to be delivered to our kababayan. All of these are our priority right now,” said Mendoza.
These priorities, he said, include the full shift to digitalization in all transactions in the agency – from transactions involving driver’s licenses to motor vehicle registrations.
From only around 70 percent utilization rate of the LTMS since he assumed the top LTO post in July last year, Mendoza said this has expanded to around 97 percent utilization rate in the first six months of his leadership.
Last month, Dermalog JV said the LTO, through LTMS, has already issued 28 million driver’s licenses, translating to about 30,000 a day fast and easy driver’s license renewal. — With Myla Iglesias
