Senate probe on LTO 'undue payment' to IT providers sought

Senate Minority Leader Aquilino "Koko" Pimentel III has filed a resolution urging the Senate Blue Ribbon committee to probe the alleged undue payment given by the Land Transportation Office (LTO) to its foreign information technology (IT) contractor.

In proposed Senate Resolution 147, Pimentel cited the 2021 annual audit report of the Commission on Audit on the Department of Transportation, where the LTO was flagged for the "undue payment" given to IT contractor, Dermalog, despite the incomplete turnover of deliverables for the P3.19 billion Road IT Infrastructure project.

According to the COA report, the contract for Component A of the IT project was perfected on May 28, 2018 and was awarded to Dermalog Identification Systems, Holy Family Printing Corp., Migrogenesis and Verzontal Builders, Inc. Joint Venture with a total contract cost of P3.146 billion.

"The said COA Report disclosed that all core applications were already paid although some of these core applications have yet to accommodate certain LTO transactions," Pimentel's resolution read.

The core applications include the Driver’s Licensing System (DLS) and the Motor Vehicle Inspection and Registration System (MVIRS), which were included in Component A of the said IT project also known as the Land Transportation Management System (LTMS).

As stated in the COA report, Pimentel said the Quality Assurance Reports dated December 9, 2021 on the functionality and regression testing performed on each application in LTMS disclosed a total of 70 open issues still to be delivered by the vendor.

The COA report likewise stated that even before LTO's acceptance of the core applications, there were 25 existing issues on it that remained unresolved as of December 9, 2021.

This, Pimentel said, is disadvantageous to the government as the core applications were already paid when such have yet to function and operate as intended.

"These unresolved issues have caused disruptions in the operations of various LTO sites. Unsurprisingly, there have been complaints of slow processing of documents in getting driver's license and its renewal, as well as registration of vehicles, which have been attributed to its new IT system," he said.

The minority chief noted that even newly-appointed LTO chief Atty. Teofilo Guadiz admitted that the glitches of LTMS are causing massive delays in LTO transactions nationwide.

Pimentel said its effects include slow processing of driver's license application and motor vehicle registration process which usually takes only two hours but now it takes around five days.

He further stressed the part of the COA report where state auditors said that: "The audit team believes that the acceptance of the DLS, MVIRS, and EIS applications is premature which led the government to pay for systems which are not yet ready and operating as intended.”

"To reiterate, it is a basic rule in procurement contracts that payment based on progress billing is allowed provided that the goods have been delivered or installed in accordance with the terms and conditions of the contract, and the same was duly inspected and accepted by the procuring entity as evidenced by a certification to that effect," Pimentel said.

"It is thus imperative for the LTO to explain why full payment has been made to the vendor of this IT system which has unresolved issues and are clearly not working as intended and is causing massive disruptions to the LTO processes in clear violation of the procurement and auditing rules and to the disadvantage and detriment of our government and country as a whole," he added.—AOL, GMA News