Senate probe of LTO’s P3.19-B IT contract sought

A SENATOR has filed a resolution seeking a probe of a P3.19-billion road information technology (IT) deal between the Land Transportation Office (LTO) and a German contractor, to which the government allegedly made illegal payments.

Senator Aquilino Martin D. Pimentel III under Senate Resolution 147 cited a Commission on Audit (CoA) report that flagged the 2018 payments to Dermalog Identification Systems GmbH even if the deliverables had not been fully turned over.

“No payment shall be made for services not yet rendered or for supplies and materials not yet delivered under any contract with the government,” the senator said, citing a state memo.

Dermalog did not immediately reply to a question posted on its website seeking comment. The company had denied any irregularities in the contract, according to a Philippine Star report on Sept. 3, 2019.

“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,” Mr. Pimentel said in the resolution. 

The project, completed in 2018, was awarded to the joint venture of Dermalog, Holy Family Printing Corp., Microgenesis and Verzontal Builders, Inc. with a total contract cost of P3.19 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,” the senator said.

“This is disadvantageous to the government as the core applications were already paid when such have yet to function and operate as intended,” he added. — Alyssa Nicole O. Tan