The judicious spending of taxpayers’ money: Does it matter?

Nelson Celis / Manila Times
Posted by CenPEG
April 11, 2017

IT has taken a surprisingly long time for the Commission on Elections (COMELEC) not to reflect on the causes of the problems that resulted in the injudicious spending of the people’s money in implementing the Automated Election System (AES). One thing for sure, it’s not the same as what happens in the automation projects of most private companies and some government agencies. The CEOs, especially in the banking sector, would make sure that the investment placed in their computerized information systems and technologies (CIST) would not only yield streamlined business processes to satisfy their depositors but more so on the quick return on investment. As much as possible, the CEOs would also ensure that they stretch their CIST more than its useful life. With the COMELEC, as observed by AES Watch, the use of PCOS machines for one day only generated not only controversies for non-compliance with AES law but also mishandling of multi-billion-peso contracts.

In January 2003, then President Gloria Macapagal-Arroyo issued Executive Order 172, which allocated P2.5 billion to fund the AES for the 2004 elections. She authorized the release of another P500 million upon the request of COMELEC. Hence, P3 billion was actually allocated for the AES in the 2004 elections.

Out of the P3 billion budget, COMELEC acquired 1,991 automated counting machines (ACMs) worth P1.3 billion from Mega Pacific eSolutions Inc. (MPEI) through public bidding. However, on January 13, 2004, the Supreme Court nullified the contract between MPEI and COMELEC, citing irregularities in the bidding process. There were 57 bidders in 2003 and only MPEI and Total Information Management, Inc. (TIM), Smartmatic’s Filipino partner for the last three elections, were declared qualified by the COMELEC’s bids and awards committee. A billion peso worth of the people’s money had already been paid for those machines and several billions more paid to other suppliers related to the voter registration system and electronic transmission for the 2014 elections. To make a long story short, a total of P 3 billion went down the drain and the machines were left rotting in a warehouse being paid P4 million in rentals annually.

In 2009, the Smartmatic-TIM tandem won the bidding for the automation of the 2010 presidential elections using precinct count optical scan (PCOS) machines. However, then COMELEC Chairman Jose Melo announced sometime in July 2009 that the 2010 elections might be conducted manually after Smartmatic’s Filipino partner TIM withdrew from the partnership. In this context, lawyer Romulo Macalintal interjected and said that the COMELEC-MPEI contract was defective, but not the ACMs and that it was the right time for the COMELEC to bring out the 1,991 ACMs. He added that there was no more legal impediment against the COMELEC personnel implicated in the voided contract as the Ombudsman cleared them of any criminal and administrative liability. When asked for elucidation, lawyer Jose Midas Marquez, the then Supreme Court spokesperson, said that the high court was ready to take up the issue of the use of the ACMs in the 2010 elections if the COMELEC would ask them.

For some compelling reason, the squabble between TIM and Smarmatic was settled. And the question of whether to use the ACMs for the 2010 elections was brushed aside as some were saying that the machines were already obsolete.

As to the difference between the PCOS machines and ACMs, the latter were intended to be used for all 1,991 counting centers in the 2004 elections, while the former were used for the 76,000 precincts in 2010 elections. Both technologies use scanning technology wherein the shaded ovals beside the candidates’ names on the ballot are counted. The only difference is that a PCOS machine counts the ballots in a precinct while the ACM counts the ballots from all the precincts in the counting center. A counting center is conventionally a school which has several precincts.

Lately, we have had two implausible cases of option to purchase (OTP). The first occurred in 2012 when the COMELEC acquired the leased 83,040 PCOS machines used in the 2010 elections through a Supreme Court ruling that said: “COMELEC is confronted with time and budget constraints x xx, the exercise of the option, and the execution of the Deed of Sale, are the more prudent choices available to the COMELEC for a successful 2013 automated elections. The alleged defects in the subject goods have been determined and may be corrected as in fact fixes and enhancements had been undertaken by Smartmatic-TIM.” Those fixes never happened due to Smartmatic’s refusal to refurbish the PCOS machines.

Thus, the COMELEC was forced to lease the 97,366 vote counting machines (VCMs a.k.a. PCOS) worth P8 billion for the 2016 elections, leaving the existing state-owned 83,040 PCOS machines unused. That only means wasting our P9 billion investment for these 83,040 PCOS machines (i.e., P7 billion lease cost of 2010 plus the P2 billion cost through OTP in 2012) and the warehousing and repair cost of P3 billion from 2009 to 2013.

The second OTP case is ongoing when once again our COMELEC is “being forced” by Smartmatic to acquire last year’s leased VCMs. Let’s put our attention now to the recent House Resolution 667, “directing the appropriate committees to conduct an inquiry in aid of legislation on the claim of Smartmatic-TIM that it has the right to enforce the “considered-sold” provision of its two lease contracts with OTP with the COMELEC for the conduct of the May 9, 2016 national and local elections, which may result in the automatic transfer of ownership of 97,366 VCMs, in addition to the previous 83,040 PCOS machines.”

AES Watch, and most likely you as taxpayers, don’t want the first OTP case to happen again in the second OTP case. If Smartmatic succeeds, COMELEC will bespending our billions to warehouse a total of 180,406 useless machines by 2019! History shall surely repeat itself.

(To be continued)

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