Baptism of fire

Just recently, the newly installed chief of the Land Transportation Office (LTO) made certain controversial remarks regarding the agency’s current information technology systems provider which a member of the House of Representatives has considered as inappropriate, if not biased.

Since 2017, German firm Dermalog Identification Systems has been providing IT services to LTO for its land transportation management system (LTMS) after it replaced Stradcom Corp., which held the multi-billion peso contract for almost a decade, or from 1998 to 2016.

Dermalog reportedly has a 27-year track record in biometrics and data security, with operations in Singapore, Malaysia, Thailand, Vietnam, Indonesia and India.

It is developing digital infrastructure for LTO’s biometric identity verification and supports six systems including driver’s license and fee payment services.

According to its website, Dermalog provided LTO in 2017 with the technology for its new driver’s license system which allows the storage and processing of all relevant data for licenses, car registration, and penalty payment of committed offenses in one system.

In 2020, LTO launched its new website portal which is combined with an LTMS that includes an automated biometric identification system from Dermalog with face and fingerprint identification to prevent false or double identities. The new system likewise allows easy integration of services of other government agencies in the country.

The LTMS portal was initially launched to allow motorists to transact online with the LTO in light of the pandemic, but the portal has become part of the agency’s day-to-day transactions as motorists are now required to access the website before going to an LTO office. The portal provides access to the driver’s license renewal course which allows motorists to both review for and take the comprehensive driver’s education exam which one needs to pass as a requirement for license renewal.

To implement LTO’s extensive modernization, Dermalog built a complete state-of-the-art data center in Manila with a capacity of more than five petabytes that would allow processing of more than one million transactions per day.

But LTO chief and Transportation Assistant Secretary Teofilo Guadiz III has recently criticized Dermalog’s services. “For me, the old IT system provides better solution. If the old IT provider Stradcom can do it, then by all means they are welcome,” he said.

He claims he has received reports that it now takes up to five days before transactions with the LTO by the public are completed, compared to the previous system wherein transactions are completed in a few hours.

Guadiz blamed Dermalog for the long queues of people making transactions in their district offices and told the company to improve its services, or the agency will find a new provider. He said that he wants

to review the contract with Dermalog and if it cannot deliver, then the LTO would look for other IT providers that can do the job, adding that Stradcom may participate in the bidding should things go south with Dermalog.

According to House deputy minority leader Rep. Bernadette Herrera, it may be considered a case of impropriety when an agency head threatens to terminate a contract and then publicly commends a possible bidder.

The Bagong Henerasyon party-list representative noted that considering Guadiz’ position and the substantial amount involved in the contract, the statement may be considered imprudent or highly irresponsible and may give rise to public speculation as to why the LTO appears to be in a rush to find a new IT supplier, or in this case revert to a previous one when they have a signed, active agreement with an existing provider.

Herrera said that this course of action may set the agency backward by several steps and ultimately result in increased costs and longer, more difficult transactions for the motoring public.

She pointed out that key stakeholders are very appreciative of the fact that Dermalog no longer charges inter-connectivity fees for motor vehicle registrations, driver’s license transactions, and law enforcement and traffic adjudication service transactions, unlike before.

Herrera revealed that while LTO is claiming that the current system has glitches, there are field reports indicating that these glitches are actually due to human intervention and manual overrides done by agency personnel.

The lawmaker also disclosed that Stradcom may also be to blame for the setbacks which Dermalog’s operations have experienced.

According to one report, Stradcom is required to turn over to the agency’s new IT contractor the database of motorists, which per the LTO-Stradcom phaseout agreement in 2016 actually belongs to the LTO.

Herrera quoted LTO sources as saying that Stradcom has not turned over the database despite the fact that the agency has paid a total of P7.53 billion for the last four-year phase of their contract. This failure to release the database to Dermalog, she said, may have crippled and debilitated the current provider’s operations since it does not have a database to work with.

The solon has also received reports that Dermalog technical representatives, data analysts, and systems engineers are literally not allowed to use the tables, chairs, and other office fixtures in LTO satellite offices because under the contract with LTO, Stradcom owns all IT-related hardware and equipment, including workplace infrastructure.

However, Guadiz is now singing a different tune. He said it was never the agency’s intention to replace Dermalog as its IT systems provider because doing so at this time will produce more problems than solutions, and that the best course of action at this point would be to sit down with Dermalog.

As an old hand in the LTO, Guadiz should have known better than to say those things in public without first getting to the bottom of things.

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