Lemonade

Last week, authorities recovered two Bugatti Chiron cars smuggled into the country – and, for some mad reason, actually used on our roads. Such smuggling might have been discouraged if the LTO had a functioning information system with a reliable audit trail.

We are not told how much the confiscated Bugattis cost. I came across a recent news item about an American sports celebrity purchasing a Bugatti for $10 million. That converts into over half a billion pesos.

If the two confiscated Bugattis are worth anywhere near that amount, that should add up to about a billion pesos. That is a humongous amount that might have been put to better use invested in a business that creates employment – instead of wasted on a psychological crutch for someone with ego issues.

This week, I came across a post by National Press Club president Lydia Bueno recounting the horror she went through trying to renew her drivers’ license at the LTO office in Sta. Maria, Bulacan. She, and others like her, had to spend six hours at the agency’s office because the Land Transportation Management System (LTMS) was not functioning.

But that system was supposed to be fully functional eons ago. The LTO set aside a budget of P3.14 billion to pay a contractor for this system. That contract ends less than eight months from now. Yet there is nothing that will convince us that the system works – or that it was capable of working in the first place.

In a previous column on this subject, I described the system procured by the LTO to be a “lemon.” Like some of the cars we get from dealers, this system has many weak points and missing parts.

The LTMS contract is merely Component A of the P8.2-billion Road IT Infrastructure Project of the DOTr. It is supposed to automate the core functionalities of the LTO.

The massive contract was awarded in May 2018 to a consortium led by German technology firm Dermalog in joint venture with three Filipino companies that do not seem to be registered to peddle advanced information systems. These consortium partners are: Holy Family Printing Corp., Microgenesis and Verzontal Builders, Inc.

In each of the past four years, the Commission on Audit (COA) Information and Technology Audit Office issued adverse observations about this LTMS contract. This is the same office that uncovered the multibillion Pharmally scandal and exposed the anomalous P2.4-billion laptop purchase of the DepEd. Yet the LTO seemed impervious to the audit findings.

From the onset, the COA found that the LTMS contract violated the revised Implementing Rules and Regulations of RA 9184 or the Government Procurement Reform Act when it modified the contract requirements, schedule of delivery and payment in favor of the contractor.

During a congressional hearing held last Feb. 20, Rep. Rodante Marcoleta quotes extensively from the latest Audit Observation Memorandum (AOM) relating to the LTMS. The AOM was sent to the LTO Feb. 6, 2024.

This 75-page document repeats many of the previous adverse findings and discovers new irregularities. The new findings include contract breaches, more project delays, unwarranted payments made to the contractor and even possible conflicts of interest.

The original contract stated the project deliverables shall be submitted within three milestones. The COA finds that the delivery schedule was extended to 13 (!) milestones. That is intolerable laxity in enforcing the terms of the contract.

The LTO did not only bend backwards in accommodating the errant contractor. The LTO accepted the delivery of items under Milestones 1 and 3 of the project despite being delayed 165 and 756 days, respectively.

The LTO appears to be unduly accommodating.

Furthermore, the LTO required the contractor to provide three redundant lines of the Data Center with a total bandwidth of 600 Mbps to link the database with other related government agencies. The contractor delivered only three lines with bandwidth of 240 Mbps. The insufficiency led to the inefficient delivery of services – and hence discomfort for the public such as was recently experienced by Ms. Bueno.

The LTMS was designed to link the LTO with other government agencies such as the LTFRB, the PNP-HPG and the Bureau of Customs to validate the pertinent data entered in the LTO portal. This feature was completely undelivered. No wonder we see smuggled Bugattis on our roads.

The COA discovered deficiencies in some of the core applications of the LTMS such as the Drivers’ Licensing System (DLS) and the Motor Vehicle Inspection Report System (MVIRS). Despite the missing deliverables, the LTO has religiously paid the contractor.

Something has to explain LTO’s generosity. The COA memo reveals that the former IT consultant of the LTO responsible for signing the Service Evaluation Report for Milestone 3 is the father of Dermalog’s business analyst. This might, of course, be entirely coincidental.

In its latest memo, the COA gives the LTO 15 days to clarify the adverse observations. Failure to satisfy the COA will lead to disallowances.

Within the contract period, the contractor was supposed to deliver an efficient LTO that provides the public the convenience of online transactions. That should at least bring some relief to the insane LTO procedures that require motorists to spend a day each year crawling under their cars scratching stencils of body numbers.

There is an American aphorism that says: If life gives you lemons, make lemonade.

But we should not do that with taxpayer money.