MANILA, Philippines ? The Commission on Elections (Comelec) will ?call off? its deal with the winning bidder for the 2010 election automation project if the technology firm fails to submit its incorporation papers by Friday, Comelec Chairman Jose Melo said.

At the same time, Melo ordered on Monday the suspension of negotiations between the Comelec and the consortium of Smartmatic and Total Information Management (TIM), two days before the scheduled contract signing on Wednesday.

?The contract signing was supposedly Wednesday, two days from now. But up to now, the winning bidder consortium of Smartmatic and TIM has not submitted the incorporation papers. If by Friday they fail to submit the required papers, we may call off the whole deal because it must be too late,? Melo said.

?Effective today [Monday], I am ordering the suspension of the contract negotiation unless the incorporation papers are submitted. The incorporation papers are needed so we know to whom we are dealing it, in fact it should have been submitted before the negotiations on the contract started. Without it, we don't know if we are dealing with a ghost or what,? Melo added.

If the Comelec calls off the deal with Smartmatic-TIM, it will look into partial automation or continuing manual elections as a last option, Melo said, adding a second bidding was out of the question due to time constraints.

Smartmatic-TIM tendered a P7.2-billion bid for the P11.2-billion automation project. Under the agreement, the consortium will lease 82,200 counting machines to the Comelec.

Despite Melo?s pronouncement, the chairman of the Comelec Special Bids and Awards Committee (SBAC), Ferdinand Rafanan, said he was still drafting the contract with Smartmatic-TIM.

?As far as I am concerned I have until Wednesday to have the contract signed but the chair [Melo] expects the incorporation papers by Friday. In the meantime, we are dong the contract and I am rushing the bidder to submit their papers this week as they promised,? said Rafanan.

Smartmatic international sales director Cesar Flores said the firm was ?not backing out? from the automation deal. He said Smartmatic has signed its joint venture agreement with TIM and was awaiting TIM?s papers.