Pimentel seeks Senate probe on LTO's 'undue payment' to IT provider | Inquirer News

Pimentel seeks Senate probe on LTO’s ‘undue payment’ to IT provider

By: - Reporter / @MAgerINQ
/ 10:31 AM August 17, 2022

MANILA, Philippines — Senate Minority Leader Aquilino “Koko” Pimentel III has asked the Senate to look into the alleged “undue payment” given by the Land Transportation Office (LTO) to a joint venture in connection with a P3.19-billion Road IT Infrastructure project.

He sought the probe by the Senate blue ribbon committee through Senate Resolution No. 147 filed Tuesday.


In the resolution, Pimentel cited a Commission on Audit (COA) report supposedly showing that the LTO gave “undue payment” to its foreign information technology (IT) provider Dermalog despite incomplete turnover of deliverables for the P3.19-billion Road IT Infrastructure project.

The said project was awarded in 2018 to the joint venture of Dermalog Identification Systems, Holy Family Printing Corp., Microgenesis and Verzontal Builders, Inc.


“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,” Pimentel’s resolution read.

The core applications include the Driver’s Licensing System and the Motor Vehicle Inspection and Registration System, which were included in Component A of the said IT project also known as the Land Transportation Management System.

Even before the acceptance of the core applications by the LTO, there were already 25 existing “issues” reported on these core applications which remained unresolved as of December 9, 2021, the resolution pointed out, still citing the COA’s report.

“This is disadvantageous to the government as the core applications were already paid when such have yet to function and operate as intended,” it then said.

These unresolved issues have reportedly caused disruptions in the operations of various LTO sites.

“Unsurprisingly, there have been complaints of slow processing of documents in getting driver’s license and its renewal, as well as registration of vehicles, which have been attributed to its new IT system,” the resolution further noted.

Pimentel pointed out that as general rule under Memorandum Order No. 172 on the rules on advance payment, “no payment shall be made for services not yet rendered or for supplies and materials not yet delivered under any contract with the government.”


And as a basic rule in procurement contracts, the senator stressed 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.”

“It is thus imperative for the LTO to explain why full payment has been made to the vendor of this IT system which has unresolved issues and are clearly not working as intended and is causing massive disruptions to the LTO processes in clear violation of the procurement and auditing rules and to the disadvantage and detriment of our government and country as a whole,” he said in the resolution.

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TAGS: LTO, Pimentel, Senate probe
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