Not authorized to enter a joint venture? Laptop suppliers face scrutiny at Senate probe

FILE PHOTO: Grade 3 teacher Edmund John Gambon checks the performance of a government-issued laptop at Apolonio Samson Elementary School in Quezon City on Tuesday, August 9, 2022. The Department of Education said it would test if indeed the laptops need replacement. INQUIRER/GRIG C. MONTEGRANDE

MANILA,  Philippines — The joint venture that supplied the alleged pricey but outdated laptops for public teachers was scrutinized at Thursday’s inquiry of the Senate blue ribbon committee.

The government awarded last year the supply contract for the P2.4 billion worth of laptops to the joint venture of LDLA Marketing and Trading Inc., VSTECS (Philippines) Inc., and Sunwest Construction and Development Corp.

But senators learned during the committee hearing that one of the three companies involved – the LDLA – was not authorized to enter into a joint venture agreement (JVA).

READ: COA flags DepEd purchase of ‘pricey, outdated’ laptops

One by one, blue ribbon chairman Senator Francis Tolentino asked the representatives of the three companies if they were all authorized to enter into a JVA.

“Yes, Your Honor, under articles of incorporation,” Sunwest president Aderma Alcazar said, responding to the question.

Before this, Alcazar explained that while the company’s main line of business was construction, its revised articles of incorporation included trading and manufacturing as a secondary purpose.

READ: Teachers’ laptops at par with gov’t requirements — supplier

When asked the same question, LDLA representative Froilan Domingo told the committee that he was unfamiliar with the joint venture.

The committee’s general counsel, Gerard  Mosquera, supplied the answer for LDLA as directed by the panel chairman.

“There’s no specific provision to that effect, your honor, in the articles of incorporation so far from our review,” Mosquera said.

Tolentino then later declared that after scrutinizing the articles of incorporation of the joint venture, only Sunwest was authorized to enter into a joint venture.

“Kung hindi authorized ‘yung dalawa, saan mag jo-joint venture ito? Hindi naman pwede kang mag joint venture sa sarili mo,” he said.

(If the two are not authorized, can a joint venture exist? You can’t have a joint venture with yourself.)

“So BAC (Bids and Awards Committee), how were you able to determine the compliance with legal requirements of the three    personalities to enter into a joint venture agreement reaching a point that you recognized a  joint venture agreement which one corporation is just allowed to enter into? Di ba gumulo? the senator asked.

But BAC chairperson Ulysses Mora explained that the only requirement for the joint venture is an agreement or a notarized statement from all parties that they would enter into a JVA once they bag the contract.

However, each joint venture member would still be required to submit their own eligibility requirements and legal documents for review.

“Lahat po sila nagsa-submit. ‘Yun lang po ‘yung aming requirement sa amin sa BAC,” Mora said.

(They all submit that. That’s our only requirement in the BAC.)

Only later in the discussion was an official of VSTECS, Atty. Bong Bernas informed the committee that, like Sunwest, they are also authorized to enter a JVA.

“VSTECS is authorized to enter into a joint venture. It is so stated in three of its secondary purposes, Your Honor,” Bernas said.

Despite this, Tolentino said there is probably a need to amend some portions of the Corporation Code of the Philippines and the Procurement  Act.