SC issues TRO on P268.8-million Smartmatic contract

MANILA, Philippines — The Supreme Court on Tuesday stopped the implementation of the Commission on Elections’ (Comelec) P268.8-million extended warranty contract given to Smartmatic-Total Information Management Corporation  (Smartmatic-TIM)

The contract awarding the contract to Smartmatic for the diagnostics, repair and refurbishment of the Precinct Count Optical Scan (PCOS) machines was made under Comelec resolution 9922.

Voting 12-2, the high court “issued a temporary restraining order to enjoin the implementation of the extended warranty contract (Program 1) effective immediately and until further orders from the court.”

Chief Justice Maria Lourdes Sereno and Associate Justice Presbitero Velasco dissented believing that an oral argument should be conducted first before issuing the TRO.

The High Court issued the restraining order following separate petitions filed by Automated Election System Watch (AES) and the Integrated Bar of the Philippines (IBP).

AES and the IBP said there was a need for the high tribunal to nullify Comelec Resolution 9922 for violation of the Constitution and of Republic Act 9184, or the Government Procurement Reform Law.

“It bears emphasizing that the aforesaid resolution clearly contravened Republic Act 9184 … as it brushed aside the requirement of a competitive bidding, not to mention that it dangerously set the stage for Comelec to resort to direct contracting with Smartmatic-TIM, to the detriment of public interest,” AES said.

IBP said Comelec committed grave abuse of discretion in approving Resolution No. 9922.

“Comelec’s approval [of the contract] constitutes grave abuse of discretion as it grossly violates the requirement of public and competitive bidding under RA 9184 which was enacted to ensure transparency in procurement processes conducted by the government,” IBP’s petition said.

The Comelec has said that it skipped public bidding due to time constraint. But IBP and AES said the reason given by Comelec was not among the conditions allowed for engaging in a direct contract.

Under the Procurement Act, direct contract is allowed only when the goods to be bought can exclusively be obtained from the proprietary source; when the procurement of critical components from a specific manufacturer, supplier or distributor is a condition precedent to hold a contractor to guarantee its project performance, in accordance with the provisions of his contract; or, goods can only be bought to a dealer or manufacturer that does not have sub dealers selling at a lower price.