Smartmatic loses, wins in biddings | Inquirer News

Smartmatic loses, wins in biddings

The Commission on Elections (Comelec) on Tuesday declared a failure of bidding for the repair and refurbishment of more than 81,000 precinct count optical scan (PCOS) machines, a development that some lawmakers fear could lead to a return to the manual count of votes.

A few hours after declaring a failed bidding, the Comelec also made a ruling on a previous bidding for the purchase of 23,000 optical machine readers (OMR). The Comelec reversed a ruling disqualifying Smartmatic-Total Information Management (TIM) Corp. virtually making it the winner in the bidding for 23,000 OMR machines that will be used in the 2016 polls.


Comelec’s special bids and awards committee 2 (SBAC2) chair Jubil Surmieda explained why the bidding failed. “Nobody submitted a bid. Three companies bought bid documents but none of them submitted a bid. Under the rules, that’s equivalent to a failure of bidding,” Surmieda said at Tuesday’s submission and opening of bids for the P2-billion project.

The three companies that purchased bid documents were Smartmatic–TIM, Indra Sistemas SA and Vertex Business Applications Inc.


The reuse of the 81,896 PCOS machines to be supplemented by 23,000 OMR units is one of the two options being considered by the Comelec for the May 2016 elections.

The other option involves the use of all new OMR units—a combination of the 23,000 and 70,977 OMR units.

Return to manual

A return to manual elections may be inevitable if the Comelec fails to find a solution to its bidding troubles, a vice chair of the House suffrage and electoral reforms committee said.

Caloocan Rep. Edgar Erice said time was running out after the Comelec declared a failure of bidding for the refurbishment of the existing 81,000 PCOS machines, which were planned to be used in the 2016 elections.

“Well, if they will not be able to find a way to bid for automation asap, then Congress must amend the election law that will allow manual elections. Otherwise, it will be unthinkable,” he said, referring to Republic Act No. 9369, which provides for automated elections.

Bayan Muna Rep. Neri Colmenares said he couldn’t understand why the Comelec seemed to be so “obsessed” with PCOS machines, which would require the government to shell out P14.5 billion.


“Why is the Comelec so obsessed with PCOS when there are anomalies happening every election because of this?” the senior deputy minority leader said.

‘Hybrid is manual’

“The only option now is not to use PCOS, especially since many PCOS machines malfunctioned in 2010, which doubled in 2013. In 2016, they’re going to use same machines. I won’t be surprised if more than 40 percent of the machines malfunction. So this proposal is dangerous,” Colmenares said.

He called on the House leadership to fast-track House Resolution No. 2073 to use the hybrid system using both manual and computerized systems.

Cesar Flores, Smartmatic-TIM president for Asia-Pacific, said a return to manual elections would represent a return to slow results and would again open threats to and coercion of teachers and the board of election inspectors (BEIs).

“BEIs will have to work all night long under difficult conditions and exhaustion, which also can influence the accuracy of the count. Lastly, on top of the vulnerabilities of the manual counting, an additional vulnerability is added into the mix, which is the discretion of the person encoding the results in the computer,” Flores said.

“In my opinion, hybrid is just a polite word for manual elections,” he added.

Budget cut

Smartmatic-TIM said it decided not to participate in the public bidding for the PCOS refurbishment after the poll body reduced last week the budget for the contract.

The original budget for the refurbishment project was P2.88 billion. But on June 23, SBAC2 announced that it was reducing the approved budget for the contract by P805.91 million after the project’s component for the replacement of PCOS units beyond repair with new machines was removed.

In a letter to SBAC2, Smartmatic-TIM said: “We reiterate our commitment to the Comelec and the Philippines that we are ready and willing to perform these refurbishments. It is important, however, that the right prices are considered and the herculean tasks to be performed are acknowledged and properly compensated.”

“As you can see from the overall description of the activities and parts involved in the refurbishment and upgrade of the existing PCOS machines, the new proposed budget of P11,141 per PCOS unit is completely unrealistic,” Smartmatic-TIM added.

Vertex failed to meet the deadline set by the Comelec apparently also because of the changes made in the budget for the contract.

“With the recent release by your office of the amendments and revisions issued, in our opinion, the set lead time for providing a meaningful and high-quality proposal is too short, especially considering the scope and complexity of this project,” Vertex said.

“We, hereby, respectfully request permission to withdraw our bid from consideration due to limited time and other constraints to meet the expected requirements to comply with for the opening of bids,” it added.

Indra, on the other hand, did not submit any explanation for not participating in the bidding process.

Only two companies—Indra Sistemas SA and Smartmatic-TIM—submitted bids for the 70,977 OMR units during the separate submission and opening of bids conducted by the SBAC 1.

Dermalog Identification Systems earlier purchased bid documents but did not submit a bid for the P7.87-billion project.

While it declared a failed bid for the refurbishment, the Comelec ruled in favor of Smartmatic’s protest which allowed it to win the contract for 23,000 OMR units.

“Wherefore, the instant protest is hereby granted. Accordingly, the commission hereby declares the joint venture of Smartmatic-TIM Corp. as the bidder with the lowest calculated responsive bid in connection with the public bidding for the lease with option to purchase of 23,000 new units for use in the May 9, 2016, national and local elections,” the Comelec en banc said in a 12-page resolution.

In May, the Comelec’s bids and awards committee (BAC) disqualified Smartmatic-TIM during the postqualification evaluation stage of the first round of bidding after the multinational company failed to submit valid articles of incorporation. It’s demo unit also failed to meet the requirements of the project.

Subsequently, Smartmatic-TIM filed a protest in the Comelec en banc in the hope of reversing the BAC decision.

On Tuesday, with 4-2-1 votes, with the majority voting to grant the protest but wishing to explore the possibility of further reducing the lowest financial bid submitted, the Comelec said the decision was based on the results of the demonstration conducted by Smartmatic-TIM before the en banc regarding the capability of the proposed OMR machine to simultaneously store data.

The en banc said it found the OMR demo machine compliant with the requirements of the P2.5-billion project.

“We clarified with BAC if there was anything else to do and they informed us that all postqualification [activities] have been finished. The notice of award will now be given to Smartmatic-TIM and we will now proceed to discussions on the contract,” Commissioner Christian Robert Lim said at a press briefing.

“If Comelec and Smartmatic will be able to agree on the contract, then we will issue a notice to proceed with Smartmatic in so far as 23,000 OMRs are concerned,” he said. “We are looking at two to three weeks of discussion. If you follow the normal course, then that’s when you will issue the notice to proceed.”

The Comelec en banc decision also means that the second round of public bidding for the 23,000 OMR machines is already terminated.

In a statement, Smartmatic said the poll body’s decision proved what it had been saying all along.

“The reversal validates what we have always asserted—that our system is indeed 100-percent compliant, with all the technical requirements of the RFP (request for proposal), and ready to be deployed in the 2016 national elections,” Smartmatic-TIM said.

“Now that this issue has been settled, we are both humbled and proud to again be chosen as a supplier of election technologies in the Philippines. We cannot wait to buckle down to work and help the Comelec with the serious task of preparing for the 2016 elections,” it added.

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TAGS: bidding, Elections, failed bidding, Smarmatic
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