DOTr agrees to pay LTO’s P8-billion debt to Stradcom

The Department of Transportation (DOTr) has agreed to pay P8-billion in debt owed by the Land Transportation Office (LTO) to its information technology (IT) systems provider, ending years of court disputes and paving the way for the government to look for a new systems provider that would help the agency’s modernization program.

Under the year-long phaseout agreement entered into by the DOTr with Stradcom Corp. on Friday last week, the government would settle its debt to the company following payment rules set by the Commission on Audit.

In turn, Stradcom has agreed to help out the agency in migrating its data and computer operations to the LTO’s next IT provider, and also turn over to the government its source code and database.

Migration

The DOTr said on Tuesday that it would take two years at most to migrate data to a new IT systems provider. It noted though that under their agreement, Stradcom was still qualified to bid to become LTO’s IT systems provider handling the agency’s hardware, software and data component requirements.

Once a new IT system has been put in place, the DOTr said it hoped that it would be able to provide a “sustainable solution” to the issues confronting the current system.

It added that this would also interlink with the Land Transportation Franchising and Regulatory Board’s (LTFRB) automation system to help “eliminate cases of [public utility vehicles] securing an LTFRB franchise without LTO registration, as well as PUVs that are registered with the LTO but do not have an LTFRB franchise.”

“It will also make it easier for authorities to recover stolen vehicles, trace smuggled vehicles, prevent double registration and monitor unregistered vehicles,” the DOTr said in a statement.

From July to November, 579 colorum (those operating without a franchise) vehicles have been apprehended by the LTFRB. This accounted to 57
percent of the 1,021 vehicles apprehended since January 2014.

Since 1998, Stradcom served as the LTO’s IT systems provider. In 2011, the agency ordered the procurement of an P8.2-billion IT system, but because of the “bidders’ failure to qualify for the project’s broad scope,” the contract was divided a year later into two.

One contract was worth P3.4 billion and was for software and data components, while the second P4.8-billion contract was for hardware components.

However, the DOTr said that due to Stradcom’s internal ownership disputes, a Quezon City regional trial court issued a temporary restraining order delaying the bidding process. While the order was in effect, the company’s contract expired in February 2013.

The DOTr said the government decided to then extend Stradcom’s contract through emergency procurement, as set forth in the Government Procurement Reform Act, to avoid the LTO from reverting to manual operations, thereby disrupting transactions.