Losing bidder raises questions on P3.8-B license plate deal

by Reinir Padua, The Philippine Star

Posted at Aug 11 2013 09:43 AM | Updated as of Aug 11 2013 05:43 PM

MANILA - A losing bidder in the license plate standardization program has raised a howl over alleged irregularities in the bidding of the government’s P3.8-billion project.

The company, Marianing & Sons Development Corp., in a series of letters to government officials, some of which even reached Malacañang, has questioned the splitting of the project – after the first bid invitation – into two components, which the company alleged was done to accommodate a “financially incapable” bidder.

“A minute and microscopic scrutiny of these General Bid Bulletins would now readily reveal that these were drawn out and formulated by the BAC (Bids and Awards Committee) to suit a particular bidder to be favored to win and eventually bag the award of the contract,” lawyer Leo Romero, who represents the losing bidder, said in a letter to Transportation and Communications Secretary Joseph Emilio Abaya dated Aug. 1.

The letter was the most recent one sent out by Romero to Abaya. Copies of the same letter were sent to President Aquino, the Office of the Ombudsman, and the Commission on Audit.

In an interview with The STAR on Tuesday, Romero tagged the action of the DOTC’s Bids and Awards Committee in splitting the project supposedly without re-advertisement as “illegal.”

“Some people in the bureaucracy are nurturing and fostering a culture of criminal impunity,” Romero said.
In the Aug. 1 letter, Romero sought an investigation “to pinpoint culpability in order that the appropriate administrative and criminal actions can be instituted against the identified responsible parties.”

“The failure and refusal to act on this matter by your Honorable Office may be perceived as one that condones and overlooks the unlawful actions of the BAC. Worse, the inordinate delay and continuing inaction of your Honorable Office may be interpreted by some quarters as a direct participation in this unlawful enterprise,” Romero told Abaya.

Dutch company JKG

The winning bidder in the contract is a Dutch company, J. Knieriem B.V. Goes (JKG), whose net income in 2011 was only 215,068 euros, Romero alleged.

Citing a financial document in 2011, Romero alleged that the company only has 45 employees.
“How can a company that small undertake a government project this huge?” Romero said.

He said the firm could not have satisfied the requirement that a contractor must have undertaken contracts in the past worth at least 50 percent of the project cost and a single contract equivalent to at least 20 percent of the current project.

“That is even assuming all the contracts undertaken by the Dutch company were all similar to this plate standardization project in the Philippines,” Romero said.

Standard plates with security features

Under the plate standardization program, the new vehicles plates will have bar codes among other security features.

These features will include the plate number, engine number, chassis number, serial number, number of plate locks, and the third plate sticker.

In past interviews, executives of the Land Transportation Office (LTO) said the new plates would be installed through one-way metal screws that are said to make the plates permanently attached to the vehicles.

For public utility vehicles, the new plates will even state the routes to address the problem of “colorum” vehicles or those either plying outside their routes or without franchises.

LTO officials had also said the new plates would also state the region where the license plate was issued.

P3.8-B project divided into two lots

The DOTC-BAC published the invitation to bid for the supply and delivery of the new plates last Feb. 22, indicating the amount of P3,851,600,100 as the approved budget for the contract.

But the invitation to bid was amended through General Bid Bulletin No. 003-2013 dated March 6, 2013.

Under this, the project was divided into two “lots.” The first one was for motor vehicle plates (5,236,439 pairs of plates amounting to P2,356,397,550). The second lot was for motorcycle plates (9,968,017 plates for motorcycles worth P1,495,202,550).

In a letter to DOTC Undersecretary Jose Perpetuo Lotilla, chairman of the BAC, dated April 1, 2013, Romero manifested his client’s “most serious and well-founded reservations and apprehensions on the regularity, validity and legality of the public bidding of the project.”

Romero cited the Implementing Rules and Regulations (IRR) of Republic Act 9184 that requires the re-publication of the invitation to bid for the splitting into lots regular.

Romero also wrote to lawyer Dennis Santiago, executive director of the Government Procurement Policy Board, on April 26 to seek clarification on the matter.

Romero argued that “the non-disclosure of the ABC (approved budget for contract) for the two lots in the published Invitation to Bid, Instruction to Bidders and the Bid Data Sheet contravenes the policy of transparency, objectivity and non-discretionary criteria established under Republic Act 984 and its Revised IRR.”

“Thus, although it may appear that there is still no evidence of collusion or that the conditions imposed by the BAC are to be made as the basis of a fraudulent award, it cannot be gainsaid that General Bid Bulletin No. 003-2013 was arbitrarily issued and the entire bidding procedure did not comply with Republic Act 9184 and its Revised IRR,” Romero said.

‘Re-publication needed’

The lawyer said a single project subject of bid invitation could not be divided into two lots through “the simple expedience of issuing a General Bid Bulletin.”

Romero then said the bid invitation should be withdrawn and declared by the BAC as a “failure of bidding.”
But Santiago responded and issued an opinion that the action of the BAC in dividing the project was in accordance with the law.

“We are of the view that it is not necessary for the DOTC to re-advertise the revised IB (Invitation to Bid) for the project, as the original IB that was advertised already provided necessary and relevant information that would sufficiently notify the public of the procurement opportunity, including the relevant components and the corresponding ABCs for each of these components; and the Bid Bulletins issued thereafter merely set to clarify that the DOTC intends to receive offers for each of the two components of the LTO MV Plate Standardization Program,” he said.

“Clarifications or modifications to the bidding documents through the issuance of Supplemental/Bid Bulletins by the procuring entity are sanctioned by the procurement law and the associated rules and regulations without need of further re-advertisement of the IB,” Santiago said in a letter to Romero dated June 11.

However, Romero said that since it was a question of policy, Santiago should not have issued the opinion on behalf of the whole board.

“The entire membership of the GPPB should have signed that,” Romero said.

GPPB resolution

Romero also found a resolution issued by the GPPB back in April 2005, which he said mandates the re-publication.

The GPPB’s Resolution No. 07-2005 (Providing for the Rules on Adjustments in the Approved Budget for the Contract) states: “Upon re-adjustment of the ABC, the procuring entity must conduct re-bidding with re-advertisement /posting. Any succeeding adjustments of the ABC shall be in accordance with these guidelines.”

“What was abominable and reprehensible was for both the DOTC-BAC and Atty. Dennis Santiago... to issue a contrary opinion when they had full and unmitigated knowledge of GPPB Resolution No. 07-2005. From this circumstance alone, one can safely surmise that there was a concerted effort to cause irreparable damage and loss to the government due to a nefarious and immoral consideration,” Romero alleged.

In an earlier letter to Abaya dated July 8, Romero said, “The BAC was earnestly praying and incessantly knocking at the gates of hell that no one will get wind of the GPPB Resolution No.07-2005 in order that it can proceed with criminal impunity.”

Romero said the presumption of the “regular performance of official duties” by the DOTC- BAC that it can divide the project into two without re-advertisement “has been contradicted and overcome by insurmountable evidence as shown by the pertinent provisions of the GPPB Resolution No. 07-2005.”

“From the above, we can solely give meaning to the actuations of the BAC that it is proceeding on a nefarious consideration which undoubtedly will result in the plunder of government funds, the betrayal of public service and not the probity, honesty and integrity that are embodiments of a ‘public trust,’” Romero said.

A copy of the same letter was given to President Aquino.
In the letter, Romero asked Abaya to withhold his signature or approval of any recommendation by the DOTC-BAC. He also asked the DOTC secretary to reject any and all bids and declare a failure of bidding.