Comelec yields total control over PCOS delivery

By Aries Rufo, Newsbreak

Posted at Mar 15 2010 06:55 PM | Updated as of Mar 17 2010 03:53 AM

Last of 2-part series

MANILA, Philippines—Commission on Elections (Comelec) chair Jose Melo has admitted that he’s having sleepless nights over the first nationwide automation of the polls.
The nightmares could have been triggered by the fact that Melo, a retired justice, is clueless on what exactly is happening with the project.
One glaring proof of this is when he told reporters last week that the Comelec had signed contracts with the 3 forwarding firms for the deployment of the Precinct Count Optical Scan (PCOS) machines and the ballots.
One, it is Smartmatic, the private entity contracted to supply the counting machines, that is directly dealing with the 3 forwarding firms machines. In effect, the Comelec—going against the poll automation law—has surrendered “exclusive control and supervision” of the elections.
Two, the companies that will deliver and track the ballots have yet to be identified. The bidding for such services is on hold.
The Comelec, however, would say that it exercises this supposed “exclusive control and supervision” through the multi-sectoral steering it had formed to oversee the projetc. It is chaired by Commissioner Gregorio Larrazabal.
However, the blueprint of the deployment of counting machines, for instance, clearly shows no direct involvement by the poll body. It is Smartmatic determining the details of the delivery.
The task has been assigned to layers of subcontractors with limited track record and with no direct accountability to the Comelec, thus exposing the deployment strategy to infiltration or influence by partisan groups.
Election observers explain what could happen to the PCOS: A party seeking to cheat will only have to gain access and manipulate a few hundreds of machines to win a national race. One machine is calibrated to read 1,000 ballots. Thus, 1,000 manipulated machines can easily cough up 1 million pre-determined votes.
In a tightly contested national race, a few hundreds of manipulated PCOS can provide a national candidate’s lead.
In local races, destroying a few PCOS meant for certain precincts can disenfranchise thousands of supporters of certain candidates.
Where is TIM?

Another concern raised by election observers is that, apart from the steering committee, nobody else putting in check Smartmatic, a foreign company. Its Filipino partner, Total Information Management (TIM), has been relegated to a secondary role, if not paralyzed.
While it supposedly is the majority owner (60%) of the joint venture—to comply with requirements under the Philippine Constitution—to automate the polls, TIM has not been assigned any role in the project.
“Essentially, TIM does not know the status on the implementation of the automation,” a source privy to the joint venture said.
Smartmatic spokesman Cesar Flores Zavarce, in an interview, said TIM is updated on the project in board meetings. “Nothing is done without TIM’s knowledge,” Zavarce said.
Pressed to name at least one part of the automation project that TIM is overseeing, Zavarce referred Newsbreak to the automation contract, saying this governs its relationship with TIM.
Larrazabal, in a separate interview, echoed Zavarce’s statement.
Newsbreak sought TIM president Jose Mari Antuñez for comment, but he declined to be interviewed.
A source from TIM said, however, “Smartmatic does not allow TIM to handle anything.”
The TIM source confirmed that TIM is updated during board meetings, “but that’s it. We get to be informed after the fact.”
Yet, if the automation project fails, TIM is jointly and severally liable for liabilities. “That’s why I initially refused to sign the contract,” Antuñez told Newsbreak in a previous interview.
The unequal division of labor and responsibility in the project triggered the spat between Smartmatic and TIM earlier, leading TIM to almost backing out of the venture. Foreseeing the scenario of Smartmatic calling all the shots, Antuñez had refused to sign the contract.
But Comelec, pressured by deadlines, intervened and threatened TIM with legal suits if it backed out.
Logistics, not technical

Smartmatic’s partnership with TIM was not only meant to comply with the constitutional requirement that the consortium should be majority controlled by a Filipino firm. TIM, as the local partner, is also supposed to be on the frontlines in dealing with local companies to be tapped for various aspects of the project.
However, such has apparently not been the case in the delivery of the PCOS machines.
The automation contract states that the joint venture partner with the longer track record in automated polls shall be in charge of the technical aspects of the project. That would be Smartmatic, which has been involved in automating polls in other countries.
But, the TIM source pointed out, “The choice of the forwarding firms…is more logistic than technical.” Yet, “Even that, it was Smartmatic that decided.”
Newsbreak research shows that 2 of the 3 forwarding firms contracted by Smartmatic—for much bigger regions at that—have mid-level capacity. They lack equipment and manpower required for a big project like this, so they will, in turn, sub-contract the job to smaller firms in the regions and provinces.
The forwarding firms are answerable only to Smartmatic. The sub-contracted companies, like trucking and warehousing firms, are answerable only to the forwarding firms.
Although the automation contract between Comelec and Smartmatic-TIM states that the “performance of portions thereof by other persons or entities not parties to this contract shall not relieve the provider (Smartmatic-TIM) of…obligations and concomitant liabilities,” Comelec’s lack of direct involvement in the nitty-gritty of the implementation has raised concerns.
The automation law mandates that the Comelec “shall have exclusive supervision and control” of the elections.

Bragging rights

In separate interviews, representatives of the forwarding firms told Newsbreak that they intend to make the arrangement work. They are aware that stiff penalties and ruined company names await them if they bungle this.
Efren Zoleta, general manager of Argo International Forwarders Inc. that will service the Visayas and Mindanao, refutes the common notion that only big forwarding companies can pull off the job. He said those international couriers also tap smaller local companies like theirs for their local deliveries.
Zoleta also explained that tapping local contacts in the provinces makes sense “since they are more familiar with the terrain and the internal politics there.” This includes accessing areas controlled by rebels and warlords.
Zoleta said Argo had studied the operational plan for the deployment of the PCOS 2 years ago when it learned of the plan to automate the polls. “We’ve been planning this for 2 years already. We also have our contacts in the field to supply the requirements.”
He stressed that Argo was originally tapped by one of the losing bidders in the automation project.
Roger Nogales, counsel for Ace Logistics Inc. that will service Luzon (minus Metro Manila), agreed that scheduling of delivery is the key. “We will start with the remotest and most difficult areas.”
He said “there is little room for mistakes in the delivery since there is a high penalty.”
Zoleta said that more than the windfall from these contracts, it is the bragging rights that they delivered the PCOS that matters more. “We have all the reasons to pull it through because our reputation is at stake here.”
Germalin Enterprises Inc., which is servicing Metro Manila, said it’s the fear of failing that led to its prudent decision to take on a limited area.
Germalin executive assistant Ireneo Padrigon said the company wanted to concentrate its resources on its core competency. It is tasked to deliver about 8,000 PCOS in the NCR.
Padrigon said the company does not want to risk taking a project that would require them to outsource because “you wont have control.”
“To perform best, you must have control, of your personnel, or your equipment. We bid for NCR because that’s the limitation of our personnel,” Padrigon said. “There is no room for error.”
The Comelec better heed that advice. —Research assistance by Lilita Balane and Reynaldo Santos Jr. (Newsbreak)

First of 2 parts: Layers of subcontractors expose poll machines to risk