OSG defends purchase of PCOS machines

MANILA - Solicitor General Francis Jardeleza defended the Commission on Elections' (Comelec) decision to purchase automated election systems (AES) provider Smartmatic-TIM's precinct count optical scan (PCOS) machines before the Supreme Court (SC) as the oral arguments on the questioned sale continued on Tuesday.

Addressing magistrates of the high tribunal, Jardeleza said the Procurement Law was not violated when the poll body and Smartmatic-TIM entered into a Deed of Sale last March 30, a day before the deadline of the extension of the option to purchase unilaterally set by Smartmatic-TIM.

Jardeleza further said the decision to exercise the option to purchase the machines leased by Smartmatic-TIM to the Comelec for the May 2010 presidential elections is "beneficial" to government.

The original deadline for the option to purchase the machines was on Dec. 31, 2010, as contained in the original AES contract for the 2010 polls.

The purchase costs P1.8 billion covering some 82,000 counting machines. The machines will be used in the 2013 mid-term elections.

"We submit that the option was valid, it was subsisting, it was amended. And even arguing that the period had expired, it was extended by parties (Comelec, Smartmatic-TIM). There is nothing illegal in an amendment," Jardeleza said in his presentation.

Jardeleza said that the "spirit of the Procurement Law" rests with contracts and transactions beneficial to government.

Jardeleza reminded the high court of its decision in 2009 finding no grave abuse of discretion on the part of the poll body in availing of Smartmatic-TIM's automated election system.

"In 2009 this issue was brought before you and in 2009, your honors decided that there was no grave abuse of discretion on the part of Comelec to use the Smartmatic PCOS machines. In 2009, the records before you was less... Today, the same petitions are brought before you. Many procedures have [since] been done, many steps have been done," Jardeleza argued.

"There is much, much more evidence today on record to give you comfort that once again, that under these trying circumstances, the Comelec has no other choice but to go ahead with the PCOS machines," he added.

In spite of problems encountered with the use of the machines in 2010, Jardeleza assured "fixes" were done to address these "non-critical problems.

"A very good deal"

Jardeleza stressed that the Comelec made a "very good deal" in purchasing Smartmatic-TIM's machines.

"Our argument is -- it is very, very advantageous to the government especially now [with] the reality of the budget [for the 2013 elections] at P7 billion. This is pure financial, commercial benefit to the government," Jardeleza said.

Associate Justice Teresita Leonardo-De Castro, however, wanted to find out if the original AES contract between Comelec and Smartmatic-TIM inked in 2009 for the automation of the May 2010 polls had already expired. She said this was critical since no extensions on any provision in the contract may be made if it is already "dead."

The magistrate asked Jardeleza when the performance security bond was released to Smartmatic-TIM, which, in turn, would mean the contract had already been terminated.

"When was the performance security released? Was it before or after the exercise of the option [to purchase]? We have to know when the contract expired... because you cannot extend an expired contract. It is the expiry that is very critical... you go back to the question on whether this is an extension or a resurrection of an expired contract," De Castro said.

"It is important for you (Comelec, Smartmatic-TIM) to justify to the Court why you consider this an extension of the Procurement Act when this does not come under the general concept of extension which is extending something which is alive. You do not extend something that is already dead," she added.

To which Jardeleza said: "Even assuming that it is a dead contract, if this was a purely civil law contract and the vendor is willing to resurrect a dead contract, under the civil law, there is nothing to prevent it."

De Castro: 'Beneficial to whom?'

De Castro also questioned Jardeleza's claim that the exercise to purchase was "beneficial" to government."

"The offer came from Smartmatic, it did not come from Comelec. So it would seem like to the benefit of Smartmatic," she pointed out.

Jardeleza admitted that Smartmatic-TIM was "not purely noble" in extending the option to purchase, but argued that "under the circumstances, what can P2.2 billion (amount allocated for lease or purchase of counting machines for 2013) buy or lease?"

Chief Justice did not attend this morning's oral arguments, but he was expected to be present in the afternoon session which started at 2 p.m.

Associate Justice Jose Perez was also on leave.