IT projects new sources of corruption, says lawmaker

MANILA, Philippines - A senior administration lawmaker warned yesterday that major information technology (IT) projects are now the new sources of corruption in government as more and more agencies shift from manual transactions and documentation to computerized operations.

Western Samar Rep. Mel Senen Sarmiento said that due to the computerization of government database and document processing systems, corruption and “under-the-table” negotiations now appear to be also shifting to government contracts involving multi-million peso IT projects.

“What makes corruption in IT projects nearly undetectable is the fact that with the exception of those employed as IT professionals, the technical intricacies in IT such as software and hardware specifications, are almost alien to most non-IT people, and that includes heads of the country’s government agencies that rely heavily on IT-driven services,” Sarmiento warned.

He noted that many questionable practices in the bureaucracy, particularly in public works projects, have been stamped out because of the reforms and relentless anti-corruption campaign of President Aquino.

“However, due to its highly technical nature, IT has remained an attractive playground for government contractors trying to pull a fast one on the government and Filipino taxpayers,” he said.

He cited the case of the Bureau of Internal Revenue’s (BIR) recent awarding of an IT project that requires the simple management and maintenance of already existing database servers of the agency to a single company in the last several years.

He said it would be cheaper and more secure if the task were run by the BIR itself.

Sarmiento said entrusting the BIR’s Integrated Tax System, which contains highly sensitive information, to a private firm could be in violation of the agency’s charter.

“It is questionable as to why the BIR needed to outsource its data center providers which the taxpayers pay hundreds of millions per year... Outsourcing data management and processing of sensitive state information such as the tax information of every taxpaying citizen raises concern on the fidelity of the BIR in securing such sensitive information,” he said.

Sarmiento also noted reports of alleged monopolization of a single company called Philcox Inc. in multi-million IT projects at the BIR as the agency’s own IT specialists are apparently “trying to pull the leg of BIR Commissioner Kim Henares.”

“In fairness to Commissioner Henares whom I know as a person of unquestionable integrity, I think that she too is a victim of this scheme in IT because based on my information, Philcox has been around at the BIR even during the past administration. I really think that she should investigate deeper,” he said.

He said that based on records, Philcox has bagged no less than 17 IT contracts from the BIR alone.

Only last December, three out of four IT projects bidded out were by Philcox in a single day. A failed bidding was declared on the fourth project but the firm likewise secured the project when it was re-bidded last Feb. 6.

“IT managers and heads of technical working groups of these government institutions can easily connive with favored IT firms to turn the government’s growing dependence on IT as virtual milking cows and get away with it. And since IT is a highly technical field of specialization, it is very easy to manipulate bids by raising absurd eligibility requirements and unnecessary technical specifications,” Sarmiento said.

He added that while many agency heads have basic computer knowledge, they are completely dependent on the recommendation of their IT personnel, who on the other hand, can easily pull some schemes to connive with their favored software and hardware suppliers together with their favored partners to make money out of the IT projects.

Sarmiento said Henares should look into the allegations of manipulation of the BIR’s IT Projects, including reports that Philcox, in connivance with the some rogue employees of its server software and server supplier Oracle and the BIR’s Technical Working Group (TWG) have been tampering with bid documents to ensure that they can control the outcome of the bidding process.

He noted that contrary to the provisions of Section 18 of Republic Act 9184, otherwise known as the Government Procurement Act, the BIR’s recent bid opening this month of simple scanning, imaging and data center management stated that “the bidder must use the latest version of the Oracle Database Enterprise Edition (our existing core relational database management system) to qualify for the project” as this is tantamount to specifying a certain brand name.

“According to my sources, this requirement was inserted as a pre-condition to qualify in the bidding to ensure that only Philcox can qualify to bid,” Sarmiento said.

He said the BIR TWG also required confidential information violating Data Center’s company ISO policies just to block even the lowest bidders from being awarded certain projects.