One bidder reenters, more to follow suit

And then there were two — again. The Comelec readmitted Saturday night into its poll automation bidding a consortium previously disqualified for insufficient documents. Re-qualified by the special bids and award body were partners, US-based Electronic Systems and Software (ES&S) and local AMA Group. Its bid will be opened Monday morning.

ES&S-AMA earlier flunked for not backing up a claim of having sold in the past at least half of the Comelec’s present automation budget of P11.3 billion. It had submitted a certificate of acceptance (of project completion) from the state of North Carolina, but imperfect papers from Minnesota and Michigan. Last weekend the Comelec bid managers accepted ES&S-AMA’s line that, per the rules, such papers can be verified after bid opening.

ES&S-AMA’s reentry poses a challenge to the joint venture of foreign Smartmatic International Corp. and local Total Information Management. ES&S is America’s top election machine maker, supplying 40 percent of units ordered by the 50 states; AMA runs RP’s largest computer training network. Earlier last week Smartmatic-TIM became the last man standing when the Comelec disqualified the team of Indra Sistemas and Strategic Alliance Inc. Smartmatic-TIM had turned in a bid of P7.2 billion, hooted as “outrageously low” because 37 percent way down the Comelec’s P11.3-billion reserve. Indra-Strategic fell in bidding P11.2 billion, but only for 50,000 ballot counters instead of the Comelec’s needed 82,200.

ES&S-AMA’s re-qualification can also embolden another US firm to ask for equal treatment. The Comelec had ditched Sequoia Voting Systems and local partner Universal Storefront Services Inc. for not having a license to import. Last week Sequoia-USSI posted a non-refundable P113-million bond (1% of the projected amount) to be able to move for reconsideration. It argued that while the newly incorporated joint venture does not have the requisite license, the mother firm does and thus suffices to comply with bidding rules. After all, a parent naturally will help the subsidiary succeed. Bidding officers at first affirmed the motion, but moments later changed their mind. The joint venture’s lack of import license, they ruled, is akin to the MegaPacific affiliate in the Comelec’s failed computerization of 2003. Theirs was a misreading, however. In 2003 MegaPacific was able to import the voting machines. But the Supreme Court nonetheless trashed the deal because of the lopsided bidding. Still, with last week’s Comelec ruling, Sequoia-USSI forfeited P113 million.

Sequoia-USSI can ape ES&S-AMA’s tack, though. Having previously lost P113 million on a failed motion for reconsideration, what the latter later filed was a motion for clarification, which comes free. Bidding observers view the Sequoia-USSI subsidiary’s lack of import license as a lighter technicality than ES&S-AMA’s documents. And it is nothing compared to the questioned “proof” of past contracts that Smartmatic-TIM had given. The Smartmatic-TIM papers had significant portions blacked out. Even the name of the contracting Smartmatic affiliate and the contract amount were inked over — and yet the Comelec had accepted it.

A third losing American bidder has pointed up other flaws in the Smartmatic-TIM papers. Avante International Technology Inc. said that Smartmatic’s business plan was in breach of bidding rules. From its papers, Smartmatic will subcontract the assembly of ballot counters to 10 percent-owned Taiwanese affiliate Jarltech International. The latter will then subcontract anew to fellow-Taiwanese Kenmec Mechanical Engineering Co. The Comelec will lose control of the process, warned Avante, supplier of the Comelec precinct counters in last year’s Muslim Mindanao election.

Yet another loser, F.F. Cruz & Co., is using Smartmatic-TIM’s own submissions to warn of bid failure. The firm complained to the Comelec that TIM is not truly a 60-percent domestic partner, as RP laws and bidding rules require. Computing from net financial contracting capacity from balance sheets, it said TIM owns only 40 percent of the venture. The bank letter of credit allegedly does not comply with the rules.

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When news broke that Gloria Arroyo’s assets grew by P44 million in 2008 from 2007, Malacañang’s first instinct was to defend it. Supposedly the President became so much richer because she had sold three hectares of land. Then the Palace realized the mistake. If Arroyo sold land, she must have previously owned it. In which case, it should have been listed in 2007 as real estate asset with corresponding value. Selling it in 2008 would have transferred the asset into the cash column. So to have a P44-million increase in total assets due to land sale, she must have made tremendous profit. But the problem is that no major land transfer with such markup transpired in 2008; otherwise, the buyer would have registered it for titling and Arroyo should have paid equally tremendous capital gains tax. The story wouldn’t hold water. So Malacañang changed it to Arroyo supposedly profiting from stock market placements.

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