Procurement

This deserves a very close look: for seven years now, the LTO has been procuring driver’s licenses without a valid contract.

RA 9184 or the Procurement Act requires all government procurement to be done on the basis of contracts concluded on the basis of transparent and competitive public bidding. We are not sure how the LTO could have gone on for seven years procuring driver’s licenses without a proper contract, but that seems to have been the case.

The relationship between the LTO and Amalgamated Motors Inc. (AMPI) has been a long one, stretching back to the Marcos years. AMPI produces the plastic card driver’s license we are all familiar with — the one that peels after a few months and fades long before expiry date. The firm is said to be owned by persons identified with a sect that wields tremendous political influence.

In 2003, the contract with AMPI expired. But the LTO continued procuring from the firm, conveniently avoiding the need to conduct competitive and transparent public bidding. That alone has to be a violation of existing laws governing public procurement. The transport agency, at the very least, owes the public an explanation for why this happened.

The deal is not a small one.

Each year, over three million driver’s licenses are printed and issued. The revenue flow from this transaction runs to well over P500 million per year. This is not a small chore and the profits are large.

In the seven years where no contract covered the printing of licenses, at least P3.5 billion worth of transactions were done. Government may be a large bureaucratic tangle, but how could something this large go on unnoticed?

The driver’s license serves more purposes than just certifying the holder to be fit to drive a vehicle on our streets. The license is often the most reliable instrument for identifying its holder. We submit our driver’s license when we apply for passports or open bank accounts. Because of that, we require this particular means of identification to be tamper-proof and consistent with global standards for such documents.

Many were surprised, therefore, when the idea was floated to bring back a paper-based driver’s license. In the age of laser cards and embedded chips, this seems a throwback to some forgotten time.

Bringing driver’s licenses back to paper departs from what has become global practice. There are now ISO grades for how identification documents ought to look like. Bringing our driver’s license back to paper will not only be an odd step. It will suggest corruption circumventing the technological edge.

Last June, finally, as the previous administration was preparing to exit, bidding for a new contract to supply driver’s licenses was finally scheduled — and then cancelled.

Competing bidders complained that the terms of reference for the bidding appear to be intended to give the old contractor overwhelming advantage over the others. The specifications were defined to suit the products of specific companies.

The bidding was re-scheduled for September 16. But the other potential bidders noted the same flaws as in the previous terms of reference. The specifications were tailor-made to suit a few companies and exclude new entrants to the supply contract.

This is against the spirit and letter of the Procurement Act. It is as if no real competitive bidding is intended.

Because of the complaints of potential new bidders, this second bid was again rescheduled. The terms of reference need to be drastically re-evaluated to make the bidding truly fair and above-board.

Unless this is done, we will be in danger either of retaining the obsolete technologies we have known for too long or even of stepping back to even more primitive technologies. In this age of rapidly developing information technologies, every new contract should reflect gains in science, bring better and more reliable systems of identification into play.

Perhaps the new leadership at the DOTC should step in and break the grip of syndicates in the agency along with their favored supplier. The purpose of public bidding is not to enshrine old technologies and keep them in use — in the process keeping old suppliers comfortably employed.

Both old and new suppliers ought to compete in an even playing field, enabling cheaper and better products to be made available to the public. The terms of reference ought not to enshrine the old ways of doing things, the old and often expensive technologies already in use.

Too, bidding is not just about price. It is about allowing new ways of doing things to come into play and given the chance to compete on even footing.

A lot, obviously, depends on the way the terms of reference are cast. Casting the terms of reference to protect the old way of doing things (and therefore the old suppliers) is often the means for frustrating the goals of procurement reform. The terms of reference ought to be forward-looking, well appraised of new developments in technology and abreast of trends.

Run-of-the-mill bureaucrats and agency insiders are, very often, not the best people to be entrusted the task of formulating the terms of reference for technology-intensive contracts. We have seen this in the twice-postponed bidding for driver’s licenses.

This is another reason for establishing a Department of Information Technology. It will enable government to be advised by a cadre of experts in new methods for doing things — even if this might be something as ubiquitous as driver’s licenses.