Automation of the May 2010 national elections appears mired in a new round of delays after the public bidding for the electronic voting system and machines unexpectedly dragged on to a third day.

Uncertainties have been fueled by the disqualification of six of the seven bidders who were ruled “ineligible” by the five-member special bids and awards committee (SBAC) of the Commission on Elections. As of presstime, the lone remaining bidder – the joint venture between giant contractor FF Cruz and Israel-based Gilat – was scheduled to undergo the committee’s scrutiny.

Spurned bidders, meanwhile, are expected to file their motions for reconsideration within three days. The bid committee promised to rule on their motions within seven days.

Avante International, the US firm Comelec contracted for last year’s automation test run during the Autonomous Region in Muslim Mindanao elections, is reportedly set to appeal its disqualification. The SBAC chaired by Comelec legal chief Ferdinand Rafanan took only five minutes last Monday afternoon to rule that Canon Philippines, a member of Avante’s consortium, cannot submit a US$128-million project undertaken by Canon Singapore as proof of its eligibility. Avante will argue that Canon Philippines is 100% owned by Canon Singapore. Canon lawyers will also inquire why bidder Smartmatic, on the other hand, was allowed to submit contracts fulfilled by its parent Smartmatic Holdings Inc.

Comelec also cited Avante’s failure to submit the first and last pages of the said contract as supporting document. Avante representatives reasoned that the SBAC only required a sworn “statement of ongoing and completed similar projects” in the latter’s Bid Bulletin No. 13 issued on April 17. Canon was prevented by a non-disclosure agreement with its Singapore client from submitting the actual contract. However, the joint venture submitted a sworn statement attested by the Philippine consulate in Singapore which also indicated the contract price and date signed by Canon Singapore’s president and CEO.  Avante and Canon argued last Monday that they brought with them the purchase order and acceptance certificate but requested the SBAC to sign an NDA as stipulated in the confidentiality agreement with the client.

The second bidder to be disqualifed was the co-venture among Spanish firm Indra, US firm Hart Intercivic, and local company Strategic Alliance Holdings Inc. (SAHI). The group failed to submit documents indicating that the provider of its voting system had an ISO certification or its equivalent. ISO is an internationally recognized accreditation body whose seal of approval indicated indicates that a company has a written quality management system in place. Indra had submitted the ISO certificate of Integrated Microcircuits Inc. – a Philippine company that is part of the Ayala Group – but the SBAC turned it down since IMI was not listed as part of the Indra Elections Consortium.  Indra argued that it submitted IMI’s ISO certification since IMI will manufacture the precinct count optical scan (PCOS) machines that will count the ballots on the precinct level and electronically transmit the results to the municipal, city, provincial and national boards of canvassers.

A third bidder, the consortium led by US firm Sequioa Voting Systems, was turned down for its failure to submit a license to export from its country of origin. Among the Comelec’s legal requirements is a waiver stating that the bidder would not file any injunction or ask the courts to restrain the poll body from conducting the bidding. Sequioa failed to get its president or managing partner to sign the waiver as stipulated by the SBAC. Sequioa’s vice president was the person who signed instead.

The fourth bidder is a joint venture between Smartmatic International Corporation and local company Total Information Management Inc.  It was deemed ineligible by the SBAC since it submitted an ISO certification of Jarltech, a 51% owned subsidiary of Smartmatic based in Taiwan. Echoing Indra’s argument, Smartmatic also asserted that Jarltech will be the company that will manufacture the PCOS system hence its ISO certification was submitted.

Smartmatic was one of the companies named by former party-list representative Etta Rosales as having a questionable reputation. In its eligibility documents, Smartmatic indicated that it is based in the Netherlands but it later manifested that its official address is in Barbados.  The company submitted a 2007 tax return authenticated by the Philippine embassy in WashingtonDC, and a 2008 tax return authenticated by the Philippine embassy in Venezuela. For the largest single contract requirement, Smartmatic also submitted documents for a project that was fulfilled by Smartmatic Holdings, its parent company.

A fifth bidder, Election Systems & Software (ES&S), partnered with the AMA Group, but was likewise disqualified because the import license it submitted was that of Teletech Telesystem Inc. which is not part of the joint venture.

A sixth bidder, Syrex, which entered into a joint venture with Amalgamated Motors Inc. and Avision, was disqualified because it did not submit a Securities and Exchange Commission registration certificate.

Observers who witnessed the unsealing of bids, which is open to the public, likewise noted some inconsistencies in the SBAC rulings. The most notable was the bending of the rule that any comment on the bidding process should be made in writing. From the start, however, Rafanan allowed lawyers and bidders’ officials to freely question the documents of their rivals. The SBAC even acted upon such questions in a curious disregard of the rule which Rafanan himself emphasized before the start of proceedings last Monday morning.  It was already Tuesday evening when Rafanan finally clamped down on those asking questions orally and reminded them to “put everything in black and white.”

Another inconsistency noted was the SBAC decision to allow three US firms – Sequioa, AMA partner ES&S and Indra partner Hart Intercivic – to delay their submission of 2008 income tax returns and unaudited financial statements to May 10. This was allowed despite Rafanan’s pronouncements last Monday that no new documents outside those submitted with the official bid would be accepted by the SBAC.

Oscar A. Gomez Jr.
with notes from CWP Staff
May 06, 2009

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