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Manila Bulletin devider Philippines devider National devider LTO seeks termination of contract with LTMS provider, awaits SolGen decision

LTO seeks termination of contract with LTMS provider, awaits SolGen decision

Published Mar 14, 2024 04:01 am

The Land Transportation Office (LTO) is now waiting for the decision of the Office of the Solicitor General (OSG) for its recommendation to end the government contract with the service provider of the agency’s new IT system, the Land Transportation Management System (LTMS). 

LTO chief Assistant Secretary Vigor D. Mendoza II said they have already forwarded the legal documents to the OSG for the review of the legal processes in the termination of the contract with Dermalog Joint Venture (JV).

The Dermalog Joint Venture is the developer of the P3.14 billion LTMS which has been the subject of several legislative hearings for alleged contract breaches and violations, and alleged complaints of underperformance.

“We already forwarded the legal documents to the OSG and we are now waiting for its decision on the matter,” said Mendoza. 

Several lawmakers have been urging the LTO to rescind its contract Dermalog Joint Venture (JV), one of them is House Committee on Transportation chairman and Antipolo City 2nd District Rep. Romeo Acop who said that the company violated two provisions of the Government Procurement Manual when it failed to submit the required deliverables on time despite being granted 13 deadline extensions.

In one of the hearings at the House of Representatives, Acop said the violations already amounted to P1.119 billion in liquidated damages, which “merits the filing of termination or rescission of the contract.” 

“Pursuant to the Revised Implementing Rules and Regulations of the Government Procurement Reform Act (R.A. 9184), once the cumulative amount of liquidated damages reaches 10 percent of the amount of the contract, the procuring entity may rescind or terminate the contract without prejudice to other causes of action and remedies available under the circumstance,” he explained.

In the same hearing, Mendoza said the LTO is also coordinating with the Department of Information and Communications Technology (DICT) to ensure that public service including motor vehicle registration and driver’s license application will not suffer amid any legal actions that the LTO will undertake.

He added that they have already provided the Department of Transportation (DOTr) of the Commission on Audit (COA) report last year and that department agreed as far as the grounds for termination of contract is concerned. 

The COA report cited the delays in the delivery period of milestones under the LTMS project, which reportedly exceeded the allowable time extension.

For his part, SAGIP Party-list Rep. Rodante Marcoleta said the termination could ensure LTO’s complete control over the LTMS to implement changes, since Dermalog allegedly refused to turn over the source code to LTO until its contract ends next year. 

It was Marcoleta who also  questioned the legality of the P8.2 billion Road IT Infrastructure Project, in which the LTMS was Component A, explaining that there were no documents showing that the project splitting was approved by the National Economic and Development Authority – Investment Coordination Committee (NEDA-ICC). 

Mendoza earlier said that there are some transactions that cannot still be processed under the Land Transportation Management System (LTMS), the new Information Technology (IT) system of the agency.

These transactions, according to him, represent three percent of the remaining online processing that prevent the 100 percent full digitalization of all online transactions of the LTO.

One of the issues, according to Mendoza, is the accuracy of the computation for the Motor Vehicle User’s Charge (MVUC) which could affect the correct payment of the LTO clients.

 

 

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