Rescind poll automation contract due to delays: CCM

Posted at 12/15/2009 8:41 PM | Updated as of 12/15/2009 10:29 PM

MANILA, Philippines - The Concerned Citizen's Movement (CCM), a group that filed a case before the Supreme Court in July to declare null and void the contract between the Commission on Elections (COMELEC) and Smartmatic-TIM, is dismayed at pronouncements by the automation vendor that it cannot meet the delivery schedule of end-December due to shipment problems.

Based on the P7.2 billion automation contract inked last July 14, Smartmatic-TIM should have delivered 12,000 units in November and another 30,000 in December. But the vendor now says it can only deliver 10,000 Precinct Count Optical Scan (PCOS) machines before the end of the year.

CCM's Atty. Harry Roque said Smartmatic-TIM is liable for the delay, citing Article 11 of the contract which states that "for every day of delay in delivery after the stipulated period, liquidated damages in the amount of one-tenth of one per centum (1/10 of 0.01) of the total value of this Contract" must be paid by Smartmatic-TIM.

"Based on computations, this amounts to P7.2 million per day of delay. They should pay this, because it is very clear in the signed contract," Roque said.

CCM is now contemplating on filing a supplemental petition to its Motion for Reconsideration on the SC ruling in favor of COMELEC and Smartmatic-TIM. Roque said it is high time for the contract to be rescinded because of the inability of the automation vendor to perform its end of the bargain as shown in its failure to meet delivery targets.

Conflicting provisions

Roque further insisted the contract is flawed from the very beginning because its Article 15 on Notice of Delay and Article 11 on Penalties and Charges are in conflict.

Article 15 states: "The PROVIDER shall promptly notify COMELEC, in writing, of any delay in providing inputs or equipment necessary for the satisfactory execution and implementation of the Project. The PROVIDER may request for an extension of time for the provision of the Project's deliverables; but said extension shall not encroach into the period of thirty (30) days before Election Day or be beyond thirty (30) days of due date thereof."

On the other hand, Article 11 says: "In no case shall the total amount of the liquidated damages under this Contract exceed 10% of the Contract Amount. Once the cumulative amount of liquidated damages reaches said 10%, COMELEC may rescind this Contract."

Roque said it is possible for Smartmatic-TIM to violate Article 11 at any given time, but Article 15 gives the vendor leeway as long as the violation does not encroach into the period of 30 days before election day.

"That is what we have been saying all this time, that the contract is flawed from the beginning. We therefore want it rescinded," he added.

Smartmatic blames CCM

But Smartmatic President for Asia, Cesar Flores, clarified the Project Management Office (PMO) of the COMELEC agreed to the adjustment in delivery schedule due to delays caused on the project by the CCM petition.

"They have in fact agreed and we are very surprised that there are pronouncements from the COMELEC now that they are not satisfied with the new schedule. What we have agreed with the PMO is to deliver in batches this time. What is important is we are sure we are able to deliver all machines by February because that is the deadline for the delivery of all PCOS machines," Flores said.

Smartmatic spokesman Gene Gregorio, in a statement, said, "despite the delays caused by the SC case, Smartmatic continued with the acquisition of all parts and materials, and mass production started already."

February deadline is critical

Atty. Howard Calleja, national legal counsel for COMELEC accredited citizen's arm Parish Pastoral Council for Responsible Voting (PPCRV), said PPCRV is not keen on pressuring COMELEC to demand that Smartmatic-TIM pay the P7.2 million penalty for every day of delay in delivery. Calleja said the critical period is the deadline in February, which is the one which should not be pushed back.

"More than the money, we are concerned about the proper implementation of the project and the quality and performance of the machines. As long as Smartmatic-TIM is able to deliver before the final deadline in February, we don't have to be too strict about penalties," he added.

Smartmatic said the problem is only in terms of availability of shipment and not on the production line which has gone full blast since December 4. Four assembly lines for the PCOS machines are now working on a 12-hour, 60-day work schedule with a full capacity output of 3,000 machines per day.

Smartmatic is confident shipment will no longer be a problem when the yuletide season ends.