DOTr settles P8-billion debt owed to Stradcom

The Department of Transportation (DOTr) has agreed to settle an P8-billion debt owed to Stradcom, the Land Transportation Office (LTO) information technology services provider, on the heels of a one-year phase-out agreement after years of disputes.

The DOTr has agreed to settle its obligations, given that the IT services firm "shall properly observe the payment rules set by the Commission on Audit (COA)," when the phase-out deal was signed on December 9, the department said in a statement on Tuesday.

Stradcom has been providing the LTO with IT services since 1998.

The December 9 agreement allowed the LTO to take in a new IT service provider – covering hardware, software, and data requirements – and gave Stradcom enough time to turn over of the source code and database to the government, the DOTr noted.

"In the agreement, Transportation Secretary Arthur Tugade made sure that Stradcom shall do its part in helping the smooth migration of data and computer operations to the next IT provider of the LTO," statement read.

Shifting to a new IT service provider will take one to two years, including the data migration.

During the one-year provision for organizing and transferring data, the government will also set a new bidding process and the conditions for a company to handle the IT service requirements of the LTO.

Under the agreement, the DOTr will allow Stradcom to join the bidding as it is open to all qualified companies that are capable of providing the requirements set under the terms of reference.

In 2011, the department ordered an P8.2-billion procurement for the LTO IT system. The following year, it split the contract into two, after the bidders failed to qualify for the project's broad scope.

The contract for the software and data components was worth P3.4 billion, while hardware component amounted to P4.8 billion.

The bidding was delayed when the Quezon City Regional Trial Court (QC RTC) issued a temporary restraining order (TRO) due to internal ownership squabbles within Stradcom.

In February 2013, while the TRO was still in effect, the contract with Stradcom expired.

To avoid a disruption in LTO services that could have forced the office to revert back to manual operations, the government extended the Stradcom contract via an emergency procurement under the provisions of Republic Act 9184 or the Government Procurement Reform Act.

The QC RTC lifted the TRO the same year and ruled that the government may proceed with the bidding for a new IT service provider.

The Court of Appeals upheld the lower court's decision in March 2016.

The new LTO-IT system aims to provide a sustainable solution to address the current system’s issues, the DOTr said.

When it finally interlinks with the automation system of the Land Transportation Franchising and Regulatory Board (LTFRB), the government will be able to eliminate cases of PUVs securing an LTFRB franchise without an LTO registration as well as PUVs registered with the LTO but without an LTFRB franchise.

It will also make it easier for authorities to recover stolen vehicles, trace smuggled vehicles, prevent double registration and monitor unregistered vehicles. — Ted Cordero/VS, GMA News