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SC: Comelec can still 'directly contract' PCOS repair, diagnostics despite voided deal

The Commission on Elections (Comelec) can still enter into a direct contract with any service provider for the diagnostics and repair of the 80,000 precinct count optical scan machines for the 2016 polls after all, the Supreme Court ruled.
This, despite its ruling during an en banc summer session in Baguio City last Tuesday that voided a P266-million direct contract between the poll body and Smartmatic-TIM.
In its 56-page ruling that was released to media on Friday, the SC said the Comelec and Smartmatic “had not shown that any of the conditions under Section 50, Article 16 of the Government Procurement Reform Act exists.”
But this does not mean the Comelec can no longer strike another direct contract deal for the diagnostics and repair.
“Note that the disposition of these cases does not prohibit the Comelec from resorting to direct contracting anew or other alternative method of procurement with any service contractor, subject to compliance with the conditions provided in the GPRA and all the pertinent rules and procedures.” read the SC decision.
These three conditions under the Section 50, Article 16 of the GPRA are:
a) Procurement of Goods of proprietary nature, which can be obtained only from the proprietary source, i.e. when patents, trade secrets and copyrights prohibit others from manufacturing the same item; 
b) When the Procurement of critical components from a specific manufacturer, supplier or distributor is a condition precedent to hold a contractor to guarantee its project performance, in accordance with the provisions of his contract; or, 
c) Those sold by an exclusive dealer or manufacturer, which does not have sub-dealers selling at lower prices and for which no suitable substitute can be obtained at more advantageous terms to the Government.
The SC made clear that its decision on the Comelec-Smartmatic deal was not meant to “thwart the conduct of automated elections, but only steps in to preserve its sanctity. After all, in a democracy, nothing is more vital than an unimpaired vote.”

'Catastrophic return' to manual polls
The Comelec, in its pleadings before the SC, had warned of a “catastrophic return” to manual elections if Resolution No. 922 and the extended warranty contract (Program 1) would be struck down. 
However, the SC quoted Comelec spokesperson James Jimenez as telling the media the Comelec can still push through with automated polls even through the previous Precinct Count Optical Scan route, something the magistrates considered to be “far from the distraught tenor of the Comelec” in its official pleadings.
“The Court has not even gone to this extreme and prohibited the re-use of the PCOS machines. Yet, the Comelec’s own spokesperson has conceded that when push comes to shove, automated elections are still possible,” said the SC.
The Comelec resolution approved Smartmatic's P300-million "Extended Warranty Proposal (Program 1)" through direct contracting. Under it, the private firm will examine the 80,000 machines for refurbishment, conduct full diagnostic of the machines, and perform maintenance minor repairs.
Citing a "tight time schedule" in the preparations for next year's elections, the Comelec had said it decided to do away with public bidding and directly contract Smartmatic in the maintenance and repair of the PCOS machines as it would be "too great a risk" to entrust the task to another company.
Petitions vs. deal
A group of petitioners led by Bishop Broderick S. Pabillo said the poll body committed grave abuse of discretion when it issued Resolution 9922, which would set in motion Program 1 of Smartmatic's extended warranty proposal, amounting to P300 million.
In its petition, the group claimed the Comelec ruling violated the Government Procurement Reform Act and the Commonwealth Act No. 128.
Pabillo's group added that the Comelec resolution was "not only anomalous but also scandalous because we feel the policy of a public and competitive bidding and transparency requirements of fundamental law was cast aside."  
He said he noticed how the Comelec seemed to be "rushing" to tap Smartmatic in conducting diagnostics and repair of the counting machines.
For its part, the IBP, in a separate petition, said with the absence of a competitive public bidding, the contract is considered contrary to public policy and should be struck down as "void and inexistent," under Article 1409 of the Philippine Civil Code.
The IBP also noted several SC rulings that held that competitive bidding in government procurement is a matter of public policy.
It said by issuing the contested resolution, the Comelec effectively amended Section 50 of RA 9184 or the Government Procurement Reform Act when it added "tight time schedule" to the three exclusively listed condition for resorting to direct contracting.
The group said Comelec's "tight time schedule" argument to justify resorting to direct contracting "is nothing but a superficial and shallow excuse."
"This is a blatant encroachment on the prerogative of legislature in enacting and amending laws," the IBP said in its petition.
The IBP said the Comelec's reference to possible time constraints when it preferred direct contracting over public bidding was "at best, purely speculative."
It further said there could be a suitable substitute to Smartmatic in refurbishing and repairing the counting machines that would offer "more advantageous terms to the government."
The group said the Comelec failed to prove that the diagnostics and repair of the PCOS machines are protected by trade secrets, patents and copyrights owned solely by Smartmatic. — JDS, GMA News