Lawmaker warns against changing LTO's IT provider, agency says it's 'never the intention'

A lawmaker on Tuesday warned the Land Transportation Office (LTO) against changing its IT systems provider amid reported glitches in its provincial offices, saying making abrupt changes might be disadvantageous to the government.

In a privilege speech, Bagong Henerasyon party-list Representative Bernadette Herrera said that she was informed that the LTO, out of supposed frustration due to glitches happening in their provincial offices, is considering overhauling its entire IT systems infrastructure and replacing its current systems provider.

LTO's current IT systems provider is Dermalog Identification Systems, a German company. Its previous IT provider was Stradcom.

"What particularly caught my attention is that the LTO chief, Assistant Secretary Teofilo Guadiz, openly lambasted its existing IT supplier, and in the same instance, actually commended the agency’s previous contract holder. He even went as far as saying that the old supplier was 'welcome to bid for their previous contract, should things go south between the LTO and its current IT provider,'" Herrera said.

"Considering his position and the substantial amount involved in the contract, this statement may be considered imprudent or highly irresponsible, to say the least. If anything, it may give rise to public speculation on why the LTO appears to be in a rush to find a new IT supplier – or in this case, revert to a previous one – when they have a signed, active agreement with an existing corporation," she added.

Best course of action

In a statement, Guadiz said it was "never the intention" of the agency to replace Dermalog as its IT systems provider "because doing so at this time will produce more problems instead of solutions."

"We believe that the best course of action at this point is to sit down with Dermalog and its officials, IT personnel, and other concerned stakeholders, and discuss with the LTO their own concerns. Our hope is that [by] doing so, issues and other concerns can be ironed out and avoid or hopefully eliminate problems and other challenges that may arise in the delivery of public service," Guadiz said.

Herrera said that she received reports that glitches are indeed taking place in LTO provincial offices because LTO personnel are manually overriding the current IT system and introducing person-to-person transactions into procedures.

"While these are just reports for now, I think the irony is not lost on my esteemed colleagues that an IT system designed to minimize human intervention is now being accused of glitches, because humans are over-riding it," she said.

She said that based on the stipulations of the 2016 phase-out agreement that the LTO had with its previous supplier, Stradcom, the agency has full and complete ownership of all collective and individual databases and requires Stradcom to turn over these crucial databases to the LTO and the supplier that replaced them.

However, Herrera said that her initial inquiries revealed that Stradcom had apparently not turned this data over.

The LTO paid Stradcom P7.53 billion during the last four-year phase of their contract.

"Perhaps there are still unpaid dues that the LTO owes Stradcom, but regardless of the reason, the fact remains that the databases remain unreleased. Can you just imagine how crippled and debilitated their current operations are, given that they do not have databases to work with?" Herrera asked.

"I have [also] received reports that Dermalog tech representatives, data analysts, and systems engineers are literally not authorized to use basic working necessities...I am talking about desks, tables, chairs, and everyday office fixtures, whenever they visit various LTO satellite offices. [That is] because, apparently, under the terms of their previous contract, Stradcom owned all IT-related hardware and equipment, including workplace infrastructure."

"If we look at the big picture and weave these circumstances into it, therefore, the glitches that Dermalog is being accused of suddenly take on an entirely different context," she added.

These developments, Herrera said, suggest that the LTO may have other reasons for floating a possible change of IT service provider.

"In this regard, I encourage my dear colleagues to exercise our constitutional powers of oversight so that we may, through investigation or remedial legislation, shed the necessary light on this issue," she said.

Herrera clarified that she was not passing judgment on Guadiz yet.

"I am not casting any aspersions on Assistant Secretary Guadiz. Since this is an issue that will affect millions of our countrymen, it is first and foremost worthwhile to examine if the glitches happening at the LTO are indeed the fault of its current IT provider," she said.

Guadiz said that "any unnecessary delays in providing services that the LTO is mandated to provide will always be detrimental to the public’s welfare and certainly this Office, and perhaps even Dermalog, does not want that to happen."

"It has always been this LTO’s intention to give the motoring public the best and quality services they so richly deserve, in the most timely, convenient, and cost-effective manner, and we will continue to abide by it," he said.

Meanwhile, the Department of Justice ordered the withdrawal of qualified theft charges filed before a Quezon City court against four Dermalog officials in connection with the company's joint venture deal for the LTO's Road Transportation Infrastructure Project.

In a resolution dated July 20, Justice Secretary Jesus Crispin Remulla granted the petition for review filed by Gunther Mull, Randolf Sitz, Michael Schutt, and Lourilyn Ocampo.

The charges stemmed from the allegations of Dermalog's local partner, Verzontal Builders, Inc., that the German firm failed to remit its supposed 25% share in the P3.19-billion project or P797,505,023.52.

"Even granting that Verzontal is entitled to [a] 25% share in the partnership, the exact amount of such share is yet to be determined for the reason that the whole project undertaken by their partnership with the LTO has not yet been fully accomplished," the resolution stated.

"When Verzontal failed to collect the amount it demanded from Dermalog, it cannot be concluded there was already a taking of personal property that belongs to another, without first liquidating the partnership funds of the joint venture."

Mill, Sitz, Schutt, and Ocampo filed the petition for review after the Quezon City Prosecutor's Office found probable cause to indict them on qualified theft charges. —VBL, GMA News