Discard rotten deal
“The most serious backlash of the unreliable Dermalog system is the delayed fulfillment of the promise to make the lives of the public more comfortable through digitalization.
Daily Tribune“The most serious backlash of the unreliable Dermalog system is the delayed fulfillment of the promise to make the lives of the public more comfortable through digitalization.
The digital shift the government has been undertaking should provide a huge opportunity primarily for technology companies to upgrade generally backward systems.
Along with opening windows come the excesses that go with it, such as what happened to the modernization thrust of the Land Transportation Office being handled by a foreign contractor.
The P3.15-billion Land Transportation Management System, or LTMS, project that started in 2018 has brought unending distress to both the agency and the users of LTO services.
German firm Dermalog has been issuing alibis instead of doing what it had committed to do under the LTMS contract, which resulted in more than four years of delay and proved its delinquency despite the enormous amount of money paid.
The moribund contractor became the subject of a series of investigations by the Senate and the House of Representatives, but the delays persisted, resulting in huge backlogs in the delivery of driver's licenses.
Defects in the electronic system have repeatedly disrupted LTO operations, particularly the procedures for the issuance and renewal of driver's licenses and the registration of vehicles.
The LTO is the third biggest source of revenue for the government, which makes the digitalization shift a must, as delays impact the capability to fund basic services.
The most serious backlash of the unreliable Dermalog system is the delayed fulfillment of the promise to make the lives of the public more comfortable through digitalization.
The LTMS implementation has thus far gone through 14 extensions in two-and-a-half years.
Throughout the extensions given to it, Dermalog still failed to deliver the IT infrastructure's integrated system in full.
Dermalog's deficiencies in the authentication process also opened the door to the registration of colorum public transport and even carnapped vehicles.
In its latest report, the Commission on Audit flagged the Dermalog contract, saying it was disadvantageous to the government.
The government interest was compromised because most of the project cost had been paid despite the glitches that have continuously bugged the system. Thus far, Dermalog has collected about 80 percent of the P3.4-billion contract.
The CoA termed the money Dermalog has received as advance payments, which was given without a pilot test and the configuration of some core applications.
During a Senate hearing, Transportation Secretary Jaime Bautista denied the "advance payments," saying those were payments due as required under the contract "based on certain milestones."
Whatever it is, Dermalog has been paid in good faith — which it has failed to match with the defective package it delivered.
From 2019 to 2021, payments to Dermalog totaled P2.3 billion, with the last payment made on 30 June last year.
Worse, Dermalog is targeting more government contracts, including the voting system, in case the Commission on Elections drops the Smartmatic machines.
"We see many areas where the Philippines can benefit from our technology," Dermalog CEO Gunther Mull had said. "From border control systems to e-passports and ID cards, we are ready to support the government."
Meanwhile, Dermalog insulted our Congress when it ignored invitations to send representatives to give its side on the allegations against it.
The company should be disabused of its sense of invincibility.
Dermalog was paid public money, and it should be made to account for the project and explain what the situation demands.