THE Land Transportation Office (LTO) has been paying its supplier of driver’s license cards millions of pesos annually for more than 24 years despite the absence of a valid contract, the Senate committee on finance discovered on Thursday.
The issue came up at the resumption of deliberations on the budget of the Department of Transportation and Communications (DOTC) when Sen. Francis Escudero asked if the proposed P586 million for the maintenance and other operating expenses (MOOE) is intended for the payment of supply of driver’s licenses.
LTO chief Alfonso Tan Jr. said only P528.7 of the MOOE will be allotted for the driver’s license payment.
Tan told the senators that the LTO is currently not paying any contractor for the supply of driver’s license because of the notice of disallowance issued by the Commission on Audit (COA) last year.
When asked why COA issued a notice of disallowance, he admitted that the contractor—Amalgamated Motors Philippine Inc. (AMPI)—had been supplying driver’s licenses without a valid contract.
The LTO chief said AMPI’s contract expired in 1990 but the company was allowed to renew its contract annually until 2006 without undergoing public bidding.
In 2012, the DOTC investigated AMPI for unauthorized modification of the design of the driver’s license.
Escudero asked DOTC Secretary Emilio Abaya why his department did not conduct a public bidding on the supply of driver’s license.
“By doing that you are simply extending the contract and continue to pay a supplier that hasn’t gone through public bidding for the past 24 years,” the senator pointed out.
He said if it was not for the notice of disallowance, the LTO would have continued with the practice of simply renewing the contract of existing suppliers without calling for a public bidding, which is against the law.
Abaya said the DOTC had gone through the pre-procurement process and is currently reviewing the terms of reference for the supply of driver’s license.
He added that instead of looking for a new supplier, the DOTC has decided to manufacture licenses.