A source gave The Manila Times documents showing that the Commission on Elections (Comelec) and Smartmatic colluded to:

(1) Arrange for the failure of the first two biddings for the supply of P42 million worth of CF cards (compact flash cards used with the PCOS or Precinct Count Optical Scan machines).

(2) Arrive at a negotiated price that makes Smartmatic’s bid of P45.2 million conform to the Approved Budget Contract (ABC).

(3) Proceed with the award of the contract to Smartmatic on a negotiated basis, which the law allows only after two bidding failure.

The contract worth P45.210 million “for the supply and delivery of CF cards main [Lot 4A] to be used for the May 13 National and Local Elections” was awarded on December 28, 2012, in a letter from Comelec Chairman Sixto Brillantes Jr. to Smartmatic-TIM Corp.

The day before, Thursday, December 27, 2012, the poll body en banc “promulgated” resolution No. 9600 authorizing the awarding of the contract.

The Manila Times acquired documents showing that the poll body’s bidding and awards committee had taken steps, with the approval of the Comelec commissioners, so that the first two biddings would fail and the poll body would then be legally enabled to give Smartmatic-TIM the contract.

On August 13, 2012, LDLA Marketing, like two other suppliers, submitted a bid for the supply of the CF Cards—Main and CF Cards-Worm, Thermal Paper, Marking Pens, Toners and External Rechargeable Batteries for use in the May 2013 National Elections.

They were responding to Comelec Invitation to Bid SBAC 004-2012. SBAC stands for Special Bids and Awards Committee.

The Comelec disqualified LDLA Marketing without opening LDLA’s bids. Comelec’s SBAC claimed that LDLA’s list of past completed projects was not “notarized.” However, the Invitation to Bid did not require notarization of the list of completed projects.

What the bid invitation required was an “Omnibus Sworn Statement.” This the LDLA corporation complied with.

In this bidding, however, Smartmatic-TIM did not bid for the CF cards but only for the paper, toners, and batteries. Smartmatic’s bid was an amount higher than the ABC or Approved Budget for the Contract.

Had the LDLA bid been opened, it would have been seen that it was the lowest bid for all the supplies required, except that it’s price for the thermal paper was higher than the other bids.

And LDLA Marketing would have been seen to be the only bidder for the supply of the all-important CF Cards. The LDLA consortium’s bid, if approved, would have saved the government more than P100-M.

LDLA filed a motion for reconsideration (MR). But Comelec rejected the MR in SBAC Resolution No. 3 dated Aug. 18.

LDLA decided not to protest the rejection. It was confident they would have a chance to win in the rebidding for the CF cards and the rechargeable batteries.

LDLA was really focused on supplying the CF cards and the rechargeable batteries. It knew it would win in a new bidding because it had previously supplied Smartmatic with 20,000 CF Cards for the May 2010 Elections.

Comelec issued another Invitation to Bid (SBAC 004ABF-2012) for the CF Cards-Main and CF Cards-Worm and the batteries. The invitation was for the bidding on October 9, 2012.

That invitation clearly stated the requirement for bidders to submit “notarized” list of completed projects. This shows that there was something wrong in disqualifying LDLA in the first bidding when no notarization was required.

LDLA made sure its bid complied with all the requirements so that it could not be disqualified for any small matter.

This time LDLA had a competing supplier for the CF Cards Main. This was Unison Computer Systems.

During the bid opening on October 9, it was seen that Unison’s bid was to use generic CF cards from China. It also did not have all the required documents, such as an ISO certificate.

LDLA pointed this out. Based on what happened to LDLA in the original bidding, Unison should have been disqualified on a “pass/fail” basis right at the start.

But the Comelec SBAC told LDLA that it was their prerogative to allow this competitor to participate!

Again, Smartmatic did not participate in the 2nd bidding for the CF cards. It only made a bid for the batteries and that bid won.

Unison’s financial bid for 82,000 CF cards-Main was for P44 million, while LDLA’s was for P36.5 million each for both Main and Worm. Thus, LDLA was declared to have the Lowest Calculated Bid but had to be post qualified.

As part of the Post Qualification process, LDLA’s cards were tested in public with the media present. LDLA’s cards were found to be compliant with the Comelec’s technical requirements.

However, LDLA’s Worm CF cards did not work with the PCOS machine.

The reason: Smartmatic refuses to give LDLA the technical requirements of the PCOS, claiming it as proprietary.

If the PCOS and its technical requirement were “proprietary” and only Smartmatic could possibly supply technical requirements that will make any CF Cards Worm, why ask other companies to bid?

The cards LDLA submitted were Kingston Branded CF cards. Kingston is one of the top three manufacturers in the world. LDLA sold the same kind of CF cards to Smartmatic for use in the 2010 elections.

The post qualification took almost one month. LDLA was declared disqualified on November 05 (SBAC Resolution No. 4).

The reasons given were that LDLA did not have sufficient cash and it did not list all its past government projects. Usualy there should have been a meeting between SBAC and LDLA about the post qualification. There was such a planned post qualification meeting but Comelec cancelled it twice.

Had a meeting taken place, LDLA would have shown that it had had more than enough cash to deliver on its bid. Not listing LDLA’s past projects should have been tackled during the bidding, not at the post qualification stage.

Again, LDLA filed a motion for reconsideration (MR) which was denied through SBAC Resolution No. 6 dated Nov. 18.

After two failed biddings, Comelec could now negotiate with any supplier, according to the law.

Was this Comelec-Smartmatic plan all along?

To give the procedure a semblance of fairness, Comelec conducted another testing of all CF cards on November 30 supposedly to short list which suppliers would be invited. Again, LDLA’s CF-Main passed but, as expected, its CF Worm was rejected by the PCOS machines because it did not have the required technical information for Kingston to properly program the Worm cards.

At this point, LDLA was willing to just concede the Worm cards to Smartmatic and just concentrate on the CF Main.

But LDLA was wondering how Smartmatic could get the award for the CF Worm since they never bidded to supply any of the CF Cards during the first two biddings.

Up to now no Award Notice to Smartmatic for the CF Worm has been published. So is Smartmatic’s price within the within the ABC (approved budget price)?

The Comelec then asked for sealed bids for the CF Main within 48 hours on December 6. LDLA submitted its sealed bids.

If LDLA’s CF Main Cards were defective, they would not have invited it to submit a sealed bid. This time, Smartmatic and SPH International participated, despite not doing so in the first two biddings for the CF cards.

Is it legal to have companies that did not participate in the first two biddings for the CF cards to be allowed to make negotiated bids?

LDLA’s sealed bid was for 33.5 million, SPH International was for P45.2 million and Smartmatic’s was for 50.9 million. The ABC is only P46.6 million.

But Comelec Resolution No. 9600, passed by the En Banc meeting on December 27, and decided to award the CF-Main to Smartmatic, the highest bidder.

The Comelec Technical Working Group report indicated that LDLA’s CF Main were difficult to eject from the PCOS machines. There was no such finding in any of the two observed testings.

Unknown to most people, Smartmatic was also asked on December 19 (before the en banc meeting) to submit a lower bid for the CF Main in order to meet the ABC.

Smartmatic did that and lowered its bid to P45.2 million, still higher than LDLA’s but now within the Comelec’s ABC.

Smartmatic also won the bid for the transmission modems and the transmission of results.

Comelec bought the PCOS machines from Smartmatic for P1.8 billion.

Now it controls all elements of the PCOS process—including the counting and transmission of results in the 2013 elections.

FROM THE MANILA TIMES SPECIAL REPORTS TEAM