Smartmatic continues to hostage the Philippines – with the complicity of COMELEC



THE House committee on suffrage and electoral reforms, under the chairmanship of Rep. Sherwin N. Tugna, started this week the initial deliberations on House Resolution 667 filed by party-list lawmaker Anthony M. Bravo of the COOP-NATCCO.

The resolution aims to conduct an inquiry in aid of legislation on the incredible claim of Smartmatic-TIM that it has the right to enforce the “considered-sold” provision of its two lease contracts with option to purchase (OTP), entered into with the Commission on Elections (COMELEC) for the conduct of the May 9, 2016 national and local elections.

The questionable “considered sold” provision in the lease contracts between Smartmatic and COMELEC is as follows –

“6.9 All goods still in the possession of COMELEC as of 01 December 2016 because of any election protest or audit requirement shall be considered sold to COMELEC pursuant to its option to purchase under this contract, and the COMELEC shall pay the corresponding price in accordance with the financial proposal within ten (10) working days from receipt by COMELEC of the invoice from the PROVIDER covering said goods, without prejudice to COMELEC requiring the protestant to shoulder the costs.”

The enforcement of the above provision would result in the government paying an additional P2.08 billion plus to Smartmatic.

Where will the government source this kind of money? Of course, from us – the taxpayers.

The COMELEC had ‘sold’ the Filipinos

The COMELEC had effectively sold the Filipino people when it entered into the unconscionable contracts containing the “considered sold” proviso with Smartmatic-TIM.
The provision, on its face, is illegal and shows a streak of ignorance (or feigning ignorance in exchange of you know what) on the part of the COMELEC.

First, it is time-bound. Specifically, all “goods”, pertaining to the vote counting machines (VCM), should be returned to Smartmatic-TIM on or before December 1, 2016. As it is, COMELEC should have been diligent in returning the machines before the date.

Well, what do we expect from COMELEC? To do its job on time? The heck, no.

We have our national and local elections every three years. The Constitution mandates that elections be held on the second Monday of May, following the three-year cycle. Here are the specific provisions:

“Article VI. SECTION 8. Unless otherwise provided by law, the regular election of the Senators and the Members of the House of Representatives shall be held on the second Monday of May.”

“Article VII. SECTION 4. xxx Unless otherwise provided by law, the regular election for President and Vice-President shall be held on the second Monday of May.”

There is no surprise in the schedule. What is surprising is that COMELEC always claim that it lacks the time to bid out the goods and services pertinent to the automated election system (AES). Presto, it manages to directly contract out, without the benefit of public bidding, with Smartmatic-TIM.

Second, the Constitution, as enunciated in Paragraph 1 of Section 29 of Article VI, prohibits the payment of such a provision in this wise – “No money shall be paid out of the Treasury except in pursuance of an appropriation made by law.”

As a matter of fact, there is no appropriation for such in the General Appropriations Act (GAA) of 2017, or even in the GAA of 2016.

For all we know, the failure to return the VCMs on time to Smartmatic might have been deliberate attempt in order for the “considered sold” provision to kick in. Voila, more than two billion pesos out of the government coffers and a sizeable portion of it into the pockets of the COMELEC hooligans.

Election protests and audit requirements

Election protests and audit requirements are sure to happen every time elections are held in the Philippines. It will always be there, as sure as the sun will come out tomorrow.

So, who in his right frame of mind will approve the provision “because of any election protest or audit requirement shall be considered sold to COMELEC”?

In fact, it should have been part of the warranty of the machines, or as part of the lease contract, that COMELEC be allowed to retain some VCMs in the event of an election protest.

It will be recalled that the Supreme Court ordered the COMELEC to fast-track the closure/stripping activities of all the VCMs covered by the election protest filed by former senator Ferdinand Marcos Jr. in last year’s vice-presidential election.

However, COMELEC Chair Andres Bautista claimed that the protest will cost the government over P2 billion to handle, because it would have to pay Smartmatic on account of their holding on to the VCMs.

Whose fault is it then? Is it not that it was already during the time of Bautista that the “anomalous” contract was executed? Who approved such lease contracts with incredible and unconscionable “considered sold” provisions?

My insight tells me that there would have been no election protest had the VCMs exhibited a 99.995 percent accuracy. Alas, the VCMs did not deliver as expected. The VCMs were not as they were warranted to be.
The Government Procurement Reform Act imposes upon contract awardees an obligation to put up a warranty to assure correction of manufacturing defects within a specific time after performance of the contract. The warranty may be in the form of retention money on which the procuring entity shall retain an amount equivalent to a percentage of every progress payment. The procuring entity shall release the retention after lapse of the warranty period if the goods supplied are free from defects and all conditions imposed under the contract have been fully met.

Did the COMELEC comply with this? I don’t think so.

Smartmatic continues to hostage the Filipinos

Based on various sources and media reports, Smartmatic-TIM had already bagged at least P18.4 billion worth of contracts with the COMELEC. It should be noted that this is a conservative estimate based only on published amounts. COMELEC had awarded other smaller contracts to Smartmatic, beyond the public view and scrutiny.

In 2010, Smartmatic dealt COMELEC with at least P7.2 billion worth of election paraphernalia, specifically precinct count optical scanning (PCOS) machines.

In 2013 the same Smartmatic contracted COMELEC for P2.5 billion worth of goods and services. Smartmatic was able to avoid competitive bidding and monopolize poll automation by extending the 2010 OTP and using the extension as an excuse for locking out other election technology providers.

For the 2016 national and local elections, the government has already paid Smartmatic approximately P8.7 billion. Now comes the “considered sold” provision for another P2.08 billion.

As a repeat performance, Smartmatic is again ramming into our throats their vaunted OTP through the “considered sold” provision.

When will this end? Haven’t we had enough of Smartmatic?


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  1. if smartmatic is so full of inconsistency how come the government cannot get rid of it?

  2. jess nazario on

    The mysterious thing Al re the recent hearing by the House committee on suffrage and electoral reforms, under the chairmanship of Rep. Sherwin N. Tugna was the obvious “disinviting” of the groups/advocates that have been hounding Comelec and Smartmatic since 2008 on account of the controversial litany of sweet deals the latter has been awarded with in exchange to a totally unacceptable automated election system. The Secretariat for this committee very well knows who these are. Why ? Is it to silence them so that the hostaging will continue for the 2019 election, the upcoming plebiscite for the new Constitution ad infinitum ? Yes, Al when will we ever STOP such serial treasonous rape of our electoral system ? What is the present administration doing ? THIS IS DEFINITELY a TOP PRIORITY. I mean the massive rebuilding of the Train Wreck of an election these criminals have wrought on our country ? Why a TOTAL Train Wreck ? Because both the system for voting/tallying/ canvassing of votes and the voter registration systems are nothing but a heap of wreckage. The AES is garbage of a system ever since while the voter registration system is a total wreck due to the hacking of its database just before the 2016 election needing total replacement via a total switch to a biometrics base different from the existing Fingerprint one.