State-run printer in trouble for sub-contracting e-passport project


MALACAñANG has hinted that state-run APO-Productivity Unit Inc. (APO-PU) committed grave abuse of discretion and could be held criminally and administratively liable for engaging the services of a privately-owned printing firm for implementation of the e-passport project of the Department of Foreign Affairs (DFA).

Chief Presidential Legal Counsel Salvador Panelo over the weekend pointed it out in a legal opinion he executed over the e-passport controversy after the Philippine Association of Free Labor Unions (Paflu), an umbrella organization of labor unions, expressed concern on the cost implications of the project amid allegations of overpricing in the contract for the new digital passport.

Paflu also assailed the DFA’s decision to decommission the Bangko Senral ng Pilipnas (BSP) from the passport project and grant the multibillion-peso contract to APO-PU, which in turn sub-contracted it to the privately-owned United Graphic Expression Corporation (UGEC) without passing through usual procurement procedures.

Panelo said APO-PU “should refrain from engaging, sub-contracting or assigning the printing of passports to private entities, including UGEC [United Graphic Expression Corp.]” because it is beyond its authority.

If abrogation of the joint venture agreement (JVA) between APO-PU and UGEC would render APO-PU incapable of performing its contractual obligations under a memorandum of agreement (MOA) with the DFA, he added, the DFA “may then have sufficient basis to terminate the same in accordance with its terms and conditions.”

Panelo junked the APO-UGEC JVA as invalid or “void for being ultra vires,” meaning it is “an act committed by an entity beyond the powers conferred upon it by law.”

The Palace official said under the MOA forged between APO-PU and the DFA on October 5, 2015, APO-PU is “required by law, rules and regulations to use its own facilities, equipment and machinery in printing the passports for the DFA.”

Curiously, the JVA was executed by APO and UGEC on November 14, 2014, indicating that the government-owned printing facility had already anticipated the e-passport contract almost one year ahead of the formal signing of the MOA with the DFA.

Prior to the execution of the MOA, printing of passports was handled by the BSP.

The DFA reportedly vetted APO, a corporation attached to the Presidential Communications Operations Office then headed by Secretary Herminio Coloma, as an authorized supplier/service provider for the production and printing of “accountable forms and sensitive high quality/volume” documents including passports and tax stamps.

It turned out, however, that APO-PU did not have the technical capability or the state-of-the-art equipment to perform its contractual obligations to the DFA, hence, it hired the services of UGEC.

Panelo clarified that the outsourcing scheme by APO-PU resulted in a breach of a resolution by the Government Procurement Policy Board, as well as pertinent General Appropriations Act and Republic Act (RA) 9184 prescribing the rules on public bidding.

“Such sub-contracting arrangement or assignment may subject the APO and/or UGEC officials responsible for the same to criminal and administrative liabilities pursuant to RA 9184 and [RA] 3019, the Administrative Code of 1987, and other applicable procurement and criminal laws,” he stated in his legal opinion.

Panelo recommended that the passports should cost only P650 each.

The DFA currently charges P950 per, plus P250 for “overtime charges” if the applicant was in a hurry and opted to use the express lane.

Many of the passport applicants are Filipino migrant workers.

Data indicates that there are 5,000 Filipinos who leave the country every day either as tourists, overseas workers or immigrants.



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