LTO, Dermalog accused of collusion

A petition was filed before the Supreme Court seeking the nullification of the P3.19billion information technology contract between the Land Transportation Office and German firm Dermalog Joint Venture to develop the Land Transportation Management System or LTMS.

The petition, lodged by lawyers Carlito Montenegro and Gerald Domingo in their capacities as taxpayers, motorists, and holders of driver’s licenses, accused the LTO and Dermalog of conspiring to violate existing laws to the detriment of Filipinos.

According to the petitioners, despite the original terms stipulating the completion of Dermalog’s deliverables within 26 weeks, numerous extensions were granted, prolonging the project delivery schedule by almost three years.

Despite these delays, the LTO allegedly failed to impose liquidated damages on Dermalog as required by the contract and Republic Act 9184, also known as the Government Procurement Reform Act.

The petitioners are urging the Court to compel the LTO to file appropriate administrative and criminal cases against officials and employees involved in the project’s implementation. They also sought to penalize and block Dermalog from participating in any government bidding process and rescind the contract between LTO and Dermalog, barring further use of LTMS.

The petitioners defended their decision to bring the case directly to the SC, citing the “transcendental importance” of the issues to the public. They argued that the LTMS contract was flawed from its inception and should be declared null and void.

The LTMS, intended to replace the LTO’s old IT system, has been criticized by the petitioners as incomplete and substandard despite its acceptance and continuous use by the Department of Transportation and LTO.

The petitioners highlighted concerns regarding national security, emphasizing the failure to secure LTMS’ source code, which contains data and personal information of Filipino driver’s license and vehicle owners.

The petitioners have sought immediate relief from the SC, including a temporary restraining order enjoining the LTO from further payments to Dermalog and directing Dermalog to turn over the database containing all data owned by LTO.

The Senate Blue Ribbon Committee conducted an inquiry into Dermalog’s contract with the LTO last year.