LTO to terminate IT supplier’s contract

THE Land Transportation Office (LTO) said it would terminate its P3.14 billion contract with German information technology firm Dermalog due to underperformance.

The company was commissioned to develop the Land Transportation Management System (LTMS).

LTO Chief Assistant Secretary Vigor Mendoza 2nd said the agency was being assisted by the Office of the Solicitor General in the process of rescinding the contract, noting the action was approved by the Department of Transportation (DoTr).

“They have reviewed, and we have already provided them with the [Commission on Audit] report as early as last year,” Mendoza said, adding the termination process would be completed within the week.

Mendoza said they were coordinating with the Department of Information and Communications Technology to ensure that motor vehicle registration and driver’s license application will not be affected by the initiative.

The DoTr also said the LTMS still lacks features crucial to LTO’s daily operations, including a payment system.

The LTMS was developed through a joint venture agreement between Dermalog and its local partners Holy Family Printing Corp., Microgenesis, and Verzontal Builders Inc., after the German firm secured the project through competitive bidding in May 2018.

During a congressional hearing on March 7, House Committee on Transportation chairman and Antipolo City 2nd District Rep. Romeo Acop said that Dermalog violated two provisions of the government procurement manual when it failed to submit the required deliverables on time despite being granted 13 deadline extensions.

Acop added that the violations resulted in P1.119 billion worth of damages that merit the filing of termination of contract.