Privilege Speech of Senator Risa Hontiveros on Comelec procurement issues
March 18, 2024

Mr. President, dear colleagues, I rise on a point of personal and collective privilege. I rise to bring to your attention a disturbing contractual award entered into for the 2025 National and Local elections.

Last February 22, 2024, the COMELEC announced that it awarded the contract for the lease - not the purchase, but the lease - of the Automatic Voting Machines for the 2025 National & Local Elections.

With an P18.827 Billion Approved Budget for Contract, ang kontratang ito ang pinakamalaki sa kasaysayan ng mga halalan sa Pilipinas. It dwarfs the aggregate total of P25 Billion spent for poll automation from 2010 to 2022.

Ang nakakapagtaka, Mr. President, dear colleagues, the bidding for the richest single contract in Philippine election history was only able to attract a single bidder: a Joint Venture composed of South Korea's Miru Systems Co. Ltd., and Philippine companies Integrated Computer Systems, St. Timothy Construction Corporation, and Centerpoint Solutions Technologies.

This company, Miru, is no stranger to controversy. Miru was previously involved in supplying automated election systems for aside from its home country, the Kyrgyz Republic, the Democratic Republic of the Congo, and the Republic of Iraq.

In Congo, researchers reportedly found that the machines Miru tried to sell there were repackaged equipment originally intended for Argentina, where similar machines faced pushback. Ang tawag nga sa Congo ng mga election machines doon ay "cheating machines."

In Iraq, a 2018 Reuters report found that Miru's machines were "at the heart of fraud allegations that led to a manual recount in some areas after the May 12 election."

Ayon sa mga mananaliksik, 30% and 75% of the voting machines supplied by Miru, respectively, were affected by election-day glitches and malfunctions, which lead to failure of elections in those countries.

And while these doubts linger in our minds - doubts caused by electoral troubles in fragile states like the Democratic Republic of Congo and Iraq - it seems that there is also a clear violation of law.

Question: prototype nga ba ang automated counter machines?

During post-qualification - the phase of the competitive bidding process where the winning bid is validated to ensure that it meets the requirements in the bid documents - COMELEC Commissioner Marlon Casquejo admitted that the ACM being presented was a prototype.

He said: "this machine is ours; it really belongs to the COMELEC. We made xxx our wish list. Miru just followed. So, if you noticed, this is a customized machine which has not yet been produced."

But Section 12 of Republic Act No. 8436, the Automated Election Law, as amended, requires that the system procured must have been successfully used in a prior electoral exercise here or abroad.

Kaya ang dami ang nagtatanong: Does Section 12 of the Automated Election Law prohibit the use of such prototype ACMs in connection with the 2025 elections? Kung oo, bakit pinayagan ang prototype ACMs ng Miru?

Even a simple online search will reveal that there are at least 20 suppliers of automatic voting machines worldwide. Despite this, the COMELEC was only able to attract a single bid for the largest single contract in Philippine election history.

Dako naman tayo sa issue ng local kanilang local partners.

Mr. President, just what is a construction company doing leasing voting machines to the Filipino people? A construction company that appears to share principal office address of another Company - St. Gerrard Construction General Contractor & Development Corporation - blacklisted by the Department of Public Works & Highways, as shown by this document.

The two companies also share a common incorporator - a certain Pacifico F. Discaya II. Was St. Timothy incorporated to circumvent the blacklisting of St. Gerrard?

There are also reports St. Timothy wrote the COMELEC revoking the authority of a certain Mr. Jinbok Chung to represent the company in the contract signing for the procurement project. St. Timothy said that - given the magnitude of the potential liability - it was not fully informed of the scope of its responsibilities under the contract.

Totoo ba ito? If even a blacklisted company smells something fishy, maybe that should be considered a double red flag?

Next question: was there competitive bidding?

Republic Act No. 9184, otherwise known as the Government Procurement Reform Act, requires that all public procurement be done - with certain exceptions - through competitive bidding.

In a paper entitled Intensifying Competition in Public Procurement, by Tátrai, Vörösmarty, and Juhász published August of last year, it was found that "encouraging intense competition in public procurement is of fundamental importance for the presence of a sufficient number of competitors and their active commitment to bidding is a key element of efficient public spendings."

In this controversy, it was confirmed that while 5 companies - including Dominion Voting Systems, Indra Philippines, Inc., AMA Group Holdings Corp., and Smartmatic - they purchased bidding documents, all but Miru declined to submit bids.

Napakalaking kontrata, walang ni isang bidder? Yes Smartmatic was disqualified because of its own money laundering controversies, but there were others. Bakit biglang naglaho nalang?

The Organization for Economic Co-operation and Development or OECD, in its Guidelines for Fighting Bid Rigging in Public Procurement defines "Bid-Suppression" as an agreement among competitors in which one or more companies agree to refrain from bidding or to withdraw a previously submitted bid so that the designated winner's bid will be accepted.

In essence, bid suppression means that bidders other than the designated winner do not submit bids, or are prevented from doing so? Some quarters are asking: is this what happened here?

Is this real competition, or is the real competition in the back rooms of the halls of power? I hope not.

This makes me wonder, Mr. President: how many other substantial contracts have been awarded to the lone entity who bothered to submit a bid?

Thus, I agree with Sen. Angara, it appears it might be time to re-examine the legal framework we have set in place for public procurement, to prevent the system from being gamed, rigged, and manipulated for private gain. Let's bring back real competition in public bidding.

At ang aking huling tanong: what will happen to the Php402 million we spent to procure automated election software - including the source code - to enable a proper source code review thereof? Gone with the wind?

Mr. President, these questions are very important. Hindi lang po dahil public procurement requires the highest duty of care and responsibility from our public servants, but also because - since electoral machines are involved - they strike at the very heart of our democracy.

Always, but most especially in these turbulent and divisive political times, the people's right to suffrage must be protected from fraud or the perception of fraud, and kept sacrosanct. Salamat po, Mr. President.

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Please see attached presentation in powerpoint