Press Release
June 3, 2009


Opposition Sen. Chiz Escudero wants the Commission on Elections (Comelec) to put in an "iron-clad" prohibition against price escalation in the contract of the winning bidder for the automation of the 2010 elections to ensure that the government does not pay beyond the bid amount.

"There should be a firewall against escalation costs or an iron-clad prohibition against cost overruns. The winning bid should be the final price and Comelec should not allow any fine print that will allow change orders or revisions in deliverables that will bloat cost," Escudero said.

The senator issued the statement in light of what he described as an apparent trend of "over-the-budget" payments in government projects, be they foreign-assisted or locally-funded, due to cost overruns.

"We don't want voting machines to become slot machines where you will have to put in more coins to continue playing. We don't want Comelec computers to be littered with pop-ups warning us that purchase of new hardware or program is needed for us to proceed," Escudero said.

The Smartmatic/Total Information Management consortium submitted the lowest bid at about P7.2 billion, or P4 billion lower than the P11.3 billion allocated for the automation of the 2010 polls.

Procurement laws and rules, Escudero said, state that all bid prices shall be considered fixed and therefore not subject to price escalation during the implementation of the contract.

"But the law provides an imprimatur. Price escalations are allowed under extraordinary circumstances and upon prior approval of the Government Procurement Policy Board (GPPB)," he said.

He explained that all the contractor will do is request for price escalation under extraordinary circumstances and submit it to the National Economic and Development Authority (NEDA), with the endorsement of Comelec, and then prove the need for escalation.

"By that time, we would have been held hostage. And since we are dealing with the automation of the elections, the highest exercise of our democracy, how can we refuse such a request when our fate as a nation depends on those machines?" Escudero said.

"Comelec can still prevent this scenario by preparing the contract carefully. If the absolute prohibition for any price escalation is incorporated in the contract, then we are assured that we won't be paying more than the bid price," he added.

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