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The G-EPS
Mess Gets Murkier
By Michael Alan Hamlin
February 17, 2003
The G-EPS mess has just gotten a
lot murkier, if not downright sinister. It turns out that the Inter-Agency
Bids and Awards Committee (IABAC) has provided notice of the selection
of a winning bidder for the Government Electronic Procurement System
(G-EPS) project after all. It didn't do this publicly in a formal
way or on its own initiative, however.
You may recall that in my column
January 27, I wrote that IABAC failed to make public notice of the
selection of a winning bidder, as prescribed in the project bid
documents.
It still hasn't done that. What it
has done is respond to a letter, a copy of which was furnished to
me last week, from Barbara L. Domingo, director of marketing of
Ayala Systems Technology, Inc. (ASTI) to IABAC chairman Eduardo
P. Opida. Ms. Domingo's letter, dated December 2, 2002, requested
that the Department of Budget & Management (DBM), which overseas
IABAC, to "communicate with us officially on the results of
the bid."
Opida eventually got around to writing
back on January 15, saying that, "based on the evaluation of
submitted proposals, iTBF was rated as Rank 1," and that "Notice
of Award of even date has been issued in favor of iTBF." Aside
from the obfuscation with respect to the notice and its date that
Opida references, his response to Ms. Domingo also failed to address
two key points raised in her letter. The first point had to do with
the location of the iTBF mirror site, which apparently is overseas.
This raises the security and cost issues I discussed previously.
Ms. Domingo's second question, and
this is where things get sinister, had to do with the structure
of the iTBF. She noted that iTBF is a newly organized corporation,
led by a foreign-owned partner that does not have majority control.
She asked, "Has DBM considered the risk inherent in dealing
with start-ups" for such a major project of national significance.
In light of the PIATCO shenanigans of which we are all painfully
aware, one might reasonably venture to suggest that such a concern
should in fact be very much top-of-mind. Much of the woes associated
with PIATCO and its construction of Terminal III can be traced back
to a supposedly dominant foreign partner who lost control of the
project.
So Ms. Domingo wrote back on January
16, the day after receiving Mr. Opida's acknowledgement that IABAC
had quietly awarded the project to G-EPS. And in that letter, she
noted that iTBF is not even a corporation, let alone a new one.
"Based on the results of our inquiry with the Securities and
Exchange Commission (SEC), it appears that as of January 6, 2003
the SEC has no record of a company registered as iTBF qualified
as a bidder for the G-EPS bid." This strongly suggests, of
course, that iTBF has been operating illegally in the Philippines.
That would explain in part why IABAC has tried to keep the lid on
the results of the bidding: it wants to award the project to an
entity with no legal personality.
Of course, one has to wonder why
the IABAC would not disqualify a "vapor firm" that isn't
a real firm from the bidding in the first place, especially since
other second-round finalists were quickly dismissed for minor procedural
infractions (I must again disclose here that one of those losing
consortia involved a number of my clients.). I would surmise that
iTBF is now off feverishly trying to get its SEC registration so
that it can actually sign a contract. All this, I'm pretty sure,
should classify as a major procedural violation.
But it turns out that procedural
violations are a relatively minor issue. Among the more significant
issues is transparency, which has been noticeably absent from the
bidding process. That's truly ironic, since one of the principal
objectives of the G-EPS is to enhance transparency of government
procurement. In fact, Ms. Domingo wrote in her January 16 letter,
"In the interests of transparency and fair play, may we request
DBM to provide us with details on how the individual members of
the evaluating team scored" ASTI and iTBF.
Ms. Domingo explained her request,
indicating that, "By showing the individual judge's scores
it would indicate the independence of each judge. It should be no
different from the open and transparent scoring used in the Olympics,
where a winner is decided based on the judges" decision.
"In this type of scoring, the
competitors and audience know how the individual judges scored and
therefore rigging is almost impossible. Of course, one may still
not agree with the outcome, but the judges can claim that the scoring
is fair and transparent." That's something IABAC's judges so
far can't claim, and so it's not surprising that Ms. Domingo's letter
has gone unanswered.
Ms. Domingo notes that the lack of
transparency is in considerable contrast to other government bids
her company has participated in. "We have participated in other
government bids where the chair of the evaluating team met with
each bidder to inform the bidder of how they scored in the different
aspects of the evaluation. In our experience, a bid evaluation process
that has been conducted in a fair and transparent manner is able
to stand up to challenges raised by bidders."
IABAC's silence is probably intended
as an attempt to stay below the horizon until these - and numerous
other issues raised in Ms. Domingo's last letter which I won't go
into here - blow over. Bidders who argue that they were short changed,
however, vow that's not likely to happen. I'm told that they will
push for a congressional investigation to draw some real scrutiny
to the apparent anomalies in the G-EPS bidding process, and they
are likely to present their own findings in a major public announcement
in the meantime.
Clearly, it's time for IABAC to come
clean. This issue isn't going to go away, and the longer it goes
on the more funny - or should I say sad - business is going to be
made public. And it will be far better for IABAC to deal with this
now, than later when it is completely out of their control.
(Michael Alan Hamlin is the managing
director of consultancy TeamAsia and the author of three books on
Asian economies and companies. His latest book is Marketing Asian
Places, of which he is a co-author (Wiley, 2001), and he is currently
at work on High Visibility: The Making and Marketing of Asian Professionals
into Celebrities. Write him at mahamlin@teamasia.com.).
Copyright © 2003 Michael Alan
Hamlin. All Rights Reserved.
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