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Nothing
but Silence
By Michael Alan Hamlin
March 17, 2003
Exactly a month ago I suggested
that the Inter-Agency Bids and Awards Committee (IABAC) would likely
refuse to respond to questions raised by Ayala Systems Technology,
Inc. (ASTI) concerning the bidding for the Government Electronic
Procurement System, or G-EPS. That's because responding to ASTI's
letter would likely require IABAC to reveal information that would
confirm its bidding was tainted. It's in IABAC's twisted best interest,
therefore, to say nothing.
ASTI raised both procedural and substantive
issues to IABAC. The procedural issues are important because IABAC
has selectively employed procedural issues to disqualify technically
qualified bidders (Full Disclosure: Including some of my clients.).
Far more serious, however, are the substantive issues. ASTI asked
three questions: 1) How did individual judges score the two finalists?
2) How can the winning bidder guarantee security and system integrity
of the G-EPS if the mirror site is located offshore? 2) How can
the critically important G-EPS project be awarded to a startup organization
that is not registered with the Securities & Exchange Commission?
In that column a month ago I predicted
that despite the silence, this issue wouldn't go away. Sure enough,
ASTI, with the support of local e-marketplace BayanTrade, is taking
the next logical steps required to shake information loose from
IABAC. ASTI leads a partnership that was one of two qualified bidders
for the G-EPS. It has been told by IABAC that it lost the bid. BayanTrade
was a member of one of the consortiums conveniently disqualified
on procedural grounds.
The first step involves the distribution
of a position paper to IABAC co-chairs Emilia Boncodin and Romulo
Neri. Ms. Boncodin is secretary of the Department of Budget and
Management. Neri is director general or the National Economic Development
Authority. The important part of this paper involves four issues.
Three of them have to do with transparency of the bid process and
the G-EPS itself, and the fourth with the announced winner, iTBF,
an organization with no legal personality in the Philippines.
The transparency issues are these:
1) An offshore mirror site does not fall under the laws of the Philippines,
so how can data security and system integrity be assured? No other
government in the world allows sensitive government transaction
data to be stored outside its borders. 2) If the bidding was honest,
why has IABAC so far refused to produce the individual scoring sheets
of the judges involved in the evaluation? 3) If the procurement
process for the G-EPS system is tainted, it is likely that the G-EPS
system itself will have anomalies built in.
Just think about that last item a
minute. Imagine if the same people responsible for the tainted G-EPS
bid build into the procurement system programs that allow government
insiders and the operators of the system to favor select vendors?
This would mean, if true, that the real money will be made in the
operation of the G-EPS, not merely its bidding. It will also mean
that the transparency and integrity of government procurement will
be no better than it is now. And G-EPS is meant specifically to
address those vital concerns.
The fourth issue raised in the position
paper has to do with iTBF's capacity to fulfill its obligation to
deliver the G-EPS. iTBF has no track record, and its partners are
mostly bit players with minor or very limited track records in the
provision of very large, very sophisticated IT projects. And as
relatively small companies, their capacity to generate the financial
resources required to deliver the G-EPS is also a legitimate concern.
ASTI and BayanTrade are hopeful that
IABAC will call a meeting to consider these issues, and ultimately,
to declare the bidding a failure if these issues are not addressed
in a timely and credible manner. If no meeting and no resolution
of the issues takes place, the two companies will raise their concerns
to Congress. It may then go to the president. In the meantime, if
a contract is signed with iTBF, presumably after it manages to get
itself registered with the SEC, then ASTI and BayanTrade will file
a case before the Ombudsman.
So in the G-EPS matter, silence is
definitely not golden. IABAC still needs to come clean, these issues
need to be addressed, and the country needs desperately to get on
with building a truly world-class, transparent, credible G-EPS.
(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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