Stradcom improves offer, but DoTC remains unconvinced, cites firm’s violations

Information technology firm Stradcom Corp. has submitted an improved offer to the Department of Transportation and Communications (DoTC) in an effort to retain what is expected to be an P11-billion, 10-year contract to maintain and operate a national database of vehicles for the government.

In an interview with the Inquirer, Stradcom president Cezar Quiambao said the offer was made by his firm recently to Transportation Secretary Manuel Roxas II, despite the latter’s recent pronouncement that the government would not renew Stradcom’s contract with the Land Transportation Office and instead bid this out to other parties.

Stradcom’s move is the firm’s latest initiative to win over the DoTC and the administration of President Aquino, which has maintained an adversarial stance against the IT firm ever since it came into power in July 2010.

“We offered them three options in a recent letter to Secretary Roxas,” Quiambao said. “The first one involves their renewal of our contract for another 10 years, during which we will set aside P2 billion in an escrow account, which the government can use for any improvement it deems necessary, be it in the computer systems, the physical infrastructure of the project or the government’s own facilities like the LTO’s office buildings.”

Quiambao added that the latest offer to the DoTC also included the option of a revenue sharing scheme with the government to the tune of P200 million a year, or a total of P2 billion over the decade-long life of the contract.

Should the DoTC decide to integrate the printing of drivers’ license cards in the system—at present handled by another contractor—the Stradcom chief estimated that the government could save another P300 million a year in costs.

Finally, Quiambao said that he has offered, as a last-ditch attempt, a one- to two-year extension of Stradcom’s current 10-year LTO IT contract, which expires next year, to give the government a transition period that would help ensure a seamless shift to another service provider.

“The government stands to save more than P8 billion over the life of the project if they retain us,” he said.

Unfortunately for the firm, Quiambao lamented that the current administration has closed its doors in his face, with ranking officials from both the Palace and DoTC supposedly refusing to meet him or company officials for a dialogue.

Various industry sources attributed this to the perception that Quiambao is linked to the administration of former President Arroyo, although he had denied this. “The existing Stradcom contract was started under the administration of President Ramos and was continued through the administrations of Presidents Estrada and Arroyo,” Quiambao said.

Despite his pleas, the DoTC seems bent on shutting the company out of the next contract.

In a telephone interview, Transportation Undersecretary Jose Perpetuo Lotilla said the government’s right to terminate Stradcom’s services was clearly stated in the contract.

“There were issues raised by the Commission on Audit against Stradcom,” he said, pointing to the auditors’ finding about supposed unpaid interconnectivity fees to the government and some “objections” to the contract’s provisions. “Just from that alone, it’s not easy to just renew their contract. Any prudent government will not just renew the contract. One way to address it is to start afresh.”

Asked whether the DoTC would allow Stradcom to participate in a fresh round of bidding, Lotilla was noncommittal. “We’re still going through all the things that have been raised,” he said. “There are many findings. We don’t rush to judgment.”

With the chances of securing a fresh contract looking dim, Quiambao is now hoping that the government would at least pay his firm the P2.7 billion in back fees accumulated since a high-profile boardroom squabble erupted in the firm in late 2010.

“The courts have determined us to be the rightful shareholders of the company, so the government should now pay us for the services we have rendered,” he said. “That is a contractual obligation on their part.”