Controversy mars bidding for LTO P3.85-B license plates contract

MANILA, Philippines—Only two firms have been left in the running for the P3.85-billion supply contract for license plates for all motor vehicles in the Philippines, the Department of Transportation and Communications  announced Wednesday.

In a statement, the DOTC said out of the eight pre-qualified firms, only two were able to pass acceptable technical and financial criteria.

These were the joint venture between Dutch firm J Knieriem BV Goes (JKG) and the local firm Power Plates Development Concepts Inc., and another joint venture between the Spanish company Industrias Samart and its local partner Datatrail Corp.

The JKG-Power Plates joint venture offered to supply license plates for cars for P1.98 billion, and P1.196 billion for motorcycles, for a combined cost of P3.18 billion, which was the lower of the two offers.

Samart-Datatrail’s combined offer reached P3.305 billion. Both bids were below the ceiling of P3.85 billion.

This early, however, one bidder has already questioned the bidding process, saying that  all other bidders made false statements when they attested to having complied with a non-existent technical requirement.

In a letter to Transportation Undersecretary Jose Perpetuo Lotilla, RNA Holdings Inc., which bid for the project in partnership with Polish firm Utal So. Z.O.O., said they had earlier challenged the technical working group about the existence of an “ASTM D 4956 8.5” standard, which is supposedly used by international testing bodies for evaluating the quality of reflective surfaces for traffic control purposes.

RNA’s representative, Robert N. Aventajado, said that his group pointed this out to officials but was assured that the requirement was accurate and did not have any typographical errors despite the existence of a closely related standard known as “ASTM D 4956 7.5”.

Despite this, all bidders certified under oath that they had conducted tests under the supposedly non-existent standard.

“This is false and perjurious,” Aventajado said in his letter to Lotilla, who also chairs DOTC’s bids and awards committee. “There is no such standard and no test can prove conformity to a non-existing standard. Yet, as the rules require, all bidders swore under oath that they did the test” for the plates’ reflective surfaces.

Aventajado pointed out that the government’s rules mandate that bidders’ claims that are not supported by evidence should be rejected.

“We thus implore the [bids and awards committee] to render all submitted bids rejected and therefore declare these proceedings a failed bid,” he said in his May 7, 2013 letter.

Meanwhile, DOTC said that it will conduct a detailed evaluation of the financial proposals to determine the correctness and completeness of the eligible bidders’ calculations.

“Based on those results, we will declare the lowest calculated bidder, who will then undergo post-qualification,” the DOTC said.

The bids were opened during “marathon sessions”  May 6 to 7, the DOTC said. While Samart-Datatrail’s bid was higher, it still has a chance to win the contract if the JKG-Power Plates proposal fails the DOTC’s detailed evaluation.

The winning bidder will supply license plates for all registered vehicles —new and old—for the next five years. The new contract will also likely address supply shortage issues that have hounded the LTO for months.

The DOTC said the six firms whose bids were not accepted submitted incomplete documents.

“Where any requirement was absent, we had no choice but to declare ineligibility,” the DOTC said.

RNA is also questioning DOTC’s decision to exclude it from the list of final bidders for the deal, pointing out that the prices it offered the government for license plates were significantly lower than those of its pre-qualified rivals.

Sources familiar with RNA’s bid pointed out that the Filipino-Polish consortium had offered to provide the LTO the expended demand of 5.2 million two-piece license plate sets for cars, trucks, taxis, buses and other four-wheeled vehicles at P163.85 each.

In contrast, qualified bidders from the Netherlands and Spain offered theirs at P380 and P388.05 per set, respectively.

For motorcycles, RNA offered to supply 10 million license plates at P46.16 each versus the Dutch and Spanish suppliers’ offers of P120 and P128 each, respectively.