The Bangko Sentral ng Pilipinas (BSP) and Philippine Statistics Authority (PSA), the main implementing agencies of the Philippine Identification System (PhilSys) or National ID project, on Thursday said that it did not violate a rule against sub-contracting when another company was tapped to supply cards, equipment, and machinery to print National IDs.
In a statement, the BSP said that it “has fully complied with the Agency-to-Agency Procurement Guidelines (Negotiated Procurement under Section 53.5 of the Implementing Rules of Republic Act No. 9184) and its agreement with the PSA for the printing of National IDs.”
“The BSP did not subcontract its obligations to AllCard Inc. (ACI),” the central bank said, adding that BSP and PSA personnel managed the operations, while ACI provided equipment, raw materials, and technical support under a lease and supply contract.
“The Commission on Audit (COA) team assigned to BSP flagged no issues related to subcontracting in its review of BSP’s transactions,” the central bank added.
The BSP echoed the PSA’s statement that the COA cited its May 2023 audit report finding that subcontracting is not allowed under the Memorandum of Agreement (MOA) between the PSA and BSP for the printing of the National ID cards.
With this, the Statistics bureau said that it has fully complied with Agency-to-Agency Procurement Guidelines under Republic Act No. 9184 regarding the printing of the National IDs.
“As the primary stakeholders in the ongoing implementation of our National ID system, we affirm our alignment with the BSP’s commitment to transparency, accountability, and compliance with our procurement laws,” the PSA said.
Moreover, the BSP said the ongoing issue with ACI, concerning its failure to meet contractual obligations, is now under arbitration.
“This independent proceeding serves as the proper venue to resolve all issues raised by ACI, and the BSP shall abide by the decision of the arbitration committee,” the central bank said.
“Considering the ongoing arbitration, the BSP will refrain from making further public statements on specific matters pertaining to the proceedings,” it added.
The BSP had terminated its contract with ACI for the supply, delivery, installation, and commissioning of Card Production Equipment for National ID cards.
The central bank cited the following as grounds for terminating its contract with ACI:
Failure to deliver any or all of the goods specified in the contract, amounting to more than 10% of the contract price —with ACI’s failure “to delivery enough raw materials within the specified period, even within the extension granted” and the supplier also failing to “maintain the production machinery due to unavailable machine spare parts causing prolonged machine downtime
Failure to perform other obligations under the contract
The BSP, in particular, said ACI failed to perform the following:
- Failed/refused to comply with valid instructions
- Failed to timely provide a comprehensive and realistic catch-up plan
- Incurred almost 7% wastage, which grossly exceeded the 1% maximum allowable maximum wastage
The notice also indicated that, as of June 30, 2024, the cumulative liquidated damages due from ACI have reached more than 10% of the contract price.
With this, the BSP said: “The contract is hereby deemed terminated from receipt by ACI of the notice decision. No other paper or document shall be entertained by the Monetary Board.”
ACI, meanwhile, is appealing the termination of its contract with the central bank, saying it has complied with its contractual obligations. — RSJ, GMA Integrated News
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