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Saturday, January 24, 2015

A sinfully outrageous proposal!


It will cost the country P3,649.64 per PCOS machine to have each examined for possible defects. It does not include services and parts to get all of the PCOS machines back to normal operating condition!
The Commission on Elections (Comelec) intends to negotiate with Smartmatic-TIM (Smart matic) “Program 1 Extended Warranty Proposal (Program 1)” which will cover diagnostics to be performed on the PCOS machines and minor repair of up to 4% of the existing stock of PCOS machines for the sum of P300 million.
It will be recalled that the stock of 82,200 PCOS machines was purchased for P1.8 billion (this means 1,800 millions pesos) after it had been used in the 2010 elections.
The general understanding in buying used equipment is that it is bought “as is”—that is, it includes defects that may already exist at the time of original purchase. It may include a warranty but for a period much shorter than the original warranty period.
The typical IT industry annual maintenance rate is about 12% to 15% of the price of brand new equipment while the typical diagnostic charge for desktop computers or similar equipment hovers around P500 per piece only.
The amount quoted for Program 1 is equivalent to 16.67% of the purchase price of used PCOS while the per PCOS rate of P3,649.64 for diagnostics is 729.93% of the typical diagnostic charge for the same or similar equipment.
Using the typical rates as standard, it is easy to see that the cost for Program 1 is outrageously high!
Justifying why it did not conduct a bidding for Program 1, Comelec, in its Resolution No. 9922 dated December 23, 2014, reasons “In the consolidated cases of Capalla et.
al. v. Comelec et. al. the Supreme Court upheld the validity of the exercise of the OTP (Option to Purchase) as it was an extension of the original AES (Automated Election System) contract and therefore, there was no need to bid the same.” It appears that the contract of sale covering used PCOS machines includes a warranty condition which is simply being extended. Co melec’s justification alters the general understanding of extended warranty.
Offered for a defined period at the time of purchase of a product, warranty, among other things, is an assurance to repair and/or replace the product should it be found defective or not performing as promised. The general understanding of extended warranty is that the warranty period is being extended for a price lower than the typical maintenance rates and is bought at the time the product is purchased.
The Comelec Advisory Coun cil’s Report on the 2013 Elections cites reports malfunctions of some PCOS machines. The Technical Evaluation Committee also reported digital lines running the length of the ballots. If the used PCOS machines were covered by warranty, why weren’t these repaired or restored to normal operating condition?
Why didn’t Comelec negotiate for better warranty terms at the time that it exercised its option to purchase and be consistent with the general understanding of extended warranty?
Comelec also cites, in the same Resolution No. 9922, the highly technical nature of the PCOS machine and its repair.
Surely, there are more sophisticated electronic devices than PCOS machines which the public is familiar with. Smart phones are an example.
Smart phones are packed with more functionalities than a PCOS machine. It can be used to capture photo and video, record voice, play games, organize activities and schedules, prepare and write documents, read and send email, get connected to social networks, store thousands of photos, videos and other recordings, and a host of other functions.
The PCOS is designed to only scan ballots, count votes, generate election returns, and print and transmit election returns to a target. Its scanning technology is no different from any other scanner.
Yet, as users of smart phones, we bring said smart phones not to the manufacturer but to any shop that provides diagnostics and repair service.
So, why should the PCOS machines be treated differently?
How can the Comelec determine a more reasonable price for Program 1? Well, aside from considering typical industry rates, it should look into the “Mean Time Between Failure (MTBF)” schedule of PCOS parts. The MTBF schedule is a list of parts of the PCOS machine with estimates of the scientifically determined useful life of each part.
In performing maintenance on equipment like the PCOS, certain parts may be replaced if said parts are at or near their useful life. This practice is done to avoid failure of the whole device. The cost of each part should be indicated too.
Let’s face IT! The P300 million quote for Program 1 or diagnostics of the PCOS is grossly overpriced. Comelec should perhaps simply double the typical diagnostics rate so that Program 1 would not exceed Pesos 82.2 million.

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