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Thursday, April 25, 2024

What happened to due diligence?

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"Perhaps the Philippine Statistics Authority can shed some light on this matter."

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President Rodrigo Duterte ordered acting National Economic Development Authority Secretary Karl Kendrick Chua to expedite the implementation of the National ID system. It is widely believed that this could have made easier the distribution of the government’s emergency subsidy distribution during this COVID-19 crisis.

This has long been anticipated by the chief implementor of the program—the Philippine Statistics Authority when Undersecretary Claire Dennis Mapa, chief of the PSA, announced last week his office would resume data collection operations including work on the national ID, after its employees secured exemptions from quarantine protocols during the Luzon-wide enhanced community quarantine.

In fact, Mapa had already informed JV Idemia Identity and Security France and FMC Research solutions  Inc. it had secured the P683-million project as early as the first week of April, having submitted the lowest bid.

In his letter addressed to Gauray Gupta, authorized representative of Idemia dated April 6, Mapa instructed the bid winner to enter into a contract with PSA10 days upon receipt of the letter and to submit the corresponding Performance Security Bond.

While we have no idea how PSA arrived at awarding the project to Idemia, it seems the agency had failed miserably in conducting due diligence on the bid winner.

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According to sources, Idemia is blacklisted in other countries, including Kenya, which it failed to disclose to the PSA, which in itself, is a ground for disqualification.

To effectively hide from supposed liabilities and blacklisting, Idemia allegedly uses multiple companies when in fact, it is controlled by a single global ultimate owner–Advent International Corp.

Accordingly, Advent has been the owner of Oberthur Technologies since 2011. On May 31, 2017, Advent completed the acquisition of Safran Identity and Security (Morpho). As a result, Oberthur Technologies became OT-Morpho which was eventually rebranded as Idemia on September 2017. 

In 2015, Oberthur entered into a deal with the People’s Republic of Bangladesh to establish a secure, accurate and reliable national ID system. The project however, was debarred by the World Bank in 2017.

In 2019, the Kenyan High Court declined to suspend a 10-year ban imposed by the National Assembly on Idemia because of corruption and fraud issues connected to the Hiduma Namba 

National ID Project in 2017. 

However, in its notarized Omnibus Sworn Statement submitted to the PSA, Idemia declared they have no active blacklist from any local or foreign government or foreign international financing institutions despite its active ban in Kenya which include all its affiliates.

Further, according to the source, the National ID System’s Modular Open source Identity Platform or Mosip registration system is integrated to an Automated Biometric Identification System or Abis which is said, not to be compatible with that of Idemia’s system.

If the PSA awards the Abis, a vital component in the national ID system, Idemia has to work on the following developments: (a) A validator middleware for quality check of biometric captures; and, (b) Synching features to send offline packets for biometric processing), which according to IT experts, will take at least four to six months. In addition, there will be a stabilization stage that would take another two to six months depending on the issues to be encountered when the system is deployed.

In sum, given Idemia’s lack of experience in the system the PSA’s national ID requires, implementation of the program would take at least eight to twelve months to implement, which runs counter to the government’s objective of capturing and issuing five million IDs this year.

To date, Idemia reportedly has yet to submit its contract and Performance Security Bond, according to the source.

While PSA may justify its awarding of the project to Idemia, it seems having submitted the lowest bid should not be the sole consideration in securing the said project. If the allegations against Idemia are true, then how can it be expected to deliver everything it had promised.

It has been two years since the national ID system had been approved. Why then did it take so long for the PSA to finally announce the bid winner and a time when everyone is focused on the COVID-19 pandemic? And to a possibly questionable supplier at that?

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