The Office of the Ombudsman has initiated a fact-finding probe into the Department of Information and Communications Technology (DICT) over an alleged fraudulent IT scheme where suppliers reportedly delivered substandard or non-existent software while billing the government in full.
Assistant Ombudsman Mico Clavano disclosed on Friday that anti-graft investigators uncovered the mechanism behind the alleged anomaly involving multi-billion-peso tech contracts.
“Here’s how it works… government pays billions of pesos for IT systems with very specific technical requirements… but once the hardware, the machines, the routers are delivered and passes inspection, everyone assumes the software that is supposed to run on it is there as well,” Clavano said.
“There comes the loophole. A contractor can install cheaper, outdated or even fake software while still charging the government full price for the real thing,” he added.
According to Clavano, a major gap in the procurement process occurs because technical inspectors frequently fail to verify installed software once hardware components pass initial checks. This vulnerability allows potential overpricing and fake installations to go unnoticed until systems malfunction or undergo audit.
The anti-graft body is currently determining whether contracted projects were genuinely established and functional, and whether public funds were disbursed for undelivered services.
Additionally, investigators are assessing whether hardware, software, and service costs were unjustifiably inflated, while working to identify officials who authorized payments for compromised or non-operational projects.