IBM-GSIS row heats up over faulty database

By Alexander Villafania - INQUIRER.net

The dispute over the problematic database system of the Government Service Insurance System (GSIS) continues to worsen as the government agency’s legal counsel accused IBM of providing a defective product.

IBM is guilty of false advertising for denying customers with proper after-sales services, GSIS chief legal counsel Estrella Elamparo said in a statement, saying the technology company sold the agency a “lemon”, a derogatory term for a defective product.

She also said that the “special build” to fix the constant crashes of the GSIS’s Integrated Loans, Membership, Acquired Assets and Accounts Management System (ILMAAAMS) did not work, describing it as a “clunker.”

She also claimed that IBM’s Canada Laboratories admitted to having supplied GSIS with a defective product.

“IBM cannot smokescreen the fact that its database management software caused a crash in the GSIS system at just two terabytes of data when that software was purportedly able to handle 512 million terabytes,” Elamparo said.

IBM Philippines countered Elamparo’s accusations with an official statement, stating that IBM provided free support to the agency even if it was not involved in the implementation of the ILMAAAMS.

The company also said that it sent two special builds developed in IBM’s Toronto Lab to the GSIS in May, a few weeks after the series of crashes suffered by ILMAAAMS. IBM claimed that the second special build is already working successfully.

IBM also belied Elamparo’s claims that IBM Laboratories in Canada admitted to problems with their product and that it was not them who directly supplied the product to GSIS.

At the center of the controversy is IBM’s DB2 database software, which was the main application for ILMAAAMS. The GSIS first suffered crashes in April this year, which became more frequent in the following weeks.

IBM and the ILMAAAMS system integrator Questronix argued that GSIS failed to implement critical disaster recovery measures to prevent problems. They also stated that GSIS’s corrupted back ups worsened their situation.

GSIS filed a P100 million suit against IBM, its Philippine subsidiary, and Questronix for breach of contract. GSIS added a libel case against Questronix for allegedly making false claims that were published.

IBM countersued with a P200 million libel suit.

‘Highly unusual’ data handling caused GSIS database system crash, says IBM

‘Highly unusual’ data handling caused GSIS database system crash, says IBM

IBM PHILIPPINES, Inc. has rejected allegations of inefficiency and negligence made by erstwhile client Government Service Insurance System (GSIS), saying it has provided enough technical support for the state pension fund’s database system.

IBM said during the weekend that it actively participated in fixing GSIS’s database after it crashed in March despite having no contract and involvement in the supply design or installation of the system.

"IBM Philippines completely rejects the assertions made by the GSIS against IBM and its affiliates in paid newspaper and television advertisements," IBM said.

"This year, IBM Philippines celebrates its 72nd anniversary of serving our clients in the Philippines. During IBM Philippines’ long history as a member of this business community, it has always attempted to resolve issues with clients in a constructive and respectful manner."

IBM trades legal suits with Philippine govt agency

The local unit of US computer giant IBM has filed a libel suit against a Philippine government agency after being accused of selling it faulty software, court records showed Friday.

IBM Philippines filed against the Government Service Insurance System (GSIS) after an advertising campaign in which it claimed the US giant had sold it faulty software.

IBM Philippines said the GSIS ads in local newspapers "were not only false and misleading, but were motivated by ill will and malice."

The computer firm is demanding P205 million (US$4.33 million) in damages and legal expenses.

IBM said GSIS had acquired the faulty software from a local joint venture of three local firms that IBM Philippines was not a party to.

"IBM was not involved in the design, supply, installation and maintenance," of the systems, it said in a statement.

GSIS filed a civil suit against IBM Philippines on Wednesday and its US parent over the alleged failure of its software system, demanding more than 100 million pesos in damages and litigation expenses.

GSIS officials also said they had filed suits against the president of Questonix Corp., the firm contracted to install the IBM database management software. Agence France-Presse

GSIS files libel case against IT contractor

By Alexander Villafania - INQUIRER.net

The Government Service Insurance System (GSIS) filed on Thursday a libel case against the head of IT systems integration company Questronix.

The government agency alleged that Questronix President Alex Aloba discredited the government agency through statements published in two major dailies last May 31.

GSIS and Questronix, along with IT services company IBM, are in a bitter dispute over the problematic implementation of a massive GSIS database project.

The libel case against Questronix would be the second against the company, with the first being a breach of contract case that was filed by the GSIS on June 3.

IBM Philippines and its US-based parent company IBM Corporation are also respondents in the first tort and breach of contract case by the GSIS.

GSIS blamed IBM Corporation and Questronix for the constant crashes suffered by its main database infrastructure collectively called ILMAAAMS (Integrated Loans, Membership, Acquired Assets and Accounts Management System), which processes nearly all of the transactions of the GSIS and its more than 1.5 million members.

Questronix is the main contractor to implement ILMAAAMS in 2006.

The project cost was P80 million at that time.

Problems started on March 30 when ILMAAAMS suffered a major crash, resulting in a halt of all transactions for that day.

GSIS Chief Information Officer Helen Macasaet said it had earlier requested Questronix to identify the cause. Questronix later reported alleging problems with the IBM’s DB2 database software were to be blamed.

Macasaet argued that IBM continued to fail in providing a solution despite repeated calls, leading to the decision by the government agency to file a civil case against IBM and Questronix.

The GSIS is also seeking P100 million in damages against the respondents.

In retaliation IBM on June 3 said it is filing a libel case against the GSIS, seeking P200 million in damages. The company accused GSIS of unwarranted public attacks against them.

Prior to the filing of their cases, IBM Philippines insisted that it had no contractual relationship with the GSIS on the ILMAAAMS project, thus it was not present when DB2 was being installed and maintained.

The company also said it has already been working on solving the GSIS problem at their expense.

In a press conference, GSIS Chief Legal Counsel Estrella Elamparo said Aloba imputed that GSIS was to blame for the massive system crashes, despite reporting earlier to GSIS that software bugs in the database software were the culprit.

“He made it look like GSIS was at fault but it was GSIS who wasthe victim because many of our members are relying on this system to process their transactions,” Elamparo said.

Mitigating measures

With the cases already in court, GSIS officials said they are implementing mitigating measures to prevent crashes of the DB2 software, which they continue to use.

Macasaet said that some of the electronic processes that should have been done through ILMAAAMS are now being handled manually.

They are also prioritizing certain daily transactions, such as online queries, loans and membership updates.

Macasaet also stressed that the agency might be forced to shift to different database software if problems persist. “We might fast track another project that’s not even supposed to be implemented yet just to make sure we don’t encounter these problems.”

Nevertheless, Elamparo said that is still open to discussions with the respondents to try and fix the problem. “We’re open to settle this because it’s not just us who are suffering but the GSIS members.”

Computer crash was GSIS’ fault—contractor

A technology contractor threatened with a lawsuit by the Government Service Insurance System (GSIS) for the malfunctioning of its computer database has tossed the blame back to the government pension fund.

Questronix Corp., which supplied the GSIS database software package, said the pension fund managers themselves caused their computers to crash because of poor database management and lack of standard backup measures.

Questronix said that the GSIS used the system in an “unusual” way that led to a crash twice.

Last week, GSIS officials sent Questronix a demand letter, saying the crashes caused the agency “incalculable damage” and resulted in a backlog of applications for loans, including 20,000 filings for claims mostly by newly retired members.

In a letter to the GSIS dated May 28, Questronix countered that if the pension fund had invested in disaster recovery and implemented proper backup-and-restore procedures, its members would not have been left hanging by the crash.

Questronix is the lead systems integrator for the GSIS database that brought together sub-systems from German software application vendor SAP-AG, which included software developed and licensed by IBM Corp.

GSIS claimed it was supplied with “defective software” and has threatened a series of suits against IBM, SAP-AG and Questronix.

In a statement to the Inquirer, IBM Philippines had countered that GSIS did not engage IBM in the selection, customization and implementation of its system.

IBM said its DB2 was packaged with an application that was part of a global OEM (original equipment manufacturer) arrangement between SAP and IBM. Ronnel W. Domingo - Philippine Daily Inquirer

GSIS saves P500M annually with eCard Plus

THE Government Service Insurance System (GSIS) is saving P400-P500 million a year in printing cost by scrapping the check disbursement system for loan proceeds and pension benefits and instead crediting them electronically to the eCard Plus.

GSIS President and General Manager Winston F. Garcia explained that by freeing itself from printing around 8-10 million checks every year, with printing and mailing costing around P50 each check, the GSIS can use the savings to fund other projects and programs for its members.

The pension fund approves around P60 billion in loans and claims every year.

“All of them (loans and claims), we used to disburse in checks. If half of these checks are cashed through rediscounting, and the rediscounting is 5-10 percent of the value of the check, that’s easily P3 billion of money lost to these discounters of checks,” Garcia said.

The GSIS chief said there will still be complaints against the eCard system despite the benefits it brings.

“There will always be complaints because when you implement change, there’s always a resistance to change. A lot of people got used to the inefficient ways of the past. Some even profited from the inefficient ways of the past,” he said. “What people should realize is the delivery (of loan proceeds and pension benefits) is more efficient through the eCard because instead of waiting for weeks or months for the checks to be mailed, the money is credited electronically to the ATM account of their eCard Plus. Once it is credited, they can immediately withdraw it from any ATM.”

Aside from serving as an ATM card, the eCard Plus also serves as an official GSIS ID card, debit card, hospitalization discount card in select partner-hospitals in the Philippines under the GSIS Hospitalization Support Program and most importantly, provides access to the GSIS Wireless Automated Processing System or G-W@PS kiosk.

Working in synergy, the eCard Plus and the G-W@PS kiosk serve as a virtual GSIS office wherein members can check their records in seconds and apply for loans in mere minutes, such as the P10,000-Cash Advance and the Consolidated Loan.

On the other hand, pensioners can use the eCard Plus and the G-W@PS kiosk to renew their active status during their birth month, thus ensuring the continuous receipt of their monthly pension benefits.

As of September 7, 1,108,464 active members have already enrolled to the eCard Plus out of a total membership base of 1,366,000.

On the other hand, 110,459 old-age pensioners have enrolled to the eCard Plus out of 145,210 total old-age pensioners in the GSIS database.

The eCard Plus and the G-W@PS were first introduced on October 1, 2006 to a number of island provinces in the country, including Camiguin, Abra, Romblon, Coron, Masbate, Vorac, Siquijor, and Batanes.

High-tech ID system gets additional funding

By Alexander Villafania
INQUIRER.net


MANILA, Philippines -- The multi-agency project Unified Multi-purpose ID System (UMID) is set for the next phase of implementation after receiving $502,534 from the United States government through the US Trade and Development Agency.

The Philippine government, through the e-Government Fund of the Commission on Information and Communications Technology (CICT), has also allocated a corresponding amount of P88.75 million.

The next phase of UMID, which started pilot tests late last year, is to create 5,000 biometric cards with electronic chips. Likewise, an automated fingerprint identification system would be fine-tuned and integration with a common reference number for the pilot test recipients at the National Economic Development Authority (NEDA), National Statistics Office (NSO) and the Philippine Health Insurance Corporation (PHILHEALTH).

The next phase will also see the purchase of several biometric machines that capture the image of the would-be cardholder, signature and index finger prints.

The other card-issuing government agencies that are part of the UMID project are the Government Service Insurance System, Bureau of Internal Revenue, Pag-IBIG, Philippine Postal Office, Commission on Election, Social Security System, Land Bank and Philippine Postal Saving Bank.

Through UMID, Filipino citizens need only one type of card that have unique common reference numbers to grant them access to government services.

In an interview with INQUIRER.net, NEDA Assistant Director-General Danny Pabellon said the next phase would start in the first week of October. It would still be a full government project and no private sector has been tapped to conduct the project.

Pabellon said that NEDA is still working on the technical specification, the terms of reference and the request for proposals, which is set to be completed by December 2007. The documents are to be finally released by February 2008.

“This would be a build, operate and transfer project. By June 2008, we’ll be approving the contract to the winning bidder and full nationwide implementation will start in July 2008.

Dispelling misconceptions of potential security breaches of UMID, Pabellon noted that only 14 items will be included in the card. These are the cardholder’s name, address, birth date and birthplace, sex, picture, signature, height, weight, marital status, parents’ names, index finger prints and tax identification number.

“All the rest of the information are retained by the respective government agencies. We’ll ensure the security of each of the databases to prevent information theft,” Pabellon reassured.

The UMID is similar to the United States’ Social Security Card, which contains information about American citizens and indexes their employment records, student records and even health and credit card records. While not a requirement, the social security card speeds up processing of government services rendered to individuals.

Moreover, the UMID will not be a required card. Filipino citizens can still get separate cards from the different agencies to access individual services.