Landing Craft Utility acquisition project

The Department of National Defense initiated the P189,934,000 ┬áLanding Craft Utility acquisition project on June 25, 2008 on behalf of the Philippine Navy. Because of the project’s monetary value, it fell under the responsibility of the DND Bids and Awards Committee (BAC).

A Landing Craft Utility (LCU) is a relatively small amphibious assault vessel that transports vehicles, personnel, and materiel to direct to shore, without the need for port facilities. Prior to this project, Philippine Navy ships in this category consisted of ex-US Navy LCU Mk.6s which were remnants of the Second World War. Replacements were sorely needed.

The project produced the largest locally manufactured Philippine Navy ship to date. The previous record holder was the Marcos-era 44-meter Aguinaldo class patrol gunboat. The LCU, in comparison, is 51 meters — 15 meters longer than existing LCUs.

In addition to its place in history, this project is also noteworthy for the numerous twists and turns it took in its three year run. For example, its first bid opening was deferred a total of 11 times, between August and December 2008. Despite this, the first bid attempt was declared a failure. This craft is held up on the Timawa.net forum as an illustration of the challenges facing SRDP as a whole, and naval shipbuilding in particular.

The Philippine Navy is expected to commission this LCU, tentatively named BRP Tagbanua, in November 2011.

The following table presents the latest official timeline for this project, as stated in the Department of National Defense Procurement Monitoring Report for July 2010. This PMR is currently available on the GPPB Website, and is open source information.

Date Activity
October 14, 2005 AFP Capability Development Board approves replacement of LST upgrade project with Landing Craft Utility acquisition project
June 25, 2008 Pre-procurement conference
July 9, 2008 Posting/publication of Invitation to Apply for Eligibility to Bid (ITEAB) on the Philippine Daily Inquirer, PhilGEPS, and DND Websites
July 17, 2008 Pre-bid conference
August to December 2008 Bid submission and opening. There were a total of 11 schedule changes for the opening of bids.
January 22, 2009 Only one (1) bidder, Santiago Shipyard and Shipbuilding Corp, participated during the bid opening. The Tax Clearance Certificate submitted by the bidder was found to have expired, thus patently insufficient and not compliant with the bidding documentsDND BAC Resolution No. AFPMP-PN-LCU-09-001. DND BAC declared a failure of bidding for the said project and directed the conduct of re-bidding.
January 29, 2009 Rebidding. Posting/publication of ITEAB on the Philippine Daily Inquirer, PhilGEPS, and DND Websites
February 12, 2009 Pre-bid conference
May 7, 2009 Bid opening. Two (2) bidders participated during the bid opening:

  • Propmech Corporation
  • Santiago Shipyard and Shipbuilding Corp

DND BAC Resolution No. AFPMP-PN-LCU-09-002. DND BAC declared Propmech Corporation as the Lowest Calculated Bidder and Santiago Shipyard Shipbuilding Corporation as LCB2 for the said project and directed the conduct of Post Qualification.

June 4, 2009 DND BAC Resolution No. AFPMP-PN-LCU-09-003. DND BAC resolution amending Resolution No. AFPMP-PN-LCU-09-002 dated May 7, 2009 and declared Santiago Shipyard and Building Corporation as Lowest Calculated Bidder (LCB) and Propmech Corporation as LCB2 for the said project and directed the conduct of Post Qualification.
July 5-9, 2009 The PN TWG and DND TWG conducted the post qualification in Cebu City
October 8, 2009 The DND BAC declared Santiago Shipyard and Shipbuilding Corporation as Post Disqualified for the project
December 14, 16, and 17, 2009 The first phase of Post Qualification focused on visit to the main office of Propmech, the verification of the eligibility documents submitted during the bid opening of the legal and financial documents with the Maritime Industry Authority (MARINA), the Bureau of Internal Revenue (BIR), and Banco de Oro.
January 11 to 13, 2010 The second phase of the post qualification was in Cagayan de Oro City which focused on the Shipyard in Jasaan, Misamis Oriental and the warehouse and service center in Cebu City.
January 21, 2010 The third phase involved the visits and interviews of ISO-related entities and authorities
February 5, 2010 DND BAC Resolution No. AFPMP-PN-LCU-10-001. DND BAC declared Propmech Corporation as the Lowest Calculated Responsive Bidder (LCRB) and recommended SND’s approval for the issuance of Notice of Award (NOA) in its favor.
March 16, 2010 NOA was approved/signed by the Secretary of National Defense (SND)

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