In the twilight of the Arroyo administration, the AFP was poised to embark upon its most ambitious, most expensive project in AFP history. What would become the largest naval vessel ever to join the fleet the Multi-Role Vessel (MRV) project.
As per PN sources, it was supposed to have consisted of one South Korean-built LPD based on the Makasaar class coupled with a partnership agreement with a yet unselected local partner to build 5 more in the Philippines. After years of negotiation, the DND and the Republic of South Korea had agreed upon project pricing as well as a cap on project escalation costs. The initial vessel would have included the following components
By September 2010, P2B had already been allocated for the project -- taking advantage of the then brand new budgetary instrument the DND's arsenal: the Multi-Year Obligating Authority.
To the horror of the individuals intimately involved in MRV negotiations, when the Aquino administration took over power from Arroyo, all existing projects were suspended. Budgets already allocated -- to include the P2B already set aside for the MRV -- were earmarked for re-allocation.
The MRV project, as already negotiated, was dead.
However . . . a mere five years after that calamitous turn of events that saw career PN officers resigning their commissions having lost sight of the way ahead for the Philippine modernization program, the BRP Tarlac entered service.
Gone was the original in-country manufacturing deal. In its place was a boost for the Indonesian shipbuilding industry. The AAV component had been spun off into a separate project that is also slated to be awarded to South Korea. The mobile hospital component was no more.
The specific of the MRV project had morphed into the Strategic Sealift Vessel. The Philippine Navy still got its ship.
Fast-forward to 2016. Another President . . . another project.
Reports emanating from the grapevine strongly suggest that the P18B Frigate Acquisition Project is headed for a deal-cancelling delay. While Hanjin Heavy Industries' bid cleared post qualification hurdles the continued viability of its tender in the face of deferral of actual notice of award is causing the same concerns and general consternation as the original delay of the MRV.
This really should not come as a complete surprise. With a price tag of "P18,000,000,000.00", it is simply too large of deal to slide through to the contract-signing-state without scrutiny or any form of due diligence on the part of leaders who would then be answerable to taxpayers for the selection.
Will the FAP go the way of the MRV project? There is cause to believe that it would.
That leaves open a number of interesting questions:
Does that put an end to the Philippine Navy's efforts to acquire Frigates?
Sail Plan 2020, and the plans that came before it, are products of careful study of the country's maritime security requirements. While many aspects of the minutiae of requirements definition may post technical challenges, the broadsrtokes for the necessary capabilities are well established. If not completed within the Duterte administration . . . it will be pursued in the next.
As demonstrated by the SSV project . . . the PN will put in the work to get the ships that it needs.
If the deal is indeed cancelled, does this mean that we are back at the start of the bidding process?
What Duterte ultimately decides will be known when he makes it. Predictions about what that decision will ultimately be is a function of the analyst's faith in -- or lack thereof -- in the President's capacity for reason. Setting crystal-ball-gazing exercises aside, we can at least look at the procurement framework within which the President is operating to see what he can do if he so chooses.
Short answer is NO
When the Aquino administration select the FA-50PH as LIFT, it represented the only time that it exercised the following provision in the Implementing Rules and Regulations for the government procurement law:
Negotiated Procurement is a method of procurement of goods, infrastructure projects and consulting services, whereby the procuring entity directly negotiates a contract with a technically, legally and financially capable supplier, contractor or consultant only in the following cases:
. . .
g. Upon prior approval by the President of the Philippines, and when the procurement for use by the AFP involves major defense equipment and/or defense-related consultancy services, when the expertise or capability required is not available locally, and the Secretary of National Defense has determined that the interests of the country shall be protected by negotiating directly with an agency or instrumentality of another country with which the Philippines has entered into a defense cooperation agreement or otherwise maintains diplomatic relations: Provided, however, That the performance by the supplier of its obligations under the procurement contract shall be covered by a foreign government guarantee of the source country covering one hundred percent (100%) of the contract price;
Promulgation of the Defense System of Management (DSOM), comprehensive requirements definition and equipment selection process, within the AFP should have given the Aquino administration the doctrinal and budgetary definition for outright selection of equipment . . . WITHOUT the need for time consuming bids.
Sadly, for reasons that hopefully will come to light in time, after the FA-50 acquisition the Aquino administration refused to leverage this capability for subsequent modernization projects. As a consequence . . . the Frigate Acquisition Project is where it is now. Caught between two administration with an uncertain future.
Will the Duterte administration be gun-shy about using this authority to do away with public biddings and simply pick up where the Frigate Acquisition Project left off, and select South Korean frigates outright?
You be the judge
Contractors with lowest bid not the best for Duterte
Published August 2, 2016 9:53pm
By TRSIHA MACAS, GMA News
President Rodrigo Duterte said on Tuesday that he would not follow the government's "lowest bid" rule in awarding contracts for government projects as it led to corruption and usually left the government with sub-standard equipment.
. . .
The president explained that he did not want to purchase equipment that would not be durable.
"Pahabulan ng presyo, pababaan mo ang presyo mo. Iyong iba, 100, ipabili nito ng 20, eh 'di ipabili mo nalang sa akin iyong made in--alam mo na. Huwag muna ngayon kasi may alitan tayo. Tapos sabihin ng mga sundalo, 'Sir, nasira agad.' Kagaya ng jeep ng police. Tignan mo iyong binili nila. Wala na. Sabi ko, 'Huwag mo akong bigyan ng sh-t na iyan.' Ako, ang pulis ko doon [Davao City], Isuzu, and it will last for about three to five years. Huwag lang ibunggo ng mga buang," Duterte said.
"Iyong [medical] equipment ninyo, state of the art. Bahala na mahal. Ayaw ko iyong gagamitin, nasisira," he emphasized.
Duterte said that to get the best, he would ask experts to guide him on which had the best value.
< Edited >
- See more at: http://www.gmanetwork.com/news/story/576085/news/nation/contractors-with-lowest-bid-not-the-best-for-duterte#sthash.KNNgElAr.dpuf
This article is also available on the Timawa.net forum here.
Whereas 2014 was the year of the "Notice of Award", 2015 was the year of deliveries. No less than 18 projects -- for all three services -- saw their first or full deliveries this year, making it the most active project-conclusion period since the first acquisitions of the AFP Modernization Program in 2003.
Among the capabilities that the AFP acquired this year are:
- Supersonic flight with a limited capability for conducting air interception missions
- Close air support platforms that can engage ground targets at night
- Significant increase in cargo transport capability, both by air and sea
- Armored, night-fighting-capable, mobility for mechanized troops
|Commissioning ceremony for various PAF assets. Photo c/o DND||Armored recovery vehicles during the 80th anniversary of the Armed Forces of the Philippines. Photo c/o DND|
To give a more complete view of the state of the modernization program, this year's article is divided into the following sections, presented here in reverse order:
- Pending acquisitions - these are acquisitions that have been publicly announced, either in conventional media or on the DND Website, that are still in various stages of completion. Some are still awaiting results of bids or re-bids. Others have had Notices to Proceed (NTP) to issued. Notable examples of projects in this state are the Philippine Army Shore-based Missile System and the Philippine Navy Frigate projects. Both of which have experienced very public reversals over the past year.
- Awaiting delivery - these are are projects for which the acquisitions are in the process of being built from scratch, or are currently undergoing mandatory refurbishment, and have yet to be formally turned over to the AFP for operational use. A notable examples of acquisitions in this state would be the Strategic Sealift Vessel which is currently underconstruction in Indonesia and the ex-ROKN Mulkae class LCU, which is already in the Philippines, but is still awaiting refurbishment before it can be commissioned into service.
- Acquisition list - these are items that are officially in the possession of the Armed Forces of the Philippines.
In addition to the various official acquisitions, South Korea has committed to providing the Philippines with one surplus Pohang Class corvette (see here). To this date, details of this project have not been firmed up. It is unclear if this project will materialize.
Note: This article is also available on the Timawa.net forum on the long standing What's happening with the AFP modernization thread that's been documenting the progress of the up-arming effort since 2003.
The following list focuses on actual deliveries of equipment that were made in 2015.
|Surface Attack Aircraft / Lead-In Fighter Trainer||After an arduous 5-year process -- from concept to signing -- the Philippine Air Force is finally slated to return to supersonic flight operations after almost a decade with the acquisition of twelve (12) Korean Aerospace Industries FA-50PH Fighting Eagle aircraft worth P18.9B. These will also be the first brand new supersonic aircraft that the PAF will acquire since the factory-fresh F-5A Freedom Fighters that were delivered in the 60s. Subsequent fighter acquisitions had focused on excess defense articles such as the F-8 Crusaders which were recovered from AMARC and 2nd-hand F-5As from South Korea. The first two aircraft were delivered to Clark Air Base on November 28, 2015 with the first aircraft touching down at 10:23AM GMT+8. Details here.
The screen capture on the right was taken from the official PAF video timeline of the event.
|Attack Helicopter Acquisition Project||The DND awarded the contract to supply eight Agustawestland AW109E helicopters in late 2013. Training of flight and maintenance crews commenced in Italy in 2014. The first two units were delivered in late December 2014 along with two Philippine Navy Multi-purpose AW109s. The remaining six were delivered this year and commissioned on the 5th of December. Details here.|
|Combat Utility Helicopter (CUH)
||Not to be confused with the Arroyo-era CUH project that acquired the W-3 Sokol in 2009, this P4.8B project sought to acquire eight additional helicopters for combat and VIP duties. This project went to Bell Helicopter which will delivered Bell 412EP aircraft by 2015. Three of these helicopters will be delivered in VIP transport configuration. See here.|
|Refurbished UH-1 acquisition project
||This P1.26B project sought to acquire 21 refurbished UH-1 Iroqouis helicopters. The helicopters eventually bought were ex-German "D" versions, built under license in Germany aircraft that were equivalent to the "H" versions that were already in service with the PAF. This effort was marred by scandal with allegations of extortion, resulting -- intially -- in the cancellation of the deal while deliveries were being made, and then made even more controversial by the DND's self-exoneration of all charges without the benefit of a third-party investigation. Details of this convoluted affair are available here.|
|Medium-Lift Aircraft acquisition project||Notice of award for this P5.3B acquisition was issued to Airbus for the delivery of three C-295 aircraft on February 2014. The first aircraft was delivered on March 30, 2015, while the second aircraft arrived on September 15, 2015, and the third arrived on December 11, 2015. Details here.|
|Rockwell OV-10 Bronco refurbishment||OV-10 #636 returned to service in November 2015. This was part of a PhP16,490,363.56 effort to return two OV-10s to active duty. #402 is also slated for refurbishment See here.|
|BRP Ivatan (AT-298)
||On the 2nd of July 2015, Philippine Navy personnel arrived in Australia to take possession of two Balikpapan Class Landing Craft Heavy (LCH): HMAS Brunei and HMAS Tarakan. They were donated by the Australian government as part of an aid package promised in the wake of Typhoon Haiyan. Both ships were commissioned into the Royal Australian Navy in 1973 and were subject to navigational upgrades before being turned over to the Philippines.
The former HMAS Brunei entered service with the Philippine Navy as the BRP Ivatan on July the 23rd, 2015. See Timawa discussion here.
|BRP Batak (AT-299)
||The former HMAS Tarakan entered service with the Philippine Navy as the BRP Ivatan on July the 23rd, 2015 and was donated by the Australian government along with the HMAS Brunei as described above. See Timawa discussion here.|
|BRP Lake Caliraya (AF-81)||The first of three tankers that the Philippine Navy received from the Philippine National Oil Corporation (PNOC) was commissioned into service on the 23rd of May 2015 as the BRP Lake Caliraya . Timawa discussion here.|
|Agustawestland AW-109E gunships
|| Two armed AW-109E gunships were commissioned into Philippine Navy service on August 10, 2015. These joined the three AW-109s that were delivered in December 2014. These aircraft featured combination 0.50 cal gun and 2.75 inch rocket pods comparable to those carried by PAF AW-109s.
The photo on the left shows one of these gunships on a deck qualification landing on the BRP Gregorio del Pilar. Photo c/o of the Philippine Navy.
|Britten Norman Islander refurbishment
||The Philippine Aerospace Development Corporation (PADC) delivered a refurbished Philippine Navy BN Islander (#PN320) on July 21, 2015 sporting a new grey color scheme. See Timawa discussion here.|
|PF-16 weapons upgrade||The two Mk.38 25mm RCWS were initially slated for installation prior to the ship's departure from South Carolina but had been delayed. Timawa discussion here.|
|General Purpose Machine gun 7.62mm||On January 4, 2015, the Philippine Marines received 220 units of US Ordnance M-60E6 General Purpose Machine Guns via FMS. See Timawa discussion here. Photo c/o Philippine Star.|
|ex-Belgian Army M113 Armored Personnel Carriers with RCWS
||The first six of 28 ex-Belgian Army M113s from Israel were delivered on July the 28th. These units were armed with Elbit Remote Control Weapon Systems (RCWS) which featured .50 cal machine guns in a gyro-stablized mounts. In an interview with the PNA, Army spokesperson Lt. Col. Noel Detoyato reported that fourteen of the remaining M-113s were configured as fire support vehicles, four as infantry fighting vehicles, and another four as armored recovery units. See Timawa discussion here.|
|ex-US Army M113A2 Armored Personnel Carriers
||The Philippine Army acquired 114 M113A2 armored vehicles, in various configurations, from the US as Excess Defense Articles (EDA) (Timawa discussion here). While the transfer of the vehicles were completed as early as January 2014, difficulties in arranging for transport delayed actual delivery, which eventually cost the GRP P67.5M. The first 77 units were delivered to Subic on December 9, 2015|
|High Mobility Multipurpose Wheeled Vehicle - Ambulance variant||Thirty units of HMMWV ambulances with associated shelter and medical equipment acquired. Twenty-three were delivered on January 26, while the remainder arrived the following month. Total value for this acquisition was 229,944,149.10. Details here.|
|Chemical, Biological, Radiological, and Nuclear protective and detection gear
||The Armed Forces of the Philippines (AFP) received $1 million worth of chemical, biological, radiological and nuclear (CBRN) protective gear and detection equipment from the United States intended for the Army Support Command on Thursday at Camp Aguinaldo. According to the US Embassy press release about the donation:
The Dismounted Reconnaissance Sets Kits and Outfits (DRSKO) is a portable collection of Chemical, Biological, Radiological and Nuclear (CBRN) protective gear and detection equipment used to support dismounted Reconnaissance, Surveillance and CBRN site assessment missions. This increases the AFP’s capabilities to conduct CBRN site assessments to mitigate risks and gather intelligence on Chemical Agents, Biological Agents or other potential chemical hazards. The DRSKO is designed to equip a team of 27 CBRN personnel.
The photo shown on the right was taken from the above-mentioned embassy press release. See Timawa discussion here.
|GA Special Purpose Rifle (SPR) / Designated Marksman Rifle (DMR)||Government Arsenal produced 70 units of these SPR/DMR for the Philippine Marine Corps and Philippine Army. For the Marines, this involved upgrading existing Marine Scout Sniper Rifles (MSSR) from their Generation-3 configuration to this, which could be called "Gen 4". For the Philippine Army, particularly the Scout Ranger Regiment, the GA upgraded unused lower-rifle components for M-16A1s that were previously in LOGCOM storage. See Timawa discussion here.|
|GA 5.56 16 inch mid-length barrel
||The Government Arsenal undertook refurbishment of 400 existing M-16A1 rifles to their GA Carbine 16 inch mid-length standard. First units were issued to JSOG and NAVSOG. See Timawa discussion here.|
In addition to acquisitions via bidding, South Korea has committed to providing the Philippines with one surplus Pohang Class corvette, a landing craft, and several rubber boats. These and the aforementioned Korean acquisitions have yet to be delivered and have therefore been omitted from the list above.
A significant number of high-profile projects remain pending, and have been omitted from the acquisition list. These are listed immediately below.
ex-ROKN Mulkae class (LCU-78) - South Korea promised this EDA item in June 2014 and quietly delivered the boat in July 2015. As of writing the ship remain queued for a refit costing P27,138,295.51, and has not yet been commissioned into PN service. See Timawa discussion here.
LCH 3, 4, and 5 - efforts are underway to acquire three more Balikpapan class Landing Craft Heavies from Australia. Invitiations to bid have even been issued for equipment associated with these vessels. See here.
Amphibious Assault Vehicle (AAV) - Samsung Techwin was declared the lowest single calculated bidder for the P2.5B AAV project. Details here.
5.56mm assault rifle acquisition - this project went to Remington to supply rifles to both the Philippine Army and Philippine Marines in 2013 with deliveries made in 2014. However, issues with rifle quality hounded the acquisition which in faced termination earlier this year. The AFP announced that by August, Remington had replaced all defective rear-sights and that they were satisfied with them. It was unclear whether or not other quality related issues (e.g., quality of hand guards, rumored Front Sight Block alignment issues, etc.) were also resolved. Another batch of rifles is due for delivery.
Rocket Launcher Light Acquisition Project - Airtronic USA, Inc. was selected to supply 400 US-made RPG7 rocket launchers, and associated 40mm rockets, as part of a Foreign Military Sale (FMS) deal. While components of this deal have reportedly been delivered, the remainder remain obscure. For that reason, this project remains listed as "awaiting arrival. See Timawa discussion here.
A significant number of high-profile projects remain pending, and have been omitted from the acquisition list at the bottom of this article. These are listed immediately below.
|Long Range Patrol Aircraft acquisition project - the DND declared a bidding failure in August due to documentation deficiencies among bid participants. see here.
Close Air Support Aircraft acquisition project - the bid for this project failed for the second time in December 2015. Based on procurement rules, the DND is now authorized to pursue negotiated procurement. However, an announcement to that effect has yet to be issued. See here.
Air defense radar acquisition project - like the SAA/LIFT project, this P2.68B acquisition is part of the PAF's systems approach to reviving the country's ability to enforce the Philippine Air Defense Identification Zone (PADIZ). This project has been the subject of much speculation, with very little official discussion. The TPS-77 and Elta ELM 2288 are touted as contenders for this project, however media reports have touted the Israeli contender as being favored. See details here.
SAA/LIFT munitions - the ordnance that SAA-LIFT aircraft will carry are being acquired via a separate acquisition project. These include Air-to-Air Missiles (312 Pieces), Air-to-Surface Missiles (125 Pieces), 20mm ammo (93,600 Pieces), and Chaffs/IR Flares. Details here. Upon arrival of the first two FA-50s, however, the PAF revealed that this project had fallen behind and would not yield results till three years.
|Frigate Acquisition Program - this P18B project seeks to acquire two brand new multi-role frigates in a complicated two-stage bidding process. To date, the following shipbuilders have signified interest in the project: Navantia Sepi (RTR Ventures), STX Offshore & Shipbuilding, Daewoo Shipbuilding & Marine Engineering Co Ltd, Hyundai Heavy Industries Inc., Garden Reach Shipbuilders & Engineers Ltd of India, STX France SA. Details here.
Anti-Submarine Helicopter Acquisition - as of writing, Agustawestland was the only company that qualified to take part in the bidding in November. Second-stage bidding set for December 22, 2015. See here.
USCGC Boutwell (WHEC-719) - On November 17, 2015, the Office of the President of the United States issued a press statement that confirmed a planned transfer of the USCGC Boutwell to the Philippines as an Excess Defense Article item. This confirmed various US news reports circulating the month before of the impending transfer. Incidentally, the first crew of the BRP Gregorio del Pilar, previously the USCGC Hamilton, served on board the Boutwell as part of their training for accepting the PN's first Hamilton class WHEC. See Timawa discussion here.
Jacinto Class Patrol Vessel Upgrade Phase 3 - this project sought to upgrade the weapons and electro-optical systems of all three ships of the class. See Timawa discussion here.
Jacinto Class Patrol Vessel Upgrade Phase 2 - this is a sought, among other things, to overhaul and improve the main propulsion system, electrical, and various auxiliary systems of BRP Artemio Ricarte (PS-37). Other members of the class had already been upgraded to this standard. See Timawa discussion here.
Marine Forces Imagery and Targeting Support Systems (MITSS) - this P684.32M project sought to acquire 6 sets of Small Unmanned Aerial Vehicles, 9 sets of Target Acquisition Devices, and 12 kits of Tactical Sensor Integration Subsystems. Details here.
40mm automatic grenade launcher - the DND issued a Notice To Proceed (NTP) in favor of Advanced Material Engineer / ST Kinetics, represented locally be Floro International Corp, to supply and deliver eight (8) units of 40mm automatic grenade launchers for the contract price of P19,750,672.00 on March 4, 2014. Details here.
|Shore-Based Missile System - arguably, the AFP modernization controversy of the year was the deferral of the Philippine Army's Shore-Based Missile System (SBMS) to an as yet undisclosed "horizon" of the AFP Modernization Program. This was discussed on the Timawa forum on the following thread. Funds for the P6.5B project -- which originally became public in 2011 and discussed on the forum here -- were realigned to acquire force-protection equipment instead. It was a stunning reversal of a territorial defense initiative that drew boisterous condemnation on defense social media and earned the Chief of Staff AFP, General Hernando Iriberri, the monicker "General Helmet".
60mm Mortar Acquisition project - 150 mortars are being acquired. Details here.
KM-450 1/4-ton truck acquisition - on October 19, 2015, the DND issued a Notice to Proceed to Kia motors for the supply of 717 trucks to the Philippine Army. See here.
KM-451 ambulance acquisition - on October 19, 2015, the DND issued a Notice to Proceed to Kia motors for the supply of 60 units of Field Ambulances to the Philippine Army. See here.
The Philippine Navy's two Strategic Sealift Vessels are now both under construction, with the steel cutting ceremony for the second SSV taking place on the 5th of June. The first vessel had its equivalent ceremony in January and is expected to be launched in November 2015 with full completion by May the following year.
The Strategic Sealift Vessel project is the Aquino administration's implementation of two older Arroyo administration projects:
Strategic Sealift Vessel - this was reportedly crafted by the Center for Naval Leadership and Excellence (CNLE) and originally envisioned to acquire a 2nd-hand civilian Roll-On Roll-Off (RORO) vessel from Japan. Delays in the execution of the project resulted in an aborted attempt as the Japanese vendor choose to sell the prospective vessel to another buyer.
Multi-Role Vessel (MRV) - this project sought to acquire a brand-new Makasaar class Landing Ship Dock directly from South Korea complete with an amphibious assault package and a sophisticated mobile hospital. The following image of a Philippine Navy poster displayed on Navy Day shows what this project sought to acquire as a single project.
|The original project that was broken up onto different components|
The current administration opted to break up the MRV project into multiple components, award the contract to South Korea's partner in Indonesia -- which incidentally had the license rights to the Makasaar class LPD -- and then rename the project to the current SSV title. The latter decision initially created confusion among long-time defense enthusiasts who had been aware of both projects, but were not privy to project decisions.
|SSV-1 steel cutting ceremony||SSV-2 steel cutting ceremony|
As shared by an Indonesian Timawan with ties to PT PAL, the shipbuilder responsible for the construction of the two vessels, construction of the keel for SSV-1 is well underway. Credit for the following photographs of the SSV-1 keel, and translation of the Indonesian news article, go to the member who goes by the username "Gombaljaya" (or Alberth Minas on the Timawa FB extension)
As the ships themselves are progressing, so too are other components of the original Multi-Role Vessel package. The contract to supply Amphibious Assault Vehicles (AAV), which comprise part of the SSVs offensive punch, are slated to be awarded to Samsung Techwin, which will provide the South Korean version of the American AAV7 amtrack.
Discussions about the two SSVs are available on the Timawa.net forum at the following locations: