DND officials face criminal raps over chopper deal

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OFFICIALS of the Department of National Defense (DND) may have broken the law, particularly Republic Act 9184 or the Government Procurement Reform Act, when they insisted on acquiring 21 refurbished UH-1D helicopters through negotiated contract despite repeated warnings by the Government Procurement Policy Board (GPPB) against it.

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Documents obtained by The Manila Times that were cross-checked with the online version on the GPPB website indicated that the DND pulled a fast one on the GPPB headed by Budget Secretary Florencio Abad when it claimed that it had conducted two failed biddings as of October 2012 when, in fact, the first public bidding for the project was conducted on December 4 that year.

The GPPB is the highest policy-making body of the government when it comes to procurement of new assets. DND insiders who were privy to the chopper deal pointed out that Defense officials who were itching to award the contract through negotiation with Rice Aircraft Services Inc. (RASI) may have violated RA 9184 and Executive Order (EO) 645, which requires the head of any department to seek the GPPB’s approval when a project is worth more than P500 million.

Records show that the GPPB repeatedly denied the DND’s request to negotiate the acquisition of the 21 helicopters for the Philippine Air Force and other aircraft for the Philippine Navy. Eventually, the GPPB allowed the department to pursue a negotiated contract for the attack helicopters but not for the 21 UH-1D aircraft. This was after DND officials made several attempts to reverse the resolution of the GPPB in June 2012 that insisted on competitive bidding for the 21 helicopters.

Interestingly, GPPB Resolution 23-2012 signed and approved on October 25, 2012 indicated that the DND claimed to have had two failed biddings so that it may be allowed to negotiate the contract.

Sen. Jose Victor Ejercito called for a Senate probe of the alleged anomaly principally to find out if the DND committed violations of RA 9184 and EO 645.

A DND insider who led The Times to check the legality of the contract in the face of EO 645 and the provisions of RA 9184 said the DND “misrepresented” and “misled” the GPPB into believing that biddings had been conducted.

The law provides that an agency can pursue a negotiated contract after two failed biddings. In the case of the 21 UH-1Ds, there were three failed biddings, which, critics said, were only a “show” so that the department may be allowed to negotiate and award the contract to RASI.

The Manila Times checked the web and asked sources if, indeed, there were two failed biddings for the chopper project before October 25, 2012. It turned out, however, that the first bidding was done on December 4, 2012. One year later, in December 2013, RASI bagged the negotiated contract.

It was learned that the first public bidding failed because the bidders did not meet some requirements. Two companies–Star Defense System/Radom Israel and RASI–joined the December 4 bidding in Camp Aguinaldo, the Armed Forces general headquarters in Quezon City.

An issue tackled during the bidding was whether the bidders can deliver the helicopters in February, citing the need to use them for the 2013 elections, which the DND used as basis of claiming an “emergency” for the chopper acquisition.

The Air Force had recommended that the helicopters be delivered by February 28, 2013 because these will be used during the midterm polls that year.

To be continued

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11 Comments

  1. To Senators Chiz and JV, we’re all born for a reason and a purpose higher than ourselves. Others, many others, have been blinded by “gold, fame and fortune”. Others simply by indifference and self-preservation… and thus will they be remembered with contempt.
    You are now entrusted [by God] to do the right thing. May you FEAR none but GOD. And put people above “party”, duty above friends.
    More than ever, NGAYON kayo kailangan ng bayan at ng mga kawawang sundalo at opisyal ng AFP at PNP.

  2. May mga tunay na nagmamahal at humagalang pa po sa inyo. God bless the AFP & PNP.
    Hindi po kayo empleyado ng iilan lamang mga magnanakaw sa gobyerno at walang pagmamahal sa bayan!
    Ang mamamayang Filipino ang “boss” niyo! (Next to Almighty God)

  3. Totoo po ang “tsismis” (gossips). Hindi po lahat sa gobyerno ay walanghiya at magnanakaw. Mas marami nga Lang ang tahimik at walang paki-alam kaya nanaba ang mga katulad ni langhap sarap.
    Pero, HINDI NA NGAYON!
    To our true heroes at the AFP & PNP etc. Time to be heard and be silent no more!

  4. Some people at legal knows about these but could not do anything. “Baka sumabit tayo dyan” said an officer. Referring to a SIGNED & APPROVED deal by no less than Malacanang!
    Ganyan katapang ang dynamic duo na sila langhap sarap at yung hindi maka-explain na undersecretary na Manalo.
    Source: BAC insiders po (mga sawa na sa pinaggagawa nitong mga de____yong ito!)

  5. Just in and fyi to you brave souls at MT: from the mouth of a “burdened” soldier… dig deeper on past DND deals and you’ll find favor and manipulations both at BAC and AFPPS.
    It’s worst, sagad sa buto kawalanghiyaan!
    Done and approved deals “shot-down” to resurrect failed, disqualified and unqualified company. Paki tanong si Langhap Sarap… at yung “janet napoles” sa BAC

  6. There were three failed biddings. The first in December of 2012 resulted in a failed bid when Star of David/Radom and Rice Aircraft were both disqualified due to failure to meet pre-qualification document requirements.

    The second bidding was conducted on February 2013, again with the two same bidders. Rice won the bid but was disqualified due to failure to meet post-qualification document requirements, resulting in a second failed bid.

    A third bid was conducted in September of 2013, with one lone bidder, again Rice Aircraft. However, they were disqualified once again due to failure to meet document requirements, thus resulting in a third failed bid. Bear in mind the AFP Modernization Law specifies negotiated bidding can be conducted after TWO failed bids. However the DND opted to have a third bid due to fourteen companies expressing interest in participating. Ultimately, only one company (Rice) bid. The other companies were probably either spooked by the low budget or tired of dealing with DND red tape and PH government penchant for reneging on agreements (a common Filipino practice, but that’s a discussion for another day).

    Rice was selected by default for negotiated bidding because they were the only interested party left. Ultimately, the negotiated price was less than the budgeted price. The problem all along was the 180 day lead-time, which was very aggressive and in my opinion unattainable. Rice was forced to pay 10% liquidated damages, and the DND, to my surprise, included a cancellation clause to be exercised at the discretion of the buyer in the event delivery schedule is not met.

    I still don’t see where the DND committed anomalous transactions however. Probably a combination of sour grapes and political grandstanding in my opinion. It’s a wonder Singapore is where it is, and the Philippines will forever be stuck in a state of mediocrity. Actually, I would take mediocre at this point. How can we achieve national goals when each and everyone of us has our own ulterior motives.

    • It’s your motive that is questionable. The facts are all written in front of you and still you choose to play blind. Don’t compare PH with Singapore when it comes to deals like these. They have better leaders there. Check the story again and see for yourself. The reporter used published and approved resolutions. Go to the GPPB website and see that as of October 25, 2012, the GPPB had been informed by your DND patrons that 2 bidding had already failed when the first bidding, as you said it right, happened only on December 4, 2012. Are DND officials gifted with the ability to look into the future?:

      GPPB RESOLUTION NO. 23-2012

      WHEREAS, in a Special Meeting held on 25 October 2012, the GPPB carefully
      discussed, judiciously deliberated, and took into consideration the recommendations
      submitted by the GRC;
      NOW, THEREFORE, for and in view of all the foregoing, WE, the Members of the
      GOVERNMENT PROCUREMENT POLICY BOARD, by virtue of the powers vested on US by law
      and other executive issuances, hereby:
      1. AFFIRMS its original decision under Resolution No. 19-2012 to procure Twenty
      One (21) units of UH-1 Helicopter through Competitive Bidding, and
      consequently, DENIES the Request for Reconsideration to resort to Negotiated
      Procurement (Emergency Cases) under Section 53.2 of the Revised IRR of RA
      9184 for the acquisition of the UH-1 Helicopters.
      INFORMS the Department of National Defense (DND) that, based on its earlier
      representation that there have been two failures of bidding for this procurement,
      alternatively, they consider resorting to Negotiated Procurement (Two Failed
      Biddings) under Section 53.1 of the Revised IRR of RA 9184, provided that the
      conditions therein are complied with.
      2. APPROVES the Request for Reconsideration to resort to Negotiated Procurement
      (Defense Cooperation Agreement) under Section 53.8 of the Revised IRR of RA
      9184 for the acquisition of Naval Helicopters, provided that, as required under
      Section 53.8 of the Revised IRR of RA 9184, the DND certifies that, based on the
      representations and documents presented by the Italian Government, the identified
      suppliers are “agencies or instrumentalities” of the Italian Government, as defined
      under Section 2, paragraphs (4) and (10) of Executive Order 292, otherwise
      known as the Administrative Code of 1987.

  7. You’ve struck a “nerve”. A corruption that goes way, way back… ask arround Aguinaldo, Villamor and Ft. Bonifacio. Don’t be surprise to hear nothing but silence. None of the brave sentries and officers have the b_lls to speak. Which in the rule of interrogation it is inferred, SILENCE MEANS YES!

  8. Your article is like a hammer “hitting the nail on the head.” It’s just that, you’ll be needing more hammer because there’s more nails to hit…

  9. kabayang Jose on

    Ipakulong kapag mapatuyan na may sala ang mga DND officials para mag silbing halimbawa sa papalit sa kanila. Ayaw niyong tumino, kalaboso kayo. Gawin din sa Customs ….all out war sa mga corrupt government employees. Dito mag kakaisa ang bayan at susuporta kay Pnoy. Simulan niya kay Purisima….obvious naman na irregular ang ginawa niya sa Mitsubishi Prado at ang White House sa Camp Crame. Tanungin niyo mga junior officers, usually mga chief PNP and Chief AFP,may automatic na kickback yan. Mostly tinatanggap once in a blue moon, Meron ayaw tumanggap.