As the Armed Forces of the Philippines (AFP) prepares to acquire new planes for its search and rescue operations and armor vests to protect its soldiers, questions have been raised in the conduct of separate biddings for these items costing billions of pesos.
Defense Undersecretary Fernando Manalo already signed a bid bulletin and the deadline for submission of bids is on November 29 at 10 a.m. with tenders to be opened that day.
The three brand new search and rescue seaplanes, worth P2.67 billion, are geared to be used in humanitarian assistance, disaster response and maritime search and rescue missions in areas hit by Super Typhoon Yolanda (Haiyan) and others to come.
However, DND Secretary Voltaire Gazmin is already being urged to investigate irregularities in the failed recent bidding and subsequent re-bidding of the P5.3-billion medium lift fixed wing aircraft acquisition project of the agency.
Three bidders attended the pre-bid conference and indicated willingness to participate in the bidding in October. They were Alenia Aermacchi, EADS Casa Air Bus Military and PT Dikrgantara Indonesia/Indonesian Aerospace (IAe/Persero).
But the DND bids and awards committee (BAC) admitted that it failed to comply with the legal requirement of publishing the supplemental bid bulletin seven-days prior to the bid opening. It declared the bidding a failure on November 11.
The BAC said that because of the problems raised it had to wait for half an hour after the scheduled closing time before allowing other bidders to come in.
The extra time given by the BAC to other bidders raised concerns as it failed to post the supplemental bid bulletin seven days before the bid opening date.
The DND published the supplemental bid bulletin at the Philippine Government Electronic Procurement System website only on November 5 (instead of November 4 to make it to the required seven days under the law).
At the November 11 failed bidding only two bidders showed up and only one submitted a sealed bid while the other raised the matter to the BAC, which later admitted its mistake and ordered a correction through the immediate publication of the supplemental bid bulletin and opening of the bids on November 18 at 2 p.m.
The aircraft to be bought is capable of operating in any environment and organic general support for territorial defense, internal peace and security operations and disaster response.
Another bidding for 44,080 pieces of armor vests worth P1.763 billion was rejected by DND because the products did not meet the required technical specifications.
But bidder Kolon Global Corp., a Korean firm, disputed the findings of the technical working group of the BAC claiming that the force protection equipment it is offering is responsive to the requirement of the DND and had been approved by a third party picked by the government, an accredited ballistics testing facility of the US National Institute of Justice.
“We then offered the best price for the value-for-money force protection equipment, that could have saved the government almost P1 billion,” said Kolon’s president, Byung Duk Ahn in his letter to the BAC.
“With our unexpected disqualification, the Philippine government will be spending approximately P400 million, assuming it accepts the second lowest bid,” he added.
On November 11 the BAC rejected through a post qualification the P800- million bid of Kolon, or P400 million less than the tender of UM Merkata DOO, the second lowest bidder which the BAC entertained even it could finally resolve Kolon’s bid, particularly the BAC’s mandated motion for reconsideration.
Army Col. George Cabreros admitted during the deliberations on November 11 that the government would be losing P357.99 million if it would accept the second lowest bid.
Cabreros said the amount could be used in buying an additional 18, 000 sets of force protection equipment.
Cabreros said the bid of Kolon was lower at P894.095 million from the original price set by the DND of P1.763.2 billion.
Col. Joselito Reyes, a regular member of the BAC, then moved that the committee consider the bid of the second lowest bidder, which was concurred in by lawyer Cherrie Belmonte-Lim, the acting chairperson of the BAC during the hearing.
Director Nestor Castro, another member of the BAC, told Reyes and Belmonte that they should follow the procurement rules by allowing the Korean company to file its appeal, if it so wishes, under the legally allowed period.
Castro insisted that the rules should be followed before the committee entertains the second bidder being pushed by Reyes and Lim.
This prompted the BAC to give Kolon three days to file an appeal. The company said in its letter to BAC that it would ask for reconsideration of BAC’s decision.
“We pray for the Philippines, which needs a well-equipped Filipino soldier, that the wisdom and sensibility of our investment will be recognized,” he said.
“During this distressed times, every centavo saved counts. The Filipino soldier, brave as he maybe, will benefit the most from this saving,” he added.
The DND has lined up 138 projects worth P70 billion over the next five years for its modernization program for armaments and defense equipment.