Bid documents opened for P4-B acquisition of 2 Navy vessels

From InterAksyon (Aug 29): Bid documents opened for P4-B acquisition of 2 Navy vessels

The Department of National Defense (DND) on Thursday opened bid documents for the acquisition of two brand new, multi-purpose transport vessels for the Navy worth P2 billion each, but only two of nine interested bidders showed up.

A multi-purpose vessel is designed for transport for a battalion of soldiers as well as for logistics, with helipad and medical facility on board. It can also be used for disaster response.

The Bids and Awards Committee (BAC), chaired by Efren Fernandez, Assistant Secretary for Personnel, presided at the proceedings the BAC Conference Room in Camp Aguinaldo.

Funds for the project will be sourced from the P75-billion fund approved by President Benigno Aquino III for upgrading the capability of the Armed Forces of the Philippines (AFP).

Earlier, nine firms had expressed interest to join the bidding, but seven withdrew and only two appeared Thursday: Daewoo International Corp. (Daesun – Republic of Korea) and PT PAL Indonesia (Indonesia).

Those who withdrew were: Astartez Defense (Philippines), Rescue Solutions JV with Coastal Industries Ptd Ltd (Singapore/ Vietnam), PROPMECH Corporation, Larsena and Toubro (India), Stone of David Tactical Equipment Co., STX Off-Shore Shipbuilding Co. (ROK), and Keppel Philippines Marine, Inc. (Philippines).

 The bids panel, after an executive session, had reportedly disqualified Daesun for non-compliance with certain technical specifications. A Daesun representative said they manifested an intent to file a motion for reconsideration.

At posting time, the BAC had yet to open PT PAL’s bid documents.

A 2-page document from Stone of David Tactical Equipment Co., meanwhile, showed why it withdrew from the bidding. The August 29, 2013 letter, addressed to Fernandez, was signed by president-CEO Jocelyn U. Magcale, and listed these reasons:

• The official response of the DND BAC to the numerous procedural and technical inquiries made were either vaguely stated or was inclined, conveniently, towards “function of design” which was to be borne (risk, cost, timeline) by the Suppliers. It must be noted that the Navy’s SSV design (SSV being a renamed project for the former Multi-Role Vessel Project) may most likely have been lifted from the patented designs of Daesun (Makassar) and PT PAL (Banda Aceh);

• The payment schedule of 15-75-10 percentages within a time frame of three years places the Suppliers in a tempting position of conveniently taking the 15% of the ABC (roughly P600 million) and possibly reneging on the contract implementation, considering that blacklisting as penalty is merely for a period of one year. The possibility of the supplier folding up after taking the 15% advance payment would result in severe opportunity and capability loss for the DND-AFP.

•  Lastly, cost of project cannot be justified merely by the given payment schedule. In previous participation in several DND-AFP-PN projects, there were necessary incidental expenses in contract implementation which affect, or are additional to, cost in manufacturing, 1.e. Shipping, insurance, Fuel, Oil and Lubricants for the conduct of tests and trials, among others. The general description of the project lacks defined performance parameters for test and acceptance of various systems, sub-systems, equipment, tools and special tools and even the design/general arrangement diagrams itself ---this subjects the project acceptance to risk in unwarranted delay and penalties.

Such realities are observed by the fact that the design of the vessel is not yet adequately covered by clearly defined Philippine Navy doctrines, hence, its officers are not first-hand qualified for conducting test and acceptance procedures. Most often, interpretation of test parameters in other projects are affected by personal preferences.

http://www.interaksyon.com/article/69643/bid-documents-opened-for-p4-b-acquisition-of-2-navy-vessels