DND declares failure of bidding for P5.9-billion Air Force planes

From the Business Mirror (Aug 17): DND declares failure of bidding for P5.9-billion Air Force planes

The bidding for the acquisition of two long-range patrol aircraft for the military with a contract price of P5.9 billion is technically back to square one, after all the proponents failed in the initial stage of the delivery process.

Without precluding the decision of Defense Secretary Voltaire Gazmin on the motion for reconsideration that the failed bidders may file, Defense Undersecretary Fernando Manalo said that last week’s opening of bid documents was a failure.

As such, the Department of National Defense’s Special Bids and   Awards Committee (SBAC), headed by Manalo, will conduct a rebidding, wherein all of the disqualified bidders, and even those of other defense contractors that are interested over the project, may join.

“Not a single one qualified for the project and, at the end of the committee meeting or at the end of the bidding process, we declared the bidding as failed,” Manalo said.

At least 10 firms have earlier expressed their interest to supply the long-range aircraft, which are being procured under the modernization program of the military; but during the opening of bids on Monday last week, only seven submitted documents.

These firms are Elbit Systems Ltd. and Elta Systems Ltd. both of Israel, EADS-Casa, SAAB-Asia Pacific, L-3 Mission Integrated, PT Dergantara of Indonesia and Lockheed Martin, an American company considered as one of the world’s biggest defense contractor.

Manalo said that while the two Israeli companies went through the initial stage, which involved documentation, they failed in the further evaluation involving technical specifications for the project.

On the other hand, the five other companies immediately failed in the first stage.

The two Israeli contractors and the other defense suppliers manifested their intentions to file an appeal, which, under the BAC rules, they can do so within three days.

“You’ll be surprised to note, some of the reasons you thought would not happen. For example, the requirement of our laws is for the proponents to submit a list of ongoing contracts. You need it to determine the net financing capability of the company. Because you have your assets, your liabilities, and so you have your networking capital. But you would deduct there the contracts to arrive at a net financing capability. One of them is PT Dergantara of Indonesia,” Manalo said.

“PT Dergantara of Indonesia won in the bidding of our light-lift aircraft, so we have a contract with them, but it did not include it on its list of ongoing contracts. Everybody knew that we have a contract with them,” he added.

“It did not cheat, it seems like it wanted to bump its head. Carelessness,” Manalo said of the Indonesian company.

He said the same mistake was committed by EADS-Casa, which has won the contract for the delivery of medium-lift aircraft to the Air Force, but did not also include it on its list of ongoing projects.

“It is the responsibility of the bidder, of the proponent to see to it that the documents they are submitting are correct,” the chairman of the Special BAC said.

Manalo believed that the firms will not commit the same mistakes again for the second bidding.

“No more, it’s too much of stupidity if they still fail because of paper works,” he said.

http://businessmirror.com.ph/index.php/en/news/nation/37228-dnd-declares-failure-of-bidding-for-p5-9-billion-air-force-planes