For failing to deliver the 21 UH-I "Huey" combat
utility helicopters on the stipulated time, the Department of National Defense
(DND) issued a notice of partial termination to suppliers Rice Aircraft
Services Inc. and Eagle Copters Ltd. on Wednesday.
The two companies earlier formed a joint venture to supply
21 UH-I helicopters to the Philippine Air Force (PAF) for PhP1,263,600,000.
"In compliance with Section 88, Rule XXII of the IRR of
Republic Act No. 9184 (Philippine Procurement Law), the contract agreement
between the DND/AFP and the Joint Venture of Rice Aircraft Services Inc. and
Eagle Copters Ltd. for the supply and delivery of 21 UH-I helicopters for the
PAF with corresponding contract price of PhP1,263,600,000 shall be partially
terminated for exceeding the ten percent maximum liquidated damages," the
DND order signed by Secretary Voltaire Gazmin said.
The letter was sent to Robert Rice Jr., the representative
of the joint venture.
"Liquidated damages" refers to "at least
equal to the one-tenth of the one percent of the cost of the underperformed
portion of every day of delay."
And once the "cumulative amount of the liquidated
damages reaches 10 percent of the amount of the contract, the procuring entity
shall rescind the contract without prejudice to the other courses of action and
remedies open to it," DND said.
It added that maximum liquidated damages was reached last
Jan. 31.
“You failed to comply with the agreed schedule of
requirement of the contract agreement, which provides that the delivery should
be within 180 calendar days upon opening of the Letter of Credit… The deadline
for the delivery for the contract is on 23 September 2014,” the DND stressed.
It added that eight out of the 21 choppers were only
delivered as of Wednesday.
Rice and its joint venture partner were given seven days to
respond to the termination letter.
http://www.pna.gov.ph/index.php?idn=&sid=&nid=&rid=747870
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