Magdalo lawmaker urges gov’t scrap order for 2 warships

[Invictus]

Ex-Navy chief: Frigate project must push through
By Priam Nepomuceno  January 22, 2018, 1:48 pm

Well, sa amin lang naman is I like that frigate (project to push through) because everyone in the Navy wants that frigate (to be completed) kasi it's a combat ship, anong mangyayari sa Navy natin kung walang punch 'di ba, you cannot (only have) transport ships, we should have a punch, the frigate is the capital ship, and this is the first time in the history of the PN that we will have a frigate newly constructed tapos missile capable (and can defeat) air, surface and undersea (threats)

[Invictus]

Lorenzana: Frigate project cancellation unlikely
By Priam Nepomuceno  January 23, 2018, 1:47 pm

MANILA -- Despite allegations hounding the Navy's Frigate Acquisition Program (FAP), Defense Secretary Delfin Lorenzana said that it is very unlikely that the project would be cancelled.

'With all the facts we know about the frigate (project)? No," he said in a message.

Earlier, the DND announced that it is welcoming any investigation on its PHP18 billion FAP, noting that it has nothing to hide regarding the matter.

DND public affairs office chief Arsenio Andolong made the statement in response to plans of the Senate minority bloc to conduct an investigation on the FAP.

"The DND welcomes the plan of the Senate to conduct an investigation on the Frigate Acquisition Project. In fact, we have long been waiting for the opportunity to shed light on this issue so that the truth will finally be known," he added.

[adroth]

Malacañang calls for Probe into Frigate Deal Issue
February 3, 2018, 5:39 pm

MANILA -- Presidential Spokesperson Harry Roque Jr. on Saturday called for an investigation into the multi-billion Navy frigate contract entered into by the previous administration with a Korean firm.

This is in connection with the statement of Magdalo Partylist Representative Gary Alejano saying that Hyundai Heavy Industries was banned to participate in state-led bids in South Korea due to the firm's alleged bribery cases in other countries.

Congressman Alejano, salamat po. Dahil sa iyong sinabi iimbestigahan na po natin yung inyong mga kakampi noong nakalipas na administrasyon...

Kung totoo na blacklisted iyong binigyan nila ng kontrata, dapat managot iyong mga opisyales ng mga nakalipas na administrasyon at sabihin sa atin bakit naging ganoon ang kanilang naging desisyon

The Duterte administration, according to Presidential Spokesperson Harry Roque Jr., merely performed a ministerial function in giving the Notice of Award to the winning bidder, pursuant to a provision of Republic Act No. 9184 or the Government Procurement Reform law.

[adroth]

Details are unfolding

Navy frigate deal: What we need to know
By Jose Cielito Reganit  February 18, 2018, 7:00 am

http://www.pna.gov.ph/articles/1025561

MANILA -- The Senate on Monday, Feb. 19, will start its probe into the alleged controversies surrounding the PHP16-billion acquisition of two Philippine Navy frigates.

The investigation by the Senate Committee on National Defense and Security, headed by Senator Gregorio Honasan, as well as the Congressional Oversight Committee on the Armed Forces of the Philippines Modernization Act, seeks to determine whether the acquisition of the combat ships "promotes the goals of the modernization program and complies with pertinent laws".

The investigation was initiated by opposition lawmakers in the Senate — Minority Leader Franklin Drilon along with Senators Francis Pangilinan, Paolo Benigno Aquino IV, Risa Hontiveros, Leila de Lima, and Antonio Trillanes IV —through Resolution No. 584.

It was filed in the wake of allegations that Special Assistant to the President (SAP) Christopher "Bong" Go endorsed a letter to the defense department regarding the project.

But what was the root of the controversy and how was Go's name dragged into it?

The Frigate Acquisition Project (FAP) is one of the key pieces of the Armed Forces of the Philippines’ (AFP) modernization program, as it seeks to provide the country with the capability to deal with air, surface and sub-surface threats.

It will be armed with a variety of missiles and guns capable of defeating such threats.

The acquisition of the two frigates is widely seen as the first step to provide the Philippine Navy with modern and capable warships to protect the country’s vast maritime territories.

‘Done deal’

The FAP contract, which is worth almost PHP16 billion excluding the weapon systems and munitions, was initiated in June 2013 and was awarded during the time of President Benigno "Noynoy" Aquino III under then defense secretary Voltaire Gazmin.

On June 16, 2016, the notice of award was issued to HHI by Gazmin and the conforme was signed by HHI  on September 13, 2016.

On June 30, 2016, President Rodrigo R. Duterte was inaugurated as the 16th president of the Republic.

In September that year, then-appointed DND Secretary Delfin Lorenzana sent the Notice of Award, and shortly after being confirmed by the Commission on Appointments on Oct. 19, signed the FAP contract agreement with the naval shipbuilder.

The Notice to Proceed was issued to HHI on Dec. 13 of the same year.

But for the most part of 2017, the project was stalled at the Critical Design Review (CDR) stage after the Navy and HHI raised conflicting concerns on the combat management system (CMS) to be installed on the frigates.

The CMS is what most call “the brain of a naval combat vessel”, a computer and software system package that integrates all the sensors and weapons systems of the ship into a single system to assure “knowledge superiority” over potential enemies, shorten decision-making cycles, and execute rapid and accurate weapon engagement, especially during combat or security operations.

HHI, citing a provision in the contract, claims “sole right” to choose the CMS maker and selected fellow South Korean company Hanwha Systems as the preferred supplier.

On the other hand, former Philippine Navy (PN) flag-officer-in-command Vice Admiral Ronald Joseph Mercado said that the PN preferred the Tacticos system made by Thales of The Netherlands.

It is the choice for the CMS supplier that will be at the center of Monday’s Senate investigation.

In a privileged speech at the House of Representatives last Jan. 15, Magdalo party-list Rep. Gary Alejano claimed that the FAP project’s “design was altered from the original”.

He also accused HHI of surreptitiously inserting “disadvantageous” provisions, or “fine prints”, into the contract that the Navy leadership and Lorenzana were unaware of.

Alejano also questioned the choice of HHI over its main rival for the project, Garden Reach Shipbuilders and Engineers of India, which submitted a bid that is PHP700 million lower than the winning bidder.

Aside from this, there are claims that SAP Bong Go allegedly got involved in the choice of the CMS supplier.

SAP Go

The Philippine Daily Inquirer and online news outlet Rappler claimed that Go allegedly gave Lorenzana a “white paper” about the supplier to provide the CMS for the warships sometime in January 2017.

This document was passed on to Mercado with a marginal note, dated Jan. 12, 2017, signed by Lorenzana.

“To Admiral Mercado,” Lorenzana wrote on a post-it. “Ronald, This was given to me by Bong Go. Go over it and prepare a report/rebuttal to be submitted to the Pres.”

The Presidential Management Staff, which Go heads, also asked then Frigate Project Technical Working Group chairman Commodore Robert Empedrad to a meeting in Malacañang to discuss the CMS concern.

However, Go refuted sending the controversial document himself, while Lorenzana flatly denied Go interfered in the warships deal.

"My name has been unfairly dragged in this issue. I am not privy to the frigate transaction of the DND. I have never seen the controversial document that is alleged to have come from me, much less, handed the same to SND Lorenzana," he said in a statement issued on January 17.

"In fact, I will resign if it can be proven that I intervened. It should be emphasized that the frigate project was already a done deal in 2016 during the time of former President Aquino,” Go added.

Lorenzana, Mercado and Empedrad likewise denied that Go intervened in the frigate project.

In a Radyo Pilipinas interview last Jan. 20, Mercado, cleared Go of any interference in the warships deal.

"Ilang beses kami na magkasama ni Secretary Bong Go, ilang beses kaming mag kausap. In fact, pag nag-escort ako kay President (Duterte) aboard foreign navy ships, gaya nung sa China, Pakistan, Japan, ni isang beses 'di kami nag-usap tungkol sa Navy frigate project (Secretary Go and I have met and spoken to each other a number of times, such as when I escorted the President aboard foreign navy ships, such as those of Chine, Pakistan, Japan. But not once did we talk about the Navy frigate project)," Mercado said.

Malacañang also cleared Go of the allegations after conducting an internal probe.

“An investigation has been conducted and it has been found that the allegations of Rappler are untrue and unfounded,” Presidential Spokesperson Harry Roque said on January 18.

The DND later on announced that the alleged “white paper” originated from Hanwha, one of the proponents for the CMS which was post-qualified by the PN for the FAP.

Timeline in review

For a better perspective on what have transpired thus far regarding the frigate project, the Philippine News Agency (PNA) has obtained a copy of the chronological order of key events relating to the Frigate Acquisition Project.

June 7, 2013 – Former Defense Secretary Voltaire Gazmin signed Acquisition Decision Memorandum No. ‎‎2013-019 to initiate the immediate implementation of the acquisition of two brand new Frigates for the Philippine Navy with an approved budget of PHP18 billion.

Dec. 4, 2013 – The first stage bidding was conducted wherein six proponents were declared eligible by the DND Special Bids and Awards Committee (SBAC), namely: Daewoo Shipbuilding & Marine Engineering Co. Ltd. (DSME) – Korea; Hyundai Heavy Industries Co. Ltd. (Hyundai) – Korea; STX Offshore & Shipbuilding Co. Ltd. (STX O & S) – Korea; STX France S.A. – France; Garden Reach Shipbuilders & Engineering Ltd. GRSE – India; and Navantia SEP (Navantia) – Spain.

March 17, 2016 – The two lowest cost bidders were declared: Garden Reach Shipbuilders and Engineers (GRSE) with bid price of USD322 million or PHP15,047,704,000 (1USD = PHP46.732); and Hyundai Heavy Industries (HHI) with bid price of USD336,912,000 or PHP15,744,571,584.

April 30 to May 8, 2016 – GRSE was declared non-compliant to the financial requirements of the project as required by Section 23.5.2.6 of the Implementing Rules and Regulations (IRR) of RA 9184 or the Government Procurement Reform Act. Its Net Financial Contracting Capacity (NFCC) was found to be below the approved budget contract of PHP16 billion.

June 16, 2016 – DND Bids and Awards Committee declared HHI as the winning bidder and issued the Notice of Award in its favor.

Sept. 13, 2016 – DND Sec. Lorenzana sent a Notice of Award to Mr. Ki Yeong Sung with a corresponding contract price of PHP 15,744,571,584.00.

Oct. 24, 2016 – A contract agreement was signed by Sec. Delfin Lorenzana, Major Marlon B. Dayao, Comm. Robert A. Empedrad, Kisun Chung (Executive Vice President HHI) and Jae R. Kim (Senior Sales Officer of HHI’s Special and Naval Shipbuilding Division)

Jan. 11, 2017 – Col. Leonardo D. Dela Paz, chief of the DND’s Defense Acquisition Office, informed Mr. Ki Young Sund that the “Remarks on Makers” list are grossly disadvantageous to the PN and to the AFP/DND.

Feb. 8, 2017 - Mr. Ki Yeong Sung wrote a letter to the Defense Acquisition Office saying that HHI is entitled to choose HSC Naval Shield as the combat management system (CMS) for PN frigate, which is beneficial for both PN and HHI.

HHI said it can consider the CMS choice of the Navy if it is “willing to compensate USD9 million per ship which is aggregated sum of price difference for the system and service for installation, test and integration in our shipyard.”

April 1, 2017 - Vice Admiral Ronald Joseph Mercado wrote a letter to Lorenzana stating the opinion that “Remarks” provisions in the contract are grossly disadvantageous to the PN and to the AFP/DND, saying: “This remarks, if permitted, are akin to a buyer (PN/DND) with his/her own money being told by the seller HHI on what to buy.”

April 6, 2017 - Col. Dela Paz wrote a memorandum to Lorenzana, stating that the Thales offer, although compliant of the technical specifications, is not commercially competitive in view of the price difference of USD 14,050,000.00 as compared to the offer of HSC Naval Shield.

Commercial competitiveness is one of the requirements stipulated in the “Remarks” provision before the shipbuilder should consider the owner’s preferred maker.

April 20, 2017 - Dela Paz informed the Assistant Chief of Naval Staff for Logistics that Lorenzana has approved the recommendation for the continuation of the Frigate Acquisition Project with the HHI-selected maker of the CMS.

Aug. 10, 2017 - In a memorandum addressed to the AFP Chief-of-Staff, Lorenzana said it is improper for the PN, which had post qualified the HSC Naval Shield CMS, to declare it as non-compliant during the project implementation.

Sept. 14, 2017 - Hanhwa issued a Certificate of Conformance with respect to the request of HHI on the CMS and Link 16 on the new frigates of the PN.

Dec. 8, 2017 - Lorenzana sent a letter to Mr. Kisun Chung, EVP of HHI, informing them that the request for amendments to the contract Agreement of the Payment terms and Delivery Schedule of the 2 units Frigate Acquisition Project is approved.

Dec. 18, 2017 - Mr. Park Moon Yung, Senior VP of HHI, sent a reply-letter to Lorenzana, thanking him for the approval of the amendments to the Contract Agreement of the Payment Terms.

At present, the FAP is proceeding with the other technical specifications of the combat ships.

On Monday, several key personalities mentioned in the frigate project, including representatives from HHI, are expected to attend the Senate investigation to shed light into the issues allegedly hounding the warship deal.

Go and Lorenzana have both welcomed the investigation as the perfect opportunity to air their side so that truth will be finally known.

And come Monday, as the Senate investigation begins and due process takes its course, the real truth will surely come out. (PNA)

[adroth]

Day 1 of the hearing

https://www.facebook.com/1515763818663512/videos/2141787536061134/

[adroth]

Day 1 of the hearing

https://www.facebook.com/1515763818663512/videos/2141787536061134/

Bong Go: Frigate deal controversy endangering national security
By CNN Philippines Staff

Updated 15:51 PM PHT Mon, February 19, 2018

http://cnnphilippines.com/news/2018/02/19/Frigate-deal-Philippine-Navy-Bong-Go-Duterte.html

Metro Manila (CNN Philippines, February 19) — President Rodrigo Duterte's right-hand man Bong Go on Monday denied his involvement in the Navy frigate deal, adding the controversy poses danger to national security.

"Labis na kailangan ng Philippine Navy ang proyektong ito sa pagpatrolya sa ating karagatan. But this controversy is seriously derailing the implementation of this security measure," the Special Assistant to the President said during the first Senate hearing on the Armed Forces of the Philippines modernization program.

[Translation: The Philippine Navy badly needs this project to protect our seas, but this controversy is seriously derailing the implementation of this security measure.]

< Edited >


=====


Defense Dep't to pursue warship deal despite controversy
By David Santos, CNN Philippines

Updated 20:55 PM PHT Mon, February 19, 2018

http://cnnphilippines.com/news/2018/02/19/defense-department-frigate-warship-deal.html

Metro Manila (CNN Philippines, February 19) — The Department of National Defense is bent on pursuing the frigate deal despite alleged anomalies in the Navy's procurement of billions-worth of new warships.

The Frigate Acquisition Program is the biggest defense procurement in the country's history, with a price tag of P16 billion.

The frigates are capable of anti-air, anti-surface, and anti-submarine warfare. It can do longer maritime patrol and surveillance, making it ideal in defending our sea borders, Defense Secretary Delfin Lorenzana said on Monday.

"Some of our vessels cannot go into a sea-state 7 - yung malalaking alon - hindi nila kaya. But this one, it can go to sea-state 7. Ibig sabihin makakapunta sila, makakapagtagal sila diyan sa West Philippine Sea kahit na malakas ang alon or even sa Philippine Rise," he said during the Senate probe on the Armed Forces' modernization program.

[Translation: Some of our vessels not cannot go into a sea-state 7, it cannot withstand strong waves. But this one can. Our officers can go and stay in West Philippines Sea and even Philippine Rise.]

But this project has been sailing on rough waters.

Lorenzana said he merely carried out the procurement process from the previous administration when it initiated the project in 2013.

< Edited >




====

CMS to be acquired for frigates compliant to Navy specifications
By Priam Nepomuceno  February 19, 2018, 7:46 pm

http://www.pna.gov.ph/articles/1025747

MANILA -- Department of National Defense (DND) Secretary Delfin Lorenzana on Monday assured the public that the combat management system (CMS), being acquired for the two frigates contracted by Hyundai Heavy Industries (HHI), is compliant to all the specifications set by the Navy.

"No, we are not settling for a less capable system, compliant system (Hanwha CMS), yan ang (that is the) term sa (in) procurement," Lorenzana noted.

Lorenzana made this statement shortly after Monday's Senate hearing where the Navy's Frigate Acquisition Project (FAP) was tackled and the reasons why HHI opted to pick Hanwha over Thales Tacticos, the manufacturer preferred by former PN flag-officer-in-command Vice Admiral Ronald Joseph Mercado.

And while acknowledging that Thales Tacticos is a good CMS brand, the DND chief said the Hanwha CMS being selected to fit the Navy's first two missile-firing capable frigates is equally capable.

"We are not buying a lesser product. We are buying an equally capable product to be put into our ship(s)," he added.

Also, Lorenzana emphasized that Mercado's relief last December was brought about by the latter's refusal to comply with two of his memorandums on the CMS and pronouncements that he will have the project cancelled if Thales Tacticos was not selected to supply the above-mentioned equipment.

"(The reason for his relief as FOIC was) dahil dalawang beses na memo ko hindi n’ya sinusunod tapos, sa mga conference niya (sinasabi) na pag hindi (na)tuloy ang (Thales) Tacticos, ika-cancel niya ang FAP (The reason for his relief as FOIC was he disobeyed my memos twice and he says in his conferences that he will have the FAP cancelled if Thales Tacticos will not be selected)," the DND chief pointed out.

Also, Lorenzana said that it was Mercado who had the specification "Tactical Data Link 16" or the ability to transmit and receive data from various platforms in a bid to justify the preference for the Thales Tacticos CMS.

"Hindi ko alam may motivation siningit nila nung tapos na technical specifications nung Link 16, baka (para) ma-disqualify ang Hanhwa (I didn't know there was this motivation that they have inserted when the technical specifications of Link 16 were done. Maybe, it's for Hanhwa's disqualification)," he added.

The DND chief added that this specification was not present in the original specifications. Also, Lorenzana said he has no objections to acquiring the Thales Tacticos CMS provided that adequate funds are allotted for it.

The FAP has a contract of PHP18 billion including the weapon systems and munitions. Earlier, the DND chief said that using the Thales Tacticos CMS will shoot the price of the frigates by USD7 million per ship or USD14 million for the two vessels. (PNA)

[mamiyapis]

This GIF perfectly describes my 5 hours this morning til past lunch:



Gazmin didn't perform due diligence. Lorenzana didn't perform due diligence. Mercado didn't perform due diligence. Empedrad didn't perform due diligence.

The only silver lining is we DO get the designs for the HDF variant we are buying. This should allow us the ability to build more ships without HHI and the South Koreans. That means any of the local yards that are capable can now build us what we need, and we can do direct contracting with Thales Nederlands for the rest of the systems.

Some of the meatier points that came out:

Post-Qual declared both CMS as compliant pre-Link 16 supplementary. Post-Link 16, Hanwha eliminated as consequence of a highly dubious supplementary specifications addendum.

Navy legal officer during the workshop for the contract specifications list signs away control of the final specs despite having JUST CONCLUDED A WORKSHOP where the Navy and HHI argued over control. Legal officer claims he signed them just as a matter of formality.

Officers under both Mercado and Lorenzana argue without supervision of their direct superiors, hence leading to knowledge gaps regarding the true state of the frigates.

2 state of minds regarding the FAP leads to animosity between SND and FOIC, ultimately leading to Mercado's ouster.

This and more... Jeebus.

[adroth]

Post-Qual declared both CMS as compliant pre-Link 16 supplementary. Post-Link 16, Hanwha eliminated as consequence of a highly dubious supplementary specifications addendum.

Referring to this?

"Hindi ko alam may motivation siningit nila nung tapos na technical specifications nung Link 16, baka (para) ma-disqualify ang Hanhwa (I didn't know there was this motivation that they have inserted when the technical specifications of Link 16 were done. Maybe, it's for Hanhwa's disqualification)," he added.

The DND chief added that this specification was not present in the original specifications. Also, Lorenzana said he has no objections to acquiring the Thales Tacticos CMS provided that adequate funds are allotted for it.

The need for Link16 wss actually specified in a Supplemental Bulletin

In all the recent discussions about the FAP and Link16, one important part of the project appears to have been missed. SBB NR DND-PN-FAP-16-01 specify Link16 and Link22 as requirements  . . . but were to be FFBNW

[mamiyapis]

Yup, some seriously hard questions need to be asked about VAdm. Mercado. Because I have a hard time understanding how they were legally able to insert the requirement post-bid and post-NOA.

[adroth]

From a related discussion on the forum's FB extension

https://www.facebook.com/groups/rpdefense/permalink/1580958091990032/

[Invictus]

Frigate deal in accord with PH laws to push through: SND
By Priam Nepomuceno  February 20, 2018, 2:19 pm

MANILA -- The Navy’s Frigate Acquisition Project (FAP) is aboveboard and will be strictly completed in accordance to the country's procurement laws.

This was emphasized by Department of National Defense (DND) Secretary Delfin Lorenzana in Monday's Senate hearing on the frigate project.

The DND is ensuring that the procurement process for the frigates are done and completed strictly in accordance with our laws, namely, Republic Act 9184 or the Government Procurement Reform Act, and 10349 (the Revised AFP Modernization Program),"

[Dutch]

Yup, some seriously hard questions need to be asked about VAdm. Mercado. Because I have a hard time understanding how they were legally able to insert the requirement post-bid and post-NOA.

Sir M, why ask VAdm Mercado? IMO, these questions should be asked first to the head of the TWG during that time, the one who signed it.

[LionFlyer]

I am curious on this recent revelation that the design was part of the deal. How real is this and what is meant by design? All engineering drawings, build plan or simply the "design"? I'm skeptical to say the least because the deal amount is already so low.

In any case, having the design doesn't necessarily mean it is easy to replicate...

[adroth]

The quote below was supposed to focus on the urgency of the modernization effort . . .

Lorenzana: Philippines minutes away by jet from reclaimed islands
Audrey Morallo (philstar.com) - February 19, 2018 - 9:20pm

MANILA, Philippines — Chinese jets could reach and bomb the Philippine mainland in 15 minutes if launched from reclaimed features in the South China Sea, Defense Secretary Delfin Lorenzana admitted in a hearing at the Senate.
 
Lorenzana also admitted that Chinese ships can reach the Philippine mainland in half a day after China had built military structures in seven reclaimed features in the West Philippine Sea (South China Sea).
 
"Correct, senator," Lorenzana answered after being asked by Sen. Richard Gordon if Chinese jets could reach the country in a matter of minutes from their artificial islands near Palawan.
 
The Defense secretary also admitted before the Senate panel on national security and defense that the Philippine military would not be able to detect Chinese jet overflights as the country does not have a radar nor interceptor fighters.
 
"That is why you should have a sense of urgency. The frigate will be used to protect other shipping and anti-submarine warfare," Gordon said.

< Edited >

Read more at https://beta.philstar.com/headlines/2018/02/19/1789506/lorenzana-philippines-minutes-away-jet-reclaimed-islands#j2qwcE1v5VIlopzQ.99

. . . then this interesting insight was placed there. So might as well reshare here.

Gordon is spot on that PN, along with AFP, should have that sense of urgency. But as i watched the hearing, i think the two FOICs(recent and former) has different approaches. Mercado, being very passionate and persistent on the frigate while Empedrad highlighted that capability of a submarine (forward to 2:59). Yes empedrad acknowledges that the navy needs a lot of things, but his vision is not floating above water.

[adroth]

I am curious on this recent revelation that the design was part of the deal. How real is this and what is meant by design? All engineering drawings, build plan or simply the "design"? I'm skeptical to say the least because the deal amount is already so low.

In any case, having the design doesn't necessarily mean it is easy to replicate...

The local-manufacture aspect was actually something that DAPA made part of the package of the original Multi-Role Vessel (MRV) project that would have manufactured the first MRV in South Korea, and the second one at a Philippine yard.

The overall plan was reportedly supposed to include a ToT that would enable the construction of frigates at the yard that would have been selected for the PH-built MRV.

Whether or not this offer was a standard DAPA offer that was revived . . . or how the PN would manage this project given that the PN Modernization Office (which negotiated the original ToT project) no longer exists both remain unclear.