The Senate on Monday, Feb. 19, will begin 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, in addition to the Congressional Oversight Committee on the Armed Forces of the Philippines Modernization Act, seeks to find out whether or not the acquisition of the fight 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 together with Senators Francis Pangilinan, Paolo Benigno Aquino IV, Risa Hontiveros, Leila de Lima, and Antonio Trillanes IV —by means of 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 protection division concerning the challenge.

But what was the root of the controversy and how was Go’s title dragged into it?

The Frigate Acquisition Project (FAP) is one of the key items of the Armed Forces of the Philippines’ (AFP) modernization program, because it seeks to supply the nation with the functionality to deal with air, floor and sub-surface threats.

It might be armed with a range of missiles and weapons succesful of defeating such threats.

The acquisition of the two frigates is extensively seen as the first step to supply the Philippine Navy with trendy and succesful warships to guard the nation’s huge maritime territories.

‘Done deal’

The FAP contract, which is value nearly PHP16 billion excluding the weapon programs and munitions, was initiated in June 2013 and was awarded throughout the time of President Benigno “Noynoy” Aquino III beneath then protection secretary Voltaire Gazmin.

On Aug. 18, 2016, the discover of award was issued to HHI by Defense Secretary Delfin Lorenzana 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 12 months, then-appointed DND Secretary Delfin Lorenzana despatched the Notice of Award, and shortly after being confirmed by the Commission on Appointments on Oct. 19, signed the FAP contract settlement with the naval shipbuilder.

The Notice to Proceed was issued to HHI on Dec. 13 of the similar 12 months.

But for the most half of 2017, the challenge was stalled at the Critical Design Review (CDR) stage after the Navy and HHI raised conflicting issues on the fight administration system (CMS) to be put in on the frigates.

The CMS is what most name “the brain of a naval combat vessel”, a pc and software program system package deal that integrates all the sensors and weapons programs of the ship into a single system to guarantee “knowledge superiority” over potential enemies, shorten decision-making cycles, and execute speedy and correct weapon engagement, particularly throughout fight or safety operations.

HHI, citing a provision in the contract, claims “sole right” to decide on the CMS maker and chosen fellow South Korean firm Hanwha Systems as the most well-liked provider.

On the different hand, former Philippine Navy (PN) flag-officer-in-command Vice Admiral Ronald Joseph Mercado mentioned that the PN most well-liked the Tacticos system made by Thales of The Netherlands.

It is the alternative for the CMS provider that might be at the heart of Monday’s Senate investigation.

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

He additionally accused HHI of surreptitiously inserting “disadvantageous” provisions, or “fine prints”, into the contract that the Navy management and Lorenzana have been unaware of.

Alejano additionally questioned the alternative of HHI over its principal rival for the challenge, Garden Reach Shipbuilders and Engineers of India, which submitted a bid that’s PHP700 million decrease than the profitable bidder.

Aside from this, there are claims that SAP Bong Go allegedly got concerned in the alternative of the CMS provider.


Timeline in overview

For a greater perspective on what have transpired so far concerning the frigate challenge, the Philippine News Agency (PNA) has obtained a replica of the chronological order of key occasions regarding the Frigate Acquisition Project.

June 7, 2013 – Former Defense Secretary Voltaire Gazmin signed Acquisition Decision Memorandum No. ‎‎2013-Zero19 to provoke the quick implementation of the acquisition of two model new Frigates for the Philippine Navy with an accepted finances of PHP18 billion.

Dec. four, 2013 – The first stage bidding was performed whereby six proponents have been declared eligible by the DND Special Bids and Awards Committee (SBAC), particularly: 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 price bidders have been declared: Garden Reach Shipbuilders and Engineers (GRSE) with bid worth of USD322 million or PHP15,047,704,00Zero (1USD = PHP46.732); and Hyundai Heavy Industries (HHI) with bid worth of USD336,912,00Zero or PHP15,744,571,584.

April 30 to May eight, 2016 – GRSE was declared non-compliant to the monetary necessities of the challenge as required by Section of the Implementing Rules and Regulations (IRR) of RA 9184 or the Government Procurement Reform Act. Its Net Financial Contracting Capacity (NFCC) was discovered to be beneath the accepted finances contract of PHP16 billion.

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

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

Oct. 24, 2016 – A contract settlement 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, knowledgeable Mr. Ki Young Sund that the “Remarks on Makers” checklist are grossly disadvantageous to the PN and to the AFP/DND.

Feb. eight, 2017 – Mr. Ki Yeong Sung wrote a letter to the Defense Acquisition Office saying that HHI is entitled to decide on HSC Naval Shield as the fight administration system (CMS) for PN frigate, which is useful for each PN and HHI.

HHI mentioned it might contemplate the CMS alternative of the Navy whether 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 supply, though compliant of the technical specs, isn’t commercially aggressive in view of the worth distinction of USD 14,050,00Zero.00 as in comparison with the supply of HSC Naval Shield.

Commercial competitiveness is one of the necessities stipulated in the “Remarks” provision earlier than the shipbuilder ought to contemplate the proprietor’s most well-liked maker.

April 20, 2017 – Dela Paz knowledgeable the Assistant Chief of Naval Staff for Logistics that Lorenzana has accepted the advice 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 mentioned it’s improper for the PN, which had post certified the HSC Naval Shield CMS, to declare it as non-compliant throughout the challenge 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. eight, 2017 – Lorenzana despatched a letter to Mr. Kisun Chung, EVP of HHI, informing them that the request for amendments to the contract Agreement of the Payment phrases and Delivery Schedule of the 2 models Frigate Acquisition Project is accepted.

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

Last month, the Philippine Daily Inquirer and on-line information outlet Rappler claimed that Go allegedly gave Lorenzana a “white paper” about the provider to supply the CMS for the warships someday in January 2017.

This doc was handed on to Mercado with a marginal notice, 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, additionally requested then Frigate Project Technical Working Group chairman Commodore Robert Empedrad to a gathering in Malacañang to debate the CMS concern.

However, Go refuted sending the controversial doc himself, whereas 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 mentioned in an announcement 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 challenge.

In a Radyo Pilipinas interview final 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 mentioned.

Malacañang additionally cleared Go of the allegations after conducting an inside probe.

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

The DND in a while introduced 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.

At current, the FAP is continuing with the different technical specs of the fight ships.

On Monday, a number of key personalities talked about in the frigate challenge, together with representatives from HHI, are anticipated to attend the Senate investigation to shed mild into the points allegedly hounding the warship deal.

Go and Lorenzana have each welcomed the investigation as the good alternative to air their facet in order that reality might be lastly identified.

And come Monday, as the Senate investigation begins and due course of takes its course, the actual reality will certainly come out. (PNA)