Philippines to Terminate ₱1.2-billion UH-1 Chopper Deal ; Supplier failed to Deliver Sep 2014

TERMINATION NOTICE. The Department of National Defense has notified the foreign suppliers of the choppers. Photo from Philippine Air Force


DND moves to terminate controversial chopper deal

The defense department has sent a notice to the foreign suppliers for their failure complete the delivery of the 21 choppers on time

MANILA, Philippines – The Department of National Defense (DND) has moved to partially terminate a 1.2-billion chopper deal with foreign suppliers following allegations of anomalies raised by a senator.

A "Notice to Terminate" was sent on Wednesday, March 25, to the joint venture of US-based Rice Aircraft Services Inc and Canada-based Eagle Copters Ltd for failing to complete delivery of the 21 UH-1 choppers for the Philippine Air Force.

Only 8 of the 21 choppers have been delivered when it should have been completed in September 2014. The DND initially granted extensions.

"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 notice read.

The supplier has 7 days to respond to the DND's notice. "Failure to show cause within the provided period, either by inaction of default, shall cause the issuance of an order terminating the contract," the notice added.

Senator JV Ejercito put the chopper deal on the spotlight when he filed this month a Senate resolution seeking a probe into the chopper deal. He claimed that the project was "tailor-fitted" for a "favored bidder.

"The Senate should check if any violations were made on the procurement law in the purchase of these 21 helicopters. We have to look into this deal because P1.2 billion worth of choppers that cannot be used and have obsolete parts are disadvantageous to the AFP Modernization Program," said Ejercito, a member of the Senate committee on national defense and security.

Ejercito, in his resolution, cited reports from The Manila Times and the Manila Bulletin that uncovered alleged irregularities in the deal.

"These reports alleged that the UH-1D units that were delivered by the suppliers to the Philippine Air Force were non-compliant with the project contract's Terms of Reference. Furthermore, they have limited use due to some defects, thereby defeating the purpose of its acquisition and is a prima facie wastage of taxpayers' money," the resolution said.

The Armed Forces of the Philippines awarded the contract to the joint venture in December 2013 after 3 failed biddings. The project is part of the AFP modernization program.

The bidding process was led by a retired Air Force general Fernando Manalo, who is now the defense undersecretary for finance, munitions, installation and materiel. – with reports from Carmela Fonbuena/

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