Losing bidders buck P18-b Navy deal

Participants in  the bidding  for the  P18-billion acquisition of two Navy frigates for the Armed Forces’ modernization program have asked the Department of National Defense  to defer awarding the  deal until President-elect Rodrigo Duterte has  assumed office.

The four bidders were Garden Reach Shipbuilders & Engineers Ltd., (GRSE), STX France SA, Thyssenkrupp Marine System and Hyundai Heavy Industries Inc. (HHI).

The first three bidders were disqualified during the first phase due to alleged deficiencies in the documents they submitted.

Issues were raised on the net financial contracting capacity of GRSE and STX France and the list of completed contracts submitted by Thyssenkrupp Marine.

The DND stipulates that the winning bid would go to the one who could offer the lowest price.

The BAC disqualified GRSE allegedly due to insufficient capitalization, although during the bid preparation, the latter submitted a letter asking for time saying their latest Financial Statement was not yet available. The BAC issued a post-disqualification notice to GRSE which submitted a motion for reconsideration.

The three firms have asked the DND bids and awards committee  to overturn their disqualification.

GRSE’s offer was P900 million  cheaper than HHI’s bid.

When BAC conducted a post evaluation of the 2nd bidder, HHI was  declared as having  passed the post qualification stage.

In asking for a review, bidders  want to know why the BAC has approve a more expensive offer of a yet to be tested model in the guise of fast-tracking the upgrade of the country’s territorial defense capabilities.

Proponents asked whether HHI was chosen because the frigate it offered was similar to the Incheon Class, a proven design or a prototype of the Incheon Class, which has yet to prove its capabilities.

Proponents said the offer must be carefully evaluated before awarding the project to HHI, otherwise the DND could be accused of a midnight deal, done on the day that President Rodrigo Duterte was being sworn into office.

Garden Reach Shipbuilders & Engineers Ltd is one of India’s leading shipyards. It builds and repairs commercial and naval vessels. Founded in 1884, GRSE has also started ships for export to expand its business.

The company is owned by the Indian government and was awarded the Miniratna status, with accompanying financial and operational autonomy in September 2006.

Topics: acquisition of two Navy frigates , Armed Forces’ modernization program , Department of National Defense , Garden Reach Shipbuilders & Engineers Ltd. , (GRSE) , STX France SA , Thyssenkrupp Marine System , Hyundai Heavy Industries Inc. (HHI)

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