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Friday, March 22, 2019

Contract Signing for PAF's Combat Utility Helicopter Project to happen very soon

The Philippine Air Force (PAF), through its former Commanding General Lt. Gen. Galileo Gerard Kintanar Jr. announced in late 2018 that the Technical Working Group (TWG) for the Combat Utility Helicopter (CUH) acquisition project under the Horizon 2 phase of the Revised AFP Modernization Program (RAFPMP) has selected the Sikorsky S-70i Black Hawk as its top choice. This was after the project's TWG evaluated it against other competitors which include the Leonardo AW139M, Korea Aerospace Industries KUH-1 Surion, Russian Helicopters Mil Mi-171 Hip, among others.


The Sikorsky PZL Mielec S-70i Black Hawk International. Photo c/o Lockheed Martin.



The Combat Utility Helicopter acquisition project under the Horizon 2 phase calls for the supply and delivery of 16 units of new Combat Utility Helicopters, including the specified Integrated Logistics Support (ILS) package that includes the spares and logistics support, training and conversion requirements, and mission essential plus support tools and equipment. The Approved Budget for Contract (ABC) is worth Php12.1 billion, or around US$230 million. It remains to be seen if the budget will increase to allow the PAF to be able to pay for its selected product.

Sikorksy S-70 Black Hawk helicopters of the Austrian Air Force. The PAF has selected a newer version of the helicopter to be its next Combat Utility Helicopter.
Photo taken from Photo Nexus.



It did not take long for Defense Sec. Delfin Lorenzana to back Lt. Gen. Kintanar's announcements, that the Department of National Defense (DND) supports the PAF's selection of the American-designed helicopter for the CUH acquisition project. He even mentioned that the Black Hawk is a proven platform, in use by the US Army and many other militaries around the world.

So it is actually surprising that, its already 4 months and no announcement has been made by the DND on the formal awarding of the project to the Black Hawk's manufacturer Sikorsky, or its mother company Lockheed Martin.


Procurement Process:

After the PAF and DND confirmed the selection of Sikorsky's S-70i Black Hawk as its top selection, the TWG and the DND's Bids and Awards Committee (DND-BAC) proceeded with the Post Qualification Inspections (PQI) to determine if Sikorsky and its Polish subsidiary PZL Mielec both comply to their submitted documents and requirements, and if their product complies with the technical specifications.

As early as January 2019, MaxDefense was informed that Sikorsky & PZL Mielec did pass the PQI by the PAF TWG and DND-BAC, thus it is eligible to proceed with the project and receive a Notice of Award (NOA) from the Philippine parties.

The Sikorsky-PZL Mielec S-70i Black Hawk.
Photo taken from and credited to Rob Lovesey @ Flickr.



Finally a Good News:
After a long wait, finally there is good news on this project.

Based on information MaxDefense received from reliable sources, the Notice of Award (NOA) for the project was already released in favor of Sikorsky Aircraft Corp.- PZL Mielec last February 2019, and Contract Signing will be happening very soon, 

The event may happen anytime, and could even be as early as within today if the DND has made the entire process quicker than expected.

Drafting the contract may take time, as it involves both parties to agree on the contents of the contract, including the clauses and appendices on requirements, schedules and programs, inclusions and exclusions, items for clarification, any side-agreements, warranties and after sales support, modifications to suite the end user, and other necessary requirements.

Based on experience using the PAF's previous contracts, it may take from as short as one (1) month from NOA release, to as long as almost a year to complete. In this case, MaxDefense expects the contract to be ready for signing within 2 months from NOA release.

MaxDefense was informed that the deal will be a Direct Commercial Sale (DCS) mode of procurement instead of the lengthier Foreign Military Sales (FMS) with the US government, and will mostly involve PZL Mielec being the manufacturer of the helicopter.


Notes from Previous Announcements:

a. Training: 

It would also be remembered that the PAF and the DND confirmed during the Defense Budget 2019 hearing with the Senate that training of pilots will be conducted with Sikorsky in Florida, USA. This is despite the helicopters and aftersales support being provided by its Polish subsidiary PZL Mielec.

This allows for easier training of PAF air and ground personnel due to the use of English as medium of instruction, which was said to be a problem when the PAF previously awarded a similar CUH acquisition contract to PZL Swidnik for the W-3A Sokol utility helicopters under the old RA7898-supported AFP Modernization Program.


b. PAF being an Experienced Black Hawk operator:
Another benefit that is worth raising here is that the PAF is actually a long time user of the Sikorsky S-70 Black Hawk, as it has been one of the first Black Hawk operators outside the US when it acquired a couple of S-70A-5 Black Hawk from Sikorsky in the mid 1980s. At least one of the Black Hawks remain in service with the PAF as a Search and Rescue platform of the PAF's 505th Search and Rescue Group.

The PAF is a long time user of the Sikorsky S-70A Black Hawk. One unit remain in service with the 505th Search and Rescue Group.
Photo taken from Defense of the Republic of the Philippines Facebook page, credits to Patrick Joseph.



c. Early Delivery:

The PAF and DND also confirmed during the said hearing that Sikorsky-PZL Mielec has committed to deliver the first batch within 6 months. MaxDefense believes that this timeframe is based on the Opening of the Letter of Credit, which is usually the case for most AFP modernization projects.



MaxDefense will provide more updates regarding this project as more information comes in. Considering that the project is moving forward without any more expected roadblocks from people with influence from now on.

7 comments:

  1. Sir Max,

    Will the US allow the export of the Black Hawk to US due to the EJK issue with you-know-who?

    ReplyDelete
    Replies
    1. The AFP isn't having their hansa on the so-called EJK issue, not to mention that the US supports the Philippine War against drugs.

      So, it will not be that much of an issue.

      Delete
    2. It was the S70i that was offered not the US Spec Black hawks.
      And EJK issues only affects PNP and not the AFP.

      Delete
    3. it may not affect delivery as this is for the military.

      Delete
  2. Mubuhay ka Gen Kintanar. Your sacrifice will never be forgotten. You prove that there are still a few good men in our service. May other personnel follow your example. Mabuhay to our AFP.

    ReplyDelete
  3. If the budget will still be the same then the $230M budget will only be enough for around 5 units based on the price that the Polish Armed Forces paid for their's last January. According to the Jane's article I read, the unit price for the S70i is around USD46M. So for 16 units that would be around $736M.

    ReplyDelete
  4. I always learn something from you,sir. Keep up the good work.

    ReplyDelete

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