Your 1st in Philippine defense

Sikorsky PZL-Mielec S-70i Black Hawk Combat Utility Helicopter of the Philippine Air Force

For a more detailed information regarding the Combat Utility Helicopter acquisition project {Horizon 2), please refer to the resource page for the said project:

"Combat Utility Helicopter Acquisition Project (Horizon 2) of the Philippine Air Force"


===============

The Philippine Air Force (PAF) selected the Sikorksy PZL-Mielec, with their S-70i Black Hawk International, as the winning proponent for the Combat Utility Helicopter Acquisition Project (Horizon 2), after providing what the PAF's Technical Working Group (TWG) believes is the best offer made to them.


Sikorksy PZL Mielec competed against several foreign helicopter manufacturers, including those from Italy, Russia, the US, South Korea, and France.


This selection and contract overrides an earlier contract made between the DND and Canadian Commercial Corporation (CCC) in December 2017 for the same project, after members of the Canadian parliament questioned the sale of 16 Canadian-made Bell 412EPI combat utility helicopters to the PAF. 


The S-70i combat utility helicopter built by Sikorsky's Polish subsidiary PZL Mielec.
Credits to the original source of the photo.

Overview:

(still under construction)



Summary:

Combat Utility Helicopter Acquisition Project (Horizon 2)

* End User: Philippine Air Force (205th Tactical Helicopter Wing)

Quantity: at least 16 helicopters


* Modernization Phase:
 Horizon 2 Phase of RAFPMP


* Project ABC:
 Php18,976,000,000.00


Acquisition Mode: Negotiated Procurement (Government-to-Government)

* SARO Release:
 SARO-BMB-D-17-0025076 dated 20 December 2017 (majority of funds)


* Winning Proponent:
 Sikorsky Aircraft Corp. (thorough its Polish subsidiary PZL Mielec)

Product for Delivery: Sikorsky S-70i Black Hawk International


* Contract Price:
 
US$241.4 million

* First post by MaxDefense: Combat Utility Helicopter: 3 July 2016
                                                Selection of S-70i Black Hawk:

Status: Contract signed 21 March 2019. Notice to Proceed released as of 16 April 2019. For delivery.




============
U P D A T E S:
============

08 December 2018: 


MaxDefense received confirmation from at least 3 relevant sources that the Philippine Air Force has selected the Sikorsky PZL Mielec S-70i Black Hawk for its Combat Utility Helicopter acquisition project (Horizon 2).

This was also confirmed by Defense Sec. Delfin Lorenzana in an interview by the media. He also confirmed that the PAF is looking at finalizing the acquisition of the S-70i Black Hawk by next year.


It's good that Defense Sec. Delfin Lorenzana himself confirmed that the Philippines Air Force's Technical Working Group for the Attack Helicopter and Combat Utility Helicopter acquisition projects selected the Turkish-made T129 ATAK attack helicopter made by Turkish Aerospace Industries, and the US-made S-70 Black Hawk made by Sikorsky (Lockheed Martin), respectively. This means that the DND and the SND himself supports the decision of the PAF, and would back them up for this decision in getting the final approval by the president.

At least former Commanding General PAF Lt.Gen. Galileo Kintanar's sacrifices of being forced to step done from his position would not be in vain. 

Sec. Lorenzana's statement was recorded in the footage, which can be accessed HERE.

The PAF's TWG and leadership selected the Sikorsky PZL Mielec S-70i Black Hawk for the PAF's Combat Utility Helicopter acquisition project. Credits to original source of photo.



===============

09 December 2018:

KAI, one of the competitors for the Combat Utility Helicopter (CUH) project of the Philippine Air Force, also confirmed in their Company President's speech recently that they acknowledge Lockheed Martin (owner of Sikorsky) as offering low price dumping for their CUH (obviously talking about the Black Hawk) in the Philippines.

This corroborates with Defense Sec. Delfin Lorezana's announcement that Lockheed Martin Sikorsky did offer their Black Hawks lower than expected. The SND mentioned that Sikorsky will indeed supply 16 Black Hawks for the same budget originally allocated for 16 smaller, cheaper Bell 412EPI helicopters, although originally Sikorsky offered to sell only less than 16 units for the same budget.

Recent reports also confirmed that KAI can only provide 10 helicopters in the same budget, which makes Sikorsky's offer very enticing to the PAF.


===============

11 December 2018:

The Department of National Defense (DND) needs to hurry the acquisition of the Combat Utility Helicopter (CUH) acquisition project of the Philippine Air Force. MaxDefense received a bleak info from some of its defense and government sources that the SARO (fund allocation) for the CUH acquisition project worth Php12.1 billion is EXPIRING THIS MONTH, and has been denied extension by the Department of Budget & Management (DBM) since this has already been extended last time. Once expired, the allocation will be cancelled, and the DND would need to do the request for funding allocation again next year, and this might take several months again, numerous meetings and document signing before getting re-approval.


There are only few solutions that the DND can do, and all of them require the DND Bids and Awards Committee as well as the DND Negotiating team to convene and work fast. Government to Government Deal (G2G), including US Foreign Military Sales (FMS) won’t be possible as it normally takes months before a deal can be reached.

One of the options is to work fast and award the project to Lockheed Martin – Sikorsky Helicopters within this month. But this may require the DND to pass a new Acquisition Decision Memorandum (ADM) in favour of a Commercial Contract with Lockheed Martin – Sikorsky, instead of a G2G or FMS deal with Poland or US, respectively. The current ADM approved by the DND is said to be in favour of G2G or FMS with a foreign country.

MaxDefense also received fresh confirmation that Polish government officials, as well as representatives from Lockheed Martin – Sikorsky are currently in the Philippines to discuss the deal and try to find ways to speed up the awarding. Polish officials are needed since Lockheed Martin – Sikorsky will be sourcing their helicopters from Sikorsky’s subsidiary PZL Mielec in Poland. But here’s the problem: even if G2G can be done quickly, the Philippines doesn’t have a Defense Cooperation Memorandum of Agreement (MOA) with Poland that would allow G2G between the 2 countries. Even if the DND tries to, it may take months before a MOA between the DND and its Polish counterpart can be made, approved and signed for implementation.

Thus the only way to go is a quick awarding of a contract in favour of Lockheed Martin – Sikorsky under a Commercial Contract with the DND.

Poland’s participation in the project also support MaxDefense’s information posted these past few days that Sikorsky’s offer is based on the S-70i International Black Hawk made by PZL Mielec in Poland, rather than the UH-60M Black Hawk made in the US by Sikorsky. Only the S-70i can possibly meet the budget requirements of the Philippines, considering that Php12.1 billion is only worth US$228.3 million in today’s exchange rate, which in turn means 16 Black Hawks could translate to only US$14.3 million each, still far too low compared to the recent contracts Sikorsky made in 2018 alone for Black Hawks in the global amrket.

Normally US made UH-60M Black Hawks would cost north of US$20 million each, and even the Polish built S-70i normally cost upward of US$15 million.

Nonetheless, the DND should work fast and complete this deal within this year. Otherwise, the last remaining solution is for Pres. Duterte to intervene and instruct the DBM to allow the SARO extension until next year.

===============

14 December 2018:

In this news report from Poland, Lockheed Martin's Director of Communications in Europe, Middle East and Asia Mr. John Nielson confirmed that the Black Hawks that were offered to the Philippines are those made in PZL Mielec's plant in Poland, which means these are S-70i International Black Hawks, contrary to reports by other pages that the offer was the US-spec UH-60M Black Hawk.

Excerpt from the news report:

"We note information about the selection of Black Hawk helicopters produced in Poland by the Philippines. Every sale of S-70i Black Hawk helicopters is excellent news in the context of employment in the Polish aviation sector. This applies to both production and engineering sites, including 1,700 people employed at PZL Mielec, the largest Lockheed Martin production plant located outside the United States" - says John Neilson, head of Lockheed Martin communication in Europe.

MaxDefense earlier doubted the news on offering the UH-60M to the PAF, since this variant is expensive and illogical, considering it is unreasonable for Lockheed Martin Sikorsky to offer it based on the PAF's budget. The S-70i variant is the same standard Black Hawk model but is cheaper since it is produced using lower Polish labour and production costs, and has less bells and whistles than it's American counterpart.

Based on information released in the past 2 weeks, the PAF selected the Sikorsky Black Hawk, with 16 units said to have been offered to the PAF with the budget it allocated, approx at US$240 million. Even based on previous Black Hawk acquisition by other countries, US$240 million isn't enough to allow for the acquisition of 16 brand new Black Hawks, even the cheapest variant. This deal is actually a bargain for the PAF, so it's interesting to see what are the inclusions should a deal be finalized between the DND and LM Sikorsky.


The Sikorsky PZL Mielec S-70i Black Hawk. Photo taken from Wikimedia Commons.


===============

23 December 2018:

During the change of command ceremonies for the Philippine Air Force, outgoing chief Lt.Gen. Galileo Gerard Kintanar highlighted the expected deliveries for the PAF for 2019. All of the flying assets highlighted in the list were already discussed by MaxDefense in the past, considering our accurate monitoring of RAFPMP projects based directly from AFP and DND records.

Among those he mentioned and listed was the 1
6 Black Hawk helicopters, which he  described as “the best combat utility helicopter in the world”.

Report from Philippine Daily Inquirer can be accessed HERE.




===============




22 March 2019:

MaxDefense released a blog entry on the Combat Utility Helicopter project, as the project was expected to be finalized soon with Sikorsky Aircraft Corp., through its Polish subsidiary PZL Mielec as the selected proponent with their S-70i Black Hawk combat utility helicopter.

As of 22 March 2019, MaxDefense was informed that the Notice of Award (NOA) was already released in favor of PZL Mielec as of late February 2019. This means that PZL Mielec already passed Post Qualification Inspections prior to NOA release, and price negotiations have been completed.

Based on information MaxDefense received from DND sources, the NOA was based on an offer Sikorsky-PZL Mielec made worth US$241.4 million for 16 brand new S-70i Black Hawk helicopters made in PZL Mielec's factory in Poland.

The NOA is a sign that Sikorsky-PZL Mielec has indeed bagged the project, subject to payment of bonds and Contract Signing with DND. Usually it can take between less than 1 month, up until several months from NOA release for the Contract Signing to take place depending on how quick the DND finalizes the deal.

With the bonds already paid, and the draft contract content said to be agreed upon by both parties, signing of the contract is expected to happen very soon, considering the DND and PAF has placed this project as an urgent one.

MaxDefense expects the deal to be made through Direct Commercial Sales rather than US Foreign Military Sales (FMS) due to the long process of getting approval from the US government, and administrative works with the US Department of Defense.

More information can be found on the blog entry.

Sikorksy PZL Mielec received the Notice of Award to supply CUH to the PAF on February 2019.
Photo taken from Lockheed Martin's website.



===============

24 March 2019:

After releasing our blog on Sikorsky PZL Mielec winning the Combat Utility Helicopter acquisition project (Horizon 2) of the Philippine Air Force, we received confirmation from both DND and PAF sources that the Contract Signing between the DND and PZL Mielec happened on 21 March 2019.

The Contract value is the same as indicated in the Notice of Award (NOA) which is US$241.4 million. So far MaxDefense has not receive the actual value in Philippine Pesos (Php) which depends on the agreed exchange rate between the two parties.

While contract was already signed, Sikorsky PZL Mielec can only prepare for the implementation of the contract once the Notice to Proceed (NTP) is released by the DND, backed by the Opening of Letter of Credit (LOC) to support the financial requirements of the deal.

===============

0 comments:

Post a Comment

Philippine Coast Guard Modernization Projects