Post-SONA Updates on the AFP Modernization Programs under RA 10349 and RA 7898

Philippine President Benigno Aquino III confirmed during his last State of the Nation Address (SONA) early this month that 30 projects for the modernization of the Armed Forces of the Philippines (AFP) were signed and funding will be allocated soon. So far, the approval was only made in less than 2 months, so it is expected that the budget may not have been released yet.

But with elections coming in soon, the government may need to speed-up the release of budget to allow the Department of National Defense (DND) to award them immediately before they are considered as midnight projects.

MaxDefense takes a look on the status of projects under the Revised AFP Modernization Program Horizon 1, as well as some projects for older AFP Modernization Program that are still ongoing.



Backtrack:

Before the 30 projects were approved, several projects were already prepared for acquisition, or were already being tendered. These includes several big-ticket items under Horizon 1 (2013-2017) phase of the Revised AFP Modernization Program (RAFPMP) under Republic Act 10349, in addition to projects already approved in the past but are under the AFP Modernization Program (AFPMP) covered by Republic Act 7898. Delayed as they are, these balance AFPMP projects are being pushed to be completed within Pres. Aquino's term.

MaxDefense believes that at its current phase, the DND and AFP won't be able to complete all balance projects under the AFPMP RA 7898.



Multi-Year Obligational Authority 

Due to the huge amount of several projects, the DND has proceeded to fund these projects in an installment basis based on the Multi-Year Obligational Authority (MYOA), a system that provides funding of a certain project in a yearly installment basis. This is by ensuring that the AFP/DND includes the annual payment for the project in their annual budget proposal, in this case, the AFP Modernization Program. 

There are several projects that are to be acquired via MYOA, an example of which is the Frigates for the Philippine Navy, and the FA-50PH for the Philippine Air Force.

More on MYOA can be seen on link provided HERE.



Projects under the Revised AFP Modernization Program:

Philippine Navy Projects:

The Philippine Navy (PN) has 10 projects covering Horizon 1 phase of the Revised AFP Modernization program, and some have already started the tendering process, including the Frigate project, Anti-Submarine Helicopter (ASH) project, Multi-Purpose Attack Craft (MPAC) Mk. 3 project, Jacinto-class Patrol Vessel (JCPV) Combat Systems Upgrade project, Amphibious Assault Vehicle (AAV) project, and the Marine Forces Imagery and Targeting Support System (MITSS) project,

The month of August is about to end yet there is no news yet on the awarding of the new frigates for the Philippine Navy to any of the contending shipbuilders.

The Frigate and Anti-Submarine Helicopter projects have already completed the Stage 1 of its 2-Stage Bidding. But it is expected that the Frigate will be awarded first, as the final design and subsystem composition of the ship would be the basis for the final specifications of the Anti-Submarine Helicopters. Up until this writing, there are no formal indications yet that an awarding can be made soon for the frigates, while AgustaWestland has so far been the only responsive bidder for the helicopters with their AW159 Wildcat. It is still to be determined though if the final offer from AgustaWestland will be responsive to the final specifications and budget provided for the bidding's 2nd stage.

With no award yet for the new frigates, the Anti-Submarine Helicopter acquisition project has stalled since it would be dependent on the winning frigate's design and components. So far only AgustaWestland has cleared the 1st stage of the 2-stage bidding.  

Meanwhile, the Amphibious Assault Vehicle project has completed the post-bid qualification and is only awaiting for a Notice of Award (NOA) to be provided to the winning bidder. Samsung Techwin of South Korea will only start the production of the actual product, the Korea Amphibious Assault Vehicle (KAAV) after the DND issues the Contract and necessary notices. According to MaxDefense sources, actual release of funds for the initial payment covered by the MYOA is already being processed to secure backing for a NOA.

A Notice of Award for Samsung Techwin's KAAV to fulfill the acquisition of Amphibious Assault Vehicles for the Philippine Navy is still pending as of this writing.

The MPAC Mk.3 project, which is divided into 2 parts, has already announced the bidding for the 1st lot which covers the actual boat and standard subsystems. As of this writing, the DND has not yet made an updated schedule on when the bid submission and opening is. The 2nd lot will involve the acquisition and installation of remote weapons systems (RWS) and short-range surface-to-surface missile systems that will be awarded via Government-to-Government (G2G) deal with Israel. MaxDefense expects this to be Rafael's Typhoon 12.7mm RWS and Spike-ER missiles.

3 more additional MPACs are being procured under the RAFPMP's Horizon 1 phase, and will be installed with a remote weapons station for a 12.7mm machine gun and short range surface-to-surface missiles.

The Jacinto-class Patrol Vessel Combat Systems Upgrade project's bidding was recently reported to have failed as none of the 9 potential bidders submitted a bid. As discussed in our MaxDefense Facebook page, several of the bidders requested to increase the Approved Budget of the Contract (ABC) as the amount was not enough to do what the PN specified. The PN and DND is now reviewing the details and is yet to decide if they would increase the budget, or reduce the amount of work to be made to fit in the budget allocated.




Philippine Air Force Projects:

With 11 projects, the Philippine Air Force (PAF) has so far been the recipient of the only projects approved earlier under the RAFPMP, which are the Combat Utility Helicopter (CUH) project and the Surface Attack Aircraft/Lead-in Fighter Trainer (SAA/LIFT) acquisition project. The CUH project saw the delivery of 8 Bell 412EP helicopters from Canada, and the awarding to Korea Aerospace Industries (KAI) for 12 FA-50 Fighting Eagle jet aircraft.

A replacement for the PAF's OV-10s is urgently needed, but so far the bidding for the CAS aircraft acquisition project has not moved even after the project was approved for budgeting.

Prior to the president's SONA, the PAF has several projects already being tendered but are awaiting for approval for funding of the projects before it can push further. These includes the Air Defense & Surveillance Radar project, the Close Air Support (CAS) aircraft project, the Long Range Patrol Aircraft (LRPA) project, the Full Motion Flight Simulator project, and the C-130T acquisition project.

The C-130T acquisition is a Foreign Military Sales (FMS) project with the US government, in which the US government will shoulder $20 million for 2 ex-US Marine Corps C-130T Hercules aircraft, while the Philippines will shoulder around Php1.6 billion. As per previous press releases and latest confirmation by US Ambassador to the Philippines Philip Goldberg, the aircraft will arrive in the country by 1st quarter of 2016.

The delivery of 2 C-130T from the US was confirmed recently as on the way and expected to arrive by 1st half of 2016.
Photo taken from the US Embassy in the Philippines website.

Another project is a government-to-government (G2G) deal involving the acquisition of 3 Air Defense & Surveillance Radar systems from IAI-Elta of Israel, which is already delayed due to the late approval by the president. Originally the plan involves the donation of a feeder radar system to the PAF in time for the APEC Conference this November 2015 while the 3 new radars are being made. With the delays, it is still not confirmed if the Israeli government can provide the said radar before the said conference. The NOA for this project is also pending until now, and further delays would mean the new radars would only arrive in 2017 following the delivery time frame. While the radars are still pending award, the construction of facilities to house these radars are also awaiting awarding.

The Long Range Patrol Aircraft project's bidding failed in its first attempt last year, and no new announcement has been made by the DND on when they intend to restart the tendering process. Take note that this project is confirmed by DND sources as separate from the plans to acquire refurbished maritime patrol aircraft from the US and Japan. Meanwhile, the bidding for the Close Air Support Aircraft has been pending for almost 2 years now, with several changes made on the submission of bids. No time frame has been made yet on when the bid submission will take place as of this writing, although this was said to be among the most urgent requirement as the PAF's OV-10s are rapidly deteriorating due to age and airframe stress.

Plans to acquire 2 new Long Range Patrol Aircraft is still pending, as the DND and PAF has not yet confirmed of restarting the bidding for the project.

Another project that was undergoing tender last year but failed to move forward is the Full Motion Flight Simulator acquisition project, which until now has no movement as well.

Still undetermined if a bidding will be the acquisition mode to used are the ammunition for the FA-50 aircraft. MaxDefense sources confirmed that officials prefer bidding for the supply of air-to-air and air-to-ground missiles, which means that the PAF and DND is open for a challenge against the bench-marked AIM-9L/I-1 Sidewinder and AGM-65 Maverick missiles. A possible alternative would be from Israel like the Python-Derby tandem from Rafael which are said to be compatible with the FA-50. But the decision if the project would be for bidding or direct negotiation is still not final.

The PAF has bench-marked their choice of a short-range air-to-air missile to the Raytheon AIM-9L/I-1 Sidewinder missile, although it was said that they would prefer a bidding to acquire the FA-50PH's missile requirements.

Philippine Army Projects:

The Army has 9 projects being pushed for the Horizon 1 phase, and cost the least among the 3 major services of the AFP. So far, none has been awarded as well, although there are some projects that have already started the procurement process.

The only project that has already started the tender process is the Night Fighting System project, which is for the acquisition of a helmet or rifle-mounted monocular, and a laser targeting device. Although the DND has already released information to potential bidders, they have not yet decided on a confirmed date for the bid submission and opening. 

The Night Fighting System has already started the procurement stage but is yet to schedule a bid submission and opening date.
Photo taken from UDMC's FB page.

Several projects in the Army will be acquired via direct negotiation and G2G, including vehicle-mounted and handheld radios that are expected to be awarded to Harris Corp. USA, the Rocket Launcher Light which is also expected to be awarded to Airtronic USA who also previously got the contract to supply RPG-7USA to the Philippine Army. There is also another requirement for 60 Field Ambulances that will probably be awarded via G2G to AM General for additional Humvee-based M1152 combat ambulance.

The delivery of the first batch of RPG-7USA is said to arrive before the year ends. The RPG-7USA made by Airtronic USA was chosen for the Philippine Army's Rocket Launcher Light (RLL) project.

Another project that has not yet gained traction is the refurbishing and repair of 114 ex-US Army M113A2 armored personnel carriers, including its shipment from California to the Philippines. This is a critical project since, according to MaxDefense sources, the DND and PA were already given a deadline to ship them out of the storage facility.

Finally, there is the controversial acquisition of Shore-Based Missile System that was rescheduled and budget-realigned by groups led by current Chief of the Staff of the AFP, Gen. Iriberri. So far, MaxDefense was informed by its sources in the DND that the proposed projects to replace the SBMS are not yet approved by the president and was not among those 30 projects approved recently.


AFP General Headquarters and AFP-Wide Service Support Units Projects:

Aside from the 3 major services, the AFP's General HQ and Service Support Units also have 3 projects under the RAFPMP's Horizon 1 phase. 

GHQ is in need of almost 700 Kia KM-450 for the AFP-wide Service Support Units.

This includes the G2G procurement of additional 680 Kia KM-450 trucks, and the tendering for the acqusition of Civil Engineering Equipment and the C4ISTAR system. So far, MaxDefense was informed that Hyundai of South Korea is also awaiting for a NOA for the additional lorries, while tendering for the C4ISTAR and Civil Engineering Equipment has not yet started.



In-Progress Projects under the AFPMP:

Philippine Navy:

All naval helicopters awarded to AgustaWestland for their AW-109E Power helicopters have already been delivered and accepted by the PN. 

Upgrades for the Gregorio del Pilar-class frigates are also being done but at a piecemeal-basis. Although there were already several proposals provided to the PN for the upgrades of its sensors and combat suite and weapons systems, it seems that the PN has not yet fully decided on the final system composition. 

Construction of the Strategic Sealift Vessels by PT PAL of Indonesia is underway, and is reported to be within schedule. 


Philippine Air Force:

The delivery of AW-109E Power armed helicopters are expected to continue within this year after the PAF accepted the first 2 units last week. All 6 balance helicopters were reported to have completed their flight tests in Italy and are awaiting for the delivery go-signal, which may have already been provided by the DND and PAF.

Two more C-295M medium tactical transport aircraft are also for delivery within this year, with Airbus-CASA already confirming this a few months back. There appears to be no compelling reason to delay the delivery, so expect it to really be in the country soon. Indonesia's PTDI also reported that they can deliver two NC-212i light tactical transport aircraft within the year as well.

The previous plan to acquire Search and Rescue Seaplanes have been shelved for now, but was included in the PAF's acquisition plan under Horizon 2 phase. 

Plans to acquire SAR Seaplanes for the PAF has been shelved for now. Expect the plan to come out again in the Horizon 2 phase of the RAFPMP.

Philippine Army:

The Philippine Army has recently awarded a contract with Harris Corporation USA for the acquisition of vehicle-mounted battlefield communication radios, which was reported last December 2014. It is expected that the radios will commence delivery by either late this year or early 2016.

The initial 6 units of M113A2+ delivered by Elbit Systems Land & C4I has arrived in the Philippines, as covered by the Upgraded M113 Acquisition Project. Installation of its gun system is currently ongoing in Mechanized Infantry Division's home base at Camp O'Donnell, Tarlac. 

As stated earlier, the first batch of RPG-7USA for the Philippine Army is expected to arrive within the year. It was also reported recently that the stalled distribution of Remington R4A3 rifles has already been settled and will commence very soon.

The acquisition of 12 155mm Towed Howitzer for the Philippine Army and Philippine Marine Corps is also awaiting for the Notice of Award, after Elbit Systems Land & C4I passed the post-qualification requirements of the DND. 

Bad news has hit the delivery of Force Protection Equipment for the Philippine Army and Marine Corps as the winning bidder Achidatex Nazareth Elite has failed to deliver the products. The DND is expected to make a decision on the matter very soon.

The first batch of 6 M113A2+ from Elbit Systems of Israel has arrived, with the next batch of armored vehicles expected to arrive in the country soon.

Summary:

Despite the massive delays, AFP Modernization Program under RA 7898 has been progressing well, although some setbacks arose on several projects like the Force Protection Equipment, the Joint Assault Rifle, and the Gregorio del Pilar-class upgrades. There were also previous set-backs that have been ironed-out including the AW-109E for the PAF.

The real problem now is on the implementation of the Revised AFP Modernization Program under RA 10349, which has not moved much after a month after the president approved the projects. MaxDefense believes that further delays in the implementation of these projects will not only further delay the project delivery and integration of the weapons system to the AFP's capability, but may also delay projects that will be implemented under the Horizon 2 phase of the program. 

It would be in the best interest of both the AFP and DND to speed-up the acquisition process, and to avoid an overlap of phases in the coming years. It should be noted that the next phase would be much more complex than the current phase, and will be difficult to implement if there are still pending projects from the previous phase that are still being processed.