How Did Thales Became Involved in the Philippine Navy's Frigate Project in the First Place?

The Department of National Defense, specifically its head Defense Sec. Delfin Lorenzana, has admitted in his statement yesterday 20th December 2017, that the reason why he relieved Vice Admiral Ronald Joseph Mercado as the Philippine Navy's Flag Officer in Command (FOIC), was because VAdm. Mercado was in conflict with the Defense Department's orders to proceed with Hyundai Heavy Industry's insistence to use the Hanwha Systems Naval Shield Combat Management System for the Frigate Acquisition Project (FAP). There are many sources online but readers may refer on the clickable links HERE, HERE, and HERE.

It was stated in many reports, and in MaxDefense Philippines Facebook page posts that VAdm. Mercado was indeed in favour of using the Thales Nederland TACTICOS Combat Management System, which both the DND and Hyundai are not in favour to use.

But it was made to appear in reports that VAdm. Mercado was the only one insisting on the use of Thales TACTICOS.

But in the first place, how did Thales come into the picture of the Frigate Acquisition Project? Did Thales just suddenly came out of nowhere and became VAdm. Mercado's preferred supplier in an instant? Who brought in Thales in the first place?

MaxDefense would like to clarify this misrepresentation of the issue.

The photo above shows a 3D render of the Philippine Navy's Future Frigate as posted by Hyundai Heavy Industries in their website on October 2016. The additional captions were made by MaxDefense Philippines based on the information coming directly from HHI's bid submission on the FAP's 2nd Stage Bidding. Pitz Defense Analysis provided the labelling works on MaxDefense's behalf. This photo was posted in our blog entry dated October 24, 2016 when HHI and DND signed the contract for the FAP.
Original photo taken from Hyundai Heavy Industry's website. Thanks to Pitz Defense Analysis for the assistance.

First of all, Thales Nederland came into the picture because Hyundai Heavy Industries was the one who brought them into the project. Among those submitted by HHI during the 2nd Stage Submission and Opening of Bid Envelopes (SOBE) last December 2015 was a proposal to use a Thales combat management and sensor suite for the future PN frigates, as indicated in their Baseline Configuration List submission.

As MaxDefense discussed as early as October 2016 in the blog entry "Finally, the Contract Signing for 2 New Light Frigates between Philippine Navy and Hyundai Heavy Industries", MaxDefense already mentioned the subsystems approved by the Philippine Navy for the frigates, and it includes the Thales Nederland TACTICOS Combat Management System. The PN's FAP Technical Working Group (TWG) was the one who insisted the use of Thales TACTICOS. The list MaxDefense provided in that blog entry came directly from the Baseline Configuration List submitted by Hyundai last December 2015 to the DND's Bids and Awards Committee and did not just came out of nowhere.

For further reference, even India's Garden Reach Shipbuilders & Engineers (GRSE) submitted a full Thales Nederland combat management and sensor suite which is more comprehensive than those submitted by Hyundai.

So it was not VAdm. Mercado nor the Philippine Navy who brought in Thales into the project. It was Hyundai. So why did Hyundai, and even GRSE, brought in Thales into the project?

That is because Thales' products were compliant to the project's Technical Specifications, which was confirmed by the PN's Technical Working Group for the Frigate Acquisition Project. So why did Hyundai offered Thales only to backtrack later on when the contract was already awarded to them? Is this a case of "Bait and Switch" which, as many in the defense industry know, the Koreans are very well known of doing?



Evidence can be seen below on the position paper submitted by the Philippine Navy to higher authorities showing that the PN FAP TWG "sustained its preference of TACTICOS" for a number of reasons, mostly because Hanwha Naval Shield did not meet the project's Technical Specifications. For the record, this position paper was made in early 2017 when the contract was already signed and the Critical Design Review (CDR) already happening (hense, the FAP PMT Chairman position and not TWG which only applies before project starts), and did not come from VAdm. Mercado, but MaxDefense will reveal further details soon.

Above is an excerpt from just one of the position papers submitted by the Philippine Navy's Frigate Acquisition Program Project Management Team (FAP PMT) on their sustainment on using Thales TACTICOS as the project's Combat Management System. Other reasons for the decision was blurred for now, but will be discussed in the future as it holds key information on why TACTICOS was being consistently pushed by the PN including former FOIC VAdm. Ronald Joseph Mercado.
Thanks to our sources outside the Philippine Navy for providing this important document. (YES, it came from a different source which will surprise everyone when we post it later on.)

VAdm. Mercado's insistence to use the Thales TACTICOS has basis, being the one chosen by the PN's Technical Working Group since 2016, and according to further position papers submitted by the PN's Techical Inspection and Acceptance Committee (TIAC) and Project Management Team (PMT) which succeeded the TWG after the project proceeded with the Critical Design Review last January 2017, shows that the PN did not deviate from its position and still continued to insist on the use of Thales TACTICOS CMS.

VAdm. Mercado's position has legal basis, and has complete black and white documentation. Any investigation on the issue can easily see these evidences if investigators just request for a copy from the Philippine Navy.

MaxDefense will discuss more about the issue in future blogs.

Also, may I take this opportunity to inform everyone that there is a fake MaxDefense Philippines Facebook page that copied the cover photo, profile photo, group name, and even the layout of our page. The difference with this fake group and the original one is that our membership is more than 82,000 people, while the fake one was at 14 people as of this noontime. It also comments on Facebook regarding the FOIC relieving and frigate issues with an opposite stand to ours.

Thank you for your continued support of MaxDefense in uncovering the truth.

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Was Former Navy Chief Really Delaying the Frigate Project? Here is Our Simplest Answer

With all the fuzz on the relief of Vice Admiral Roland Joseph Mercado as the Philippine Navy's Flag Officer in Command (FOIC), different reasons were floated out by the public and even by the media reports. But one thing is certain so far, all media reports agree that VAdm. Mercado was relieved because of his disagreement with the Department of National Defense with regards to certain systems of the future frigate. Specifically the Combat Management System (CMS).

While the CMS isn't the only issue of the future PN frigate, it is the most highlighted issue because it was the one whose conflict was in every black and white everytime the PN makes its position to the Defense Department, and to the Office of the President.

Some reports say that the reason for the relief was because VAdm. Mercado was favouring a French company, which MaxDefense understand as Thales, in supplying the Combat Management System, and was in conflict with the Defense Department who chose a Korean-made CMS, which MaxDefense understand is Hanwha Systems.

While the reason is partly true, there is a reason why the former Navy chief was in favour of using the CMS from Thales, which MaxDefense named before as the Thales TACTICOS BL2.

First of, Thales TACTICOS was the original offer made by Hyundai Heavy Industres when their bid proposal was accepted by the Philippine Navy's Technical Working Group for the Frigate Acquisition Program. Why would Hyundai deviate its offer from the proven TACTICOS to the less proven Hanwha Naval Shield?

Secondly, to make it simple, does the Hanwha Naval Shield meet the Technical Specifications set by the Philippine Navy for all subsystems of the frigates. If it doesn't meet the specs, then why bother using them? So far, TACTICOS met the specs of the project, and the Navy's own hired consultant for the project agrees to it too.

Thirdly, does the change from TACTICOS to Naval Shield conform with the Government Procurement laws under RA 9184? If it does not, then why push it to happen? Breaching the law is considered an illegal act and may be a valid reason to stop a deal and compromise the success of the project.

Also, in its recommendation letter to relieve VAdm. Mercado, it was indicated that the Philippine Navy's TWG rated the Hanwha Naval Shield as compliant to the project's requirement. The question here is, did the PN's FAP TWG really found the Naval Shield compliant, and did they agree to use it in the first place? Then why are the position papers of the PN TWG and Project Management Team (PMT) since early 2017 up until now all mention that the Hanwha's Naval Shield did not comply to the project's specifications. All position papers of the PN mentioned the same all this time.


With the insistence to correct the use of a non-compliant CMS, for people who do not understand the situation it may appear the VAdm. Mercado and his team are "delaying" the project considering that the Defense Department already issued a memorandum last October 2017 to use the Korean-made Hanwha Systems Naval Shield BL2 as the future frigate's CMS. But for those who understand the situation, is he really delaying the project, or was he just insisting that the project must follow proper process as prescrbed by RA 9184?


In a nutshell, these are at the simplest explanation for the FOIC's position that MaxDefense hopes that even the laymen can understand. MaxDefense will discuss the issues deeper considering that CMS is not the only problem hounding the Frigate Acquisition Project. As of my last count, there are also STRUCTURAL, COMMUNICATIONS, SENSORY, AND SAFETY ISSUES that are not yet discussed but are worth discussing too.

Until then, stay tuned.

Edit: with the Defense Sec. Delfin Lorenzana already releasing a statement on why he ordered the relief of VAdm. Lorenzana, MaxDefense believes its also time to answer and show evidence of what really happened these past few weeks. He even admitted that lots in Social Media has painted the DND into a bad light, and there is a reason why.

Until then, stay tuned.

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MaxDefense Facebook Ban Could Be Coordinated with FOIC Sacking

After asking around our contacts and sources in the AFP and DND who are familiar of the situation, it appears now that my banning last weekend from posting on Facebook may not be from communist terrorists or their legal fronts, but may have to do with the impending relief of the Philippine Navy's chief / FOIC yesterday. It was a coordinated move, which includes making the entire process quick so any detractors won't be able to react fast enough.

This is to keep me silent when they started their move. MaxDefense only received the info on FOIC's confirmed relief on Monday night 18th December, when the change of command was done the next day at 0900H. By the time my Facebook account is up late this week, its too late.

Several sources confirmed that MaxDefense is being accused of being an unofficial mouthpiece of the Navy leadership, which is NOT TRUE.

While MaxDefense may have contacts in the military and defense establishment, our stand is based on our own opinion and not because we were told by certain people to be in this position. And in this case, based on black and whte evidence and personal accounts, MaxDefense agrees that the leadership change based on the issues of the frigate is unjust and unfair and threatens the frigate project by breaching RA 9184.

MaxDefense expects the media blitz to begin in favor of the DND and RAdm. Empedrad in the next few days, as they expect that no one from the Philippine Navy will speak up on the issue, and the people who made the move were prepared for this.

MaxDefense also thank its readers who diseseminated the info on my posting ban, and we also thank other FB-based defense pages like Pitz Defense Analysis and Inside Military Forum, among others, for posting related info without us asking.

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Philippine Navy Chief Suddenly Relieved, Frigate Mess Cover Up Highly Likely Reason

In a very suspicious move made by the Philippine Navy and Department of National Defense, the Philippine Navy's Flag Officer in Command (FOIC), Vice Admiral Ronald Joseph Mercado, was relieved from his post and was replaced by AFP J9, Rear Admiral Robert Empedrad effective today, 19th December 2017 at 0900H. This despite VAdm. Mercado was slated for retirement by March 2018 when he reaches the mandatory retirement age of 56 years old. Its still being confirmed what would be VAdm. Mercado's new position.

The turn over appears to have not been covered by the media, or if it did it was done minimally. No speeches whatsoever. And it was done in the Office of the Chief of Staff AFP's instead of a public area. The ceremony was simple: just a quick handover ceremony that isn't normal when replacing the head of a major armed service branch of the Armed Forces of the Philippines. VAdm. Mercado will prbably be assigned in AFP Headquarters until he retires, which is tantamount to floating status.

Were the issues on the Philippine Navy's Frigate Acquisition Project the reason why FOIC was suddenly replaced? MaxDefense will discuss soon.

As many of our readers may have already known, this is likely something to do with the mess involving the Philippine Navy's Frigate Acquisition Program, which we have been covering since September 2016 before the DND and Hyundai Heavy Industries signed the contract for the deal.

MaxDefense has been raising the alarm on the issue for several months now, wherein Hyundai is attempting to revise the frigate's subsystems and design in violation of RA 9184 and not in compliance to the Technical Specifications of the project, with the backing of the Department of National Defense. This issue has become too serious to the point that the Defense Secretary himself has took notice of our posts and placed MaxDefense in the DND and AFP's monitoring.

Prior to this relief of the FOIC, the chairman of the PN Technical Inspection and Acceptance Committee (TIAC) and Project Management Team (PMT) of the Frigate Acquisition Project, Commo. Sean Villa was also relieved from his post last week.

As a background, RAdm. Empedrad was formerly the FAP Technical Working Group head when he was still a Commodore, and was also a FAP Steering Committee member and adviser at the same time as being the AFP's J9. Incidentally, VAdm. Mercado was also the first Technical Working Group head of the FAP before then Commo. Empedrad took over when Mercado became FOIC in 2016.

So why relieve these two important officers of their post, considering their involvement in the project? Why was RAdm Empedrad involved in the Frigate Project until before he was made FOIC despite already the AFP J9 which has nothing to do with the FAP? Why was there even a Steering Committee made by the Defense Secretary despite the presence of a Project Management Team and Technical and Inspection Acceptance Committee? There are many questions actually but we will all bring it to place very soon.

Also why do this change of command just before the Christmas holiday when everyone including the Senate and Congress will be out of session, and the media's attention is on the holidays and the aftermath of the devastating typhoon?

MaxDefense will discuss more of the issues in our next blog entry very soon.

Meanwhile I, Max Montero, is still banned from posting on our Facebook Group Page, as well as on my personal page until next week. Coincidence as well?

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Banned Again from Posting on Facebook

For our Facebook page readers, you may have noticed that we have been silent for the past 3 days. Unfortunately, Max Montero (the only admin of MaxDefense Philippines) is banned from posting on Facebook and replying messages in Facebook Messenger for a week.

Looks like our "friends" from the terrorist New People's Army and its so-called legal left wing legal groups are not happy with our recent posts about them.

Anyway, please spread the word that any worthy topic and discussion would be posted here.

Cheers everyone!

Max Montero

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