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Saturday, April 6, 2019

Del Pilar-class Offshore Patrol Vessels Upgrade - Hanwha Systems Wins Tender?

After several postponements between December 2018 to February 2019, the Department of National Defense's Bids and Awards Committee (DND-BAC), has finally successfully tendered the Del Pilar-class (Frigate) Upgrade Project of the Philippine Navy (PN), which is a Horizon 2 phase project under the Revised AFP Modernization Program. 

The Limited Source Bidding's bid opening appears to have been made on 19 February 2019, or two months after the original bid opening schedule of 28 December 2018.

This blog entry is the first one focusing more on the Del Pilar-class (Frigate) Upgrade, as previous discussions were more focused on our own suggestions or recommendations. 

One of the Del Pilar-class ships, BRP Andres Bonifacio (PS-17, then FF-17) leading ships from the Indian Navy and Japan Maritime Self Defense Force on its way to Pearl Harbor, Hawaii to participate in Rim of the Pacific 2018 multilateral naval exercises. Photo taken from the Philippine Navy.

Scope of Works:

With an Approved Budget of Contract (ABC) worth Php1,540,000,000.00, the scope involves the upgrade of sensor systems and combat management system of the three (3) ships of the class, namely BRP Gregorio del Pilar (PS-15), BRP Ramon Alcaraz (PS-16) and BRP Andres Bonifacio (PS-17) to make them more capable and responsive to growing maritime threats.

Among the reasons the ships were downgraded in February 2019 from frigates to offshore patrol vessels was due to lack of capabilities, at least in major combat features inherent of frigates namely anti-surface warfare (ASuW), anti-submarine warfare (ASW), anti-aircraft warfare (AAW), and electronic warfare (EW).

Before any improvement can be done in the ship's combat systems, it has to improve its "eyes" and "ears" first to be able to see the target, identify them properly, and guide its weapons accurately. Thus this upgrade program is the first step in improving the ship's overall capabilities.

In summary, the scope of works are as follows:

* Supply and Installation of a new Combat Management System (CMS), Hull Mounted Sonar (HMS), and Radar Electronic Support Measures (R-ESM). Based on the infographics supplied by the Philippine Navy below, these are under the "AFP Modernization Projects (CMS, ESM, HMS)"

* System Integration of the Proponent (winning bidder) Supplied Equipment with the Government Supplied (Philippine Navy) Equipment, which includes the Saab AN/SPS-77 Sea Giraffe AMB 3D radar, Identification Friend or Foe (IFF), FLIR SeaFLIR 230 EO/IR camera. These are all listed under the "US FMS/FMF Projects", as these subsystems were acquired by the Philippine Navy under cooperation with the US government, and passed through the US Foreign Military Sales (FMS) or Foreign Military Financing (FMF) programs of the US Department of Defense.

* System Integration of existing ship subsystems including navigation, situational awareness, AIS, weapons and guns, countermeasures, and other systems. These existing subsystems are shown under the "Current Capabilities" portion of the inforgraphic.

* Provide an Integrated Logistics Support package to support the upgrades for a certain time.

Based on the schedule required by the Philippine Navy, the proponent-supplied equipment must be delivered and ready for installation within 720 calendar days (~2 years) from receiving the Notice to Proceed (NTP). That is somewhere around 2021.

Installation will be a different delivery schedule, with ships no. 1 scheduled to have the integration and installation works starting 2021, and must be completed within 6 months after the Arrival Conference of the proponent-supplied equipment. It is expected that ship no. 2 will undergo the upgrade work within 2021 also, while ship no 3 will have it in 2022.

An infographic released by the Philippine Navy on the DPCF Upgrade project. Bas This current upgrade project covers the supply of the listed items under "AFP Modernization Projects"

Participating Proponents:

Being a Limited Source Bidding, only selected companies who were pre-evaluated by the Philippine Navy's Technical Working Group (PN TWG) were invited to participate in the tender submission. After thorough consideration, the shortlisted companies were as follows:

1. Saab Group of Sweden:

*  a world-renowned naval systems supplier and integrator involved in upgrade of warships, as well as supply and integrating sensors for new major warships around the world.
*  is supplying one of the most important items for integration into the Del Pilar-class, which is the US-supplied Saab AN/SPS-77 Sea Giraffe AMB 3D air/surface search radar system.
* they also have a representative office in Manila, and is also tied under cooperation with Filipino marine services provider Propmech Corporation.

2. Ultra Electronics of the United Kingdom:

* another globally known naval systems supplier and integrator, and is also involved in many upgrade projects of warships regionally.
* has experience working with the Philippine Navy when it won the Phase 3B combat systems upgrade of two of the PN's Jacinto-class patrol vessels.

* they are also represented locally by a Filipino group.

3. Hanwha Systems of South Korea:

* is a new player in the global scene but has been extensively involved in naval systems supply and integration works with the fairly large Republic of Korean Navy (ROKN).
* was born out of cooperation between Samsung (Hanwha System's former owner) and Europe's Thales Group. Some of their products were actually developed from early-model Thales products.
* currently is involved with the Philippine Navy, being Hyundai Heavy Industry's naval systems supplier and integrator of choice for the Jose Rizal-class frigates under construction in South Korea.

Tender Results:

Based on a statement made last February 2019 by the Philippine Navy's Flag Officer in Command (FOIC) himself, Vice Adm. Robert Empedrad during an interview with AFP-controlled radio station DWDD, the lowest bidder was a UK-based company.

Of the three companies expected to participate in the tender, only Ultra Electronics is based in the United Kingdom. This was later on corroborated by our naval, defense, and industry sources, who all confirmed that Ultra Electronics was indeed the lowest bidder.

Also, the only other bidder that submitted for the tender is South Korea's Hanwha Systems.

As for Saab Group, it was confirmed to MaxDefense that they did not submit a bid. No official reason was provided, although sources mentioned that it could be because Saab believes that the budget allocated for the project was too low considering the requirements being asked by the Philippine Navy.

MaxDefense and its contributors believe that if Ultra Electronics wins the project, it is expected to supply the following:

1. For Combat Management System: the Ultra Electronics OSIRIS CMS, which is already in service with several navies. 

2. For Radar-Electronic Support Measures: a variant of the UltraEAGLE ELINT system, wherein a naval variant is available.

3. For Hull Mounted Sonar: due to costs, MaxDefense believes that Ultra would be offering their lower-end model, probably the Ultra Sonar 2091 (MFS-7000) single-frequency sonar, whose technology is now more than 10 years old and was the basis for the Royal Navy's HMS for the Daring-class air defense destroyer.

The console of the Ultra Electronics OSIRIS CMS as installed on a Brazilian offshore patrol vessel. Photo taken from Forcas de Defesa Brazilian defense website.

Turn of Events:

But due to turn of events in the past 2 months, it was later confirmed to MaxDefense that Ultra Electronics was disqualified from the project.

Apparently, Ultra Electronics failed the Post Qualification Inspection (PQI) conducted by the PN TWG and the DND BAC. Usually, a company could fail the PQI if it does not meet certain documentary, administrative, financial, or technical capabilities when matched against its submission during the tender.

MaxDefense believes that the issue could be a technical one, as Ultra Electronics already underwent a PQI with the PN TWG and DND BAC for the Jacinto-class Patrol Vessel Stage 3B Combat Systems Upgrade project, and passed the PQI without problems.

This disqualification by Ultra Electronics opens up the chance for the next lowest bidder, South Korea's Hanwha Systems, to undergo the PQI process to determine if it matches its submissions during the tender, and is eligible to undertake the project.

Like Ultra Electronics, Hanwha Systems already "passed" a PQI conducted by the a PN TWG and DND BAC as part of its participation in the PN's Frigate Acquisition Project. So it is expected that Hanwha Systems would sail through the inspection process.

And apparently, it did.

Hanwha's Offer:

Based on information gathered from sources, the offer made by Hanwha is mostly familiar to us since we have been discussing them since 2015.

1. For Combat Management System: the Hanwha Systems Naval Shield Baseline 2 Integrated Combat Management System, which is the same system to be used on the Jose Rizal-class frigates.

2. For Radar-Electronic Support Measures: the Elbit Systems - Elisra Aquamarine NS9300A R-ESM, similar also to the one to be installed on the Jose Rizal-class frigates.

3. For Hull Mounted Sonar: no full confirmation yet, although apparently it is not the Harris (EDO) Model 997 which was selected by HHI and Hanwha Systems for the Jose Rizal-class. MaxDefense won't release more info for now, but if our information is right, the sonar offered by Hanwha is a European-made model.

Hanwha's advantage is that the systems they offered, except for the Hull Mounted Sonar, would be very much compatible to the ones installed on the new Jose Rizal-class frigates. This allows for easier and simpler logistics, training, commonality and interoperability.

But the question remains on the Tactical Data Link 16 compatibility and workability of the Naval Shield BL2 ICMS, and like the previous issues on the Frigate Acquisition Project (FAP), this is a requirement of the Philippine Navy for this DPCF Upgrade.

It would be noted that during the Senate Hearings on the FAP issues, as well on submitted documents by HHI and Hanwha to the PN and DND in 2016, Hanwha claims that they are on track to allow TDL Link-16 to be fully compatible with the Naval Shield BL2 ICMS by 2019. 

It remains to be seen if this would indeed happen, considering the first ship of the new frigates, BRP Jose Rizal (FF-150), is scheduled for delivery to the PN in less than 10 months from now. The ship's CMS should all be complete, tested, and workable before handing the ship over to the PN.

The upgraded console, apparently used for the Naval Shield BL2 ICMS as displayed in MADEX 2017. Photo taken from Navy Recognition.

What's Next:

No formal awarding has been made yet as far as we know, although passing the PQI means that the next process was for the DND to issue the Notice of Award (NOA) to Hanwha Systems.

Usually it takes as early as 1 month to as late as 1 year for the DND to release a NOA to a winning bidder, depending on availability of funds, availability of Letter of Credit (LOC) to financially support the payments, and depending on document or administrative processing. 

In this case, MaxDefense believes that a NOA can be released by April or May 2019, and a contract signed on or before July 2019 based on our compiled data.


Del Pilar-class (Frigate) Upgrade Project

* End User: Philippine Navy (Offshore Combat Force)

* Modernization Phase: Horizon 2 Phase of RAFPMP
* Project ABC: Php1,540,000,000.00
Acquisition Mode: Limited Sourced Bidding
* SARO Release: TBA
* Winning Proponent: TBA
* Contract Price: TBA
* First post by MaxDefense: 02 October 2017

Two of the Del Pilar-class ships in maneouvers with a US Navy Arleigh Burke-class destroyer during a naval exercise between the two allies. Photo taken from DVIDS website


  1. Wait... Propemech has Saab AND Damen locked up in cooperation agreements?

    Well if the Navy does not pick Propmech, then I know the Navy is not looking for combat, but is actually avoiding it.



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