Philippine Army's Light Tank and Wheeled APC projects awarded to Israel's Elbit Systems

With the Philippines looking at reopening itself to business despite COVID-19 pandemic still ongoing, it looks like the Department of National Defense (DND) and the Armed Forces of the Philippines (AFP are doing the same now.

As the Department of Budget and Management (DBM) confirming the release of funding for the initial 15% of the total project costs of the Light Tank and Wheeled Armored Personnel Carrier (APC) Acquisition Projects of the Philippine Army (PA), we now believe its time to announce the results of both projects.

The Sabrah light tank using the GDELS ASCOD 2 tracked armored vehicle platform. Photo from Elbit Systems.

And the Winner is:

To those following MaxDefense for a long time, they already know our style of doing things, of how we drop bits and pieces of information everywhere, bring in related information as clues, give info on what's happening around the world that may affect certain projects, and push our community members to look for them and think for themselves.

And so far, MaxDefense is happy that more people are understanding our way of bringing in information. 

Not surprising, many of our community members guessed who the winners are for both the Light Tank and Wheeled APC APC Acquisition Projects.

And yes, MaxDefense Philippines can finally confirm that the winner for both projects is none other than Elbit Systems Land & C4I of Israel, working closely with the Israeli Ministry of Defense, which received the Notice of Award (NOA) for the projects a few months ago.

Elbit Systems was working with General Dynamics European Land Systems (GDELS) and Excalibur Army/Czechoslovak Group to offer the Sabrah Light Tank family using the ASCOD 2 tracked armored vehicle and the Pandur II 8x8 wheeled armored vehicle are platforms.

Also, Elbit Systems was working with IVECO Defense Vehicles for the Wheeled APC project, which offered to use the Guarani 6x6 wheeled APC. 

The Sabrah Light Tanks using the GDELS ASOCD 2 tracked, and GDELS-Excalibur Army Pandur II 8x8 wheeled armored vehicles as platforms (top), and the IVECO Guarani, all offered by Elbit Systems Land & C4I to the Philippine Army. Top photo from Elbit Systems, above photo from IVECO.

What Happened in the past few months:

MaxDefense previously mentioned in past posts and blogs, as well as in our extension Philippine Defense Resource, that as as October 2019, the Department of National Defense (DND) already released a Acquisition Decision Memorandum (ADM) that points to the Light Tank and Wheeled APC Projects to be acquired through Government-to-Government (G2G) process.

This was later affirmed in April 2020 with the PA and DND finally confirming that the project would be undertaken with the Israeli Ministry of Defense's International Defense Cooperation Directorate (MOD-SIBAT). So far, IMOD-SIBAT has assigned only Elbit Systems as their proponent.

The DND was already preparing the details and terms for the project's contract when the Philippine government decided to stop international travel and close the country due to COVID-19 pandemic. 

This delayed the entire process since both the Light Tank and Wheeled APC projects were among those affected by the realignment and diversion of funding as covered by Republic Act 11469, or the Bayanihan to Heal and One Act.

The Light Tank's 1st MYCA allocation worth Php1,422,649,800.00 provided under GAA FY2019, and the Wheeled APC's 1st and 2nd MYCA allocations worth Php339,780,000.00 and Php792,820,000.00 as provided by GAA FY2019 and FY2020, respectively were among those included in the fund diversions/

But not all was lost. Due to the realignment, the Armed Forces of the Philippines and the DND revised its funding plan for FY2020, by identifying which projects from the original GAA FY2019 and FY2020 are the most important. Among those considered important were the Light Tank and Wheeled APC projects. This allowed both projects to be re-assigned with funding of what remained of the GAA FY2019 and FY2020 funds.

Thus, the 1st MYCA for the Light Tank worth Php1,422,649,800.00 and the 1st MYCA for the Wheeled APC worth Php339,780,000.00 were restored. They only adjusted the project's delivery schedule which is now to be completed by 2022 instead of 2021. The 3rd and final MYCA allocations for both projects were also moved to be funded under FY2022. This revision was approved by the DND and national government on May 2020, and paved the way to continue with the finalization of both projects.

As early as August 2020, MaxDefense already received confirmation that the DND has released Notices of Awards (NOA) for both projects to Elbit Systems Land & C4I, which also represented their partners in the project.

When Elbit Systems formally included the Sabrah Light Tank family into their portfolio as posted on their website since last August 2020, it was actually a heads-up that something positive already happened. The information was also confirmed by MaxDefense sources who were familiar with the project.

And since the Wheeled APC would be closely tied to the Light Tank Project, it was expected that it would also be reaching the same milestone.

With the funding allocation for both projects already released, its only a matter of time for both project to proceed further.

How the Projects were Won?

Honestly, these 2 projects are one of the tightest competitions in the AFP Modernization Program due to it not undergoing public tender, which means decision making from the Philippine Army and DND are based on other factors aside from price.

In this case, Elbit Systems' best selling point was the inclusion of Battlefield Management System, Command & Control, Fire Control, and Communication systems that are common and compatible, or to be compatible with existing and future networked systems that the PA and the AFP are introducing. And obviously, Elbit's competitors in both projects cannot offer subsystems that are compatible to what the AFP will be using.

The installation of the Elbit Torch-X battlefield management system, the Combat NG command and control system, and the E-LynX software defined radios on the Sabrah ASCOD 2, Sabrah Pandur II, and the Guarani vehicles would allow seamless networked connectivity to each other and to other units using the same systems.

While Hanwha Defense did offer to install a Korean-made BMS into its Light Tank and Wheeled APC offers, it does not work with the Israeli BMS and communications system already in use or ordered by the Philippine Army and the Armed Forces of the Philippines.

Both the Torch-X battlefield management system (top) and the E-LynX software defined MANET radio (above) would be installed on the Sabrah tanks and Guarani wheeled APCs.

Another selling point is the non-usage of Belgian-made turrets and guns, due to the ongoing arms export restrictions made by the Wallonia regional government of Belgium against the Philippines. Since Elbit's competitors on the Light Tank  Project, Hanwha Defense-Otokar JV and PT Pindad, using John Cockerill's C3105 turret and 105mm guns made in Belgium, it is expected that there are chances of delays or problems that may happen should the Light Tank project be awarded to the losing proponents.

Sabrah's turret was made by Elbit Systems with assistance from the Israel Defense Force's Ordnance Corps MANTAK (the same designer of the Merkava tank's turret), replacing an earlier proposal that used the Oto Melara Hitfact turret. The changes were made due to the requirement for an autoloading system, a better firing arc for the gun, and lower cost.

The Sabrah's turret was made by Elbit Systems with assistance from the Israel Defense Force's Ordnance Corps MANTAK, the same team that designed and built the Merkava tank's turret. Photo taken from Elbit Systems.

Other factors also were considered, including the lack of users of PT Pindad's Harimau tank, and better performance by the winning products over their competitors, although those mentioned above are said to be the main reasons.

Why Guarani 6x6 for Wheeled APC, and not Pandur II 6x6?

Another main point that many of our readers have been asking, is why did Elbit Systems offered to use the IVECO Guarani 6x6 for its Wheeled APC offer, rather than use the GDELS/Excalibur Army Pandur II 6x6?

Commonality should have been a factor in deciding to go with Pandur II 6x6 since it shares a lot of parts and traits as the Pandur II 8x8 that Elbit offered for the Wheeled Tank component of the Light Tank project.

According to Army sources, it was the Philippine Army's Technical Working Group who actually decided to go for the IVECO Guarani, as Elbit Systems offered both the Guarani 6x6 and Pandur II 6x6 for the project. But it appears that Pandur II was more expensive than the Guarani, since Guarani benefits from cheaper Brazilian labour and steel compared to the Pandur II which is produced in the Czech Republic.

The Pandur II 6x6 wheeled armored vehicle, which is also among those offered to the Philippine Army. Credits to original source of the photo.

Also, if Elbit Systems offered to use IVECO's Italian-made SuperAV 8x8 wheeled armored vehicle for the Wheeled Tank component of the Light Tank project, it would also be more expensive than the Pandur II 8x8, thus the decision to stick with Pandur II 8x8.

Honestly, this is one of the flaws in the Philippine defense procurement, as it makes more sense for the Philippine Army to have chosen the Pandur II 6x6 if cost is the only issue.

The Guarani's 8x8 variant, called the SuperAV, was said to be more expensive than the Pandur II 8x8 as it was built in Italy by IVECO's main production line rather than in Brazil. 

The Future:

It remains to be seen if a Contract was already signed between Elbit Systems Land & C4I and the Department of National Defense, but the recent release of funding for both projects only means that this could be coming, or might have already been done since a contract can be signed with or without the funding allocation released by the DBM in favor of the DND. What MaxDefense can confirm through, is that there is no Notice to Proceed (NTP) yet, since the funds were only released last 21 October 2020.

The release of NOA favoring Elbit Systems is another milestone reached by the DND and the Philippine Army in implementing the Horizon 2 phase of the Revised AFP Modernization Program. This also means that the only project meant for the Philippine Army's Armor Division is the M113 Firepower Upgrade Project, which MaxDefense Philippines discussed in a blog entry back in April 2019.

Since the Philippine Army originally requested for 144 Light Tanks and 114 Wheeled APCs in its original Horizon 2 Phase Proposal submitted in 2017, it remains to be seen if the Philippine Army will pursue the acquisition of 116 more light tanks and 86 more wheeled APCs under the Horizon 3 phase of the RAFPMP, which runs from 2023 to 2027.

Anyway, MaxDefense Philippines would like to congratulate the Philippine Army, the Department of National Defense, Elbit Systems, General Dynamics European Land Systems, Excalibur Army / Czechoslovak Group, IVECO Defense Vehicles, and their local agents for pushing these 2 projects forward.

Project Summary:

Light Tank Acquisition Project:

Note: Edited as of 23 October 2020.

* End User: Philippine Army (Armor Division)

* Quantity: 18 tracked and 10 wheeled tanks, 1 armored command vehicle, 1 armored recovery vehicle.

* Modernization Phase: Horizon 2 Phase Priority Projects of RAFPMP

* Project ABC: Php9,484,332,000.00

* Acquisition Mode: Government-to-Government (G2G) Procurement with Israeli government

* Source of Funding: GAA Funds through AFP Modernization Program Trust Fund, to be paid via Multi-Year Obligatory Allocations (MYOA).

* SARO Release: SARO-BMB-D-20-0017126 dated 15 October 2020, released 21 October 2020, worth Php1,422,649,800.00 for 15% initial payment.

* Winning Proponent: Elbit Systems Land

* Product for Delivery: 
    - 18 Sabrah ASCOD 2 tracked tanks
    - 10 Sabrah Pandur II 8x8 wheeled tanks
    - 1 ASCOD 2 Armored Command Vehicle 
    - 1 ASCOD 2 Armored Recovery Vehicle
    - All tanks to be equipped with Elbit turret and 105mm gun, E-LynX SDR, Torch-X BMS
    - Unspecified amount of 105mm tank gun ammunition

* Contract Price: US$172,220,000.00 (approx. Php9,484,332,000.00), excluding exchange rate differentials.

* Residual Price: Php930,831,000.00, to be used to cover for any exchange rate differential.

* First post by MaxDefense: 15 November 2015

* MaxDefense Searching Hashtag: #PALightTankAcquisition

* Status: Notice of Award (NOA) released in favor of Elbit Systems Land & C4I on 3rd quarter 2020. Contract and Notice to Proceed (NTP) pending, expected to be released before end of 2020.

Wheeled Armored Personnel Carrier (APC) Acquisition Project:

Note: Edited as of 23 October 2020.

* End User: Philippine Army (Armor Division)

* Quantity: 28 units

* Modernization Phase: Horizon 2 Priority Projects of RAFPMP

* Project ABC: Php2,265,200,000.00

* Acquisition Mode: Government-to-Government (G2G) Procurement with Israeli Ministry of Defense.

* Source of Funding: General Appropriations Act (GAA) starting FY2020

* SARO Release: SARO-BMB-D-20-0017340 worth Php339,780,000.00 (15% initial payment) dated 19 October 2020, released 21 October 2020.

* Winning Proponent: Elbit Systems Land

* Product for Delivery: 
    - 28 units of IVECO Guarani wheeled 6x6 Armored Personnel Carriers (APC) 
    - Mounted with a manned turret armed with a 12.7mm heavy machine gun and 40mm automatic grenade launcher
    - Options to alternatively equip with remote-controlled weapon station (RCWS) with a 12.7mm heavy machine gun.
    - Equipped with Elbit Torch-X BMS, E-LynX SDR

* Contract Price: Php2,265,200,000.00

* Residual Price: Php0.00

* First post by MaxDefense: 15 November 2015

* MaxDefense Searching Hashtag: #PAWheeledAPCAcquisition

* Status: Notice of Award (NOA) released in favor of Elbit Systems Land on 3rd quarter 2020. Contract and Notice to Proceed (NTP) pending, expected to be released before end of 2020.

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First edit and release: 23 October 2020
Copyright MaxDefense Philippines