Frigate Acquisition Project (FAP)
The Frigate Acquisition Project (FAP) is one of the key pieces of the Armed Forces of the Philippines’ (AFP) modernization program, as it seeks to provide the country with the capability to deal with air, surface and sub-surface threats. The 2,600 ton frigates will be armed with a variety of missiles and guns capable of defeating such threats. The two missile-armed frigates were expected to be delivered in 2020 which would cement the country's vision of having a strong and credible Navy.
The Frigate Acquisition Project (FAP) is one of the key pieces of the Armed Forces of the Philippines’ (AFP) modernization program, as it seeks to provide the country with the capability to deal with air, surface and sub-surface threats. It will be armed with a variety of missiles and guns capable of defeating such threats. The acquisition of the two frigates is widely seen as the first step to provide the Philippine Navy with modern and capable warships to protect the country’s vast maritime territories.
The Frigate project is a very important subject for the Philippine Navy as it was the first modern and fully equipped ship to be acquired by the Philippine Navy which is at par with modern warships of other countries. The acquisition of these frigates will definitely boost the country's external defense capabilities.
The frigates to be acquired would be capable of conducting Anti-Air Warfare (AAW), Anti-Surface Warfare (ASUW), Anti-Submarine Warfare (ASW) and Electronic Warfare (EW) Operations, it also has extended maritime patrol range through an embarked naval helicopter and extended maritime surveillance capability through air and surface search radar, and Sound Navigation and Ranging (SONAR) for sub-surface search, among others. Likewise, it can sustain 30 days operations at sea which is needed to patrol the EEZ, especially the WPS and the Philippine Rise.
The FAP contract, which was worth almost PHP16 billion excluding the weapon systems and munitions, was initiated in June 2013 and was awarded during the time of President Benigno "Noynoy" Aquino III under then defense secretary Voltaire Gazmin. On 07 June 2013, Defense Secretary Voltaire Gazmin signed Acquisition Decision Memorandum No. 2013-019 to initiate the immediate implementation of the acquisition of two brand new Frigates for the Philippine Navy with an approved budget of PHP18 billion. The project used the public bidding mode of procurement, following the technical specifications provided by the Philippine Navy as the end-users.
In conformity with the AFP Modernization Program, the Philippine Navy initiated the Frigate Acquisition Project (FAP) as early as 2013 in order to boost their capability. Philippines Department of Defense announced 10 October 2013 a public tender to upgrade its naval combat capability, including two types of new frigates. During the five-year military modernization projects, the Philippine Government will fund the $ 1.73 billion purchase of new ships. Accordance with the timetable, the Philippines Department of Defense will be held October 11 pre-tender meeting was held, the tender deadline is October 25. Deputy Defense Minister Fernando Manalo stressed that bidders need in the past 10 years have had a similar experience bidding and public commitment to be able to deliver two frigates in 1,460 days. Philippine President Benigno Aquino III hoped that these vessels can be delivered before he retires from service in 2016.
On 04 December 2013 the first stage bidding was conducted wherein six proponents were declared eligible by the DND Special Bids and Awards Committee (SBAC), namely: Daewoo Shipbuilding & Marine Engineering Co. Ltd. (DSME) – Korea; Hyundai Heavy Industries Co. Ltd. (Hyundai) – Korea; STX Offshore & Shipbuilding Co. Ltd. (STX O & S) – Korea; STX France S.A. – France; Garden Reach Shipbuilders & Engineering Ltd. GRSE – India; and Navantia SEP (Navantia) – Spain. The second stage of the bidding, or the financial aspect of the bidding took place in March 2016. Four (4) companies participated in the bidding, with Garden Reach Shipbuilders and Engineer (GRSE) as the lowest calculated bidder and Hyundai Heavy Industries (HHI) as the 2nd lowest calculated bidder. Per open public bidding conducted, on March 17, 2016 the two lowest cost bidders were declared: Garden Reach Shipbuilders and Engineers (GRSE) with bid price of USD322 million or PHP15,047,704,000 (1USD = PHP46.732); and Hyundai Heavy Industries (HHI) with bid price of USD336,912,000 or PHP15,744,571,584.
GRSE was declared non-compliant to the financial requirements of the project, as its Net Financial Contracting Capacity (NFCC) was found to be below the approved budget contract of PHP16 billion. The GRSE was declared postdisqualified on 30 April 2016 for failure to meet the Net Financial Contracting Capacity (NFCC) requirement of the project. Defense Secretary Delfin N. Lorenzana signed the Notice of Award in favor of HHI on 18 August 2016 after the South Korean company has been declared the Lowest Calculated Responsive Bidder (LCRB) for the project, following the disqualification of GRSE during the post qualification. HHI received the Notice to Proceed from the DND on 13 December 2016.
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