The Department of National Defense (DND) on Friday said it remains committed to acquiring the remaining UH-1 combat helicopters that have yet to be delivered by a joint venture of two companies based in North America.
DND Spokesman Peter Paul G. Galvez told the BusinessMirror that the Huey helicopters are needed by the Philippine Air Force (PAF) to boost its capability to combat terrorism and conduct rescue operations.
“Filipinos need those helicopters. Do we have to wait for another terrible natural disaster before we purchase [the Hueys]?” Galvez asked.
Of its helicopter requirements, the Philippines only has about 25 percent. Galvez said the purchase of the 21 Huey helicopters and the additional eight combat utility helicopters would fill 65 percent of its requirements for air assets.
Not purchasing the helicopters, the DND official said, could result in the loss of lives.
Galvez issued his statement following reports that the DND is mulling over the possibility of terminating the contract of a joint venture involving American firm Rice Aircraft Services Inc. and Canadian company Eagle Copters Ltd.
He said the DND’s Contract Termination Review Committee (CTRC) will disclose its decision on the “partial” termination of the joint venture’s contract.
Galvez said the department had to “partially” terminate the contract, because of the delay in the delivery of the remaining 14 Huey helicopters.
Under the country’s procurement rules, the government can charge 10 percent of the cost of the purchase as liquidated damages due to delays.
In the case of the UH-1s, Rice and Eagle Copters have already exceeded the 10-percent liquidated damages, prompting the DND to issue the partial termination.
Galvez said this does not mean that the contract will be rescinded automatically. This partial termination only mandates Rice and Eagle Copters to issue, within seven days, an explanation for the delay.
This explanation will be evaluated by the CTRC. The committee decision will be rendered next week and will set the course of how to proceed on the matter.
While it has yet to issue its decision on the partial termination, Galvez said the DND is looking at alternatives on how best it could proceed with the purchase of the helicopters.
The seven Huey helicopters that were delivered cost the government around P53 million each. The P1.26-billion supply contract was awarded to the joint venture in December 2013.
Cai U. Ordinario