Bidding aside

Something must be terribly wrong with the way the Department of National Defense, which has an annual budget of P80 billion, conducts biddings for huge contracts under the so-called military modernization program.

In just the past two months, the DND tried and failed—twice, mind you—to bid out a P5.3-billion contract for three brand new “medium lift fixed wing” aircraft, which should be able to do almost everything under the sun.

Kidding aside, boss, the DND said the “aircraft should be able to operate in any environment and provide organic general support for territorial defense, internal peace and security plan, internal security operations, disaster response and national development.”

Whew.

Anyway, you would think that, with all the acquisition of the DND in the past 20 years, or since the birth of the “modernization” program during the time of former President Fidel V. Ramos, it should have mastered the bidding process by now.

But aside from the two successive “failed” bidding for those three medium lift aircraft, questions also are going around business circles on another bidding—this time involving the purchase of “light lift” aircraft, with the contract said to be worth P2.7 billion, which the DND wanted to use for its response to calamities, such as carrying out relief and rescue operations.

From what I have gathered, only one company submitted a proposal during the bidding held last week by the DND bids and awards committee, known simply as BAC. Although the lone bidder failed to submit one important document, the BAC still wanted to consider its bid. It is said that the BAC even wanted to consider awarding the contract to the lone bidder.

Early this year, the DND also accepted delivery of three helicopters for the Philippine Navy under a negotiated contract with a foreign firm, which was actually not the “winner” in the original bidding held some three years ago.

Because that bidding also created quite a stir, the DND had to declare it a “failed” bidding, although the DND already proclaimed a “winning” bid.

For the DND, particularly its BAC, it seems that the public bidding for billions of pesos worth of contracts is a touch-and-go improvisation process. To think, the military modernization program hardly gets priority in the national budget.

Under the 2014 budget, the DND will only get about P80 billion, compared to some P290 billion for education.

You would think that, given its limited funding for military modernization, the DND would try to clean up its bidding process, thus inspiring public trust in the department, affording it wider access to more funding for the crucial modernization program.

As it is, certain groups are already asking the Government Procurement Policy Board (GPPB) to investigate “possible” irregularities in the bidding for the P5.3-billion contract for the medium lift aircraft.

From what have I gathered, only three companies showed up during the prebidding conference last October, namely, Alenia Aermacchi (an Italian defense contractor), EADS Casa Air Bus Military (the military airplane arm of the European joint cooperation venture called Airbus) and PT Dikrgantara Indonesia.

The DND already held two biddings, which as I said were both declared “failed” biddings. In the first bidding last Nov. 11, only two bidders showed up, namely EADS Casa Air Bus—which nevertheless did not submit a bid—and Alenia Aermacchi, which submitted a sealed bid.

Surprise—the BAC waited for more than 30 minutes after the supposed deadline before it declared the bidding as “closed,” because the BAC members wanted to “wait” for other bidders. And this is supposedly the stickler-for-time military?

Anyway, the BAC had no choice but to declare it a “failed” bidding. As it turned out, the reason given by the BAC was that, well, the BAC itself failed to follow all the legal requirements on public biddings for government contracts.

And so, having admitted its mistake, the BAC ordered another bidding to be held after a couple of weeks, hoping that the three interested bidders would finally present separate proposals.

Still, based on a letter sent by the Italian firm Alenia to the GPPB, the BAC again forgot to inform Alenia about the prebidding conference that the BAC scheduled last Dec. 2 for the same contract.

Moreover, the BAC forgot to publish additional bidding rules, called technically as “supplemental” bid terms, which it never posted on the “PhilGeps” website or on the official website of the DND.

From what I have gathered, only one company showed up during the second bidding, which apparently resulted in another “failed” bidding, although the BAC also took its sweet time to declare it as such.

With all its forgetfulness and sloppiness, setting aside the rules in the bidding process, it would look down here that the BAC may be trying to favor a certain bidder.

Why can the BAC not just iron out all the kinks in the bidding rules to make sure it will not have a “failed” bidding again next time?