COA finds P24-B worth of defense purchases irregular

The Commission on Audit (COA) has found several irregularities in the Armed Forces of the Philippines’ (AFP) procurement deals in 2014 which included the purchase of helicopters, armored vehicles and communication equipment totaling P24.883 billion.

In a 2014 audit report published on its website on Wednesday, the COA said the AFP purchased the questioned items without holding public bidding as required under Republic Act 9184 or the Government Procurement Reform Act.

The COA said the AFP instead resorted to alternative modes of purchase such as negotiated procurement under emergency cases, direct contracting and negotiated procurement under the Defense Cooperation Agreement.

“Review of the procurement activities under the AFP Modernization Program disclosed that no public bidding was conducted for 19 out of 25 projects which were opened during the year 2014,” the COA report said.

The COA said that while some modes of procurement can be allowed under RA 9184 “in highly exceptional cases”, the AFP failed to have met the “conditions” that would justify its 2014 procurement activities.

“Other deficiencies include non-submission of complete documents preventing the auditors from completing the auditorial review of the contracts,” the COA report added.

The COA noted that the amount used for the purchase of the questioned items came from the AFP Modernization Act Trust Fund (AFPMATF).

“Several items procured under the AFP Modernization Act Trust Fund were not made through public bidding as required under RA 9184, but through various alternative modes of procurement…notwithstanding that the conditions under RA 9184 were not met and/or justified,” the COA report read.

Below were the items supposedly procured irregularly by the AFP:

• 12 units of FA-50 jets from Korea Aerospace Industries (KAI) as the supplier and Korea Trade-Investment Promotion Agency (KOTRA) as the contractor  (P18.976 billion)
• Eight units of Bell 412EP helicopters from Canadian Commercial Corporation (P4.763 billion)
• 28 units of armored vehicles from Elbit Systems Land and C41 Ltd. of Israel (P882.000 million)
• C4I/GIS computer system from joint venture of Triton Communications Inc. of Japan and Geodata Systems Technologies (P188.877 million)
• 340 units of portable radio transceivers from Triton Communications Inc. (P52.499 million)
• Technical Forensic Upgrade System (TFUS) from Triton Communications Inc. (P19.978 million)

In an interview with several reporters, Department of National Defense (DND) spokesperson Arsenio Andolong maintained that there was nothing irregular with the procurement of the items mentioned in the COA, especially in consideration of the existing “internal and external security situations”.

"To begin with, we would like to point out that public bidding is not the only mode of procurement provided for in law. The RA 9184 allows for alternative mode of procurement in specific situations,” Andolong said.

Andolong said the procurement of the questioned items can be classified as “emergency” as it is aimed for security operations.

“Batid po natin na meron tayong ongoing internal security operations, tapos yung ating existing security environment internally and externally ay medyo nagbago na over recent years kaya kailangan na itong magamit kaagad agad,” Andolong said.

“Yung interpretation kasi ng emergency, doon nagkakaroon ng konting kaibahan. We feel that the immediate need is there. Hindi po natin pwedeng isakripisyo ang security  ang mga operations na umaasa po dito sa mga kagamitan na ito,” he added.

Andolong said that government-to-government negotiated procurement is allowed under the Defense Cooperation Agreement.

“Under po sa Defense Cooperation Agreement natin, pwede po talaga na ganoon (negotiated procurement) ang gawin. Lalo na at na-determine na itong mga aircraft na ito ay cost effective,” Andolong said citing as example the procurement of eight Bell helicopters from Canada, in which the Canadian government was the one who identified the Canadian Commercial Corporation (CCC) as the most competitive supplier.

Andolong said the Bell helicopters, which arrived in the country last August, will be used in transporting some VIPs during the Asia Pacific Economic Cooperation (APEC) Summit to be held in Manila next week.

Andolong said the Bell helicopters “also has the capability to be used in the event of contingency” situations during the APEC Summit.

After the APEC activities, Andolong said the helicopters will also be used in the AFP’s defense operations.

“Na-recognize na po yan (Bell helicopters) as vital for a credible defense posture, matagal na na plano ‘yan [bilihin],” Andalong said.

Andalong said that should the AFP entered into a public bidding, the helicopters could have not made it on time for the APEC Summit. -NB, GMA News