DND disqualifies lowest bidder in P16-B Navy frigate project

MANILA, Philippines – It will now be up to the Duterte administration to decide whether to pursue the P16-billion Navy frigate project as the Indian firm that offered the lowest bid has been disqualified by the defense department.

State-run Indian company Garden Reach Shipbuilders & Engineers Ltd. has offered to supply two ships for P15.047 billion, about P950 million lower than the approved budget for the project.

The company, however, did not meet some post-qualification requirements, Defense Undersecretary Fernando Manalo told The STAR yesterday.

“The firm from India was post disqualified,” Manalo said. “(The company) is not capable financially as per computation of its net financing contracting capacity.”

The post-qualification phase allows defense officials to determine whether the offer of the lowest bidder complies with technical and financial requirements. The phase involves visits to the headquarters and the inspection of the facilities of the prospective supplier. Manalo said the post-qualification phase for the frigate acquisition project was held last May.

A total of four firms joined the bidding for the Navy project last March. Other companies that submitted bids were Hyundai Heavy Industries Inc. and Daewoo Shipbuilding & Marine Engineering Co. Ltd., both from South Korea; and Spain’s Navantia S.A.

Only Garden Reach and Hyundai were qualified to join the bidding as the two other firms had failed to satisfy some documentary requirements. Hyundai offered to provide the ships for P15.744 billion, higher by close to P700 million than Garden Reach’s offer.

The frigate acquisition project is one of the biggest items in the Armed Forces’ modernization program shopping list. The project seeks to strengthen the Philippines’ territorial defense and disaster response capabilities.

The ships can boost the Philippines’ presence in the West Philippine Sea (South China Sea) and can be used to conduct relief efforts in disaster-hit areas. The Aquino administration also intended to spend about P2 billion for the ammunition of the two vessels.

The Philippine Navy has two frigates in its inventory, namely the BRP Gregorio del Pilar and BRP Ramon Alcaraz. Both were former cutters of the US Coast Guard.

A Navy team flew to South Korea for the inspection of two frigates of the Hanjin Heavy Industries Inc. (HHI)

Rear Admiral Roland Joseph Mercado, Western Command (Wescom) commander and head of the Navy technical working group, said the post-qualification inspection on HHI is “very favorable.” He added they focused on HHI’s capability to meet the project’s technical proposals and technical requirements.

The Department of National Defense has allocated P18 billion for the purchase of two missile-armed frigates capable of engaging surface, air and sub-surface targets. – With Jaime Laude