Rules broken in helicopter deal

MANILA, Philippines - Senate investigators believe that someone very powerful dictated upon the Philippine National Police (PNP) the overpriced purchase in 2009 of used helicopters passed off as brand new.

This is because the 27 mostly generals and colonels involved broke all the rules on government procurements, from bidding to acceptance to payment.

Citing a report from PNP chief Director General Raul Bacalzo, Senate President Juan Ponce Enrile says that two “public” biddings were simulated to fail as early as 2008.

This enabled the officers to negotiate instead “behind closed doors” for the acquisition in July 2009.

Originally the PNP had two separate budgets for aircraft acquisition: P111 million for three brand new helicopters under the “2nd Addendum APP 2007,” and P105 million for three brand new “light police operation helicopters” under the Capability Upgrade Program of 2008. In September 2008 the technical committee under Deputy Director General Emmanuel Carta recommended to then PNP chief Jesus Verzosa combining the two purchases into one P216-million bidding.

Two biddings subsequently were held. No supplier qualified, since distributors usually exclusively sold only either expensive turbine-engine models or relatively cheaper piston types. Besides, the bidder for the first type could supply only two-seater makes, not the required three or four. Sen. Sergio Osmeña, adept at aircraft, says that even back then the PNP showed inadequate knowledge, because LPOH means “light police observation helicopter,” not “operational” that made it sound “for tactical use.”

The two failed biddings gave the officers reason for negotiated purchase of the three brand new LPOH. The first negotiation in May 2009 failed: Manila Aerospace Products Trading Co. (Maptra), then a single proprietorship of Larry de Vera, bid P105 million for only one equipped and two standard units. Beeline bid P119 million, above budget, and only for two equipped units. Third participant Aerotech submitted no bid. Deputy Director General Jefferson Soriano informed Verzosa of failure of the first negotiation. Supporting him were Directors Luizo Ticman, Romeo Hilomen and Ronald Roderos, and Chief Superintendents Herold Ubalde and George Piano.

In June 2009 Senior Superintendent Leocadio Santiago of the Special Action Force changed his requisition into one fully equipped and two standard units, paving the way for a second negotiation. No permission was sought from the National Police Commission for the change. Nor did the Napolcom question it in the mandatory reviews of both the purchase and the payment. The Napolcom consists mostly of top officials of the Department of the Interior and Local Government, to which the PNP reports.

That June Maptra was incorporated with paid-up capital of P212,000, thus changing its personality. Despite such change and undercapitalization, Maptra bagged the award by July, for P104,985,000. Beeline’s bid was only P2,000 higher. Maptra’s price was roughly P31 million for each of the standard units and P43 million for the equipped version. The going rate for old Robinson standard units at the time was about P24 million.

Robinson usually takes four months to manufacture and fill in orders for brand new standard units. Maptra delivered the two standard units in only two months. This was because the units already were in Manila, Senate Blue Ribbon committee chairman Teofisto Guingona III notes. They were old, manufactured in late 2003 and delivered in early 2004, based on their engine serial numbers. In fact, Maptra had purchased them only weeks before from Lion Air as “pre-owned.” By then Chief Superintendent Benjamin Belarmino had joined the negotiation team.

Piano, as head of the inspection and acceptance committee, formed a test flight team. Accompanying the team were Superintendent Larry Balmaceda, head of the SAF Air Unit, and Superintendent Claudio Gaspar Jr. They recognized the two private Robinson Raven-I units as five years old; they had been flying the Arroyo first family in them since 2004. They said nothing then, claiming at the Senate hearing last week under questioning by Sen. Jinggoy Estrada that their opinion was not sought.

In that hearing Piano admitted to Sen. Panfilo Lacson that he did not know how to determine an aircraft’s condition. Had Piano looked closely at the cockpit like a car’s dashboard, he would have noticed that the helicopters had already flown 350 hours each. What was eventually accepted by the PNP were not the test-flown units, but two even more used ones that had notched 500 flying hours each, Lacson says. SAF insiders explain that this was on the recommendation of the pilots who preferred the more stable but more flown ones. Lacson was the first to expose all four used Robinson choppers to have been owned by then-first gentleman Mike Arroyo.

In October 2009 Roderos, as director for research and development, fired off a memo to Piano to accept the two choppers. By then the PNP had taken to describing them as “service center condition,” mumbo jumbo for “used.”

The two old accepted units carried no manufacturer’s warranties, for these had expired long ago, Sen. Franklin Drilon notes. But the equipped model, because truly brand new, had warranties. Drilon sees a pattern of deceit and incompetence in the procurement.

Even this one brand new model was attended by procedural lapses. Maptra failed to deliver within the stipulated six months, or January 2010, because of failure to remit to Robinson the required full payment before delivery. Immediately, in breach of procurement rules, PNP comptroller Hilomen approved a 50-percent advance payment for the three units, effectively covering the cost of the equipped model. It was delivered soon afterwards.

In December 2009, the SAF’s Santiago requisitioned Verzosa for yet another helicopter, specifying even a used Bolkow German make, slightly bigger than the Robinson. Osmeña notes that the only secondhand Bolkow unit for sale at the time was owned by Mike Arroyo’s LTA Corp.