DND clears executives in helicopter deal

MANILA, Philippines - The Department of National Defense (DND) has cleared the officials accused of rigging the bidding for the procurement of 21 refurbished UH-1H helicopters worth P1.2 billion.

A special investigative panel formed by Defense Secretary Voltaire Gazmin found the allegations of corruption to be pure hearsay and uncorroborated, Defense Undersecretary Pio Lorenzo Batino told the House of Representatives committee on national defense and security chaired by Muntinlupa City Rep. Rodolfo Biazon during a hearing Wednesday on the Armed Forces Modernization program.

The investigative panel “dissected” the alleged helicopter scam on three aspects: bidding procedure, technical specifications of the helicopters and corruption allegations, he added.

Batino, who headed the investigative panel, had submitted a copy of their findings to the committee.

Some defense and Air Force officials, including Undersecretary for Finance Fernando Manalo, allegedly tailor-fitted the bidding procedures, as well as the technical specifications, to ensure the P1.2-billion contract would be awarded to the US-based Rice Aircraft Services Inc. (RASI) and the Canada-based Eagle Copters Ltd., according to reports.

Some of the delivered helicopters were reportedly defective and dangerous to fly.

Manalo used to be an agent of RASI, according to former government employee Rhodora Alvarez, who had participated in meetings with bidding officers. 

Manalo denied the allegations before a Senate inquiry into the matter.

The procurement process leading to the grant of a negotiated supply contract to RASI was “compliant” with Republic Act 9184, the Government Procurement Reform Act, and its revised implementing rules and regulations, Batino said.

The negotiated supply contract had been awarded to RASI after the three previous biddings for the UH-1 Acquisition Project failed, a procedure allowed under RA 9184, he added.

The DND’s Bids and Awards Committee (BAC) complied with all publication requirements during the bidding process and issued letters of invitation to many prospective proponents during the negotiation procurement stage, Batino said.

The fact that RASI also failed during the three bidding procedures rebuts allegations the supplier received undue advantage from DND and Armed Forces officials, he added.

Various prospective bidders and observers witnessed the entire bidding process at every stage, as required by law, Batino said.

The investigating committee had thrown out the allegations of Alvarez, who claimed to have been involved in the negotiations, that the helicopters were incompatible with night vision goggles and lacked crash-worthy, self-sealing fuel cells.

Members of the technical working group and the Technical Inspection Acceptance committee of the Air Force had declared the features complained by Alvarez to “comply with the specifications in the (contract’s) Terms of Reference,” Batino said.

 “The expert opinions of the PAF officials must be given much greater weight in technical matters versus the accusations of Ms. Alvarez,” he said.

The committee also considered the “presumption of regularity of performance of official functions of the Inspection Committee, absent any evidence of collusion,” he added.

Alvarez failed to substantiate her claims that the deal was tainted with corruption,   the investigating panel said.

The “uncorroborated statements” of Alvarez were denied not only by the DND and military officials involved, but also by representatives of RASI, Batino said.

 “Moreover, many of her allegations do not have probative value as they fall under the classification of hearsay,” he  said.

“The affidavits, which she issued, are marked with inconsistencies, and thus substantially erode her credibility. Her allegation that RASI does not have sufficient facilities was based on a flimsy conjecture,” he added.

The committee had recommended the filing of appropriate criminal or civil charges against Alvarez and RASI’s Thach Nguyen after the company admitted submitting spurious documents during the bidding process, Batino said.

The investigating panel’s report will be referred to the DND-BAC “for consideration of other penalties that can be imposed” against RASI, Batino said.

The Office of the Ombudsman and the Department of Justice will be furnished a copy of the report “even if no irregularities on the acts of the DND and AFP officials were found,” he added.

The Bureau of Internal Revenue will also be given a copy of the report with pertinent affidavits, Batino said.