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Proposals to exempt the AFP Moderniztion from RA 9184

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Proposals to exempt the AFP Moderniztion from RA 9184

Post by adroth on Wed Nov 23, 2011 6:19 pm

Senators Enrile and Lacson have filed bills in the Senate to amend / revise the AFP Modernization Law which expired this year. In both bills, they propose allowing the DND to formulate its own procurement system for AFP Modernization purposes, and exempt them from requirements imposed by RA 9184.

What effect will this have on the Procurement System as a whole?

Are there really too many irreconcilable difference between the procurement law and specialized needs of the AFP?

See here: http://adroth.ph/afpmodern/?p=1001
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Re: Proposals to exempt the AFP Moderniztion from RA 9184

Post by jcolas on Thu Nov 24, 2011 11:23 am

"adroth wrote"
Senators Enrile and Lacson have filed bills in the Senate to amend / revise the AFP Modernization Law which expired this year. In both bills, they propose allowing the DND to formulate its own procurement system for AFP Modernization purposes, and exempt them from requirements imposed by RA 9184.

What effect will this have on the Procurement System as a whole?

Are there really too many irreconcilable difference between the procurement law and specialized needs of the AFP


Again I will repeat your question sir. Are there really too many irreconcilable differences between the procurement law and the specialized needs of the AFP to warrant the exemption of the AFP from the GPRA? If that is so, what can deter other agencies to ask exemption from the GPRA? From my readings of the procurement activities of the AFP, i can not see any fundamental defect of the GPRA that can be construed as the culprit in the graft ridden procurement of the AFP.

The hawkish attitude of Senator Enrile and Senator Trillanes is very evident in their resolution to exempt AFP modernization law from the GPRA; but again, the questions that needs to be answered is; what really is the priority of the government? Do we really need this sophisticated weaponry, as agsinst our basic needs for medicines, education, shelter and the like. Just asking po sir...
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Re: Proposals to exempt the AFP Moderniztion from RA 9184

Post by jcolas on Thu Nov 24, 2011 11:42 am

"adroth wrote"
Senators Enrile and Lacson have filed bills in the Senate to amend / revise the AFP Modernization Law which expired this year. In both bills, they propose allowing the DND to formulate its own procurement system for AFP Modernization purposes, and exempt them from requirements imposed by RA 9184
Don't they have their own Generic Procurement Manual? Instead of being exempt from the GPRA, I suggest that they revisit their Generic Procurement Manual and make some revisions; but again, any revisions should be scrutinized and approved/disapproved by the GPPB..
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Re: Proposals to exempt the AFP Moderniztion from RA 9184

Post by engrjhez® on Thu Nov 24, 2011 6:18 pm

adroth wrote:Senators Enrile and Lacson have filed bills in the Senate to amend / revise the AFP Modernization Law which expired this year. In both bills, they propose allowing the DND to formulate its own procurement system for AFP Modernization purposes, and exempt them from requirements imposed by RA 9184.

What effect will this have on the Procurement System as a whole?

Are there really too many irreconcilable difference between the procurement law and specialized needs of the AFP?

See here: http://adroth.ph/afpmodern/?p=1001

This is my quoted (earlier) reply to this at the Facebook Page ( http://www.facebook.com/ra9184gpra )

Welcome Adroth! To me, an attempt to exclude one agency from RA 9184 will be a precedent act. I believe that if WB, ADB, JBIC and other development partners were able to harmonize with our procurement system, so should us. Smile
While I cannot answer how responsive the GPPB is on specific military/defense needs, I believe reconciliation and harmonization is very much attainable. Smile
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Re: Proposals to exempt the AFP Moderniztion from RA 9184

Post by adroth on Thu Nov 24, 2011 7:11 pm

jcolas wrote:Don't they have their own Generic Procurement Manual? Instead of being exempt from the GPRA, I suggest that they revisit their Generic Procurement Manual and make some revisions; but again, any revisions should be scrutinized and approved/disapproved by the GPPB..

Actually they do. Based on GPPB Resolution 21-2007. See here:

http://www.timawa.net/forum/index.php?topic=27516.0

Part of the reason I've brought the matter up on several venues (here, FB, as well as on our forum) is to somehow encourage discussion on a matter that may have multiple unintended consequences down the road, not only for the AFP, but for government procurement as a whole.

I do not know how much of Lacson and Enrile bills are based on actually legislative requests from the DND, or if these are simply based on their perceptions of how to fix difficulties in procurement.

Does the GPPB have the authority to tap the DND's shoulder to ask what can be done to help?
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Re: Proposals to exempt the AFP Moderniztion from RA 9184

Post by adroth on Fri Nov 25, 2011 5:14 am

jcolas wrote:what really is the priority of the government? Do we really need this sophisticated weaponry, as agsinst our basic needs for medicines, education, shelter and the like. Just asking po sir...

Without security, there can be no progress.

Without an armed forces, we cannot offer protection for economic activities in our EEZ, and therefore cannot attract investment. You would be denying future generations their birthright if you permit foreign plunder of our resources.

The hawkish attitude of Senator Enrile and Senator Trillanes is very evident in their resolution to exempt AFP modernization law from the GPRA

Trillanes' bill is actually mute on the subject of exemption. Enrile and Lacson want it.

From my readings of the procurement activities of the AFP, i can not see any fundamental defect of the GPRA that can be construed as the culprit in the graft ridden procurement of the AFP.

Corruption is not the issue they want to address.

The problem they seek to address are the perceived incompatibilities between the needs of maintaining what is arguably the most equipment-dependent branch of the government and a procurement system that by design has to cater to the needs the entire government, everything from buying paper supplies, to janitorial services, to constructing buildings.

These are actually incompatibilities that BREED corruption, as creative solutions to equipment needs also create opportunities for malfeasance. The same way that poor budgetary forecasting create the need for funds conversion . . . which then give thieves a chance to get at the AFP's coffers. There are legitimate needs for conversion (e.g., using money for bullets to buy bandages). Sadly not all instances of conversion are legitimate but happen because of a culture of budgetary make-do.

Here are some real-life examples of how acquisitions were believed to have been made difficult by prevailing regulation. Whether or not this is the result of a defect in the AFP's understanding of the law, or if there is a need to adjust the law, is unclear. I trust that if there is a place where that question could be answered, it would be here in this assemblage of procurement professionals.

The AFP's 5.56mm Squad Automatic Weapon (SAW) project

This was the first item acquired as part of the AFP Modernization program. A Belgian company, FN Herstal, won the public bidding for Phase 1 of the project on March 18, 2003, and the AFP received brand new, factory-fresh, weapons that were widely regarded as the cadillacs of this weapons category.



A few years later, the AFP initiated Phase 2 of the project to acquire a second lot of SAWs. As per the IRR of RA 9184, the AFP can only issue a follow-on order from the same supplier for a smaller amount than the initial order. So the another bid was called, and FN Herstal put in an offer that was identical to its previous winning price. This time, however, a South Korean company, Daewoo, took part in the bid, and submitted a bid that was lower than the Belgian company. So in 2007, the AFP took delivery of the K-3 SAW



Now, the AFP has two SAWs in its inventory. Both fire the same round, but their operating parts are not compatible with each other, so unlike our standard assault rifle: the M-16, soldiers will not be possible to swap components in the field if a unit is ever fielded with one of each type. It also requires AFP armorers to become familiar with more types of weapons, and logisticians have to support different weapons types. That gives Murphy's Law a lot of room to throw a monkey wrench in support and supply. Imagine sending the wrong part to the wrong unit. At the very least that could open an opportunity for pilferage, at worst, it could cost a life.

As the AFP grows, and the increasing number of units require a third batch of SAWs . . . could we be looking at yet a third SAW in the inventory?

Combat Utility Helicopters

This issue has not cropped up yet since we are still awaiting their delivery, but this matter has actually already been discussed here before, and the responses from the subject matter experts here indicate that the AFP is under a Damocles sword in this situation.

The PAF has a published need for 100 operational transport helicopters to meet its mission objectives. Based on numerous reports, the PAF only has 80+ UH-1 helicopters in its inventory, of which only half are operational at any given time. It is woefully lacking in assets. With the retirement of the UH-1 from the US Army in 2009, the global supplies for this helicopter type is expected decline, and consequently, the price of whatever is available -- even if it manufacture new by its company of origin -- will rise correspondingly.

Anticipating a need for a replacement helicopter, the AFP initiated the Combat Utility Helicopter project to find a replacement. Because of budgetary constraints, the AFP is only given P5 billion a year for modernization and this amount is shared by all 3 services, the project only sought to acquire 8 aircraft.

Eight aircraft . . . to make up for a shortfall of approximately 60. Without question more helicopters will be coming.

It took the PAF over four years, from July 2008 to November 2011, to take delivery of just 8 aircraft. Timawans familiar with the aerospace industry point to the Philippine's attrocious reputation when it comes to acquisition projects for high-value equipment. As reported in FlightGlobal, the general reaction to a Philippine request for bidders is often met with a rolling-of-the-eyes, a half-hearted bid, and an expectation that nothing will happen to the project.

Based on discussions with the SMEs on this forum, logistical concerns are not a valid justification for a follow-on order (see "transmogifier" discussions). So we are arguably looking at yet another bid invitation for the next batch of helicopters. A bid that will be undertaken in the vendor environment shared above.

The winner of the CUH bid, PZL Swidnik, was embroiled in a controversy in a separate bid project. How they, and its parent company Agusta-Westland, view future projects with the Philippines is suspect. If they do not take part . . . are we going to be faced with same situation with our helicopters that we did with the SAW project? Multiple equipment performing the same mission?

A helicopter, like any aircraft, is essentially an assemblage of thousands of individual parts flying in very very close formation. Those individual parts are different for each make of aircraft. So having a plethora of aircraft in your inventory means that you cannot leverage enconomies of scale when buying parts -- a logistical nightmare that the Malaysians are reportedly facing.

Different aircraft also means different skill-sets for both flying and maintaining them. This complicates training, and requires adjustments in manpower.

Spare parts

On the subject of spare parts (e.g., aircraft, ships, etc.), we also discussed that here before without a satisfactory resolution.

Individual components have programmed lifetimes. So theoretically, it should be possible to know when a particular part will have to be replaced. Such a well ordered state of affairs fits in well with Order Agreements, and Order Agreement Lists stipulated by GPPB Resolution No. 06-2005, Annex A.

However in reality, equipment do not just fail based on programmed lifetimes. This is particularly true in a military organization where the high tempo of operations for individual equipment, dictated by a low inventory, and the constant prospect of battle damage can completely disrupt time tables. This is also true damage that result from human factors (e.g., mistakes, failure to follow procedure, etc.). This is actually a downward spiral.

A portion of equipment is down because of lack of parts because they take so long to acquire, this means that whatever is operational is used for much longer thus increasing wear. When they do finally go in for maintenance, much more of the of the equipment has to be repaired, this plus how long it takes to acquire parts, means that is stays in the shop for longer than it should. This then means even fewer operational equipment . . . which means more wear for whatever is left . . .

The aforementioned resolution requires the purchasing agency to list all the parts that it requries in an OAL list, open that list up for bidding, and then enter into a 1-year agreement with the winning manufacturer. There are a multitude of issues with this procedure.

First, the vast majority of the AFP's equipment is foreign. That means whatever parts they require will have to be imported. The specialized nature of these components means that whatever local suppliers of these equipment are on-hand, will arguably not keep them in-stock in sufficient quantities. What supplier would commit to a one-year freeze on the price of components given the prevailing foreign exchange instability? If a supplier would bite, you can expect a hefty premium built into their bid submissions, an price buffer that will adversely impact the AFP's ability to acquire spares in quantity.

Second, the enumeration of individual parts in the OAL. A small trainer aircraft reportedly has over 100,000 parts, from blots, panels, wires, wire tie-downs, etc. This is significantly more complicated than for complicated aircraft and even ships. Is that really practical?

Technically oriented services have reportedly been able to get by with piece-meal bid invitations for individual, or groups of parts. A tedious process that not only adds cost but time to the process.

A blanket Service Support Agreement is reportedly one method that logisticians are looking at, but it is not clear (in fact unlikely) that this solution is compatible with the procurement law.

====

Disclaimer: I am neither a member of the AFP, nor have I ever taken part in a government procurement. The details above have been collected over a period of five years from individuals within the AFP who have, in one way or another, been part of the AFP modernization program.
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Re: Proposals to exempt the AFP Moderniztion from RA 9184

Post by jcolas on Fri Nov 25, 2011 8:22 am

Don't they have their own Generic Procurement Manual? Instead of being exempt from the GPRA, I suggest that they revisit their Generic Procurement Manual and make some revisions; but again, any revisions should be scrutinized and approved/disapproved by the GPPB.
ctually they do. Based on GPPB Resolution 21-2007. See here:

http://www.timawa.net/forum/index.php?topic=27516.0

Part of the reason I've brought the matter up on several venues (here, FB, as well as on our forum) is to somehow encourage discussion on a matter that may have multiple unintended consequences down the road, not only for the AFP, but for government procurement as a whole.

I do not know how much of Lacson and Enrile bills are based on actually legislative requests from the DND, or if these are simply based on their perceptions of how to fix difficulties in procurement


To tinker with the GPRA while in its infancy is a defeatist attitude and it shows our narrowmindedness. The GPRA, to me, has not yet reached its fullness. Let us give the law a chance to blossom. Laws are like living things, it breathes and it feeds from its own weaknesses and strengths.
I still suggest that they should go back to their Generic Procurement Manual. You pointed out that because of the stringent requirement of the GPRA, the AFP is now maintaining two kinds of Squad Automatic Weapons. So what? Supply depot in the country are keeping two or more kinds of the same supplies. The AFP might say that their agency is different as it involves security, so that it should be treated differently. The Department of Health is also maintaining different kinds of the same medicines, life-giving solutions and the like but it has not requested for exemption. All that is needed is good record keeping, cataloging and issuance of the item. May I ask, Sir Adroth. Why did the AFP not procured the same item through Repeat Order?

Without security, there can be no progress.

Without an armed forces, we cannot offer protection for economic activities in our EEZ, and therefore cannot attract investment. You would be denying future generations their birthright if you permit foreign plunder of our resources.


This is a topic which has not been resolved, sir adroth, the primacy of needs in the modern world. The Hawks want to prepare for what, war? national security? but the doves say we are still grappling where to get resources to fight diseases and the need to eradicate illiteracy. More on the topic sir...
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Re: Proposals to exempt the AFP Moderniztion from RA 9184

Post by adroth on Fri Nov 25, 2011 9:24 am

jcolas wrote:To tinker with the GPRA while in its infancy is a defeatist attitude and it shows our narrowmindedness.

The same can be said for people who would dismiss the very real concerns of the AFP.

The GPRA, to me, has not yet reached its fullness. Let us give the law a chance to blossom. Laws are like living things, it breathes and it feeds from its own weaknesses and strengths. I still suggest that they should go back to their Generic Procurement Manual.

This I agree with. We will never get anywhere if we keep trying new things, instead of working to make things work.

One of the underlying questions here is has the DND - AFP participated sufficiently in that growth so that its needs and concerns are satisfied?

What best-practices and regulations are already part of the body of knowledge built up since the law was enacted in 2003, that have not reached DND-AFP decision makers?

You pointed out that because of the stringent requirement of the GPRA, the AFP is now maintaining two kinds of Squad Automatic Weapons. So what? Supply depot in the country are keeping two or more kinds of the same supplies.

The reasons behind why this is not a good thing were actually explained quite clearly. The write up is lengthy, but patience on your part in reading the whole thing should clarify matters.

The next looming issue, which is actually similar, is also discussed. Go beyond the photographs.

Why did the AFP not procured the same item through Repeat Order?

That too was explained in the write-up, in great detail.

Jcolas, this issue is largely about communication. We do not foster communication by treating issues dismissively. Both sides need to work to understand where the other is coming from.

Clearly there are those in the organization who have given up trying and appear to be seeking a legislative out. Somehow, somewhere, there was/is a communication gap.

What I'm hoping this thread fosters is a rational discussion that generates a third option, hopefully one that actually enriches the GRPA and makes it more responsive to a particular department.

The AFP might say that their agency is different as it involves security, so that it should be treated differently. The Department of Health is also maintaining different kinds of the same medicines, life-giving solutions and the like but it has not requested for exemption. All that is needed is good record keeping, cataloging and issuance of the item.

Would it be safe to say that suppliers eagerly offer that wares to the DOH?

Had you taken the time to read the entire write-up, you would have seen how this particular example does not apply

This is a topic which has not been resolved, sir adroth, the primacy of needs in the modern world. The Hawks want to prepare for what, war? national security? but the doves say we are still grappling where to get resources to fight diseases and the need to eradicate illiteracy. More on the topic sir...

You are now going into politics . . . and beyond procurement. We are ought not to be talking about who deserves to get what budget, but rather how best to buy things with whatever budget is given.

I suggest that that aspect of the issue be reserved for a separate thread . . . if not a separate forum since there are a plethora of fora out there are discuss such matters.

What we are faced with now is a question of procurement procedure. Let us dwell on that shall we?



Last edited by adroth on Fri Nov 25, 2011 10:27 am; edited 1 time in total
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Re: Proposals to exempt the AFP Moderniztion from RA 9184

Post by adroth on Fri Nov 25, 2011 10:08 am

The following post on this thread's twin on Timawa lends credence to the possibility that the Enrile and Lacson laws were not drafted in full consultation with the AFP itself. The following quote is from an individual involved in modernization efforts:

http://www.timawa.net/forum/index.php?topic=29661.msg293323#msg293323


From reading one of your posts it was mentioned that one bill spouses the institutionalization of DSOM.  DAS which is part of DSOM actually lean more towards the alternate mode of procurement instead the of public bidding as after the second pass, the  specific equipment (with model and manufacturer) needed is already identified.   

Per consultation with concerned agencies, it was pointed out that sec 53.g of the R-IRR of 9184 actually was made with DND procurement in mind.  And that's what DND intends to do.   Again, these are for major defense equipment.  Regular items like ICIE, ammo or other equipment whose advantages over other models cannot be established will have to go public bidding. 

The following IRR section added by way of Memorandum Order No. 195 dated 14 November 2005 actually addresses the concerns that were laid out in the bill itself.

g) Upon prior approval by the President of the Philippines, and when the procurement for use by the AFP involves major defense equipment
and/or defense-related consultancy services, when the expertise or capability required is not available locally, and the Secretary of National Defense has determined that the interests of the country shall be protected by negotiating directly with an agency or instrumentality of another country with which the Philippines has entered into a defense cooperation agreement or otherwise maintains diplomatic relations: Provided, however, That the performance by the supplier of its obligations under the procurement contract shall be covered by a foreign government guarantee of the source country covering one hundred percent (100%) of the contract price
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Re: Proposals to exempt the AFP Moderniztion from RA 9184

Post by jcolas on Fri Nov 25, 2011 10:55 am

[b]"Adroth wrote"[/b
]The same can be said for people who would dismiss the very real concerns of the AFP
I would like to point out that it was never my intention to dismiss the valid concerns of the AFP. Who am I to do that? I was just trying to defend my position that we should give the GPRA a chance. You very well said in your post, that has the AFP top brass participated sufficiently and that there needs were satisfied? Definitely there needs were not satisfied that is why they would like to get out of the GPRA coverage. Can they not explore other avenues instead of getting out?
I might have ruffled some feelings here which is beyond me, Sir Adroth and so I now rest my case...


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Re: Proposals to exempt the AFP Moderniztion from RA 9184

Post by adroth on Fri Nov 25, 2011 4:02 pm

jcolas wrote:Can they not explore other avenues instead of getting out?

As stated earlier, that is what this thread is actually about. To find out what existing regulations are already available that would make the intentions of the two bills redundant.

Finding how to satisfy the AFP's needs within the boundaries of the existing law will avoid the unintended consequences of abandonment.

As shown in the previous post, Timawans in the modernization community have shared that in their discussions with "concerned agencies" (presumably the GPPB) they were told that Section 53, sub-par g was actually written with the DND in mind. This option allows the DND to implement the components of the Defense System of Management (DSOM) which already subjects prospective equipment to competitive analysis and therefore is better suited to negotiated procurement. So that aspect of the problem is addressed.

More of those insights are needed. This thread is meant to solicit more of this kind of knowledge from individuals who may be familiar with relevant aspects of the IRR, documentation, and/or have related experience.
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Re: Proposals to exempt the AFP Moderniztion from RA 9184

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