DND wants ‘partial’ termination of chopper deal with US firm

THE Department of National Defense wants its P1.2 billion chopper deal with an American firm be “partially terminated.”

Defense Secretary Voltaire Gazmin said in a letter addressed to Robert Rice of the Rice Aircraft Services and Eagle Copters dated March 25 that the company failed to deliver the units on time.

Only eight of 21 units of UH-1 choppers have been delivered and accepted by the Philippine Air Force.

“You have delivered the UH-1 units in tranches and as of the date of this Notice only eight out of the 21 helicopters including 21 sets of gun mounts has been accepted the TIAC,” the letter read.

“The contract price in the amount of P1.263 billion shall be partially terminated for exceeding the ten percent maximum liquidated damages,” it also said.

“The 10 percent maximum liquidated damages was reached on Jan. 31.  You failed to comply with the agreed schedule of requirement of the contract agreement which provides that the delivery should be within 180 calendar days upon opening of the letter of credit. The letter of credit was opened in March 27 2014 and the deadline for delivery for contract is on September 21 2014,” the letter also said.

The American firm was also asked to submit a verified position paper why the contract should not be terminated with seven days upon receipt.

“Failure  to show cause within the provided period, either by inaction or by default, shall cause the issuance of an order terminating the contract,” the letter read.

In his State of the Nation Address in 2012, President Benigno Aquino III mentioned that 21 choppers were being acquired to boost the capability of the Philippine Air Force. AC