Defense Secretary Voltaire Gazmin on Wednesday ordered the partial termination of the P1.2 billion UH-1 helicopter contract with US supplier Rice Aircraft Services Inc., after the firm failed to deliver the ordered units within “180 days upon the opening of the letter of credit.”
A notice of termination signed by the Defense chief was sent to Robert Rice Jr., the official representative of the joint venture of Rice Aircraft Services Inc. and Eagle Copters Ltd.
“In compliance with Section 88, Rule 22 of the IRR of RA 9184 (Philippine Procurement Law), the contract agreement between the DND/AFP (Armed Forces of the Philippines) and the Joint Venture of Rice Aircraft Services Inc. and Eagle Copters Ltd. for the supply and delivery of 21 UH-1 helicopters for the PAF (Philippine Air Force) with corresponding contract price of P1,263,000,000 shall be partially terminated for exceeding the ten percent maximum liquidated damages,” the DND letter to Rice stated.
According to Gazmin, the UH-1D units were supposed to be delivered on September 23, 2014, 180 days after the opening of the Letter of Credit on March 27, 2014.
“You have delivered the UH-1 units in tranches and as of the date of this notice, only eight out of the 21 UH-1 Helicopters including 21 sets of Gun Mounts has been accepted by the TIAC (acceptance committee),” Gazmin said.
The DND gave the joint venture’s representative seven days to submit a verified position paper stating why the contract should not be terminated. “You are hereby ordered to submit a verified position paper stating why the contract should not be terminated within seven (7) days upon receipt hereof. Failure to show cause within the provided period, either by inaction or by default, shall cause the issuance of an order terminating the contract,” it said.
