The Saga of the Philippine Army Body Armor Procurement

The few Philippine Army Soldiers that were lucky enough to have been issued Body Armor, taken during Balikatan 2012. Photo courtesy of the US DVIDS website.

The original meaning of the term “Saga” as defined by dictionary.com was, “a medieval Icelandic or Norse prose narrative of achievements and events in the history of a personage, family, etc.” However, in modern usage it also now means “any very long story with dramatic events or parts”, which would aptly describe the Philippine Army’s (PhA) procurement of Body Armor for its troops.

I got interested in this recently when the Manila Standard broke out the news that former Commanding General of the Philippine Army (PhA) and now Chief of Staff of the Armed Forces of the Philippines (AFP) General Hernando Iriberri sought to re-align the budget for the Shore-Based Missile System (SBMS) to instead buy Individual Equipment and Weapons for the PhA, including Body Armor.^[1]

Initially I applauded and supported Iriberri’s decision, but then the whole episode made me curious about his background and history, and of the Army's past Individual Gear procurement. So I did a little bit more research into those topics, and it turns out that there really are some issues that could be related to his proposed re-alignment, and that Iriberri himself was involved in a controversy with a supplier recently.

First, regarding the Body Armor procurement, there had been two main procurement lots of Body Armor by the PhA in the last couple of years, the first lot was for a quantity of 3.48k and later a bigger lot quantity of 44k. Below are their timelines based on news reports that I was able to find:

3,480 pcs. of Body Armor Procurement Timeline
December 2012: Serbian company "UM Merkata" wins the bidding for the contract to deliver 3.48k of armor vests at the price of USD 776 each.^[2]

January 2013: Then AFP Chief of Staff Gen. Emmanuel Bautista raises concern as to why UM Merkata shortened the warranty period for the vests. He also said that some documents were missing, and that he had some questions about the test procedures and results.^[2]

March 2013: Two months later, Gen. Bautista eventually signs the contract for Merkata after clarifying the issues with the DND.^[2]

September 2013: Six months later, the vests were expected to have arrived already and being used by the troops in time for the Zamboanga Crisis, but they haven’t, forcing the PhA to make an emergency procurement for 1k vests. However, there also is an issue as it turns out that the company contracted for the emergency procurement, Stone of David, is related to UM Merkata because Christopher Manaluz, the Local Representative UM-Merkata, is also the General Manager of Stone of David.^[2] No report if the vests provided by Stone of David underwent any test at all upon receipt, or that if they did, whether they passed or not.

September 27, 2013: DND approves the waiving of the Pre-Delivery Inspection (PDI) in its effort to rush the delivery of the vests from UM Merkata. The PDI includes the selection of the samples for additional testing.^[2]

January 2014: Despite the waiving of the PDI, it still took UM Merkata another four months to deliver the vests to the AFP.^[2] It was only this time when the samples were selected and submitted for testing.

Also January 2014: DND-BAC has its annual reshuffling, Defense Undersecretry Natalio Ecarma III succeeds Undersecretary Efren Fernandez as DND-BAC Chairman.^[2]

May 2014: Four months after the delivery, the initial Technical Inspection Report is released saying that the UM Merkata vests FAILED the tests because the Back Face Signature (BFS) went over the 44 mm requirement.^[2] No details on who made the tests. Since then the vests had been put on HOLD, stored in a Warehouse with the issue STILL apparently UNRESOLVED as of this writing.

October 2, 2014: The Government Procurement Policy Board blacklists UM Merkata, barring it from doing any further business with the government.^[3] No official explanation of the blacklisting, presumably it is due to the late delivery and failed testing of the 3.48k lot.

’UM Merkata Testing Issue’
UM Merkata provided PASSED test results from the Belgian company Concordia Textiles and German company Beschussamt Mellichstadt during the bidding, and then the DND did another testing of samples during the Post Qualification thru a different set of companies, the Dutch company TNO Defense and Serbian company Doo Jugoinspekt which I assume also PASSED because if not they would not have been allowed to ship parts. But when the main lot of the vests finally arrived, another testing was done, and this time the vests FAILED. The report did not mention where the last test was done.

One issue here is the fact that different tests were done at different sites by both the supplier and the DND, and with so many test facilities, it is not sure anymore whether the standards and procedures used were the same. This was EXACTLY one of the issues raised by Gen. Bautista which led to the delay of the shipment for a couple of months (but for a good reason).

I think that the ideal situation would’ve been to just rely on the test result of a SINGLE, CREDIBLE and IMPARTIAL testing body. Make sure that the supplier had passed tests from that body before, and then when the samples arrive, test them again at the same body to ensure that the samples the supplier delivered were the SAME as the ones they had tested with that body.

44,080 pcs. Body Armor Procurement Timeline
February 2013: The South Korean company “Kolon Global Corporation” wins the bidding for the vests with its lowest bid price of USD 408 per unit.^[4]

November 17, 2013: Nine months later, the Department of National Defense (DND) announces the rejection of Kolon Global Corp.'s winning bid after their vests failed on certain technicalities. Kolon protested the decision and countered that their vests had been approved by an American government agency. The second lowest bidder, the Serbian company UM Merkata, is selected as the winning bidder. Merkata’s bid was much higher than Kolon at USD 612 per unit.^[4]

November 24, 2013: The Anti-Corruption Watchdog Coalition Against Corruption (CAC) criticizes the DND for disqualifying Kolon Global Corp.^[5]

December 7, 2013: Kolon Global Corp. eventually withdraws their protest for fear of dragging the South Korean government (which encouraged them to join the bidding) into the controversy.^[6]

Also January 2014: DND-BAC has its annual reshuffling, Defense Undersecretry Natalio Ecarma III succeeds Undersecretary Efren Fernandez as DND-BAC Chairman.

Sometime between January to July 2014: UM Merkata was disqualified because its audited financial statement and net financial contracting capacity proved to be questionable to supply the contract worth P2 Billion.^[2]

July 28, 2014: The Joint Venture of the Israeli company Achidatex Nazareth Elite and the Filipino company Colorado Shipyard Corp. was awarded as winner of the contract, being the third lowest bidder of the project. Their bid was much higher than that of Kolon or UM Merkata at approximately USD 889 per unit.^[7]

October 2, 2014: The Government Procurement Policy Board blacklists UM Merkata, barring it from doing any further business with the government.^[3] No official explanation of the blacklisting, presumably it is due to the late delivery and failed testing of the 3.48k lot.

February 26, 2015: Seven months after Achidatex/Colorado Shipping was awarded the contract, they failed to deliver the first batch of 20k Armored Vests. Achidatex/Colorado asked for a 120 day (approximately four months) extension, which was granted.^[8]

June 29, 2015: End of 120 day extension from Achidatex,^[8] but no news if the vests were delivered or not. If not, Liquidated Damages will start to be imposed from this date until the maximum penalty for the contract price is reached. If the delivery is not made in full by that time, then the contract SHOULD be terminated, as in the case of the RASI Huey Deal.^[9]

’Kolon Disqualification’
Kolon Global’s vest were eventually disqualified by the DND-Bids and Awards Committee (BAC) who contended that the insert provided was NOT “Multi-Curve” and that it’s dimension was short by 5 mm. The “Curve” they are talking about here is simply the curve of the Ballistic Plate Insert which mainly affects the COMFORT of the wearer.^[10] Remember that the human torso is curved, hence if you are going to put a plate in front of it, naturally it should be curved also. Theoretically the more curves (hence the term “multi-curve”), then the more comfortable it is for the wearer.

As for the dimension of the plate, again it depends on HOW you MEASURE it. Remember that the plate is curved, and if you measure it using a straight ruler or some non-flexible measuring device, naturally it would be shorter than if you measured it following its curve, like when using a flexible Tape Measure, for example. Kolon is saying that their plates ARE Multi-Curved, and that if you measure the plate along the curves, it will meet the specifications. They also point out that the vest also PASSED the test conducted by the US National Institute of Justice (USNIJ), the third party accredited by the DND to test the vests.

IMHO, I think what the DND-BAC could have done is simply get the opinion of the USNIJ which would have acted as an IMPARTIAL and CREDIBLE THIRD PARTY to the dispute. They could have asked if Kolon’s Inserts really were Multi-Curve, and as to how the standard measurement of the inserts should be instead of just deciding among themselves these things. If they did, then the result would NOT be in as much contention as compared to what happened. Note that the USNIJ did not mention any issues regarding the curvature of the inserts or its dimension when they tested Kolon’s vests.

This would have avoided the impression that NITPICKING was done with the evaluation to RIG it and allow some other supplier to obtain the contract. Also, are we to assume that the other suppliers did not have the same Multi-Curve and Plate Dimension issue, and that they all passed the USNIJ tests also? This is just a question.

’Additional Questions and Observations’
* USNIJ Testing – I think the DND was right later in using the USNIJ to test the vests of the main 44.08k lot, not sure if they used it on the 3.48k lot though. I think that in the near future, all testing should be done thru the USNIJ because for one, it will SIMPLIFY the question of whose testing it is we will rely on. Second is that the USNIJ, being a GOVERNMENT INSTITUTION of the US (specifically the Research and Development arm of the US Justice Department)^[11] I feel is about a TRUSTWORTHY as it can get, hence any result from them I am more inclined to believe rather than from other sources.

* Price Increase - The price per unit of the Body Armor for the main 44.08k lot went from Kolon’s bid price of USD 408, to UM Merkata’s price of USD 612, and then finally to Achidatex/Colorado’s price of USD 889. Take note that Achidatex/Colorado’s bid is more than TWICE the price that of Kolon. No questions here though, just making an observation.

* 3.48k Lot in Limbo - Up to now, more than a year later after the delivery, the issue of the 3.48k lot is still in limbo. Not sure if the government will ever get its money back, and so far it doesn't seem like the DND has SUED the supplier yet (although they did blacklist them). I suspect this is because they are not really sure if they will win the case if they do because of the “complexity” of the issue. An alternate solution will have to be found, like perhaps having the vests tested by the USNIJ (if they haven’t done it yet) and if they pass then issue them. If they don’t pass … Then more heartache for the taxpayers as the issue will likely continue to drag on for a couple more years, if ever it will be resolved.

* Disqualification of Winners - For the both the 3.48k and 44.08k lots of Body Armor, there were THREE disqualifications of suppliers who had already won for one reason or the other, and with the last winning supplier (Achidatex) seemingly unable to deliver the required vests and on its way to being disqualified also. Not sure why this happened, I thought the screening processes during the bidding should’ve taken cared of MOST if not all of the issues that were eventually raised.

* Questionable Emergency Procurement - So, the supplier was LATE in delivering the 3.48k lot, but then the PhA makes an emergency procurement thru basically the SAME supplier, but only a different name? And conveniently with the long and extensive background checks, testing, etc. of the bidding waived? Even if the law allows for it, from a MORAL point of view, it is highly suspicious, to say the least.

Iriberri Controversy
As for the controversy that Gen. Iriberri got involved in with a supplier recently, no need for timelines here, just a description of what happened, which is supposed to be something like this: The local company Joavi Philippines Corporation won three separate ammunition projects worth P 98.7 million from 2010 to 2012. However, they were unable to deliver these allegedly because Iriberri DELAYED the issuance of the critical documents like the End-User Certificates and Notices to Proceed. Joavi subsequently filed a Criminal case in the local courts as well as an Administrative case with the Ombudsman against Iriberri.^[12]

A relatively unknown and supposedly a corruption watchdog named the “Anti-Trapo Movement (ATM)” came to Iriberri’s defense publicly, saying that Iriberri was just protecting the Army from Joavi, whose subsidiary Stone of David is affliliated with UM Merkata, the company that failed to deliver 3.48k vests on time as mentioned above, and who supposedly delivered defective vests later.^[13] Iriberri’s case with the Ombudsman and the Courts are still pending as of this writing.

Now, GRANTING that Joavi might have some questionable dealings, was the right way to treat them was to DELAY their products? Shouldn’t Iriberri have coursed his concerns thru the proper channels and proper procedures? And besides, shouldn’t he be looking at the specific transactions, instead of ASSUMING that the transactions he was looking after was corrupt just because of Joavi’s dealings with other transactions? At the very least, that looked very unprofessional of him. Iriberri is identified as being close to DND Secretary Voltaire Gazmin, having served as his Spokesman and Senior Military Aide.

’Malicious Thoughts’
We don’t know what exactly happened, but let’s pretend that I’m a malicious person (I’m not?). Now, we can come up with a number of interpretations based on the events that happened above, and my interpretation would be something like this: UM Merkata wins the bidding for the 3.48k lot, but has trouble delivering the parts. Then the Zamboanga Crisis happens, and an emergency procurement had to be made. Somehow, the deal was hijacked so basically the same supplier got to provide the vest also, allowing them to earn more money the easier way.

The main prize, of course, was the 44.08k lot, but a South Korean firm beat the favored supplier to the bidding, hence certain groups went out to ensure that the Korean firm is disqualified, and UM Merkata gets the contract. Note also the timing: UM Merkata did not deliver the 3.48k vests until AFTER they were awarded the contract for the 44.08k lot, perhaps hoping it will be more difficult to get rid of them later on if problems are found with their 3.48k vests.

When 2014 came in, there was the annual change in the DND-BAC leadership, and suddenly UM Merkata lost its “magic” for some reason (cough, cough, ubo, ubo), being disqualified from the 44.08k lot based on their lack of financial capability, which is a good thing considering that they were LATE in delivering the 3.48k lot and that when the vests finally arrived, they FAILED the testing done by the new DND-BAC leadership.

The new DND-BAC "regime" later blacklists UM Merkata for the 3.48k lot mess. However, unfortunately for the DND, the third winner turned out to be just as sh#@ty also, unable to deliver the vests on time.

Take note that in the transactions mentioned all throughout this blog, the owners behind the companies Joavi / UM Merkata / Stone of David were able to corner at least SIX contracts with the Army:
- Three ammunition contracts;
- 3.48k Body Armor lot;
- 1k Body Armor (the emergency procurement) lot;
- 44.08k Body Armor lot

Why so many contracts for more or less the same company? Furthermore, why so many controversies in the procurement? The Army is the biggest branch of our Armed Forces with approximately 76% of the total manpower of the AFP, thereby accounting for 51% of the AFP's total (2014) budget.^[14] With that much money floating around, no wonder it tends to attract some unsavory characters here and there. Iriberri might have had good cause in smelling something fishy with Joavi's transactions, but then again he should’ve done it the right way, instead of generating more controversies on his own.

Again, I am not saying that this is actually what happened, those are just my opinions and guesses. I encourage the readers to come up with theories on their own, based on the facts above.

’Parting Shot’
In summary:
- The 3.48k Body Armor procurement has been clearly BOTCHED, with the supplier delivering late and supposedly with defective parts. It is in limbo, and its fate very uncertain as of now.
- The 44.08k Body Armor procurement is controversial after the first two winners were disqualified due to different reasons. The third winner is currently very LATE with their delivery, and on the verge of NOT delivering the parts, so it is on its way to failure also as of this writing.
- Iriberri has shown to have made some poor decisions in the past, and will have to improve his judgement now that he is Chief of Staff of the entire armed forces.
- I think the current review and testing procedures should be simplified and streamlined, it needs to include a CREDIBLE and IMPARTIAL body like the USNIJ outside of the DND-BAC as much as possible.

The Public Bidding for the Body Armor lots has really been QUITE A MESS so far, and when you have so many problems like these, then that usually means something is very WRONG with the system. It’s not a coincidence that you have so many controversies left and right. I’m not so sure anymore how they can resolve the issues with these two Body Armor lots, if they can be resolved at all. There is new leadership, but Iriberri is hampered by the fact that he only has around eleven months to work things out, and that his focus is divided because his main task will be to ensure a peaceful election come 2016.

In the end, the big losers are the taxpayers who end up seeing their money go to waste, and the individual soldiers themselves, who end up not being provided the right equipment that they deserve. All thanks to CORRUPTION, INCOMPETENCE, or a combination of BOTH. And so for now the SAGA of the Philippine Army’s procurement of Body Armor continues …

The controversial Gen. Hernando Iriberri (right) meets with the US Army Chief of Staff in Washington DC in June 2014. Photo courtesy of the DVIDS website.

SOURCES:

[1] Missile system pushed,
https://web.archive.org/web/20150707110253/http://manilastandardtoday.com/2015/07/01/missile-system-pushed/

[2] Armor vests for Zambo troops still sitting in warehouse,
https://web.archive.org/web/20150710155139/http://www.rappler.com/newsbreak/68431-zamboanga-siege-body-armors

[3] Government Procurement Policy Board,
https://web.archive.org/web/20150908064330/http://www.gppb.gov.ph/monitoring/blacklistedSup.php

[4] Lowest bid in P1.7-B armor sale junked,
https://web.archive.org/web/20160729081528/http://www.manilatimes.net/lowest-bid-in-p1-7-b-armor-sale-junked/57793/

[5] Watchdog slams disqualification of bidder in AFP project,
https://web.archive.org/web/20140221073351/http://www.philstar.com/headlines/2013/11/24/1260134/watchdog-slams-disqualification-bidder-afp-project

[6] Controversies, delays in multi-billion AFP modernization,
https://web.archive.org/web/20150712072430/http://www.rappler.com/nation/45252-controversies-delays-military-modernization

[7] Joint venture wins bidding for supply of AFP protection gear,
https://web.archive.org/web/20140822044539/http://www.philstar.com/headlines/2014/08/18/1358842/joint-venture-wins-bidding-supply-afp-protection-gear

[8] Firm that won DND contract for ballistic vests fails to deliver on time,
https://web.archive.org/web/20160205170848/http://www.interaksyon.com/article/112408/firm-that-won-dnd-contract-for-ballistic-vests-fails-to-deliver-on-time

[9] DND partially terminates contract for supply of 21 'Huey' combat helicopters,
https://web.archive.org/web/20160220171953/http://www.interaksyon.com/article/107687/dnd-partially-terminates-contract-for-supply-of-21-huey-combat-helicopters

[10] Study on the Ballistic Performance of Monolithic Ceramic Plates,
https://web.archive.org/web/20130124110753/http://www.mater.upm.es/isb2007/Proceedings/PDF/Volume_2/Vol.II(87)TB100.pdf

[11] About NIJ,
https://web.archive.org/web/20160413012827/http://www.nij.gov/about/Pages/welcome.aspx

[12] Probers studying Army chief’s suspension,
https://web.archive.org/web/20150721042100/http://manilastandardtoday.com/2015/05/28/probers-studying-army-chief-s-suspension/

[13] Group hits graft charge vs Army chief,
https://web.archive.org/web/20151227181753/http://www.philstar.com/metro/2015/05/24/1458075/group-hits-graft-charge-vs-army-chief

[14] Department of Budget and Management FY 2014 Budget Ceiling,
https://web.archive.org/web/20140514202119/http://www.dbm.gov.ph/wp-content/uploads/Issuances/2013/National%20Budget%20Memorandum/NBM%20no.116%20Annex%20A.pdf