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| A computer generated image of the Frigate to be acquired from Hyundai Heavy Industries by the Philippine Navy |
A ranking Navy official, requesting anonymity, said the incident sent a “chilling message” to the military that anyone, even a flag officer in command (FOIC), can be relieved unceremoniously.
Mercado had supported the Navy project management team’s stand on various issues that came up against Hyundai Heavy Industries, the South Korean company that was awarded the warships contract.
A number of officers and other service members believed Mercado, in holding the line on the warship contract, was just protecting the Navy’s interest.
13th October 2015, the decision memorandum for the acquisition of two missile-capable frigates for the Philippine Navy was issued. The project used the public bidding mode of procurement, following the technical specifications provided by the Philippine Navy as the end-users.
Four (4) companies participated in the bidding, with Garden Reach Shipbuilders
and Engineer (GRSE) as the lowest calculated bidder and Hyundai Heavy Industries (HHI) as the 2nd lowest calculated bidder. Per open public bidding conducted, the bid price offered by the GRSE was Php 15,047,704,000.00 while HHI’s bid was Php 15,744,571,584.00.
30th April 2016, the GRSE was declared postdisqualified for failure to meet the Net Financial Contracting Capacity (NFCC) requirement of the project.
28 July 2016, Thales Group, a French multinational aerospace and defense company, has decided to sell its 50 percent stake in Hanwha Thales to Hanwha Group.
When Samsung sold its defense unit to Hanwha last year, Thales and Hanwha signed a put/call option agreement for Thales' 50 percent share in Hanwha Thales, former Samsung Thales. Under the agreement, Thales has a put option that allows it the right to sell its 50 percent stake to Hanwha one year after Hanwha Group completes the acquisition process, while Hanwha is given a call option to buy the shares.
Accordingly, Thales has had the right to exercise the put option for 40 days from June 29 to August 7 and Thales officially notified Hanwha of the sale of all of its shares, amounting to 50%, at the price of 288 billion won (US$253.86 million).
18th August 2016, Defense Secretary Delfin N. Lorenzana signed the Notice of Award in favor of HHI after the South Korean company has been declared the Lowest Calculated Responsive Bidder (LCRB) for the project, following the disqualification of GRSE during the post qualification.
24th October 2016, The signing of the FAP “Contract Agreement” was done at the Headquarters Philippine Navy. Prior to the signing of the agreement, a briefing was conducted by the Chairman, Technical Working Group (TWG) of the FAP which highlighted the FAP’s technical requirements, the procurement process and the capability of HHI to implement and deliver the project
13th December 2016, the Notice to Proceed (NTP) was issued by the DND to HHI and the advance payment of equivalent to 15% of the price (U.S.$47,186,528.00) was paid to HHI on January 16, 2017.
1st February 2017, Kick-Off Meeting” in Ulsan, South Korea, the PN sought clarification on the compliance of the shipbuilder that the CMS be compatible with the Tactical Data Link 16 (TDL-16). Although the integration or compatibility of TDL-16 with the CMS is not a factor in determining compliance of the two (2) rated sub-system contractors (Tacticos Thales of Netherlands and Hanwha Thales of South Korea) during the bidding process, HHI had nevertheless made several pronouncements in various meetings with the DND and PN officials and also in writing that the CMS “shall be compatible Link-16”. Likewise, top executives of HHI and Hanwha Thales have assured the DND that the first frigate to be delivered on April 5, 2020 will be equipped with CMS which is compatible with TDL-16.
10, August 2017, Upon recommendation of DND staff and the FAP technical adviser (Rear Admiral Robert Empedrad AFP), a memorandum was issued by the Secretary of National Defense Delfin Lorenzana to the AFP Chief of Staff in resolving the CMS issue with instruction to the PN to comply with HHI technical advise in order to avoid further delay in the project implementation.
25th September 2017, a 5 day workshop for the critical design review of the Frigate Acquisition Project was conducted. The result of this workshop was then presented to the steering committee headed by Undersecretary for Finance, Munitions, Installations and Materiel Raymundo DV Elefante
6th October 2017, the Assistant Secretary for Acquisitions, Installations, and Logistics (ASAIL) received a copy of the Philippine Navy's position paper on the selection of the Combat Management System (CMS).
18th December 2017, Mercado learned about his dismissal while presiding over the year-end command conference of the Navy and the Marines at the Philippine Navy Officers’ Club in Taguig City.
19th December 2017, transfer of command to Rear Adm. Robert Empedrad, who was sworn in, which came so abruptly it sent shock waves through the entire military.
SOURCES:
http://businesskorea.co.kr/english/news/industry/15374-thales%E2%80%99-decision-hanwha-group-acquire-remaining-50-stake-hanwha-thales
http://www.dnd.gov.ph/transparency/FOI%20Manual/StatusoftheFrigateAcquisitionProject(20October2017).pdf
http://newsinfo.inquirer.net/955661/that-sinking-feeling-the-story-behind-navy-chiefs-sudden-fall
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