Question & AnswerQ&A (MEMORANDUM ORDER NO. 194)
The purpose of Republic Act No. 7898 is to modernize the Armed Forces of the Philippines to a level where it can effectively and fully perform its constitutional mandate to uphold the sovereignty and preserve the patrimony of the Republic of the Philippines.
Joint Resolution No. 28 approves the AFP Modernization Program which includes the upgrade and/or acquisition of armor assets to enhance the AFP's armor capability.
The Philippine Army required 113 units of APCs to increase its present fill-up and enhance its operational readiness for effective Internal Security Operations (ISO).
It allocated One Hundred Fifty Million Pesos (Php150M) for the M113 APC Upgrade/Acquisition Project, enabling the funding for this acquisition.
The New Zealand Army offered its decommissioned fleet of 62 units of M113A1 APC Family of Vehicles with spares and applique armour for tender to the Philippine Army on an 'as is where is and with all faults' basis, available for government-to-government arrangement.
It is a procurement method where the Philippine government negotiates directly with another country's government or military agency, here with the New Zealand Army, for the acquisition of defense equipment.
Section 53(g) allows negotiated procurement upon prior approval by the President when the procurement involves major defense equipment for the AFP, and the Secretary of National Defense determines it is in the country's interest to negotiate directly with another government or agency with diplomatic relations.
The procurement must involve major defense equipment, prior approval by the President is required, it must protect the country's interest, and negotiation must be with a technically, legally, and financially capable supplier who is an agency of another country with diplomatic relations to the Philippines.
They conducted a technical inspection of the M113 APCs in New Zealand and reported on the condition of the units, finding 31 units generally in good running condition and 31 units restorable to working condition.
President Gloria Macapagal-Arroyo approved the acquisition recommendation as per Memorandum Order No. 194, after endorsements by the Chief of Staff of the AFP, the Secretary of National Defense, and the Department of National Defense Bids and Awards Committee.