Question & AnswerQ&A (DND DEPARTMENT CIRCULAR NO. 01)
The main objective of the AFP Modernization Program 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.
The AFP Modernization Program consists of five components: 1) Force Restructuring and Organizational Development; 2) Capability, Materiel, and Technology Development; 3) Bases/Support Systems Development; 4) Human Resources Development; and 5) Doctrines Development.
The AFP Modernization Program is intended to be implemented over a period of fifteen (15) years, but payments for amortization of outstanding multi-year contract obligations may extend beyond this period.
The AFPMATF is a trust fund created under Section 11 of the AFP Modernization Act, established to manage the funds appropriated for the AFP Modernization Program.
The Secretary of National Defense (SND) is the administrator of the AFP Modernization Act Trust Fund (AFPMATF).
Procurement contracts under the Capability, Materiel and Technology Development component of the Program are governed by Executive Order No. 302 (1996), as amended by Executive Order No. 201 (2000), unless otherwise indicated in the Implementing Guidelines, Rules, and Regulations (IGRRs).
Before entering into any multi-year contract for procurement under the AFP Modernization Program, a Multi-Year Obligational Authority (MYOA) must be issued by the Department of Budget and Management (DBM).
A Circular of Requirements (COR) defines the operational and technical requirements for equipment or weapons system to be procured, contextualized within the National Defense Strategy and AFP doctrines.
Used equipment or weapons systems may be acquired if they meet operational requirements, have at least 15 years or 50% of service life remaining, acquisition cost is reasonable, and the supplier ensures availability of after-sales maintenance and spare parts.
In procurement of sophisticated defense equipment, sovereign or government guarantees are allowed as bid security and must be in written form bearing official seal, signed and authenticated, declare ownership interest, and indicate the guarantee duration.
The AFPMB serves as an advisory body to the Chief of Staff, AFP, advising on capability development, reviewing studies and modernization programs, and ensuring responsiveness to current and future mission requirements.
The DMO supervises and monitors implementation of the AFP Modernization Program, coordinates approval processes, provides secretariat support to the Secretary and AFPMATF Management Committee, and performs other functions assigned by the Secretary.
The Five (5) - Year Rolling Plan contains a list of projects under the AFP Modernization Program, reflects future defense programs, estimated expenditures, and proposed appropriations for the fiscal year and four succeeding years, and is submitted to the Secretary for approval.
Predisqualified bidders may appeal the predisqualification to the Secretary within 15 days; the Secretary must decide within 45 days. The bidding process is suspended during the appeal, and the Secretary's decision is final and immediately executory.
Proceeds shall be used to finance the AFP Modernization Program following approval procedures and shall be deposited to the AFP Modernization Act Trust Fund in accordance with established guidelines.