National Defense terminates 21 UH-1 helicopter deal

The Department of National Defense issues partial notice of termination for 21 UH-1 combat utility helicopters from Rice Aircraft Services Inc. and Eagle Copters Ltd. after failing to completely deliver 21 UH-I helicopters on agreed schedule. “You failed to comply with the agreed schedule of requirement of the contract agreement, which provides that the delivery should be within 180 calendar days upon opening of the Letter of Credit – The deadline for the delivery for the contract is on 23 September 2014,” the notice sent to Robert Rice Jr. reads.

“In compliance with Section 88, Rule XXII of the IRR of Republic Act No. 9184, the contract agreement between the DND/AFP and the Joint Venture of Rice Aircraft Services Inc. and Eagle Copters Ltd. for the supply and delivery of 21 UH-I helicopters for the PAF with corresponding contract price of PhP1,263,600,000 shall be partially terminated for exceeding the ten percent maximum liquidated damages,” says in the letter signed by Secretary Voltaire Gazmin.

Maximum liquidated damages was reached last January 31. Only eight out of 21 ordered helicopters were completely delivered, while remaining others are undergoing flight tests and various stages of assembly.

RICE was given seven days to respond on the said notice of termination.