Armed Forces refute Eurocopter allegations of tender manipulation

The Armed Forces of Malta (AFM) have refuted allegations by Eurocopter SAS that the procurement document for a €58 million twin-engine helicopter was deliberately "tweaked" to favour a bidder whose related company had already provided the army with a patrol boat.

Legal proceedings are currently ongoing after Eurocopter SAS challenged the procurement procedure, to which the AFM is not the respondent to the warrant of prohibitory injunction filed by Eurocopter SAS.

In a statement to MaltaToday, the AFM said the tender in question, issued in September 2012, was followed by clarification meetings in October that are accessible online. "On the 21^st December 2012 the appropriate national competent authority informed Eurocopter SAS that since they submitted a bid that was administratively non-compliant, and did not respect legally established procedures, their submission was disqualified."

Eurocopter filed an objection on 28 December 2012, but its disqualification was upheld by the Public Contracts Review Board during a public hearing on 29^th January 2013.

"In brief, the Public Contracts Review Board disqualified Eurocopter SAS, as contrary to established procedures and processes established at law, Eurocopter SAS included the financial offer with the administrative and technical package; something which is legally inadmissible in a three package procedure followed during the selection process," the AFM said.

Eurocopter attempted a further procedure on 6 February 2013, but this was also repealed by the Public Contracts Review Board on 11 February 2013.

Government may be facing calls to launch an investigation into allegations that the Armed Forces of Malta "tweaked" the specifications of a €58 million tender for the provision of military helicopters for the Armed Forces.

The tender has so far been put on hold on the strength of a decree issued this week by Mr Justice Joseph Zammit McKeon, who upheld a request for a prohibitory injunction by military avionics manufacturer Eurocopter, who pointed out what it described as "anomalous" and "unlawful" changes in the specifications of the tender, to suit rival bidder Augusta Westland SpA, a subsidiary of the Italian firm Finmeccanica.

The unlawful changes pointed out by Eurocopter are said to be "identical" to what has so far been discovered by Italian police a week ago, who arrested Finmeccanica's most senior officials for allegedly bribing Indian officials in a tender for the procurement of military helicopters.

As was the case in India, the anomalies flagged in Malta are related to the tweaking of specifications in the take-off weight of the helicopters, which when compared to Eurocopter, allegedly suit Finmeccanica and its subsidiary supplier Augusta Westland.

It transpires that the Maltese contracts department had written to Eurocopter four days after the tender was issued, saying it had made 'formatting' changes to the first page of the tender document, which after a cautious analysis turned out to be a dramatic change in the maximum take-off weight of the helicopters.

The change was noteworthy to Eurocopter, who immediately pointed out that the change was deliberately made to accommodate Augusta Westland whose helicopters were heavier.

When Eurocopter wrote to ask questions about the change in the document, both the contracts department and the AFM replied that they "knew nothing about it" - a legal document sent by Eurocopter's lawyers and seen by MaltaToday shows.

Additionally, Eurocopter have pointed out that the AFM's only patrol craft with a helipad is the 'Diciotti' class P-61 vessel, which was delivered in 2005 and built by Fincantieri - Finmeccanica's marine arm - and a sister company to Augusta Westland. This led Eurocopter to suspect that the change in tonnage was meant to put Augusta Westland as the definite beneficiary of the contract.

Additionally, the P-61 vessel was financed by the fifth Italian financial protocol to Malta, and the fact that Finmeccanica is owned by the Italian state serves to raise eyebrows about the way the tender may have been adjusted to suit "political obligations" towards Italy.

In their submissions to the law courts, Eurocopter pointed out that since August 2011, the AFM were known to be considering a helicopter with a maximum take-off weight (MTOW) of five tonnes, in order to allow seaborne operations and integration with its marine craft P-61.

Eurocopter spared no words in alleging that changes to the tender document when tendering was already underway were "drafted or modified in a way to tailor the bid for specific bidders and consequently lead to the exclusion of others."

Only Eurocopter and Augusta Westland bid for the AFM tender issued last September, 75% of which will be financed by the Europea Union's border control budget.

But Eurocopter was informed that they were being "administratively disqualified" from the process last month, on the basis that their objection to the changes did not go through the right channels of redress, and that their submission was technically wrong because the financial package was included in two CDs and not in one.

Eurocopter have initiated legal proceedings against the Maltese government seeking redress for their omission from the tender process, and will be filing for damages in the days to come.

The acquisition of the helicopter is only a part of a wider project undertaken by the AFM with the assistance of the EU's External Borders Fund (EBF) aimed at enhancing Malta's (and the EU's) border control capabilities and operational efficiency.

"The AFM wishes to state that the future helicopter acquisition project, which is considered by the Force as the most significant procurement project since it came into being under the responsibility of the Maltese Government in 1970, is one that is driven by the AFM's immediate, medium and long term operational requirements in the field of border control," the AFM said.