Additional Air Transport Capability (C-130J Super Hercules) Acquisition Project of the Philippine Air Force

The Philippine Air Force (PAF) has raised the requirement for new heavy tactical transport aircraft to beef up its fleet, as requirements for air transport has increased while air assets are ageing and dwindling in numbers and operational availability.

The PAF proceeded to submit their requirements to the Department of National Defense (DND) for the acquisition of additional aircraft under the Brand New Additional Transport Aircraft, later renamed Additional Air Transport Capability Acquisition Project, which was submitted to the first raised in 2019.

A C-130J-30 Super Hercules of the US Air Force in Villamor Airbase, Manila. Photo credits to Associated Press (AP).

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Project Summary:

Additional Air Transport Capability (C-130J Super Hercules) Acquisition Project:

Note: Edited as of 13 December 2023.

* End User: Philippine Air Force (220th Airlift Wing)

* Quantity: 3 units plus ILS package, reduced from 5 units plus ILS package

* Modernization Phase: 2nd List of Horizon 2 Phase Projects of RAFPMP

* Project ABC: approx. Php22,200,000,000.00, reduced from Php37,000,000,000.00

* Acquisition Mode: US Direct Commercial Sale (DCS) Procurement

* Source of Funding: Multi-Year Contractual Authority for unspecified number of years, using General Appropriations Act (GAA)

* SARO Release:
- SARO-BMB-D-22-0004784 dated 10 June 2022 worth Php3,505,000,000.00 (15% initial payment);
- SARO-BMB-D-23-0026645 dated 11 December 2023 worth Php3,330,000,000.00 (15% 2nd milestone payment)

* Winning Proponent: Lockheed Martin

* Product for Delivery: C-130J-30 Super Hercules plus Integrated Logistics Support Package

* Contract Price: Php22,199,999,983.47

* Residual Price: Php16.53

* First post by MaxDefense: 06 May 2020

* MaxDefense Searching Hashtag: #PAFBrandNewC130JAcquisition

* Project Status: PAF sent Request for Information (RFI) to manufacturers in late 2019, and Lockheed Martin provided RFI reply on June 2020. Project was proposed for funding under FY2021 defense budget but failed to gain traction due to government's diversion of defense funds to COVID response expenses. Initial downpayment of Php5.5 billion approved under FY2022 defense budget, finalizing terms of reference and other requirements prior to project award to Lockheed Martin. MYCA shows that total quantity reduced from 5 to 3 aircraft only. SARO for 15% DP released on 10 June 2022. NOA released 29 December 2022. Contract said to be signed February 2023, and Notice to Proceed released 05 June 2023. Delivery set for July 2026 for the 1st aircraft, October 2026 for the 2nd aircraft, and January 2027. 2nd payment milestone made with SARO released on 11 December 2023.

A C-130J-30 of the US Air Force. Photo credits to Lockheed Martin.

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Overview:

The Philippine Air Force (PAF) has been in need for new heavy tactical transport aircraft to complement its ageing and dwindling fleet of Lockheed C-130 legacy Hercules heavy tactical airlift aircraft.

The last time the PAF received brand new C-130s were in the 1976-1977 when the Marcos administration acquired 4 new Lockheed C-130H Hercules from the US. Of those 4, only 1 aircraft remain at this time.

Prior to this project, the PAF has been receiving or buying refurbished legacy C-130 Hercules transport aircraft from the US during the Marcos, Cory Aquino, Ramos, Arroyo, Noynoy Aquino and Duterte administrations.

Some of the PAF's retired C-130 Hercules aircraft, as seen in Benito Ebuen Airbase several years ago. Credits to original source.

But these have not been enough considering the PAF has been losing C-130s due to crashes or accidents, or due to poor maintenance. Out of the 5 refurbished C-130 Hercules received in the last 20 years, only 2 are still in working condition.

The PAF was looking at acquiring larger aircraft, particularly strategic airlift aircraft to improve its capability to carry heavier load over longer distances, as part of its proposed Strategic Airlift Aircraft Acquisition Project. But due to the lack of numbers in its C-130 fleet, the plan was shelved in favor of acquiring slightly smaller aircraft like the C-130 or equivalent.

The PAF sent out Request for Information to global manufacturers in late 2019, and Lockheed Martin provided their reply by June 2020 with a proposal for 5 new C-130J-30 Super Hercules transport aircraft. The stretched Super Hercules was proposed based on the capacity required by the PAF.

Our parent page MaxDefense Philippines has confirmed that Airbus' previous proposals under the Strategic Airlift Aircraft Acquisition Project for 2 Airbus A400M Atlas aircraft remains in place as of 2020. Other aircraft looked at by the PAF are the Embraer KC-390 Millennium, and the Kawasaki C-2. The Kawasaki C-2 is competing against Airbus A400M in the Strategic Airlift Aircraft project.

The Airbus A400M Atlas strategic airlift aircraft, which is larger than the C-130J Super Hercules. This example with the German Luftwaffe. Photo credits to Wikipedia Commons.

The project was approved for implementation in 3rd quarter 2020, selecting Lockheed Martin's C-130J-30 Super Hercules with a proposed budget of Php37 billion for 5 aircraft including an Integrated Logistics Support (ILS) package. Acquisition will be through Direct Commercial Sales (DCS) with Lockheed Martin, which allows the deal to be cheaper although not supported by the US Government's logistics package.

A C-130J-30 Super Hercules of the Royal New Zealand Air Force. Photo credits to RNZAF.

The funding for the initial down payment of 15% of the cost worth around Php5.5 billion was requested by the PAF and DND to be included in the Fiscal Year 2021 allocation for the AFP Modernization Program, but it was not included due to reduced prioritization of defense projects in favour of COVID-19 pandemic response expenses.

It was again proposed to be included in the FY2022 funding under the AFP Modernization Program, and this has been successfully included, being "marketed" to Congress as a Humanitarian Assistance and Disaster Relief (HADR) asset.

Finally on Feburary 2023, the Contract between the DND and Lockheed Martin was signed, and the Notice to Proceed was released on June 2023.

The DND said the deliveries of the aircraft will be on July 2026, October 2026, and January 2027.

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U P D A T E S:
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14 October 2021:

Amendments were made by Congress to the FY2022 Defense Budget, with Php5.5 billion now included to allow for the down payment for acquisition of 5 new C-130J Super Hercules tactical transport aircraft for the Philippine Air Force.

It appears that this was the only item approved by Congress out of the Php98.2 billion "Additional Priority Projects of the DND for FY2022" that the DND was asking and was presented to both the Congress and Senate Hearings on the FY2022 Defense Budget.

Lets see if there will be further improvements in the Senate version of the FY2022 Defense Budget.

The House of Representatives (Congress) released their list amendments on the proposed FY2022 budget, which includes the downpayment for 5 new C-130J Super Hercules aircraft. Photo credits to Inquirer.net.

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17 June 2022:

The Department of Budget and Management (DBM) released a SARO worth Php3.505 billion tp cover for the initial funding for the Additional Air Transport Capability project, which is actually the C-130J acquisition.

The SARO also covers funds for electric meter for operational facilities at Villamor Air Base, which could only cost around Php5 million.

It appears that the cost is around 10% of the contract price, which places it at around Php35 billion, or Php2 billion less than the Project ABC.

If this is the case, the possibility that the Notice of Award to Lockheed Martin could be made before Pres. Duterte steps down from office.

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17 September 2022:

The Philippine Government has approved the Multi Year Contractual Authority (MYCA) for the project last May 2022.

But the quantity of aircraft to be procured was reduced from 5 to just 3 units. The budget was also reduced, and we are still confirming the new amount as of this writing.

With this development, it appears that a contract between the DND and Lockheed Martin would be coming soon, considering the MYCA places the project to a total of 4 fiscal years from 2022 to 2025, and the 15% initial funding was already released by the DBM through a SARO last June 2022.

Based on information, all 3 aircraft would be delivered only by 2025, although milestones have been set between 2023 and 2024 on the building of the aircraft.

It remains to be seen if the government will be funding the other 2 aircraft as part of Horizon 3, or if it would be increased to more than 2 aircraft considering the PAF may need more than 5 new C-130Js in the future.

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03 March 2023:

The DND has released a Procurement Monitoring Report as of January 2023, wherein it confirmed that a Notice of Award has already been released last 29 December 2022 for the Additional Air Transport Capability Acquisition Project of the Philippine Air Force which involves the acquisition of 3 C-130J-30 Super Hercules (stretched) heavy tactical transport aircraft from Lockheed Martin.

This project is covered under the 2nd List of Horizon 2 of the RAFPMP.

The deal was was done through Direct Contracting, which means that it is a Direct Commercial Sale with Lockheed Martin and not through Foreign Military Sales with the US Department of Defense.

This allowed for the aircraft to be slightly cheaper but without much support coverage from the US DOD, which hopefully is covered by other means by the Philippine DND and PAF.

So far no official announcement has been made by the DND, PAF and Lockheed Martin although this might chance once a Contract and Notice to Proceed are in place.

The DND report was from January so its highly possible that a Contract would be signed soon, or have already been signed between Lockheed Martin and DND.

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17 October 2023:

The DND has confirmed that it has already released the Notice to Proceed for the acquisition of 3 brand new C-130J Super Hercules transport aircraft to Lockheed Martin.

While it did not mention when the NTP was released, defense page Pitz Defense Analysis was able to obtain a copy of the NTP showing the released date as 05 June 2023, and also saying the contract was actually signed as of February 2023.

The DND said the deliveries of the aircraft will be on July 2026, October 2026, and January 2027.

The Philippines will become the 2nd country in Southeast Asia to order the C-130J Super Hercules after Indonesia.

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20 October 2023:

Lockheed Martin confirms the DND's earlier announcement on the procurement of 3 C-130J-30 stretched Super Hercules tactical transport aircraft for the Philippine Air Force.

We'll discuss in the near future regarding the potential follow-on orders for additional aircraft, as the PAF tries to meet its minimum requirements of total C-130s of around 10 to12 aircraft.

Photo screengrabbed from Lockheed Martin's Facebook page.

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13 December 2023:

The Department of Budget and Management (DBM) has released the 2nd tranche of payments for the Additional Air Transport Capability Acquisition Project of the Philippine Air Force, with a new SARO for 3 different projects combined into one.

The SARO-BMB-D-23-0026646 dated 11 December 2023 and released on the same date worth Php11,390,400,000.00 includes the 2nd milestone payment for the Additional Air Transport Capability (C-130J) Acquisition Project worth Php3,330,000,000.00.

This is worth 15% of the total contract cost, which brings the payment made for the project at 30% of total cost.