South Korea resumes bidding in jet fighter deal

Aug. 2, 2013 at 6:08 AM
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SEOUL, Aug. 2 (UPI) -- South Korea will resume its procurement process this month for a jet fighter contract expected to be worth more than $7.2 billion, Yonhap news agency reported.

South Korea's Defense Acquisition Procurement Agency suspended bidding for the 60 aircraft in mid July over concerns that manufacturers' bids were higher than the budgeted $7.2 billion.

DAPA announced the decision to restart bidding in mid August in a meeting presided over by Defense Minister Kim Kwan-jin, Yonhap reported.

Boeing's F-15 Silent Eagle, Lockheed Martin's F-35 stealth fighter and the Eurofighter Tranche 3 Typhoon from EADS -- European Aerospace Defense and Space Co. -- are the shortlisted aircraft.

The contract is to replace South Korea's aging fleet of McDonnell Douglas tandem, two-seat, twin-engine F-4 Phantoms and the single-seat, twin-engine Northrop F-5 Freedom Fighter and Tiger variants starting in 2017.

There were 55 bidding sessions in June and July for what will be Seoul's largest import deal, Yonhap said.

"DAPA decided to resume the bidding after taking all alternatives into consideration," DAPA spokesman Baek Yoon-hyeong said in a briefing.

"There was a consensus that resuming the bidding under the same condition as the last one is the best option for national interest at this point."

However, DAPA said it will halt bidding again and make an alternative acquisition plan if the bidders fail to produce solutions within the government's budget.

"If no company offers a proposal within the budget, even after the bidding resumes, DAPA will restart the project from the beginning by revising the number of jets or increasing the budget," Baek said.

When DAPA announced it had stopped the bidding process, Baek said the agency had difficulties convincing the manufacturers to offer prices within the government's budget.

Yonhap said Boeing's F-15 and the EADS Eurofighter are being offered through direct commercial sales, while the U.S. government representative placed the bid for Lockheed Martin's F-35 on behalf of Lockheed Martin under the U.S. foreign military sales program.

In March 2009, Boeing launched the F-15 Silent Eagle which has fifth generation technologies to reduce its radar cross-section, Flight International reported at the time.

The F-15 Silent Eagle uses a BAE Systems digital electronic warfare system that includes a digital radar warning receiver, digital jamming transmitter, integrated countermeasures dispenser and an interference cancellation system.

South Korea already operates more than 60 of the Eagle variant, the F15K Slam Eagle.

In February last year, DAPA awarded Boeing a five-year, performance-based logistics contract for the country's F-15K Slam Eagle aircraft.

Boeing provides the South Korean air force with supply chain forecasting, coordinated procurement of spare parts, contracting of suppliers and coordinates delivery of parts and services with local South Korean manufacturers.

Under the $300 million Slam Eagle contract, Boeing is working with Hyundai Glovis for logistics operations.

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