Arms agency countersues US, UK firms

By Jun Ji-hye

The Korean arms procurement agency has filed a counter suit against U.S. defense contractor Raytheon and the U.K.’s BAE Systems demanding payment of $60 million for their failure to implement a KF-16 upgrade deal.

The Defense Acquisition Program Administration (DAPA) said Wednesday that the lawsuit was filed with Seoul Central District Court last month to ask BAE pay $43.25 million and Raytheon $17.99 million.

“We took action in accordance with the contract, which stipulates that if the companies do not implement plans as agreed, then DAPA takes a legal action,” said an official on the condition of anonymity.

The action came after BAE filed a lawsuit in a U.S. court in November last year to block DAPA’s demand that the London-headquartered company cover the costs from a canceled contract for KF-16 upgrades.

The company at the time claimed that it does not owe any money in connection with the upgrade program because it was unable to force the U.S. government to withdraw its proposed price increase.

At the center of contention is a $1.6 billion deal BAE signed two years ago to upgrade the ROK Air Force’s 134 KF-16s. Under the deal, BAE was supposed to upgrade the avionics system, communications display and cockpit interface, while Raytheon was to provide active electronically scanned array radar for the fleet.

At the time, the U.S. government agreed to provide a foreign military sale (FMS) guarantee.

However, the project was canceled after DAPA was asked to pay an additional $70 million to the U.S. government and BAE.

BAE claimed that the demand for the price increase was unilaterally decided by the U.S. government, so it did not bear any responsibility.

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