By Kang Seung-woo
The national procurement agency is likely to halt bidding on the prolonged F-X III fighter program, officials said Thursday.
The move comes after all three competitors failed to satisfy the government’s budget requirements despite 55 sessions over three weeks, forcing the Defense Acquisition Program Administration (DAPA) to temporarily suspend the procedure last Friday.
Lockheed Martin, with its F-35 Lightning II; Boeing with its F-15 Silent Eagle; and the European Aeronautic Defense and Space Company (EADS) with its Eurofighter Tranche 3 Typhoon are each hoping to secure the sale of 60 aircraft to Korea, which has budgeted 8.3 trillion won ($7.3 billion) for the project.
“Whether to declare the bidding a failure and restart the procurement plan from scratch or tweak the requirement program will be discussed at a DAPA committee meeting next Wednesday,” DAPA spokesman Baek Yoon-hyeong said.
He said that lowering the number of planes to be bought; purchasing the planes over a longer period of time to reduce the financial burden; or increasing the procurement price are DAPA’s best moves.
Given that the F-X program, initially aimed at introducing 120 high-end warplanes by 2020, has been divided into three phases due to budget constraints, the agency stressed purchasing the high-end aircraft within its budget constraints ― despite a slim chance of pushing the costs down.
The cost of 60 F-35 stealth jets was projected to hit the 10 trillion won mark, while those of the F-15s and Eurofighters were estimated at around 9 trillion won, well beyond DAPA’s budget.
The F-35 will be sold through the foreign military sales (FMS) program in which Washington would broker a contract between Seoul and Lockheed Martin, which did not specify a fixed price unlike Boeing and EADS, both of which offered a fixed figure.
The government-to-government FMS requires a foreign government to pay the amount specified by the U.S. government for F-35s at the time of payment, which experts cite as one of the factors that affected the bidders’ approach.
The military allegedly wants the purchase to be divided up rather than buying fewer aircraft than originally planned, given that a set number of fighters are required to replace the Air Force’s aging fleet of F-4s and F-5s. But the extended purchase will cost Korea more money.
DAPA initially intended to bring in the new aircraft from August 2017 after coming up with a final bidder by the end of June, but the delayed timeline is expected to create a void in the Air Force’s strength.
“This, to an extent, is inevitable,” Baek said.