By Kang Seung-woo
The new date for the “final” bidding in an 8.3 trillion won ($7.5 billion) fighter jet deal will be next week, the nation’s arms procurement agency said Monday.
Should there be no winner, the stalled program seeking 60 next-generation combat planes will be called off and adjustments made from scratch.
“The final round of bidding will be carried out from Aug. 13 to 16,” said an official at the Defense Acquisition Program Administration (DAPA). The bidding will be on hold for Liberation Day on Aug. 15, a national holiday.
“If no one satisfies the procurement price, DAPA will reconsider the project from the beginning,” the official said.
Three fighter jets _ Boeing’s F-15 Silent Eagle, Lockheed Martin’s F-35 Lightning II and the European Aeronautic Defense and Space Company (EADS)’s Eurofighter Tranche 3 Typhoon _ are in contention to become a replacement for the Air Force’s aging fleet of F-4s and F-5s.
Starting on June 18, DAPA held a total of 55 bidding sessions for three weeks, but all competitors failed to satisfy the budget requirements and as a result, DAPA temporarily suspended the project on July 5.
During the six-week hiatus, the agency has been mulling options to reach a deal including 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; but concerns that the change will delay the delivery timeline have forced DAPA to re-launch bidding.
It is, however, expecting to see a company who will bid within the budget.
“I think the competitors are aware that this is the last chance, and a re-examination of the project will change the business plan and delay the purchase of the jets,” the official said.
Despite this expectation, military analysts predict the bidding will fall through after failing to close the price gap.
“Although DAPA has decided to reopen a new round of bidding, it will proceed with the same conditions that resulted in the temporary halt. What other factor will push the cost down from the companies’ side?” said Lee Hee-woo, president of ILS Research Institute and a former Air Force general.
Critics also say that as DAPA already hinted at increasing the budget if it does not find a winner, no one will lower their bid to meet the current requirements.