By Jun Ji-hye
South Korea and the United States have come into conflict over a demand made by Seoul that the latter provide compensation for a defective mid-range ship-to-air missile.
According to the Defense Acquisition Program Administration (DAPA) and the National Assembly’s Defense Committee, the Navy found a malfunction in a SM-2 missile while conducting the RIMPAC (Rim of the Pacific) exercise in July 2010, in Hawaii.
“The missile failed to shoot down a target,” said a DAPA official. “We understood that the failure was due to a flaw in the missile.”
The SM-2 missile is the Navy’s first anti-aircraft missile with a range of 148 kilometers. In May 2010, the Navy purchased Raytheon’s 84 SM-2s under the foreign military sales (FMS) format covered by guarantees from the U.S. government. Each missile costs $1.77 million.
Since then, the DAPA and the U.S. side have been negotiating over compensation, according to the arms procurement agency.
“Washington has refused to provide compensation, saying the contract stated there were no regulations regarding compensation for the failure of hitting the target,” he said. “But our position is that the U.S. should provide compensation because the defect occurred within a year after purchase, the period granting the U.S. side warranty responsibility for defects.”
The U.S. demanded that Seoul additionally pay about $540,000 per missile if it wants Washington to compensate for any misfires, said the official.
Some vernacular reports stated that the DAPA is reviewing a measure to suspend payment of the remaining $8 million of $157 million, the total cost of the contract.
He noted that the issue was one of the subjects during the talks of defense chiefs of the two countries in October in Washington.
The two sides will discuss the matter further during their meeting in March, he added.
“The DAPA will do its best to receive the compensation,” he said.
According to the agency, the Navy also found defects in two SM-2s out of four during the 2012 RIMPAC, but it was not able to ask the U.S. to compensate for these because the term of warranty liability had already expired.
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