All 3 bidders fail to meet budget
Second bidding starts Tuesday
By Kang Seung-woo
All three companies vying for the supply of F-X III fighters to Korea have reportedly placed bids that exceed Korea’s procurement price.
Lockheed Martin with its F-35 Lightning II, Boeing with the under-development F-15 Silent Eagle and the European Aeronautic Defense and Space Company (EADS) with its Eurofighter Tranche 3 Typhoon are in the competition.
The budget for 60 aircraft is 8.3 trillion won, but according to Yonhap News an official involved in the final bid stage said all three have quoted prices beyond Defense Acquisition Program Administration (DAPA)’s budget.
DAPA declined to confirm the report.
The delayed bidding for the fighter replacement program started Tuesday. DAPA is scheduled choose a winner at the end of June should it receive an affordable offer.
DAPA is standing firm on its available budget.
The Typhoo and the Silent Eagle will be purchased through direct commercial sale (DCS), while the F-35 will be sold on the foreign military sale (FMS) program, in which Washington would broker a contract between Seoul and Lockheed Martin. Currently, the U.S. Air Department is participating in the bidding instead of Lockheed Martin.
As the F-35 is being manufactured and simultaneously tested, the U.S. government has turned down DAPA’s calls to offer a fixed price and if the F-35 is selected to replace the aging fleet of F-4s and F-5s, its price will be decided each year according to the supply price to the U.S. Air Force.
Meanwhile, the Naeil Shinmun, a local evening daily, said the Finance Ministry rejected a request for more money to finance the project.
If the contract exceeds the entire program budget, DAPA can ask the ministry to increase the budget up to 20 percent.
The F-35 stealth jet is seen as the front-runner in the three-way race, but the Defense Security Cooperation Agency expected in April that a potential FMS of 60 F-35s would cost an estimated $10.8 billion, although Lockheed Martin said the final cost of an F-35 program for Korea will go down.
Korea plans to start bringing in the new fighter jets from August 2017.
Source