South Korea’s arms procurement agency on Monday decided to choose the lead ship contractor for its next-generation destroyer project through competitive bidding, reversing its earlier preference for a sole-source contract after years of delays.
The Defense Acquisition Program Administration said the decision was made at a meeting of the defense acquisition program promotion committee, chaired by Defense Minister Ahn Gyu-back, and will apply to the detailed design and construction of the lead ship.
The shift marks a departure from DAPA’s previous push for a sole-source contract — or a joint-development arrangement — for the 7.8 trillion won ($5.3 billion) Korean Destroyer Next Generation (KDDX) project. The KDDX program is South Korea’s first domestically developed destroyer project in which both the hull and the Aegis combat system are built using local technology.
However, the project has been stalled by a dispute between Hanwha Ocean and HD Hyundai Heavy Industries.
During an afternoon closed-door briefing, a DAPA official who requested anonymity said, “There have been growing views that ensuring fairness through competition would be more effective, which is why the decision was ultimately made to adopt competitive bidding.”
“Competitive bidding also offers greater potential for cost savings than a sole-source contract.”
With regard to the next steps, the official said DAPA will seek to finalize the contract by the end of next year in an effort to minimize delays in naval force modernization.
Still, restarting the contractor selection process is expected to require additional time, likely pushing back the Navy’s force deployment schedule.
Under the original schedule, detailed design and construction of the lead ship were to begin last year after the basic design was completed in December 2023. However, legal disputes and intense rivalry between Hanwha Ocean and HD Hyundai Heavy Industries prevented a decision, leaving the project stalled for more than two years.
DAPA had initially sought to proceed with a sole-source contract with HD Hyundai Heavy Industries, citing industry practice and delivery timelines. Hanwha Ocean objected, arguing that its rival’s involvement in a past military technology leak warranted either competitive bidding or joint development, complicating efforts to finalize the procurement method.
The shift also followed President Lee Jae Myung’s recent remarks questioning a sole-source award to a firm penalized for leaking military secrets.
At a town hall meeting in Cheonan, South Chungcheong Province, on Dec. 5, Lee questioned whether it was appropriate to award a sole-source contract to a company penalized for leaking military secrets, instructing new DAPA Minister Lee Yong-cheol to “check such matters carefully.” While he did not name a specific firm or project, the comments were widely interpreted as opposing a sole-source deal with HD Hyundai Heavy Industries.
The KDDX project aims to deploy six 6,000-ton “mini-Aegis” destroyers by 2030 and is considered a cornerstone of South Korea’s future naval force structure. The contractor responsible for the lead ship is widely seen as gaining a strategic advantage in follow-on production and potential export opportunities.
- Korea cuts E-9 visa quota to 80,000 for 2026
- ARKO Selection begins 18th year, continues its role as platform for new works
- Jennie unveils hangul veil at MMA 2025, spotlighting Korean aesthetics through Le Je
- Closing out K-pop 2025: Stray Kids dominate, girl groups soar
- Seoul shares soar over 2% on eased AI valuation woes
Most Commented