Favorable prices and terms should take priority in South Korea’s defense acquisition deals, the head of the military equipment acquisition agency said Tuesday following the country’s surprise choice of Europe-based Airbus Defense and Space last week for its $1.3 billion project to supply aerial refueling tankers.
“Choosing arms systems that are cheap and in better terms is fundamental,” Minister Chang Myoung-jin of the Defense Acquisition Program Administration said in an interview with Yonhap News Agency. DAPA is the defense acquisition arm of the Ministry of National Defense.
Transferring more technologies to the buyer could also be a plus factor when South Korea selects a foreign supplier of military equipment, Chang also noted.
The clarification by the DAPA head signals a possible change in the way South Korea chooses a foreign contractor in their military projects to supply military aircraft and other munitions.
In a somewhat unexpected move last week, the defense project committee, for which Chang is the vice chairman, picked Airbus to supply four in-flight refueling tankers to the South Korean military for two years to 2019.
It was a surprise blow to U.S. rival Boeing, given that American defense manufacturers used to have the upper hand in similar military deals thanks mainly to better operational compatibility they can give to the South Korean military in alliance with the U.S.
“The refueling tanker decision was made strictly based on the rule of principles,” the DAPA chief said, referring to the three main official criteria of the choice: price, performance and operational compatibility.
Cheaper euro pushed down the price of the transaction with the European manufacturer while Airbus’ promise to transfer all the technology needed for depot maintenance of the aircraft increased the allure of the European jets, he noted.
The DAPA chief also added that South Korea needs to diversify the sources of its military procurement, although issues like diplomatic relations should also be considered.
Touching on the snowballing issue of military officials taking kickbacks in defense acquisition projects, Chang vowed to push for a new regulation to root out such irregularities.
Under the new system, all the locally-operating dealers of foreign weapons and military equipment should be required to register with the DAPA and take an oath of no corruption, he said.
“The DAPA is reviewing ways to annul the dealers’ license if they commit corruption …. as well as ways to punish foreign firms who transacted with the dealers,” Chang said.
The pledge came as the military came under fire for a number of high-profile corruption cases involving procurement projects.
Two former Navy chiefs of staff have been arrested on charges of influence peddling and corruption in the Navy’s procurement projects. (Yonhap)
