'Mini Aegis Ship' Bid Rigging... Defense Acquisition Program Administration Denies Favoritism (Comprehensive)

Police Launch Investigation into 'Bid Rigging' Allegations
Favoritism Suspected During 'KDDX Contractor Selection'

The Defense Acquisition Program Administration (DAPA) stated that it has "never changed regulations to give preferential treatment to a specific company" in response to the police investigation into the selection process of the Korean next-generation destroyer (KDDX) project, which is colloquially called the 'mini Aegis ship.'

Choi Kyung-ho, a spokesperson for DAPA, made this remark during a regular briefing held on the 3rd at the Ministry of National Defense building in Yongsan-gu, Seoul. This was in response to allegations that, prior to the basic design bidding for the Korean next-generation destroyer project in May 2020, regulations related to 'security penalty points' were removed to favor a particular company. The KDDX project is valued at 7.8 trillion won and aims to deploy six 6,000-ton mini Aegis ships by 2030.

At the '2023 Busan International Shipbuilding & Marine Equipment Exhibition,' attendees are observing the next-generation Korean Destroyer (KDDX), Korean aircraft carrier, and weapon systems being developed by HD Hyundai Heavy Industries. [Image source=Yonhap News]

The company accused of receiving preferential treatment from DAPA in this project is 'HD Hyundai Heavy Industries.' At the time of the project selection, HD Hyundai Heavy Industries was chosen over its competitor, Daewoo Shipbuilding & Marine Engineering, by a margin of 0.056 points. The police recently launched an investigation after confirming circumstances where Mr. A, a former senior official at DAPA, allegedly altered bidding regulations to favor HD Hyundai Heavy Industries. Mr. A is currently known to be retired.

The background of the allegation that preferential treatment was given to HD Hyundai Heavy Industries by removing the regulation that penalized companies responsible for security incidents is as follows. In 2014, a retired naval officer was sentenced to prison for leaking the KDDX conceptual design documents prepared by Daewoo Shipbuilding & Marine Engineering to HD Hyundai Heavy Industries. However, as the regulation stating 'companies responsible for security incidents receive penalty points' was relaxed, the penalty range for HD Hyundai Heavy Industries involved in this case was reduced.

DAPA stated that it referred to the National Rights Commission's decisions on system improvements. Regarding the criticism that the security penalty regulations have been changed multiple times, spokesperson Choi explained, "On one hand, there is a perspective that the punishment is too harsh and should be eased, while on the other hand, there is a view that strict punishment is necessary when security incidents occur." He added, "We have changed the regulations according to requests from the National Assembly and recommendations from institutions."

This content was produced with the assistance of AI translation services.