DAPA Holds Disciplinary Action Against HD Hyundai Heavy Industries for 'Confidential Leak'... Why?

Reexamination of the Following Review Document... Allegations of Content Moderation Manipulation Raised

The Defense Acquisition Program Administration (DAPA) has postponed the disciplinary action against HD Hyundai Heavy Industries. As the decision was delayed, suspicions have arisen that this may be a step to reduce the severity of the punishment. DAPA had decided to impose sanctions on the company after nine HD Hyundai Heavy Industries employees were found guilty of stealing military secrets and sharing them on the company's internal network.

[Image source=Yonhap News]

On the 22nd, a government official said, "DAPA held a contract review committee meeting on the 20th to decide on sanctions against HD Hyundai Heavy Industries. However, the decision was postponed to further investigate whether the employees stole military secrets under company orders."

Since November last year, when an HD Hyundai Heavy Industries employee was found guilty in the first trial for leaking the concept design of the next-generation Korean Destroyer (KDDX), DAPA has been considering sanctions. However, HD Hyundai Heavy Industries filed a request to prohibit access to the verdict, preventing DAPA from obtaining grounds to review the sanctions. DAPA Administrator Eom Dong-hwan also acknowledged at this year's National Assembly audit, "It is difficult to conduct a detailed review without securing the verdict."

DAPA recently obtained the verdict. Following this, they began the sanction process through contract review. After the final ruling on the 30th of last month confirmed the guilt of the HD Hyundai Heavy Industries employees, it seemed that the process would accelerate. However, with DAPA postponing the disciplinary decision during the review, HD Hyundai Heavy Industries has been able to avoid sanctions such as bidding restrictions and fines for the time being. Meanwhile, they have gained time to participate in bids. Administrator Eom stated at the National Assembly audit, "Even if a company has a technological advantage, if it violates the Military Secrets Protection Act, it should be excluded from selection."

Since November last year, when the employees received the guilty verdict, HD Hyundai Heavy Industries has been penalized with a 1.8-point deduction in proposal evaluations for three years. They also lost out as the preferred negotiation candidate for the Navy’s Ulsan-class Batch-3 project’s 5th and 6th frigates. In response, HD Hyundai Heavy Industries filed an objection in August, which DAPA ultimately rejected. Given this situation, HD Hyundai Heavy Industries argued that although their technology is superior, they were not selected as the preferred negotiation candidate due to security scores, challenging DAPA’s evaluation criteria. They also filed a provisional injunction to confirm their status as the preferred negotiation candidate, but it was dismissed by the court.

A government official said, "It seems that due to insufficient time and procedures to make a judgment in this review, sanctions were not decided. We plan to reconsider it at the next review."

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