New Defense Acquisition Program Administration Chief: "Follow-up Measures Depending on HD Hyundai Heavy Industries Results"

Bid Participation Restriction Agenda on the 27th "According to Procedure"
"Sponsorship Decision for September Defense Exhibition to Be Made Soon"

Seok Jong-geon, the newly appointed Administrator of the Defense Acquisition Program Administration (DAPA), said regarding the bid participation restriction on HD Hyundai Heavy Industries, "I believe a reasonable review result will be derived in accordance with laws and procedures."

[Image source=Yonhap News]

Seok, who took office on the 19th, said during a visit to the Ministry of National Defense press room on the 22nd, "Once the result is out, we will handle the follow-up measures well."

Previously, employees of HD Hyundai Heavy Industries were found guilty last November for secretly acquiring military secrets related to the Korean next-generation destroyer project and sharing them through the company's internal network, violating the Military Secrets Protection Act. HD Hyundai Heavy Industries has already received security penalty points during DAPA bidding due to a military secret leak incident, and if it receives a bid participation restriction sanction this time, it will be unable to participate in naval ship projects for a certain period.

In particular, the company’s participation in the Korean next-generation destroyer (KDDX) construction project, for which it has already secured the basic design contract, may become difficult. The KDDX project involves investing 7.8 trillion KRW to build six 6,000-ton Korean next-generation destroyers (domestically produced Aegis ships) by 2030. If HD Hyundai Heavy Industries cannot participate in this project, it would be a significant blow. Therefore, industry attention is focused on whether the DAPA Contract Review Committee will impose bid participation restrictions on HD Hyundai Heavy Industries, the largest shipbuilding company in Korea.

Seok also stated, "We are reviewing internally," and said he would decide soon which of the two divided ground weapon defense exhibitions, KADEX or DX KOREA, to sponsor.

The domestic ground weapon exhibition has been held under the name DX KOREA since 2014, hosted by the Army Association, a reserve organization of the Army, in even years, and organized by the private exhibition company IDK, with five events held until 2022.

However, this year, the Army Association and IDK split, and on September 25, KADEX hosted by the Army Association and DX KOREA led by IDK will be held on the same day. KADEX will be held at the Gyeryongdae runway, and DX KOREA at KINTEX in Ilsan. Since defense companies have not decided which ground weapon exhibition to participate in, attention is focused on which event DAPA, the regulatory authority for the defense industry, will sponsor.

The sponsorship decision by DAPA, responsible for fostering the defense industry and promoting defense exports, could influence the choices of defense companies. Additionally, DAPA-affiliated institutions such as the Agency for Defense Development (ADD) and the Defense Technology Quality Institute are likely to participate in the exhibition sponsored by DAPA.

Seok said, "I will make a decision after receiving more detailed reports and discussions."

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