Defense Acquisition Program Administration Protects Even When Military Secrets Are Violated [Yang Nakgyu's Defence Club]

The Defense Acquisition Program Administration (DAPA) is being criticized for forcibly involving defense companies that have violated the Military Secrets Protection Act (Military Secrets Act) in projects. There are concerns that certain companies are being favored by changing the project methods and creating new internal regulations.

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According to an internal DAPA document obtained by this outlet titled "Korean Next-Generation Destroyer (hereafter KDDX) Project Promotion Plan (photo)," it states that "Since the opening of DAPA, all 18 ship research and development projects have been conducted through sole-source contracts, with the basic design company carrying out detailed design and lead ship construction." It further notes, "The related regulations stipulate that, barring special reasons, this practice should continue." This is interpreted to mean that HD Hyundai Heavy Industries, which won the basic design contract for KDDX, will also be awarded sole-source contracts for the follow-up projects (detailed design and lead ship construction). On the contrary, when controversy arose over the sole-source contract with HD Hyundai Heavy Industries on the 2nd, DAPA sent a text message to defense reporters stating that "the project promotion plan has not been finalized."

Employees of HD Hyundai Heavy Industries were caught smuggling out about ten military secrets from the Navy Headquarters. At that time, the Republic of Korea Counterintelligence Command uncovered the breach. However, just before the KDDX basic design bidding, DAPA suddenly revised the "Weapon System Proposal Evaluation Guidelines," indicating that even if the Counterintelligence Command reports a security breach, no security penalty points will be applied.

Industry insiders question the reason for pushing a sole-source contract with HD Hyundai Heavy Industries. DAPA believes that neither the CEO nor executives of HD Hyundai Heavy Industries are implicated in the Military Secrets Act violations and thus allowed their participation. In response, Hanwha Ocean filed a police complaint alleging executive involvement during the illegal acts committed by HD Hyundai Heavy Industries employees. The police are expected to release investigation results within this month. Although DAPA could decide on the contract method after the police investigation, it plans to expedite the project by holding the project subcommittee within this month. Notably, if the higher-level National Contract Act were applied, competitive bidding would be possible. However, DAPA insists on sole-source contracts citing its own regulations.

Contrary to sole-source contracts, DAPA also brought in defense companies that violated the Military Secrets Act by insisting on competitive bidding. This concerns the Type 1 submachine gun project for special operations. In June 2020, Dasan Gikong was selected as the preferred negotiation partner for the project. However, less than a month later, the Counterintelligence Command raided Dasan Gikong on suspicion of leaking military secrets related to firearm development. The leak was confirmed. A former executive of Dasan Gikong was found to have passed military secrets such as ROC related to machine guns and sniper rifles handled or decided at the Joint Chiefs of Staff between 2015 and 2020 to Dasan Gikong in exchange for money. Those involved were convicted, and the project was halted in June 2021.

Initially, DAPA accelerated the project, citing the urgent need to replace the 40-year-old K-1A submachine guns used by military special forces. However, the project was not resumed after the suspension. DAPA plans to restart it in the second half of this year. This has led to criticism that the delay was to allow Dasan Gikong, which leaked military secrets, to participate again. Due to violations of the Military Secrets Act, Dasan Gikong was sanctioned as a debarred company, prohibiting participation in project bids for 12 months. If the project resumes in the second half of this year, Dasan Gikong will be able to participate again.

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