* Tender process to be restarted, could take one year
* Lockheed's F-35A back in contention thanks to stealth
* Eurofighter says will bid again
By Joyce Lee and Ju-min Park
SEOUL, Sept 24 South Korea's government bowed to
public pressure on Tuesday and voted down a bid by Boeing
to supply 60 warplanes, saying it would restart the
multi-billion tender process to get a more advanced,
Lockheed Martin's F-35A, previously considered too
expensive, has shot to the front of the line in the race for the
contract after the defence ministry singled out a
fifth-generation fighter as the preferred option.
The fifth generation F-35A, complete with its hi-tech
stealth capability, has already been ordered by the United
States and seven other countries, including Japan and Israel.
Boeing's F-15 Silent Eagle, the only bid within budget, had
been poised to win the 8.3 trillion won ($7.7 billion) tender.
But former military top brass and ruling party lawmakers had
criticised the plane for lacking stealth capabilities.
"Our air force thinks that we need combat capabilities in
response to the latest trend of aerospace technology development
centered around the fifth generation fighter jets and to
provocations from North Korea," defence ministry spokesman Kim
Min-seok told reporters.
Experts said the phrasing of that statement meant Boeing had
a slim chance in the next round. While the F-15 Silent Eagle
offered passive stealth, its electronic warfare equipment left
it visible to adversaries.
A third bid by the Eurofighter consortium's Typhoon was also
ruled out for going over the finance ministry's budget. Under
South Korean law, only bids under budget are eligible to win
Experts said a deal with Boeing or Lockheed Martin was most
likely because of South Korea's close military alliance with the
United States against the belligerent North.
The South Korean government and air force will map out a
fresh tender process and consider a new budget, possibly
reducing the number of planes sought to 40 or 50.
The defence ministry said it could take around one year to
complete the new tender round.
"DAPA...will swiftly pursue the programme again in order to
minimise the vacuum in combat capabilities," South Korea's
Defense Acquistion Program Administration (DAPA), which led the
assessment of the fighters, said in a statement.
FRESH START FOR LOCKHEED
The collapse of the deal means a fresh start to Lockheed
Martin, which has recently taken a new order from the
Netherlands for the F-35. Britain, Australia, Italy, Norway,
Israel and Japan have also placed orders.
Lockheed has set its sights on additional orders from
Norway, Britain and Turkey before year's end.
Increased production of the F-35 aircraft could allow the
U.S. government and Lockheed to lower the tender bid. A U.S. Air
Force general vowed this month to keep lowering the cost to
build and operate the F-35.
"We will continue to support the U.S. government in its
offer of the F-35A to Korea," Lockheed Martin's South Korean
representative said after the decision.
In Washington, the Pentagon's F-35 program office said it
had not been officially notified of South Korea's decision, but
was ready to support Seoul's efforts to buy a fighter jet.
U.S. military officials say the biggest strength of the
F-35, in addition to radar-evading coatings and configuration,
is its ability to fuse data from other aircraft and sensors.
This allows it to help identify targets for other fighters, and
essentially command the battlefield.
Richard Aboulafia with the Virginia-based Teal Group said
the decision was bad news for Boeing, which is bracing for
slowing production of other aircraft, including its C-17
transport plane and F/A-18 Super Hornet fighter.
He said there was still a small chance that South Korea
could decide to buy an additional squadron of F-15K fighters.
Boeing said in a statement it was deeply disappointed by the
decision. The company has spent significant sums to develop the
Silent Eagle variant of the F-15 and has cultivated strong ties
to South Korean industry.
"We await details from DAPA on its basis for the delay while
evaluating our next options," Boeing said.
A DAPA official said South Korea had followed the rules in
the bidding process, but declined to comment on possible legal
action by Boeing.
A local representative of the Eurofighter consortium said it
would participate when the project restarted.
The DAPA had estimated that any delay in the tender process
could leave the South Korean air force 100 fighters short of the
430 jets deemed necessary by 2019.
Last month, 15 South Korean former air force chiefs signed a
petition opposing selection of the F-15, saying it lacked
stealth capabilities of more modern aircraft.