British defense firm BAE Systems Incorporated has been selected as the prime integrator to provide critical upgrades for South Korea’s KF-16 fighter jets. The multi-year contract is valued at an estimated $1.1 billion based on a bid submitted to South Korea’s Defense Acquisition and Procurement Agency (DAPA) by BAE’s United States’ branch office in December. The contract will be processed through the US government’s Foreign Military Sales (FMS) program.
DAPA’s approach to contracting for the KF-16 upgrades is unorthodox. Prime integration bids were submitted to DAPA in December and now, with a bidder finally selected, DAPA will submit a formal Letter of Request (LoR) to the United States to request the US government negotiate a contract with BAE through the FMS program.
In this way, DAPA expects to lock-in performance and service guarantees while keeping contract costs to an absolute minimum. A formal LoR will be delivered to the United States in August and DAPA anticipates finalizing the contract later this year.
The director of BAE’s South Korean office, Joe McCabe, said that the most attractive feature of BAE’s bid was flexibility in the transfer of technology. (End of abstract, if you are a premium subscriber, please continue to full article)