Thursday, July 25, 2013

F-35: South Korea reopens bidding for F-X project

In the news today:
South Korea said on Thursday it would hold a new round of bidding next month for its 8.3 trillion won ($7.43 billion) purchase of 60 next generation fighter jets, suspended after bids exceeded the budget.

The Defence Acquisition Program Administration (DAPA), the country's arms procurement agency, suspended the auction earlier this month after 55 rounds. None of the entries, Lockheed Martin Corp's F-35, Boeing Co's F-15 and EADS's Eurofighter Typhoon, submitted bids meeting the required price.
Recap: none of the three bids met the "required" or budget price.   So we're back to square one and you might think then that competitors that weren't among the final three might see this as a chance to get back into the bidding by lowering price.   

In fact, that's very unlikely.  The three finalists are the aircraft under serious consideration.  I'd suggest those that were dropped earlier were dropped for other reasons than price.  Lowering the price will likely not put them in the final three.
And, in fact, if you read on a little further into the article, you find that while price is important, South Korea may show a little flexibility with their budget:

"We have decided at the defence project committee meeting to resume bidding for the F-X project," DAPA spokesman Baek Youn-hyeong told a briefing.

 Baek hinted at the possibility of increasing the budget, but offered no further details.

"If there is no entry with price within the project budget after the resumption of bidding, we will pursue the project again through reviews or increase in overall budget," he said. 
So there you have it.  I still think the final decision will be for the F-35, and the hint of a possible expansion or increase in the budget tends to make that a credible guess.


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