DAPA Chief: 'Legality Is the Most Important Criterion in KDDX Project Decision'

[Financial News] Yongcheol Lee, head of DAPA, stated that 'legality' was the most important criterion in the decision-making process for the KDDX project plan.
At a briefing at the Ministry of National Defense in Yongsan on the 24th, Lee emphasized that President Lee Jae-myung's remarks did not influence the decision regarding the KDDX project plan.
He continued, "DAPA prioritized legal procedures based on laws and principles throughout the entire project, and promoted this agenda under the basic policy of fair handling." He added, "It was made clear that the Defense Acquisition Program Promotion Committee is the main body for legal judgment and comparative evaluation regarding the project plan."
Lee explained, "The committee, composed of internal and external members in accordance with relevant regulations, held multiple thorough and in-depth discussions." He added, "Professional reviews and broad collection of opinions were conducted on key issues such as the legality of each project plan, risk factors in project execution, and the impact on the force integration schedule."
He also stressed that, prior to the decision, the committee members were provided with detailed explanations of the strengths and weaknesses, legal issues, and risk factors of each plan. "Based on these discussions, the 'designated competitive bidding' method was unanimously adopted," he explained.
Lee stated, "Going forward, we will further strengthen schedule and risk management throughout the project and do our utmost to ensure that the promised force integration timeline is met through close cooperation with relevant agencies."
He further explained, "All three options—private contract, designated competitive bidding, and joint design—were considered suitable and submitted as agenda items." He clarified, "Designated competitive bidding was chosen as a result of comparative evaluation, not because the other two options were deemed unsuitable."
He added, "The mutually beneficial proposal cannot be conclusively deemed collusion, and the Fair Trade Commission replied that, if certain conditions are met, it could be legally permissible." However, he acknowledged, "While collusion was not the most important reason, it did have some influence on the decision."
Earlier, on the 5th, President Lee Jae-myung remarked at a town hall meeting in Cheonan, South Chungcheong Province, "There are reports that a private contract is being awarded to a company previously punished for leaking military secrets. Please look into such matters carefully."
Regarding this, Lee responded, "The President's remarks were not instructions on how to make a decision, but rather a general statement that, despite various controversies, it would be better to discuss multiple options rather than only considering a private contract."
He emphasized, "There is no need to think that the President's remarks influenced this matter," adding, "At that time, various options were already being discussed within the subcommittee."
Lee reaffirmed DAPA's existing position that the decision on whether to apply a security point deduction to HD Hyundai Heavy Industries, which could significantly impact the competitive bidding, will be made during the proposal evaluation.
DAPA stated that its top priority is to ensure that the Navy's force integration schedule is not further delayed.
At the 172nd meeting of the Defense Acquisition Program Promotion Committee held on the 22nd, it was concluded that the contractor selection method for the Korean Next-Generation Destroyer (KDDX, Korea Destroyer Next Generation) would be designated competitive bidding.
DAPA announced that this decision was made unanimously at the committee meeting. As a result, the approximately 8 trillion won KDDX project, which had been delayed for over two years, is expected to see intensified competition between HD Hyundai Heavy Industries and Hanwha Ocean for detailed design and lead ship construction contracts.
DAPA aims to select a contractor and complete the contract by the end of 2026 at the latest, in order to minimize any gaps in the Navy's force integration.
DAPA plans to revise the basic plan for detailed design and lead ship construction and resubmit it to the committee. Once the committee's resolution is finalized, DAPA will issue a bid notice for detailed design and lead ship construction based on the request for proposals. Since the KDDX is a defense article, HD Hyundai Heavy Industries and Hanwha Ocean, as designated companies, will participate in the bidding. DAPA will evaluate each company's proposal and select the final contractor.
The KDDX project, with a total budget of approximately 7.0467 trillion won from 2020 to 2036, aims to integrate accumulated shipbuilding technology and domestically produce most of the onboard weapon systems, thereby reducing dependence on foreign suppliers and constructing the nation's first Korean-style Aegis destroyer.

wangjylee@fnnews.com Lee Jong-yoon Reporter