Korea says no to US Global Hawk FMS offer, will switch to open bidding

This news is just in. The DAPA announced that they were going to switch to an open-bid contest instead of taking up the US DoD’s Global Hawk Block 30 FMS offer due to cost concerns. Will update when the English version of this news becomes available. The candidates are NG Global Hawk, Boeing Phantom Eye, and AeroEnvironment’s Global Observer.

http://english.chosun.com/site/data/html_dir/2012/12/26/2012122600938.html

U.S. Drones Too Expensive for Korea

Seoul is about to enter talks with Washington to buy coveted U.S.-made high-altitude surveillance drones, the so-called Global Hawks. Korea has been trying to buy them since 2005 but the U.S. Congress blocked their sale abroad.

On Monday, the U.S. Defense Department notified Congress of its plan to sell four Global Hawks to Korea, but the price is more than twice what Korea is willing to pay.

Korea is the first country in the Asia-Pacific region to get the nod from the Pentagon. Australia and Japan have also expressed an interest, but no decision has made yet.

The U.S. Defense Security Cooperation Agency is asking W1.3 trillion (US$1=W1,074) for the deal, which includes four RQ-4 Block 30 Global Hawks, parts, training and logistical support, but Korea’s Defense Acquisition Program Administration has earmarked a mere W480 billion.

In 2009, Washington quoted Seoul W486.2 billion, last year W942.2 billion, and in October this year W800 billion. The U.S. says the sudden surge in price covers increased remodeling costs for sale to Korea, performance and technology improvement, and additional development costs.

But Korea remains optimistic. “In many cases, the price the U.S. DSCA notifies Congress of is the uppermost limit, far higher than the offer price,” a DAPA official said Tuesday. “But if the U.S. proposes a much higher price than our budget in negotiations early next year, we may not be able to buy the Global Hawks.