[Asia Economy Yang Nak-gyu, Military Specialist Reporter] Defense company S&T Motive has protested that the Defense Acquisition Program Administration (DAPA) is shifting the responsibility for the failure of the K-11 combined rifle, which was flawed from the design stage, onto the weapon system development company.
On the 28th, S&T Motive stated, “The Supreme Court, which examined the responsibility for project delays, ruled that the fault lies with the flawed design, defense specifications, and DAPA’s failure to manage these properly,” and asserted, “As the system developer, S&T Motive only manufactured the weapon according to the design, so it bears no responsibility for the project delays.”
According to industry sources on the 28th, DAPA conveyed its position on the 25th that S&T Motive, which signed a contract with the Agency for Defense Development regarding the cancellation of the K-11 combined rifle contract, was found to have attributable fault.
In July of this year, DAPA notified S&T Motive, the mass production system contractor for the K-11, of the contract cancellation. In this process, DAPA demanded the return of advance and interim payments, claimed the performance bond due to contract breach, and requested the refund of payment for 914 delivered K-11 units, seeking approximately 160 billion KRW in damages from S&T Motive.
In response, S&T Motive rebutted based on the Board of Audit and Inspection’s audit report.
Last September, the Board of Audit and Inspection specifically pointed out the faults of DAPA and the Agency for Defense Development (ADD) regarding the K-11 research and development and project management in its audit report. Subsequently, in November last year, the Supreme Court ruled in favor of all companies involved in the lawsuit concerning payment for the K-11 production, stating, “The delay was due to correcting design defects that were not discovered during research and development, regardless of the companies’ fault, so imposing delay penalties is unjust.” The failure of the K-11 combined rifle was attributed to design flaws by ADD and defects in defense specifications, as well as DAPA’s inadequate project management.
S&T Motive emphasized, “Not only the Board of Audit and Inspection but also the Supreme Court comprehensively identified who was at fault and ultimately ruled that the responsibility lies 100% with the state,” adding, “It is inconsistent to claim that the companies’ fault was not identified during the lawsuit.”
S&T Motive also explained the reason for inevitably claiming 160 billion KRW in damages from EOSYSTEM, the supplier of the fire control device.
The K-11 combined rifle was a government-led project, with S&T Motive responsible for the rifle and EOSYSTEM responsible for the fire control device. After forcibly canceling the contract, DAPA demanded S&T Motive return the advance and interim payments, claimed the performance bond due to contract breach, and requested the refund of payment for 914 delivered K-11 units, holding S&T Motive responsible for all and seeking approximately 160 billion KRW in damages.
The total contract amount for the K-11 combined rifle project was about 69.5 billion KRW. Of this, S&T Motive (rifle) accounted for 28%, approximately 19.2 billion KRW, and EOSYSTEM (fire control device) accounted for 72%, approximately 50.3 billion KRW.
S&T Motive explained, “We are in a situation where we have no choice but to claim 160 billion KRW in damages from EOSYSTEM, the supplier of the fire control device.”
Furthermore, despite ongoing litigation, S&T Motive appealed that DAPA has not paid delivery fees, offsetting payments with items such as the K4 high-speed grenade machine gun and K5 pistol on September 4 and 24, putting the defense acquisition project at risk.
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