Defense Companies Supplying TICN Facing Crisis

[Asia Economy Yang Nak-gyu, Military Specialist Reporter] The Defense Acquisition Program Administration (DAPA) is facing various controversies as it plans to change the delivery method of partner companies participating in the Tactical Information Communication Network (TICN). Changing the parts procurement method could delay the deployment schedule immediately, and concerns about the financial difficulties of partner companies that have made significant investments in this field have also emerged as an issue.

According to the defense industry on the 5th, TICN is a project to replace analog military communication with a digital communication network. With a budget exceeding 5 trillion won, it is considered a mammoth-scale project within the military. Dozens of defense companies participate in this project, broadly categorized into ‘system integrators’ and ‘partner companies.’ The system integrators are large corporations such as Hanwha Systems, Hunid Technologies, and LIG Nex1, while the partner companies supply core components like generators, HVAC units, and shelters to them.

Until now, system integrators have directly selected partner companies, but DAPA plans to change this method to a ‘government procurement’ system. They intend to re-select partner companies through a competitive bidding process announced publicly. If this happens, system integrators may face changes in partner companies, requiring them to remake prototypes and conduct performance tests again. These procedures alone could take about a year, raising concerns that the military’s deployment schedule may be delayed accordingly.

Companies uncertain about being re-selected as partner companies may fall into financial difficulties. Partner companies have been supplying TICN parts up to the third phase since 2016 and are currently approaching the fourth phase, which has the largest volume. For example, among the 46 companies supplying the core component shelters, about 600 personnel were hired and approximately 77 billion won was invested in preparation for delivery. These companies are appealing that bankruptcy would be inevitable if the fourth phase supply is not guaranteed.