Uncertainty Remains Over KDDX Project Approach Decision This Week [Yang Nakgyu's Defence Club]

Subcommittee Meeting Scheduled, But No Agenda Notification
Civilian Members Raise Concerns Over Possible Illegality of Direct Contract

The decision on the business method for the Korean-style next-generation destroyer (KDDX) project remains shrouded in uncertainty. On the 27th, the Defense Acquisition Program Administration (hereinafter referred to as DAPA) was scheduled to discuss the project method at the Defense Acquisition Planning and Management Subcommittee (hereinafter referred to as the Subcommittee), but the agenda has not even been notified to the subcommittee members.

On the 25th, a government official stated, "The Subcommittee was held on the 17th to promote the detailed design and initial ship construction project for KDDX, but no conclusion was reached regarding the agenda items, such as the direct contract with HD Hyundai Heavy Industries or cooperation plans with Hanwha Ocean," adding, "As of today, there has been no notification of the agenda for the 27th, so the discussion itself may not take place."

The reason for the failure to make a decision on KDDX at the Subcommittee on the 17th is reportedly because DAPA failed to persuade six civilian members. In the Subcommittee, when an agenda is proposed, it is divided into report items and deliberation items. Report items are, as the name suggests, reported by DAPA and pass if there are no significant objections. Deliberation items are decided upon after discussion by the civilian members. At that time, DAPA adopted the agenda as a report item regarding whether to proceed with a direct contract or a competitive contract.

A Subcommittee official said, "DAPA reported the project promotion plan for KDDX as a basic plan for detailed design and lead ship construction," adding, "It was incomprehensible that they wanted to conclude important core issues with just a report and proceed with a direct contract."

Hanwha Ocean and HD Hyundai Heavy Industries have been engaged in a tense battle over securing the KDDX contract. Typically, the company that performs the basic design of defense materials (HD Hyundai Heavy Industries) secures the detailed design through a direct contract, but Hanwha Ocean, which conducted the conceptual design, proposed a competitive bidding and entered the project. The Ministry of Trade, Industry and Energy also designated Hanwha Ocean and HD Hyundai Heavy Industries last month as defense companies equipped with production capabilities for KDDX.

Civilian members of the Subcommittee reportedly emphasized that there is no reason to proceed with a direct contract. First, since the National Contract Act supersedes the Defense Acquisition Act, a direct contract could be illegal once multiple companies are designated. In particular, there were concerns about whether it is possible to enter into a direct contract with HD Hyundai Heavy Industries, which received a 1.8-point security deduction in national project bidding due to a guilty verdict on charges of military secret theft and dissemination by its employees.

Some Subcommittee members reportedly argued that although the Navy emphasizes the power gap caused by delays in the KDDX project, the basic design undertaken by HD Hyundai Heavy Industries reflects the 2016 operational capability (ROC) presented by the military, and thus the design should be redone. KDDX is scheduled to be delivered to the Navy only by 2031, and it is said that the future maritime operational environment was not reflected from the design stage.

KDDX requires technologies such as antenna integration within the ship, unmanned combat system integration, and multiple diverse console integration for a manned-unmanned combined combat system. However, the basic design of KDDX does not include the installation of such equipment. Meanwhile, overseas, manned-unmanned combined combat systems are being pursued. The United Kingdom is conducting pilot operations of a manned-unmanned combined combat system on the aircraft carrier Queen Elizabeth. T?rkiye, a military power in the Mediterranean and Middle East regions, is constructing a new aircraft carrier modeled after the Spanish Navy’s Juan Carlos I, known as a "mini aircraft carrier," planning to deploy about 50 various manned and unmanned carrier-based aircraft. It has also been pointed out that the crew size, about 150, is larger than that of ships of the same class.

Professor Choi Bong-wan of the Department of Industrial and Management Engineering at Hannam University emphasized, "The basic design of KDDX focuses on localization such as combat systems and integrated masts, so reflecting the manned-unmanned combined combat system required by the Navy is essential to improve operational performance."