South Korea Cap On FX Program Now At $7 Billion

South Korea’s Defense Acquisition Program Administration (DAPA) has informed the three contenders (Boeing, Lockheed Martin and EADS) vying for the F-X contract that they are to meet the required price of $7.45 billion or bow out.

With the bidding scheduled to resume on Aug. 12 through 16, Lockheed Martin’s F-35 faces the distinct possibility of being the first to be eliminated in the ongoing bidding for Korea’s next generation fighter program.

“When any of three bidders meets the procurement price, DAPA will evaluate all three fighter jets,” DAPA Spokesman Baek Youn-hyeong said at a briefing. 

“But despite finishing first in the evaluation, a firm whose bid exceeds the budget will not be signed for the F-X contract.” 

He added that a runner-up or a third place has a chance to secure a deal if either of comes to within the given budget. 

The U.S. government is unable to guarantee a fixed price because the stealth jet is being tested, so there is speculation that the Lockheed side might sharply push its cost down in the new round of the bidding to win the deal, according to Korea Times.  

The DAPA announcement is likely to be a major blow to the F-35, which has basked in spotlight as a shoo-in in the competition on the back of its low-observable technology, or a stealth capability, despite its highly-projected price tag, the report added.  

The U.S. Defense Security Cooperation Agency said in April that a potential foreign military sale (FMS) of 60 F-35 stealth jets and associated equipment, parts, training and logistical support, would cost an estimated 12.4 trillion won.