Change of plans: Seoul decides to start from scratch with helo competition

By: Jeff Jeong

SEOUL — It looked like Italy's aerospace group Leonardo was going to be an easy winner for South Korea's second batch of anti-submarine helicopters. The procurement program would seek 12 more AW-159 “Wildcat” helicopters, with no other competitors for the $840 million program.

But the Defense Acquisition Program Administration, or DAPA, threw a curveball, deciding to accept a U.S. proposal for alternate option and to begin the competitive bidding process from the scratch.

The plan for the maritime operational helicopter, or MOH, was originally to sign a direct commercial deal with a foreign helicopter maker, with three bidders — Leonardo, Lockheed Martin and NH Industries — showing interest.

The two latter contenders failed to submit their proposals by the Oct. 31 deadline, leaving Leonardo seemingly as the only remaining bidder.

According to sources from DAPA, however, the U.S. government in November sent a letter of price and availability of Lockheed Martin's MH-60R Seahawk, causing South Korea's arms procurement officials o rethink the acquisition approach.

“We've decided to consider the U.S. FMS option,” DAPA spokesman Park Jung-eun told Defense News. “We're going to weigh in on both options of commercial and FMS contracts.”

As dictated by acquisition regulation, two successive failed biddings mean that the agency can make a private contract with a sole bidder, but that's not mandatory.

The agency is expected to issue a renewed request for proposals as early as March, according to DAPA officials. Leonardo would be a direct buy, while the Sikorsky bid would be a foreign military sale.

Leonardo said in a statement that it would still pursue the South Korean naval helicopter program “in a fair and transparent manner.”

A Leonardo spokesman said the AW-159 is optimized for the Korean theater of operations, pointing to an active electronically scanned array (AESA) radar for detecting North Korea's coastal weapon system and a missile firing range that is more than three times longer than Seahawk.

“We do not really know about the details of the U.S. Navy's latest proposal,” a Lockheed Martin communications official said, declining to elaborate. “After an RFP is issued, we could be able to discuss with the service.”

Pundits here expressed different reactions to the renewed MOH bidding process.

Shin In-kyun, head of Korea Defense Network, a Seoul-based private defense think tank, said it's a better opportunity to acquire state-of-the-art naval helicopters with better performances.

“The Seahawk is estimated to be more expensive by 20 to 30 percent than the Wildcat, but the former has performances about two times better than the latter,” said Shin. “The unit price of the MH-60R could be lowered through the FMS, as the U.S. and Indian Navies are also said to be procuring more than 40 MH-60Rs.”

Shin Jong-woo, a senior analyst at the Korea Defense & Security Forum, said an FMS deal may not guarantee economic benefit for South Korea.

“You give up offset programs should an FMS deal be made,” he said. “I'm not really sure how much the unit cost of the MH-60R could be lowered. If lowered, we may have to lose some optional functions of the helicopter.”

Moreover, a possible MH-60R selection will bring more work to change the designs of warships, he added.

“The Navy's existing warships, including the KDX-III Aegis destroyer, are not able to accommodate the MH-60R, so it's inevitable to change the design should the American helicopter be chosen.”

The South Korean Navy currently operates eight AW-159s acquired under a 2012 deal. The helicopters fly missions aboard KDX-series destroyers and Incheon-class guided-missile frigates. The service plans to commission at least 12 more new frigates fitted with a flight deck and a hangar that can accommodate one Lynx helicopter.

https://www.defensenews.com/2019/01/23/change-of-plans-seoul-decides-to-start-from-scratch-with-helo-competition