'DAPA's 'inappropriate decision' in jet deal cost $90m: BAI

Korea’s Board of Audit and Inspection said Thursday that the defense acquisition body’s “inappropriate decision” during the upgrade project of KF-16 fighter jets resulted in a delay of four years and an estimated $90 million in damages.

According to the BAI, officials from Defense Acquisition Program Administration reported to the Korean defense authorities in November 2013 that they had reached an agreement with their U.S. counterparts on the project’s cost, when in fact the parties had yet to close the deal.

This forced DAPA to switch its partner from BAE Systems to Lockheed Martin in December 2015, resulting in the administration losing the $90 million already paid to BAE Systems and delays in the project. The change was spurred by the U.S. authorities’ request to revise the deal to $2.4 billion in September 2014.

The probe, which took place from Jan. 27 to March 11, was initiated upon the National Assembly’s request last December.

DAPA had pursued upgrading some 130 fighter jets through foreign military sales, for which the agency was to negotiate directly with the U.S. government. The U.S. Security Assistance Management Manual states that the buyer can recommend a particular company, although the U.S. government is not mandated to sign along.

“Although the (DAPA) official in charge of the decision did not receive any confirmation on the initial offer (of $1.7 billion) from the U.S. side, the officer had sent a report note to his team that the letter of offer and acceptance (from the U.S.) was in accord with the report filed to the defense acquisition committee,” the BAI report said.

The BAI held the two DAPA officials related to the deal responsible and recommended DAPA dismiss them from their posts.

By Yoon Min-sik (minsikyoon@heraldcorp.com)