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Problems found with negotiations for Seoul's F-35A purchase deal: auditor

All Headlines 16:13 May 22, 2019

By Oh Seok-min

SEOUL, May 22 (Yonhap) -- The arms procurement agency said Wednesday it will strive to improve systems and procedures on how "offset" deals should be pursued and implemented after the state auditor found problems with the agency's negotiations to buy F-35A stealth fighter jets.

In 2014, South Korea awarded the fighter contract to Lockheed Martin, overturning an earlier decision to select Boeing, which offered the F-15 Silent Eagle, as a preferred bidder for the FX-III project worth 7.4 trillion won (US$6.19 million).

The contract to buy 40 F-35 Lightning II fighters was concluded in an "offset" manner that called for the American defense giant to transfer dozens of key technologies to South Korea in exchange for purchasing the expensive fighter jets.

But implementation of the deal did not go well as the U.S. government refused in 2015 to issue an export license for four combat jet technologies, including a key radar technology, to South Korea, though the U.S. firm agreed to provide 25 kinds of technologies under the offset deal.

On Tuesday, the state auditor Board of Audit and Inspection (BAI) announced the results of an extensive audit of the negotiations, saying that irregularities were found in the course of the Defense Acquisition Program Administration's (DAPA) negotiations to carry out the offset deal.

The DAPA "failed to abide by some relevant regulations over the course of negotiations," the auditor said. Several DAPA officials also "turned out to have falsely reported details of the contracts" to the government committee in charge of approving the procurement project, the BAI said, calling on the DAPA chief to reprimand those in charge and revamp systems.

But the auditor refused to make public most of the details, including when and how the DAPA violated regulations, which regulations were violated and who were responsible, citing military confidentiality.

"We have been working to improve relevant systems and revamp our regulations and will make continued efforts," DAPA spokesman Park Jeong-eun said, adding that it will push to revise laws "if necessary."

"We will strive further to push for procurement deals in a transparent manner down the road," the spokesman said.

In March this year, two of the fifth-generation fighters arrived in Cheongju, 140 kilometers south of Seoul, from Arizona, and they have gone through test flights. By the end of this year, eight more are to arrive here, with the total of 40 to be deployed here through 2021.

Problems found with negotiations for Seoul's F-35A purchase deal: auditor - 1


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