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South Korea Awards $617M KDDX Destroyer Contract to Hanwha Ocean
The 882.1 billion won ($617 million) deal ends a shipbuilder dispute that delayed the program by two years. The destroyer uses a domestically developed combat system and phased-array radar. Delivery is scheduled for 2032.
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South Korea's arms procurement agency signed a contract with Hanwha Ocean on Friday for the detailed design and construction of the first KDDX next-generation destroyer, ending a nearly three-year shipbuilder dispute that had stalled the program.
The deal, valued at about 882.1 billion won ($617 million), moves the lead ship into full design and construction. Delivery to the South Korean Navy is scheduled by the end of 2032, the Defense Acquisition Program Administration said.
The KDDX will be South Korea's first large destroyer built with a domestically developed hull, combat management system, multifunction radar and other core weapons systems. The vessel is sometimes described locally as a Korean-style Aegis destroyer, but it will not use the U.S.-developed Aegis Combat System. Instead, it combines a South Korean integrated combat system with an indigenous phased-array radar.
The entire six-ship program is expected to cost about 7.8 trillion won ($5.46 billion). The government has not determined which companies will build the five follow-on ships or how those contracts will be awarded.
How the Shipbuilder Fight Ended
Hanwha Ocean, formerly Daewoo Shipbuilding and Marine Engineering, completed the KDDX conceptual design. HD Hyundai Heavy Industries later conducted the basic design, leading to expectations that it would receive a negotiated contract for the detailed design and lead ship.
Hanwha Ocean instead called for a competitive bidding process, citing a military-secrets case involving HD Hyundai Heavy Industries employees. The acquisition agency accepted that request and held a competition.
The two shipbuilders were separated by less than 0.6 point in the final evaluation. A 1.2-point security penalty imposed on HD Hyundai Heavy Industries was considered decisive. Employees of the company had been convicted of photographing or improperly handling military secrets related to the KDDX program.
Hanwha Ocean was selected as the preferred bidder on June 11. HD Hyundai Heavy Industries challenged the evaluation, but its objection was rejected in early July. Negotiations between the acquisition agency and Hanwha Ocean then led to Friday's final agreement.
The contract was signed before all cost data were finalized. The final value may be adjusted to reflect verified construction expenses, the agency said.
Ship Specifications and Technology