Hanwha Ocean announced in a regulatory filing on the 1st that it had been selected as the preferred bidder for the detailed design and lead-ship construction project of the Korean Next-Generation Destroyer (KDDX), a program led by the Defense Acquisition Program Administration (DAPA).
Hanwha Ocean said the contract amount and duration would be finalized through future negotiations between the parties. The company added that it plans to sign the final contract after further discussing specific terms, and will re-disclose the relevant details once the contract conditions are confirmed.
On the 11th of last month, DAPA notified both Hanwha Ocean and HD Hyundai Heavy Industries that Hanwha Ocean had gained the edge in the evaluation of KDDX proposals submitted by the two companies. The score gap between the two firms was reported to be about 0.59 points.
The decisive factor was a 1.2-point security penalty applied to HD Hyundai Heavy Industries. The company became subject to the security deduction after its executives and employees were found guilty of photographing and leaking military secrets, including conceptual designs related to the KDDX project.
HD Hyundai Heavy Industries objected to the evaluation results and filed an appeal, but DAPA rejected it the previous day.
The KDDX project is a large-scale national program to build six 6,000-ton “mini Aegis ships” using domestic technology, with a total budget of 7.8 trillion won.
Initially, the plan was to complete the basic design by December 2023 and begin detailed design and lead-ship construction from 2024. However, as competition between the two companies intensified, DAPA failed to reach a conclusion on selecting a contractor, and the project schedule was delayed by about two years.
With the selection of the preferred bidder, the KDDX contractor selection process—which had long drifted amid controversy over overheated competition—has entered its final phase.
Some observers project that Hanwha Ocean and HD Hyundai Heavy Industries could split the construction of the six destroyers, considering factors such as build capacity. However, analysts note that the company responsible for building the lead ship is likely to secure overall leadership of the project.