(2nd LD) S. Korea chooses Boeing's P-8 patrol aircraft for naval procurement project

All News 19:26 June 25, 2018

(ATTN: RECASTS 7th para)

SEOUL, June 25 (Yonhap) -- South Korea decided Monday to purchase U.S. defense company Boeing's P-8 Poseidon maritime patrol aircraft in a US$1.7 billion project, Seoul's military acquisition agency has said.

The Defense Acquisition Program Administration (DAPA) said that Seoul's defense project promotion committee convened to make the decision to purchase the aircraft through a government-to-government "foreign military sale (FMS)" program.

"(We have decided) to purchase the latest maritime patrol aircraft for conducting patrol, search and rescue operations through the FMS program from the U.S. government, in consideration of the cost, time schedule, capabilities as well as the legal aspect," the DAPA said in a press release.

Before the decision, a three-way competition had emerged, with Europe's Airbus Defense & Space and Sweden's Saab expressing their intentions to win the first major defense acquisition project since the Moon Jae-in government took office in May last year.

Amid the prospect of a multiple-party contest, some observers said that the naval project should be put to an open bidder, which could help lower prices.

But a DAPA official said that the U.S. government proposed a reasonable price for the Boeing aircraft similar to that of Saab's Swordfish.

"Should we opt for an open contest, Poseidon's price could go up 10 to 28 percent per unit, which would limit the number of planes we could buy within the total budget," the official said on condition of anonymity.

"It appears that the plane that we can purchase at this point in time is the P-8A, and we don't believe there is any problem with the purchase decision," he added.

The South Korean military is pushing to introduce an unspecified number of maritime aircraft between 2022 and 2023.

The DAPA plans to send the letter of request (LOR) for the procurement project to Washington this month. But sources said the project could be delayed should the U.S. government fail to offer the letter of offer and acceptance (LOA) through a congressional approval process by November.

The P-8 Poseidon is based on the 737-800ERX short-to-medium-range airliner. It is capable of conducting various missions, including antisurface, antisubmarine, intelligence, surveillance and reconnaissance operations.