On June 11, the Defense Acquisition Agency completed its evaluation of the KDDX proposal and notified both Hanwha Ocean and HD Hyundai Heavy Industries of the results. Reports indicate that Hanwha Ocean received a slightly higher score than HD Hyundai Heavy Industries.
A key factor in the decision was a 1.2-point security penalty applied to HD Hyundai Heavy Industries. The company was found guilty of leaking military secrets related to the KDDX project, which led to the penalty.
The Defense Acquisition Agency will apply this security penalty to HD Hyundai Heavy Industries until December of this year. Although the company filed for an injunction against the penalty, it was dismissed on June 5. The score difference between the two companies was reportedly less than the penalty imposed on HD Hyundai Heavy Industries.
According to industry sources, while HD Hyundai excelled in technical capability assessments, the security penalty resulted in Hanwha Ocean scoring approximately 0.6 points higher. Ultimately, the security penalty effectively determined the outcome.
The Defense Acquisition Agency plans to conduct follow-up procedures, including requests for post-evaluation explanations and appeals from each company, with the aim of selecting the preferred bidder by early next month. Additional negotiations will follow, with a goal of finalizing a contract by the end of next month.
This evaluation result brings the KDDX selection process, which has faced intense competition and controversy, closer to completion after nearly two years of delays. There are speculations that the two companies may split the construction of six ships, with one company building three and the other four, but the company selected for the lead ship will effectively hold the dominant position.
However, given that HD Hyundai Heavy Industries reportedly outperformed in technical capability assessments, the controversy surrounding the evaluation results is expected to continue for some time. Some industry insiders suggest that HD Hyundai Heavy Industries may file an appeal with the Defense Acquisition Agency or pursue further legal action.
In response to the evaluation results, Hanwha Ocean stated, "We will closely cooperate with the Defense Acquisition Agency to make up for the delayed project schedule and ensure that there are no disruptions to naval power maintenance by mobilizing all our capabilities in ship design and construction. Especially since the KDDX will be a domestically produced destroyer equipped with nine key indigenous development systems, we will do our utmost to achieve world-class performance and quality through perfect system integration."
A representative from HD Hyundai Heavy Industries expressed disappointment at not being selected despite significantly leading in technical scores, stating, "We plan to request a debriefing to confirm the details and basis of the evaluation results."
The KDDX project involves a budget of 7.8 trillion won to construct six 6,000-ton mini Aegis destroyers using domestic technology.
* This article has been translated by AI.
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