By Kang Seung-woo
The Lockheed Martin-made F-35 Joint Strike Fighter (JSF) may turn out to be too expensive for South Korea, which is seeking to buy a new fleet of aircraft to replace its aging F-4s and F-5s.
With final bidding for the F-X III competition slated to begin today, the Defense Acquisition Program Administration (DAPA) is standing firm on a plan to purchase 60 high-end aircraft for 8.3 trillion won ($7.3 billion) or below.
To make the Bethesda, Md.-based company’s situation worse, the other two rivals — Boeing and the European Aeronautic Defense and Space Company (EADS) — are expected to be more flexible in potential price cuts to pull off an upset victory.
“We cannot exceed the 8.3 trillion won budget,” DAPA spokesman Baek Youn-hyeong said in a briefing last week.
Given that the F-X program, initially aimed at introducing 120 high-end warplanes by 2020, has been divided into three phases due to budget constraints, the cost of the fleet is expected to play a key role in the selection process.
However, its high costs in development have hurt confidence in the stealth-proven fighter jet program.
In April, the Defense Security Cooperation Agency (DSCA), which handles foreign military sales (FMS) for the U.S. Defense Department, notified the U.S. Congress of a potential FMS of 60 F-35 conventional take off and landing (CTOL) aircraft and associated equipment, parts, training and logistical support would cost an estimated $10.8 billion, which is way beyond DAPA’s expectations.
In addition, according to the Government Accountability Office (GAO), the F-35’s per-plane cost estimates have doubled to $161 million from $81 million in 2001, when the multinational project hit the road.
When the Pentagon first approved of the F-35 program, Lockheed expected to develop and manufacture 2,852 planes for $233 billion, but the total price tag has been re-estimated at $391.2 billion, with 409 fewer planes.
Along with the escalating costs, the FMS is another inescapable roadblock for Lockheed.
Unlike its rivals that will be purchased under direct commercial sales DCS, the F-35 will be sold on the FMS program in which Washington would broker a contract between Seoul and Lockheed Martin — critics say the government-to-government sales has less leverage for a price discount.
As the F-35 is being manufactured and simultaneously tested, the U.S. government has turned down DAPA calls to offer a fixed price, and the procurement office plans to reflect this in its aircraft evaluation.
“Unless the F-35 is offered at a fixed-price, DAPA will subtract points in a pertinent item,” Baek said.
David Scott, director of the F-35 International Customer Engagement, said, “The F-X price bidding has not yet started so the price of the F-35 has not been established between the ROK Government and the U.S. Government. At this time it is premature to speculate on the final price of the F-35 for the F-X Program.”