HD Hyundai led on technical score but a 1.2-point security deduction flipped the result; final margin was 0.6 points. Defense Acquisition Program Administration to formally name preferred bidder in early July, ending two years of delays.
Hanwha Ocean has in effect been selected as the preferred bidder for the detailed design and lead-ship construction of South Korea's next-generation destroyer program, known as KDDX, with a security-related score deduction proving decisive in the final outcome.
The Defense Acquisition Program Administration (DAPA) completed its evaluation of program proposals Thursday and notified Hanwha Ocean and HD Hyundai Heavy of the results that afternoon. Hanwha Ocean edged out HD Hyundai Heavy by a narrow margin, according to sources familiar with the matter.
HD Hyundai Heavy had led on the technical capability assessment by roughly 0.64 points, but a 1.2-point security deduction — imposed following a conviction related to the leak of classified KDDX materials — reversed the standings, leaving HD Hyundai Heavy behind by approximately 0.6 points. Hanwha Ocean was accordingly ranked first.
HD Hyundai Heavy became subject to the deduction after employees were convicted of photographing and leaking concept-design documents related to the KDDX program. DAPA has applied the penalty through December this year. A court rejected HD Hyundai Heavy's injunction seeking to block the deduction on June 5.
HD Hyundai Heavy expressed regret over the outcome. "We are deeply disappointed that our higher technical score was overturned by the security deduction," a company official said. "Despite holding the country's only design and construction capability for Aegis-class destroyers, we have been ranked second in this highly demanding program — something we intend to examine through the remaining bid procedures." The official added that the company has filed an appeal separate from the injunction ruling.
A Hanwha Ocean official said steps remain before the process is complete. "We will mobilize our full warship design and construction capabilities to ensure there is no disruption to naval readiness," the official said.
DAPA plans to formally designate the preferred negotiating partner as early as early July, following individual debriefings and an objection period for each company. The agency is targeting contract signing by the end of July.
The evaluation brings the KDDX contractor selection process — delayed by roughly two years — to its final stage. The program calls for building six 6,000-ton destroyers using domestic technology at a total cost of 7.8 trillion won (approximately $5.12 billion).
Warship construction typically proceeds in stages: concept design, basic design, detailed design and lead-ship construction, and follow-on ship construction. Hanwha Ocean and HD Hyundai Heavy each handled one of the earlier design phases.
There is speculation that the two companies could eventually share the follow-on ship construction work, but the firm that builds the lead ship is widely expected to hold the dominant position over the program as a whole.
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