Korea threatens to disqualify F-35

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spazsinbad

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Unread post29 Jun 2013, 00:54

If I was a participant is this competition I would disqualify South Korea! :D (Look at thread title)
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XanderCrews

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Unread post29 Jun 2013, 01:00

delvo wrote:I don't foresee the manufacturers of Eagles, Typhoons, or Lightnings going cheaper than they have. At this rate, Korea's going to drop its expensive wish-list, go for the most bang it can get for fewer bucks, and end up at Rafales...


assuming the rafales are cheaper in the first place :?
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Unread post29 Jun 2013, 01:06

spazsinbad wrote:If I was a participant is this competition I would disqualify South Korea! :D (Look at thread title)
I suppose that's possible. How much is participation in this farce costing the competitors each week?
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popcorn

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Unread post29 Jun 2013, 01:51

Expectant fathers-to-be anxiously waiting outside the FX 3 delivery room. :lol: Doesn't the 4th guy from the left look like Loren Thompson? LOL
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Unread post29 Jun 2013, 07:49

gtx wrote:Maybe simply reduce numbers...at least initially.


That drives the cost up even more.
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Unread post29 Jun 2013, 21:51

It drives up the unit cost as well as the eventual total cost (if they buy more later on) but not necessarily the short term immediate cost.
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spazsinbad

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Unread post01 Jul 2013, 01:48

South Korea extends bidding on $7.3 bln fighter jet project-media 29 Jun 2013 (Reporting By Jane Chung; Editing by Michael Perry)
"(Reuters) - South Korea has extended bidding on a $7.3 billion (8.3 trillion won) fighter jet project after a second round of bidding ended on Friday with three aviation makers offering prices above the estimated cost, South Korea's news agency said.

South Korea opened the bidding on June 18 to import the country's 60 next-generation fighter jets between 2017 and 2021 and has since carried out about 30 bidding sessions, yet the offers were over the budget, South Korea's Yonhap News Agency said citing the state's Defense Acquisition Program Administration (DAPA) officials....

..."The bidding ended, and an additional bidding will resume on July 2," said Baek Yoon-hyeong, spokesman for the defence acquisition agency, according to Yonhap...."

http://www.reuters.com/article/2013/06/ ... 4P20130629
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Unread post01 Jul 2013, 02:22

spazsinbad wrote:South Korea extends bidding on $7.3 bln fighter jet project-media 29 Jun 2013 (Reporting By Jane Chung; Editing by Michael Perry)
"(Reuters) - South Korea has extended bidding on a $7.3 billion (8.3 trillion won) fighter jet project after a second round of bidding ended on Friday with three aviation makers offering prices above the estimated cost, South Korea's news agency said.

South Korea opened the bidding on June 18 to import the country's 60 next-generation fighter jets between 2017 and 2021 and has since carried out about 30 bidding sessions, yet the offers were over the budget, South Korea's Yonhap News Agency said citing the state's Defense Acquisition Program Administration (DAPA) officials....

..."The bidding ended, and an additional bidding will resume on July 2," said Baek Yoon-hyeong, spokesman for the defence acquisition agency, according to Yonhap...."

http://www.reuters.com/article/2013/06/ ... 4P20130629


3rds the charm
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Unread post04 Jul 2013, 13:01

South Korea has done a great job of disqualifying itself from this competition. Nice one.

Bidding for next generation fighter jets likely to end in failure 04 Jul 2013 By Kim Kyu-won, staff reporter

"Mixed signals on budget and air force’s preference for F-35 mean companies all making maximum price bids

It is becoming more likely that the bidding for the third next-generation fighter project being run by the South Korean Defense Acquisition Program Administration (DAPA) will end in failure. Sources say that all three of the companies that have taken part in the price bidding, which has been underway since June 18, submitted amounts that exceed the total budget of 8.3 trillion won (US$7.27 billion). Experts advise that, if the project is to be wrapped up successfully, the three companies must be motivated to compete with each other.

According to DAPA and the companies involved, from the start of bidding on June 18 through July 3, not a single company has bid less than 8.3 trillion won maximum. “We are planning to continue the bidding indefinitely, for as long as we deem it is necessary,” a senior offical with DAPA said on condition of anonymity.

However, it appears very unlikely that any of the bidding companies will make an offer of less than 8.3 trillion won. The biggest reason for this is the shadow cast by the F-35A.

DAPA has stated that any company that places a bid below 8.3 trillion won can be selected. However, the Republic of Korea Air Force favors the F-35A, which is produced by Lockheed-Martin. DAPA has not made it clear whether it would necessarily accept a bid by one of the other two companies if the F-35A bid is not less than 8.3 trillion won.

“If there are two companies that bid below 8.3 trillion won, the final selection will be made by the Defense Project Promotion Committee after a comprehensive assessment of the two,” the DAPA official said. “If there is only one, the committee will make the decision.”

Experts believe that if the bidding for the third next-generation fighter project is to be concluded at an appropriate price within the year, DAPA must have the ability to disregard the air force’s desire to purchase the F-35A. “There’s no reason to pin all of our hopes on the F-35A,” a national defense expert said on condition of anonymity. “The only way that we can induce price competition among the companies is going into this with the idea that it’s okay if we don’t purchase the F-35A. If it turns out we really need the F-35A, we can always buy it later.”

Another view is that the government must make clear that it will choose whichever jet manufacturer offers a bid that falls within the scope of the government’s budget.

“The thing is that all three of the companies’ fighters have the required operational capacity,” said Lee Hui-u, director of the Integrated Logistics Support Research Institute at Chungnam National University. “If the government lets it be known that it is willing to choose any one of the three that meets the budget, the companies will then have to match the price. The companies can compensate for the loss through armaments or operational and maintenance fees.”

Complicating things further is the fact that, at the moment, it cannot even be established whether a bidding price has been submitted for the F-35A. The US government placed the bid for the F-35A on behalf of Lockheed-Martin through its Foreign Military Sales program. Even if a price was submitted, this price is not related to the amount that the South Korean government will actually have to pay later down the line. The South Korean government in fact must pay the amount specified by the US government at the time of payment.

“With the F-35 bid, the US government may have submitted a prediction of what the price will be after development is complete, but the other two countries offered definite prices,” a representative with one of the other companies said on condition of anonymity. “This bidding is completely unfair.”

“We have been asking the US government to provide a definite price, but we have gotten a guarantee,” a source with DAPA said.

DAPA’s ambiguity about the scope of the budget for this project is another reason the companies have not felt it necessary to engage in competitive price bidding. Lately, DAPA has been insisting that it will stick to the 8.3 trillion-won budget for the project. But until only recently, rumors were rife inside the Ministry of Defense and DAPA that the budget might be increased to 9.96 trillion won (120% of the original amount). The fact that the air force’s preferred choice the F-35 is unlikely to be below 8.3 trillion won makes it more likely that the budget will be increased by 20%.

This is why the government needs to clearly indicate whether the budget for the project is 8.3 trillion won or 9.96 trillion won. If the budget goes up to 9.96 trillion won, there will probably not be a single company that will make a bid for 8.3 trillion won.

“If they had definitely stated from the beginning that 8.3 trillion won was the final budget, the companies would have given some serious thought to this price,” said Kim Jong-dae, chief editor of Defense 21+. “Even now, it’s not too late to make clear what the final budget is.”"

http://english.hani.co.kr/arti/english_ ... 94377.html
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Unread post04 Jul 2013, 14:51

spazsinbad wrote:South Korea has done a great job of disqualifying itself from this competition. Nice one.
This part is where the stupidity of their game shows.
Experts believe that if the bidding for the third next-generation fighter project is to be concluded at an appropriate price within the year, DAPA must have the ability to disregard the air force’s desire to purchase the F-35A. “There’s no reason to pin all of our hopes on the F-35A,” a national defense expert said on condition of anonymity. “The only way that we can induce price competition among the companies is going into this with the idea that it’s okay if we don’t purchase the F-35A. If it turns out we really need the F-35A, we can always buy it later.”
It is said that when gold was struck in California, an enterprising shopkeeper in San Francisco immediately purchased every shovel and pickax he could in town, and before anyone knew it, he was the only one with any in stock, able to demand top prices from desperate would-be prospectors.

LM is the only free-world manufacturer of VLO fighters and northeast Asia will soon be rife with the things as Japan, Russia, and China all have firm plans to procure or build such aircraft. Korea's sad attempt at haggling LM is like trying to talk that shopkeeper down by saying you could get by with a wooden spoon from the store across the street.

Also, the other two so-called competitors know that this may well be one of the last sales they make, with little potential for further orders in the long term; so they aren't going to risk a loss or weak profit just to get their foot in a door that they know is going to close anyways. The Korean statement that they could always buy the F-35A later (which they probably would if the JSF lost this time) actually increases EADS's/Boeing's motivation to charge as much as possible while they still can.

As for the bids... I can see EADS offering a certain price, but Boeing hasn't even started on the SE yet (demonstration of bodged-together conformal-weapons-bay doesn't count as new plane); so I don't really see how they could set firm costs.

Finally, the real impediment against price competition here is the small number of orders at stake. Forty planes doesn't offer Boeing or EADS enough cash-flow security to induce a bidding war, and LM has enough on its plate to keep busy for years without Korea. Either way, this idiotic competition is trying to squeeze blood from a turnip.
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Unread post04 Jul 2013, 15:12



a representative with one of the other companies said on condition of anonymity. “This bidding is completely unfair.”




...Unless we win-- Then its a brilliant decision on the part of the ROK, ROKAF and we look forward to working with them for years to come.


LOL

What counts though is someone made that remark, that way the internet detractors can say "they said it was unfair and the F-35 only won because X Y Z!"


So Slowman was wrong again. What a shocker.
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Unread post04 Jul 2013, 15:37

So the ROKAF is reported to have a strong preference for the F 35? I just wish someone would leak some of the comparative technical data.
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Unread post04 Jul 2013, 16:15

Is the USG quoted price public information?

http://www.ft.com/intl/cms/s/0/4cdf9244 ... ab7de.html

...The US government, which is slashing its own defence spending amid pressure to reduce the country’s fiscal debt, is acting as broker in the F-35 sale. It has put a price tag of $10.8bn on the order for South Korea, as much as 45 per cent more than Seoul says it wants to spend...
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Unread post04 Jul 2013, 16:19

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Unread post04 Jul 2013, 17:30

popcorn wrote:Is the USG quoted price public information?

http://www.ft.com/intl/cms/s/0/4cdf9244 ... ab7de.html

...The US government, which is slashing its own defence spending amid pressure to reduce the country’s fiscal debt, is acting as broker in the F-35 sale. It has put a price tag of $10.8bn on the order for South Korea, as much as 45 per cent more than Seoul says it wants to spend...


Its the nature of the FMS process. You don't buy a weapon from the company; you pay the USG, who buys it for you. The F-15SE seems to have been a DCS purchase; a direct buy from Boeing.
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