U.S. Clears New Upgrade Offer for South Korea KF-16s

The U.S. State Department approved a checkered foreign military sale (FMS) to upgrade South Korean KF-16s for an estimated $2.5 billion. The Defense Security Cooperation Agency (DSCA) notified Congress on July 15 of the proposed sale, which must be negotiated by the parties involved.

In mid-2012, South Korea’s Defense Acquisition Program Administration (DAPA) selected BAE Systems to perform the avionics upgrade of 134 KF-16C/D Block 52 fighters, marking the first time an international buyer had chosen a contractor other than manufacturer Lockheed Martin to modernize the jet. The Republic of Korea Air Force later selected Raytheon’s Advanced Combat Radar over the Scalable Agile Beam Radar offered by incumbent supplier Northrop Grumman.

In an unprecedented action, however, DAPA abandoned its contractor choice last November after the U.S. government raised the overall price of the FMS from an earlier inter-governmental offer of $1.7 billion to $2.5 billion. The U.S. then resubmitted an offer.

The DSCA notification identifies Lockheed Martin and Northrop Grumman as the principal contractors for the upgrade. “The purchaser requested offsets,” it states. “At this time, agreements are undetermined and will be defined in negotiations between the purchaser and contractor.”