The shipbuilder said in a regulatory filing that the Defense Acquisition Program Administration (DAPA) had formally selected it as the top-priority bidder for the Korean Destroyer Next Generation (KDDX) project.
The value and duration of the contract will be determined through negotiations, Hanwha Ocean said. The company plans to disclose further details once the final terms are agreed upon.
“Hanwha Ocean feels a strong sense of responsibility upon being selected as the preferred bidder for the construction of the lead vessel under the KDDX program. We will engage in negotiations with the government and do our utmost to bring the project back on track," a company official said.
Speaking at a regular Defense Ministry briefing Thursday, a DAPA official said the agency had completed its review of an objection filed over the evaluation and found no problems with the results.
“DAPA reviewed the companies’ objections in accordance with the relevant regulations and procedures and ultimately confirmed that there were no problems with the evaluation results,” the official said.
“We have notified both companies of the bidders eligible for negotiations and their order of priority and will proceed with negotiations with the top-ranked bidder,” the official added.
DAPA aims to sign the final contract by the end of August.
The agency notified Hanwha Ocean and rival HD Hyundai Heavy Industries on June 11 that Hanwha Ocean had received the higher score in its evaluation of their proposals. Hanwha Ocean reportedly prevailed by a margin of about 0.59 points.
The result was largely determined by a 1.2-point security-related penalty imposed on HD Hyundai Heavy Industries. Company employees were previously convicted of photographing and leaking military secrets, including documents related to the KDDX conceptual design.
HD Hyundai Heavy Industries filed an objection to the evaluation, but DAPA rejected the appeal Wednesday.
The 7.8 trillion won ($5.7 billion) KDDX program calls for the construction of six 7,000-ton destroyers using domestically developed technologies. The vessels are often described as “mini Aegis destroyers” because of their advanced integrated combat systems.
The detailed design and construction of the lead vessel were originally scheduled to begin in 2024 after the basic design was completed in December 2023.
The project was delayed for about two years, however, as DAPA struggled to resolve an intensifying dispute between the country’s two largest naval shipbuilders.
Hanwha Ocean’s selection brings the long-delayed bidding process close to completion and gives the company the leading role in the program.
There has been speculation that construction of the six vessels could eventually be divided between Hanwha Ocean and HD Hyundai Heavy Industries because of shipyard capacity constraints. The company responsible for the lead vessel, however, is expected to take the initiative in the overall program.
The lead destroyer is expected to be delivered to the South Korean Navy by the end of 2032 following the detailed design process.
DAPA is expected to begin awarding contracts for the five follow-on vessels in late 2028, with the goal of delivering all six ships by 2036.
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