Hanwha Ocean announced in a regulatory filing today (July 2) that it has been selected as the preferred bidder for the detailed design and construction of the lead ship for the Korea Destroyer Next Generation (KDDX) project, commissioned by the Defense Acquisition Program Administration (DAPA).

Hanwha Ocean stated that the contract amount and duration will be finalized following negotiations between the involved parties.

The company added that it plans to sign the final contract after negotiating specific terms and conditions, and will issue a follow-up announcement once those details are confirmed.

On June 11, DAPA notified the companies that Hanwha Ocean had outperformed HD Hyundai Heavy Industries in the evaluation of proposals submitted by both firms.

It is reported that Hanwha Ocean led by a narrow margin of approximately 0.59 points.

The outcome was determined by a 1.2-point security penalty imposed on HD Hyundai Heavy Industries.

HD Hyundai Heavy Industries became subject to the security deduction after its employees were convicted of leaking military secrets related to the KDDX project.

HD Hyundai Heavy Industries filed an objection against the evaluation results, but DAPA rejected the appeal yesterday (July 1).

A DAPA official stated that after the evaluation results were released, they reviewed the objection and confirmed that there were no irregularities in the assessment process.

The official added that they have notified each company of the decision regarding the priority of negotiations and will proceed with the preferred bidder.

DAPA aims to begin full-scale negotiations with Hanwha Ocean in mid-July and sign the final contract by the end of next month.

The KDDX project is a 7.8 trillion won initiative to build six 7,000-ton mini-Aegis destroyers using domestic technology.

The project was originally scheduled to begin detailed design and construction of the lead ship in 2024, following the completion of the basic design in December 2023. However, it has been delayed by approximately two years due to intense competition between the companies.

With this selection, the contractor selection process, which had been stalled for about two years, has entered its final stage.

The KDDX lead ship is expected to be delivered to the Navy by the end of 2032 after undergoing detailed design.

DAPA reportedly aims to begin placing orders for the remaining five follow-up ships starting at the end of 2028, following the completion of the detailed design, with the goal of delivering all follow-up ships to the Navy by 2036.

A DAPA official emphasized that they will continue to pursue the project fairly and legally in accordance with relevant laws and regulations, and will do their utmost to ensure there are no setbacks in the deployment schedule.

(Photo courtesy of Hanwha Ocean, Yonhap News)