By Siva Govindasamy in Singapore

737 sole contender in South Korean airborne early warning and control requirement

South Korea has dropped Israel Aircraft Industries (IAI) from its E-X competition to provide airborne early warning and control (AEW&C) aircraft, leaving Boeing as the sole bidder.

Boeing will supply Seoul with four Northrop Grumman Mesa radar-equipped 737s after South Korea's Defence Acquisition and Programme Agency (DAPA) rejected IAI's offer of Gulfstream G550s with Elta Phalcon radars due to the Israeli company's failure to provide guarantees about its technology. The agency made its decision last week after twice delaying it from the original May deadline to allow IAI more time.

A contract will be signed sometime around September, after Boeing and South Korea agree on a price, expected to be around 2 trillion won ($2.1 billion). The planes are to be delivered by 2012.

AEW&C 737 
© Boeing

Boeing and Seoul are still to agree a price for the AEW&C 373s
"Boeing appreciates the Republic of Korea's [ROK] confidence in the 737 AEW&C solution," says the company. "We understand that a selection as the only qualified supplier does not mean a successful negotiation, and that only our best effort and price will result in a contract and eventual delivery of the 737 AEW&C product. We remain committed to negotiating a fair and reasonable contract that will result in the delivery of a new and important capability into the ROK Air Force."

South Korea had been reluctant to go forward with the programme without more robust competition, and repeatedly delayed the acquisition and issued new requests for proposals.

The delays were also intended to allow IAI and its US partner DRS Technologies more time to guarantee they could overcome US export restrictions. Flight International reported earlier this year that DRS had secured a marketing licence to provide unclassified data on the proposed communications suite, but it did not obtain a licence to provide classified data and did not have technical assistance agreements in place.

Boeing has been the favourite to win the contract for some time, and it secured the required licences and technical assistance agreements with all its partners several months ago. It had lobbied Seoul for the last two years for a sole- source contract on the grounds that the IAI solution, which originally included a communications suite from L-3, did not meet the requirements. The IAI-led team tried to persuade Seoul it could secure the required licences and agreements after contract award, but DAPA decided last week that IAI could not guarantee this. As a result, it disqualified the Israeli firm from the project.

The South Korean win is Boeing's third for its 737-based AEW&C solution, following contract awards in Australia and Turkey.

Additional reporting by Brendan Sobie

Source: Flight International

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