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South Korea began the official process of changing the contractor for its F-16 upgrading project, Seoul’s arms procurement agency said. “The final decision on the contractor change will be made after checking a letter of agreement from the U.S. expected to be delivered early next year,” The Defense Acquisition Program Administration (DAPA) official Baek Yoon-hyung said.

DAPA said the planned switch from BAE Systems to Lockheed Martin – was presented at its monthly defense project committee meeting. Lockheed Martin, the F-16’s original equipment manufacturer (OEM), lost to BAE in its bid for the project.

DAPA and the U.S. defense department agreed upgrade 134 KF-16 fighter jets as part of a US$1.62 billion (1.75 trillion won) investment. Originally awarded to BAE Systems, the contract included the integration of modern avionics, primarily a new mission computer developed by BAE Systems and AESA radar provided by Raytheon. [ismember]However, BAE Systems asked for an increased price due to additional costs incurred by the U.S. government. In contrast, Lockheed Martin has its upgrade with the SABR AESA radar from Northrop Grumman and avionics from Elbit Systems.

Beside the major blow this termination meant to its rival’s ambition to seize its F-16 modernisation business, the Korean contract would secure Lockheed Martin’s F-16 business in the future, particularly after losing the US Air Force Combat Avionics Programmed Extension Suite (CAPES) program, which left Taiwan’s upgrade of 125 F-16s as the only ongoing F-16 upgrade in its stables.[/ismember]

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