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(Yonhap Interview) EADS denies procedural breach to Korean fighter jet project

By Kim Eun-jung

SEOUL, Aug. 19 (Yonhap) -- European aerospace giant EADS on Monday questioned the South Korean procurement agency's decision to drop Eurofighter out of the finalists for its fighter jet project over procedural flaws, saying its proposal is best optimized for Seoul's budget and efficient flight operations.

The Defense Acquisition Program Administration (DAPA) on Sunday announced Eurofighter was dropped from the 8.3 billion won (US$7.2 million) deal for 60 fighter jets as EADS's proposal did not meet the program's key demands.

The decision left Boeing's F-15 Silent Eagle as the sole candidate as the third company Lockheed Martin's F-35 had been eliminated from the competition due to its steep price that exceeded Seoul's budget.

South Korea is seeking 45 one-seater aircraft and 15 two-seaters. But EADS proposed only six two-seater aircraft, which are costly to produce, due to budget problems.

"I would like to stress that Eurofighter's intention has been to provide DAPA, to consider within its discretion, fully within the boundaries of the Request for Proposal (RFP), a bid package that would meet the declared essential budget," Christian Scherer, the chief sales officer and head of International Operations at EADS, said in a written interview with Yonhap News Agency.

The company official's statement comes as DAPA is preparing a comprehensive evaluation and will select a final bidder in a meeting of top military officials in mid-September.

Scherer claimed there was no operational rationale to opt for the number of twin-seaters because Eurofighter is designed for single pilot operations and the function of its simulators have been well proved by operating air forces.

"We have continuously pointed this out, but obviously we have also always considered offering the twin-seaters number requested by DAPA," the member of the Cassidian Executive Committee said. "We do not see any promises made but only different scenarios with preferences which have been discussed respectfully by the parties all along the negotiation process."

   Offering alternative solutions is a "simple, legitimate and constructive response" to requirements expressed, and EADS has always been very transparent about this, he added.

His remark refuted DAPA's statement that an arbitrary change to the conditions mutually agreed between the agency and the three bidders in the past disqualifies EADS from the procurement program.

Scherer said DAPA first notified the bidders that the price factor accounts for 30 percent of the total score, but it later changed its stance and made meeting the budget limit the most important requirement for the deal.

"Not meeting the allocated budget was never mentioned as the only disqualifying and decisive factor, which has been announced at the latest stage of the negotiations," he said.

He stressed Seoul should take advantage of its offset deal, including the transfer of technology and industrial participation for South Korea's indigenous fighter jet project for synergies between the aircraft procurement and the development program.

EADS proposed a $2 billion cash investment package to help Seoul kick-start its own fighter aircraft development and assemble 53 planes in local factories to boost its aerospace industry.

Although South Korea has bought weapons from the U.S., its close ally, especially for its Air Force, EADS has been making efforts to expand partnership with South Korea, the official said.

"We are open for any constructive discussion with DAPA. We have shown different paths, and we are ready to discuss the applicability of any or parts thereof to help DAPA come to the most cost-effective choice for the F-X Program."

   ejkim@yna.co.kr

(END)

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