SEOUL --- The arms procurement agency said Wednesday it will strive to improve systems and procedures on how "offset" deals should be pursued and implemented after the state auditor found problems with the agency's negotiations to buy F-35A stealth fighter jets.
In 2014, South Korea awarded the fighter contract to Lockheed Martin, overturning an earlier decision to select Boeing, which offered the F-15 Silent Eagle, as a preferred bidder for the FX-III project worth 7.4 trillion won (US$6.19 million).
The contract to buy 40 F-35 Lightning II fighters was concluded in an "offset" manner that called for the American defense giant to transfer dozens of key technologies to South Korea in exchange for purchasing the expensive fighter jets.
But implementation of the deal did not go well as the U.S. government refused in 2015 to issue an export license for four combat jet technologies, including a key radar technology, to South Korea, though the U.S. firm agreed to provide 25 kinds of technologies under the offset deal.
On Tuesday, the state auditor Board of Audit and Inspection (BAI) announced the results of an extensive audit of the negotiations, saying that irregularities were found in the course of the Defense Acquisition Program Administration's (DAPA) negotiations to carry out the offset deal.
The DAPA "failed to abide by some relevant regulations over the course of negotiations," the auditor said. Several DAPA officials also "turned out to have falsely reported details of the contracts" to the government committee in charge of approving the procurement project, the BAI said, calling on the DAPA chief to reprimand those in charge and revamp systems. (end of excerpt)
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