SEOUL, KOREA - The selection process for the third next-generation fighter jet development program, whose total contract amount is estimated at 8.3 trillion won, is at the final stage. The Defense Acquisition Program Administration will soon decide on the three finalists and go on a bidding once offset trade agreements of up to 60 percent of the purchase price are made with the suppliers.
A Defense Acquisition Program Administration official said on June 10, "Negotiations on the fight jet program's offsets have been almost done and currently the parties are preparing for contracts. After evaluating the three suppliers' offset programs on Eurofighter Typhoon (EADS), F-15 Silent Eagle (Boeing), and F-35 Stealth Jet (Lockheed Martin), DAPA came up with a figure of 60 percent for the expected program budget."
Offsets are a trade practice whereby a supplier agrees to buy products from the party to whom it is selling, in order to win the buyer as a customer and offset the buyer's outlay. Currently DAPA targets a combined percentage of offsets at 50 percent of the total expenditure.
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