BAE Sues Korea for Scrapping Fighter Upgrade Contract

      November 17, 2014 09:50

      BAE Systems of the U.K. is suing Korea's Defense Acquisition Program Administration in a U.S. court after being dropped from an upgrade contract for the KF-16 fighter jets worth W1.75 trillion (US$1=W1,101).

      BAE Systems Technology Solutions & Services, the U.S. subsidiary, filed the lawsuit with a U.S. district court in Baltimore last Thursday, according to Defense News weekly.

      BAE is protesting against a DAPA demand for the return of US$43.25 million in costs. DAPA blames BAE for the cancellation because the U.K. firm asked for a massive price increase.

      International litigation on this scale about a Korean military project is unprecedented.

      The project aims to upgrade the radars, mission computers, and weapons systems of the Air Force's 134 KF-16 fighter jets. It got underway in July 2012, when DAPA picked BAE's U.S. subsidiary.

      But recently both the U.S. government as guarantor and BAE demanded more money -- Washington cited up to W500 billion in "risk management" cost and BAE W300 billion for delays and increased scope.

      BAE denies wrongdoing and blames the U.S. government for hiking the price first.

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