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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] HD Hyundai Heavy Industries has filed for an injunction against South Korea’s defense procurement agency in protest of an order to share sensitive design data with rival Hanwha Ocean, escalating tensions over the delayed Korean Destroyer Next Generation (KDDX) program.
According to defense industry sources on March 25, HD Hyundai Heavy Industries submitted an injunction request to the Seoul Central District Court on March 24 against the Defense Acquisition Program Administration (DAPA). The company stated that the move was unavoidable due to concerns over “seriously unfair competition.”
The dispute centers on whether HD Hyundai should share its basic design data for the KDDX project with Hanwha Ocean ahead of the next bidding phase. HD Hyundai argues that the data includes sensitive information such as pricing, advanced naval technologies, and proprietary business strategies, which could put it at a disadvantage in the upcoming detailed design and lead ship construction tender.
The KDDX program is a KRW 7.8 trillion project to build six 6,000-ton Korean Aegis destroyers by 2030. The project progresses through conceptual design, basic design, detailed design and lead ship construction, followed by serial production.
HD Hyundai previously completed the basic design phase and is now competing for the next stage. However, DAPA has insisted that all basic design data be shared with Hanwha Ocean, which did not participate in the earlier phase, prompting the legal challenge.
HD Hyundai reportedly offered to share all but 12 items classified as trade secrets out of 195 design elements. DAPA, however, has maintained that full disclosure is required.
The KDDX project has already faced more than two years of delays due to disputes between the two companies. While DAPA initially planned to award the next phase directly to HD Hyundai, Hanwha Ocean pushed for a competitive bidding process, citing prior allegations involving a military information leak. The agency ultimately decided late last year to proceed with an open bidding process.
Additional uncertainty remains over potential security-related penalties against HD Hyundai. DAPA is considering extending the period for security-related point deductions—linked to the earlier leak case—through December this year, although the penalty score may be reduced from 1.8 to 1.2 points. Given that contract awards are often decided by narrow margins, even minor scoring differences could determine the outcome of the next phase.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
