HD Hyundai Heavy Industries was the sole bidder for the "Maritime Intelligence Ship (AGX)-III Basic Design" project, aimed at introducing next-generation intelligence ships for the Navy's Maritime Intelligence Group.
According to reporting by The Seoul Economic Daily on Tuesday, HD Hyundai Heavy Industries was the only bidder in the re-tender announcement closed on Monday for selecting a basic design contractor for the next-generation maritime intelligence ship. A two-way competition between HD Hyundai Heavy Industries and Hanwha Ocean had initially been expected, but Hanwha Ocean withdrew.
The first project announcement was canceled as neither HD Hyundai Heavy Industries nor Hanwha Ocean submitted bids. The Defense Acquisition Program Administration (DAPA) subsequently issued a second tender announcement on April 23 and held a project briefing on April 30.
DAPA specified that when only a single company bids in a re-tender, the agency can select a preferred bidder through proposal evaluation and conclude a private contract following negotiations, in accordance with Article 27 of the Enforcement Decree of the Act on Contracts to Which the State Is a Party and other relevant regulations.
Accordingly, the project is expected to proceed through a private contract with HD Hyundai Heavy Industries, which submitted the sole bid.
Warship construction projects proceed in the following order: ▲concept design ▲basic design ▲detailed design and lead ship construction ▲follow-on ship construction. It is customary to award detailed design and lead ship (first vessel) construction to the company performing the basic design through a private contract.
The basic design project will be carried out over 26 months after contract signing. The project budget is approximately 27.4 billion won. The maritime intelligence ship introduction project aims to secure two next-generation maritime intelligence ships of 4,000 tons or more by 2035, with a total investment of 1.97 trillion won.
"As a result of the re-tender announcement closing, only HD Hyundai Heavy Industries participated in the bidding," a DAPA official said. "If the proposal evaluation yields scores above the threshold, HD Hyundai Heavy Industries will be designated as the preferred bidder, after which a private contract will be concluded and the project will proceed."
Notably, DAPA is likely to make a preliminary judgment on whether to apply additional security point deductions to HD Hyundai Heavy Industries, the sole bidder in the proposal evaluation for the Navy's maritime intelligence ship basic design project, ahead of the defense industry's biggest issue — the 8 trillion won Korean-Type Next-Generation Destroyer (KDDX) project.
Whether HD Hyundai Heavy Industries will face "additional security point deductions" is a key variable in determining the KDDX project award and a matter of significant legal controversy over double application. DAPA is reportedly scheduled to conduct the maritime intelligence ship proposal evaluation on the 20th.
"Security point deductions for bidding companies are finalized during the proposal evaluation process, and nothing has been decided yet," another DAPA official said. "We plan to manage and promote the project lawfully and fairly in accordance with relevant laws and procedures."
HD Hyundai Heavy Industries has stated that it will take legal action if DAPA creates an "uneven playing field" through additional security point deductions. On March 24, the company filed an injunction against DAPA at the court, requesting that the Request for Proposal (RFP) for the Korean-Type Next-Generation Destroyer (KDDX) project not be distributed or shared with Hanwha Ocean, as it contains the company's trade secrets.
The maritime intelligence ship belongs to the Maritime Intelligence Group, a direct unit under the Naval Operations Command led by a brigadier general. The locations of vessels under the Maritime Intelligence Group, detailed organizational matters, and personnel status are all classified as Military Class II secrets.
The unit is an intelligence force that collects and analyzes maritime information for the Navy's operational forces to produce target intelligence, as well as supporting meteorological, oceanographic, and acoustic information. The maritime intelligence ship's main mission is collecting maritime data, foreign signal intelligence, and anti-submarine intelligence essential for Navy operations, making it a critical asset for strengthening naval power.
The Navy conducts intelligence operations such as anti-submarine and electronic warfare based on various military intelligence provided by the Maritime Intelligence Group. The Navy currently operates two maritime intelligence ships: the Shinsegi (AGS-12) and the Shingiwon (AGS-13). The Navy aims to expand its maritime intelligence ship fleet to a total of four vessels and establish a system capable of simultaneously conducting intelligence collection missions in the East and West Seas.
Through this project, DAPA plans to apply cutting-edge technology that can support intelligence collection and stealth maneuvering, as the ships will conduct covert operations including intelligence gathering on North Korea. HD Hyundai Heavy Industries previously won the "concept design" contract for the next-generation maritime intelligence ship (AGS-III).
