HD Hyundai Heavy Industries pulled out of the first bidding round for South Korea’s next‑generation destroyer program (KDDX), ending two years of disputes over the vendor selection process. According to reporting by the Seoul Economic Daily on May 14, HD Hyundai decided not to participate in the initial bid after an internal review identified multiple technical issues tied to the program’s delays. Company officials said they will consider entering if authorities issue a new solicitation. The registration deadline for the bid was 2 p.m. on May 14.
An HD Hyundai Heavy Industries spokesperson said, “As the only domestic firm that has designed and built an Aegis destroyer, we had been preparing our KDDX bid carefully. However, we need more time to fully assess the program’s conditions, so we reluctantly opted out of the first round.”
Sources told reporters HD Hyundai viewed the technical burden and program risk as significant. The confirmed budget closely matched the provisional contract estimate set three years ago during the basic design phase, and the construction schedule was shortened by five months from the originally assumed 76 months (which assumed immediate ordering after basic design). Taking those factors together, the company opted not to bid in the first round.
On March 20, the Defense Acquisition Program Administration (DAPA) issued a “bid announcement for selecting R&D project contractors” to carry out KDDX detailed design and build the lead ship. The contract period runs 71 months from the date of contract signing. The confirmed project budget is 882,099,000,000 KRW (including VAT) (≈ $661.57 million USD).
DAPA specified a “designated competitive contract (negotiated contract)” as the procurement method, meaning only firms designated as defense suppliers may participate. In February 2025, the Ministry of Trade, Industry and Energy designated HD Hyundai Heavy Industries and Hanwha Ocean as defense firms capable of producing the KDDX.
HD Hyundai’s absence made the initial announcement effectively void. DAPA is expected to reissue the call for bids this month to accelerate progress on the KDDX program.
DAPA had planned to begin with the March announcement and, through proposal evaluation and negotiations, complete contractor selection within the first half of the year. The goal remains to deliver the lead ship to the Republic of Korea Navy in 2032.
For the reannouncement, DAPA will again prioritize designated competitive bidding. If only one company bids, DAPA will select a preferred negotiation partner through proposal evaluation and may proceed to a sole‑source contract under Article 27 of the Enforcement Decree of the Act on Contracts to Which the State is a Party and related regulations.
A DAPA official said, “With HD Hyundai Heavy Industries not participating in the first round, the bid had no choice but to fail. Given the program’s long delay, we will quickly reissue the solicitation to keep the schedule on track.”
The KDDX program is funded at 7,043,900,000,000 KRW to build six 6,000‑ton mini‑Aegis destroyers (total program value: 7,043,900,000,000 KRW, ≈ $5.28 billion USD). Shipbuilding will proceed through concept design, basic design, detailed design and construction of the lead ship, and then construction of follow‑on ships.
Historically, the firm that performs the basic design has been awarded the detailed design and lead‑ship (No. 1 hull) construction via a sole‑source contract. Hanwha Ocean carried out the concept design, and HD Hyundai Heavy Industries performed the basic design.
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