By AARON MEHTA and JUNG SUNG-KI
WASHINGTON AND SEOUL — South Korea is threatening to break an agreement with BAE Systems to upgrade its fleet of KF-16s, opening a window of opportunity for competitor Lockheed Martin to reclaim its dominance in the lucrative F-16 upgrade market.
The Defense Acquisition Program Administration (DAPA) selected BAE Systems’ North American subsidiary in December 2012 as prime integrator to take charge of software and hardware upgrades for 134 KF-16 aircraft. It represented the first time any company had beat Lockheed, the original producer of the F-16, for upgrades to the jet.
Both BAE and Lockheed have built their upgrade packages around new avionics, including dueling sets of active electronically scanned array (AESA) radars. Lockheed’s package features Northrop Grumman’s scalable agile-beam radar, while BAE selected Raytheon’s advanced combat radar. BAE has estimated the worldwide F-16 upgrade market could be worth as much as $10 billion over the next decade, with an estimated 1,000 to 1,300 jets in play.
Now BAE’s contract, which was signed under a foreign military sales deal, is in peril, something DAPA blames on both the US government and BAE Systems asking for additional funds for the work.
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