South Korea has selected the US unit of BAE Systems to upgrade the avionics of 134 Lockheed Martin F-16 C/D aircraft, but will not make a radar supplier decision until 2013.
The deal is worth approximately $1 billion, says Seoul's Defence Acquisition Procurement Agency (DAPA). The other contender for the package was Lockheed Martin.
The decision is a major victory for BAE, which recently said it was not given the opportunity to compete for Taiwan's programme to upgrade 66 F-16s. At the recent Farnborough air show, Lockheed and Taiwan's Aerospace Industrial Development Corporation (AIDC) signed an agreement on the upgrade, leading BAE to question the fairness of the award.
Seoul's F-16 upgrade will be conducted through the US Foreign Military Sales mechanism, with the US Air Force contracting BAE Systems for the work.
DAPA has yet to name the winner of a parallel competition to upgrade the radars of its F-16s to active electronically scanned array sets. The rivals in this competition are the Raytheon Advanced Combat Radar (RACR) and Northrop Grumman's Scalable Agile Beam Radar (SABR).
DAPA said this requirement is not as urgent as the avionics upgrade, which will require more intrusive work as it will upgrade items such as the weapons systems, multi-function displays and the aircraft's mission computer.
"The avionics integration will take more time than the radar integration," said DAPA.
DAPA plans to name the winner of the radar competition in the first half of 2013.
Although DAPA plans to announce its AESA decision before the USAF, it is in consultations with the USAF about its F-16 AESA plans. The agency sees significant value in using the same F-16 AESA as the USAF, as this will is simplify logistics and interoperability.