Updated with response from Raytheon at bottom of story.

South Korea has confirmed that it is counter-suing BAE Systems and Raytheon over a cancelled deal to upgrade 134 Lockheed Martin F-16s.

A spokesman for South Korea’s Defense Acquisition Program Administration (DAPA) confirms a suit has been filed in a South Korean court, but declined to discuss the amounts involved. DAPA alleges that the two firms did not fulfill the terms of contracts signed with the South Korean company.

BAE Systems’ contract would have seen 134 aircraft receive new avionics and an active electronic scanned array (AESA) radar produced by Raytheon.

The spokesman adds that Seoul is in talks with the US government and Lockheed Martin, BAE’s rival in the original competition, around the upgrade programme. In its original South Korean offer Lockheed would have upgraded the jets’ avionics and other systems, and the aircraft would have received Northrop Grumman’s Scalable Agile Beam Radar (SABR).

The move follows BAE’s announcement on 13 November 2014 that it would sue South Korea following Seoul’s cancellation of the Foreign Military Sales contract with BAE on 5 November 2014.

According to BAE’s suit in the US District Court of Maryland, the US government in August 2014 “informed South Korea that the overall price of the upgrade program could increase by as much as $800 million”, to between $2.4 billion to $2.5 billion.

A report by South Korean official news agency Yonhap, quoting a spokesman at South Korea’s Defense Programme Administration (DAPA), said the US government wanted an additional W500 billion ($473 million) and prime contractor BAE Systems W300 billion.

BAE alleged that South Korea killed the deal because BAE failed to secure a sufficiently low price through the US foreign military sales process.

Two South Korean F-16s – one single-seat C and a twin-seat D model – have already received the upgrade in BAE System’s Fort Worth facility. The contract cancellation followed a period of price haggling between BAE, South Korea’s Defense Acquisition Programme Administration (DAPA) and the US Government that is outlined in BAE’s lawsuit.

The spokesman was unable to verify the status of these two aircraft.

In an email to Flightglobal, Raytheon said the company had met all of its contractual obligations.

"We understand that a lawsuit has been filed in Korea by the Defense Acquisition Program Administration," said Jim Hvizd, vice president of Business Development for Raytheon Space and Airborne Systems. "We met all of our KF-16 program obligations, including technical performance, schedule and cost. We will respond to the complaint in court when we receive formal service of process."

BAE Systems did not reply to Flightglobal's request for comment on the matter.

Source: FlightGlobal.com