Image 1: F-15K
South Korea's Defense Acquisition Program Administration (DAPA) has decided to restart the F-X III competition rather than accepting Boeing's F-15SE proposal. The decision of the DAPA to restart the F-X III program is likely the result of both the heavy lobbying efforts made by the Republic of Korea Air Force (ROKAF) leadership and by the less than satisfactory outcome of the competition overall. Essentially the F-15SE would have won by default had the process not been restarted as the Lockheed bid was over the $7.4 billion dollar limit and the EADS bid was faulted by the DAPA on technical unilateral contract changes.
If I may be frank for a moment, from the onset it was clear that the ROKAF was set on acquiring the F-35. Although the ROKAF and DAPA would certainly not admit to it, the addition of the Eurofighter and the F-15SE was only intended to serve as a means of lowering the F-35's price by increasing the competitiveness of the bid. This is not an uncommon tactic employed by governments in multi-billion dollar aircraft negotiations. Even the United States Government has used this tactic to its advantage, it was clear in the KC-X tanker program that the Airbus proposal would not be able to overcome Boeing's bid, nor was its admission into the program intended to. This technique can be effective but is often prone to backfire, especially when the procurement program is poorly managed.
The decision by the DAPA to restart the F-X III is attributable to the DAPA's own incompetence rather than the fault of any of the aerospace firms involved in the competition. The failure of the DAPA to succeed on its first attempt will leave it with few desirable options. Its certainly possible that both Boeing and EADS will protest the decision of the DAPA and not enter subsequent bids now that there is little doubt that the F-35 is the preferred option. This would leave a uncompetitive environment that would greatly benefit Lockheed Martin. Given the requests of the DAPA to raise the program's budget past $7.4 billion have failed, the most plausible alternative would be to purchase fewer aircraft. The delay will allow the South Korean Government to capitalize on the steady F-35 production cost reductions but even with these reductions, it is unlikely South Korea will be able to acquire the originally proposed 60 F-35's within the $7.4 billion dollar budget in the intimidate future.
To clarify, the F-35 is certainly the superior choice over the F-15SE given South Korea's unique security needs. The F-15SE would be able to sufficiently counter North Korean threats but its utility against China is much more limited. Furthermore, the F-35 will be heavily upgraded over the next two to three decades by virtue of its role in the USAF, USN, and USMC regardless of any foreign purchases. The F-15SE airframe is not guaranteed to receive the same level of capability/system growth via upgrades as the F-35 over the same period.