South Korea has decided to restart the tender process for a multi billion-dollar fighter jet contract.
The move is a blow for Boeing, seen as a favourite to win the initial bidding after rival bids by Lockheed and EADS exceeded Seoul’s budget of 8.3 trillion won ($7.7bn; £4.5bn).
Boeing had bid to supply F-15 jets, but authorities said they were looking to acquire more advanced planes.
The new tender process is likely to take one year to complete.
“Our air force thinks that we need combat capabilities in response to the latest trend of aerospace technology development centered around the fifth generation fighter jets and to provocations from North Korea,” defence ministry spokesman Kim Min-seok said.
According to report in various media, 15 former air force chiefs had signed a petition earlier this month urging the government not to opt for the Boeing bid.
Boeing said in statement that it was disappointed with the move.
“We await the details from the Defense Acquisition Program Administration on its basis for the delay while evaluating our next options,” it added.
Lockheed Martin had bid to supply its F-35 Joint Strike Fighter, while EADS had pitched the Eurofighter Typhoon.
Analysts said that the decision to restart the tender process had made Lockheed’s F-35 plane the front runner in the race to win the contract.
“I’m very surprised – everyone, from Boeing down, was looking forward to a selection today,” James Hardy, editor of IHS Jane’s Defence Weekly was quoted as saying by the Financial Times.
“The fact they’ve decided to reopen it is a big statement: basically, it means the F-35 is the only aircraft they want.”
The F-35 jet, despite being plagued by schedule delays and cost overruns, is widely regarded as a much more advanced and capable aircraft than its predecessors.
Japan, Italy and Britain are among the countries that have placed orders for F-35 jets.
“We will continue to support the US government in its offer of the F-35A to Korea,” Lockheed Martin’s South Korean representative said after the decision.