During the 7th Civilian Administration, Goheung-gun Continues Excessive Private Contracts... Company Selection Marked by 'Collusion'

Near 100% Sole-Source Contracts for Specific Processes

Goheung County Office

[Asia Economy Honam Reporting Headquarters Reporter Kim Chunsu] Since the beginning of the 7th local government term, Goheung-gun, Jeonnam Province, has set the goal of eradicating inappropriate private contracts and promoting integrity, but after two years, the current situation is evaluated to be no different from the 6th local government term.

Goheung-gun received the lowest 5th grade in the integrity measurement announced by the Anti-Corruption and Civil Rights Commission last year. Although efforts were made to establish an ‘anonymous reporting system’ in February to foster a culture of integrity, there are still complaints that integrity is only being emphasized to employees.

Since the 7th local government term, Goheung-gun has issued many public procurement materials through private contracts. Among these, there was not a single general competitive bid for the power distribution and instrumentation processes.

The county divided 28 contracts worth over 2.5 billion KRW from October 31, 2018, to June 30, 2020, among 14 companies for power distribution and instrumentation processes used in facilities such as drainage pump stations, water and sewage facilities, and large buildings. The amounts ranged significantly from about 300 million KRW to 20 million KRW, with the number of contracts ranging from 6 to 1 per company.

The problem is that the selection process of these companies was unclear, and contracts were concentrated among a few specific companies.

For general construction private contracts by local governments, the upper limit is 20 million KRW. However, for goods, there is no limit on the amount, so competition among companies is fierce.

Although there are more than 50 companies with the same conditions in the Jeonnam area, except for a few specific companies, these companies have been neglected in projects ordered by Goheung-gun.

Goheung-gun proceeded with this excessive execution of private contracts based on the Local Contract Act Enforcement Decree, which allows private contracts when purchasing goods directly produced by factories located in agricultural and fishery rural industrial complexes under the Agricultural and Fishery Rural Development Act.

However, the industry points out that Goheung-gun has concentrated contracts on specific companies despite having many eligible private contract companies, thereby inviting suspicion.

An official from a company who requested anonymity said, “We operate under the same conditions and pay taxes, but some companies receive private contracts worth hundreds of millions of won while others do not get a single contract. I don’t understand why this happens,” and appealed, “The unfair practice of collusion must be eliminated.”

Generally, private contracts in cities and counties proceed by the construction ordering department designating 3 to 4 suitable companies considering the necessity of the process and submitting them to the contracting department.

Even so, Jeonnam Province does not engage in any private contracts under the Agricultural and Fishery Rural Development Act to avoid allegations of favoritism and frequent disputes.

Nevertheless, a Goheung-gun official avoided controversy by saying, “Private contracts in agricultural and fishery industrial complexes are recommended by Jeonnam Province.” Regarding the one-sided private contracts, the official lamented, “The final selection of companies is entirely decided by higher authorities.”

This content was produced with the assistance of AI translation services.