‘Origin Unknown’ Public Procurement Service Goods Total Contract Amount Approaches 26 Trillion Won

[Asia Economy (Daejeon) Reporter Jeong Il-woong] It has been investigated that the total contract amount with unclear origin in the Public Procurement Service's (PPS) goods contracts is approaching 26 trillion won. Goods contracts are largely divided into total contracts and unit price contracts.

According to the 'Procurement Performance Data by Origin for the Last 5 Years' submitted by the PPS to Jeong Seong-ho, a member of the National Assembly's Planning and Finance Committee (Democratic Party of Korea, Yangju-si, Gyeonggi-do), during this period, the total contract amount with unconfirmed origin in the PPS's goods contract performance was 25.909 trillion won, accounting for 99% of the total supply amount (26.1571 trillion won).

Total contracts are a method of contracting all purchased goods in bulk, distinguished from unit price contracts which contract goods on a per-item basis.

Also, from 2016 to 2020 (end of June), the scale of goods procurement contracts by the PPS was a total of 105.5175 trillion won, of which total contracts accounted for 26.1571 trillion won (24.8%) and unit price contracts accounted for 79.3604 trillion won (75.2%).

At this time, the confirmation of origin greatly differs between the two contract methods. In goods unit price contracts, 96.4% of the total amount has a confirmed origin, whereas in the total contract sector, conversely, 99% is unconfirmed.

For example, in the last 5 years, the origin and amount scale of goods under PPS unit price contracts showed 73.1905 trillion won (92.2%) from Korean products, 1.4909 trillion won (1.9%) from China, and 596.7 billion won (0.8%) from the United States. Considering that the supply scale of unit price contract goods is in the 79 trillion won range, it means that the origin of most goods can be confirmed.

However, the origin and amount scale of goods under total contracts confirmed were only 236.6 billion won from Korean products, 5.6 billion won from the United States, 5.5 billion won from Belgium, 300 million won from France, and 100 million won from Russia, showing that the supply amount of goods with confirmed origin is less than 1% of the total.

Regarding this, Assemblyman Jeong emphasized, “The PPS should thoroughly manage the origin within the scope permitted by international norms for both unit price contracts and total contracts, and promote a virtuous cycle of the domestic economy through the procurement market.”

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