"Could Buy Cheaper"... 7 Organizations Including LH Waste 12 Billion Won Budget Through 'Split Purchasing'

[Sejong=Asia Economy Reporter Son Sunhee] It has been revealed that some public institutions, including Korea Land and Housing Corporation (LH), wasted a budget amounting to 12 billion KRW by entering into non-competitive supply contracts through so-called 'splitting (divided purchasing)' methods.

The Government Joint Anti-Corruption Promotion Team under the Office for Government Policy Coordination announced on the 16th that it conducted an operational inspection of the Multiple Award Schedule (MAS) system for the top seven institutions by MAS contract amount (LH, Korea Rural Community Corporation, Korea Water Resources Corporation, Korea Hydro & Nuclear Power, Korea Expressway Corporation, Korea Railroad Corporation, Korea Environment Corporation) based on a total of 10,261 purchase records (583.6 billion KRW) from January 2017 to June last year. As a result, it confirmed 563 cases that caused a loss of budget-saving opportunities amounting to 12 billion KRW.

The government requires that for competitive products among small and medium enterprises (SMEs) and SME-manufactured items, contracts over 100 million KRW, and for other supply contracts over 50 million KRW, suppliers must be selected through a two-stage competition process (evaluation of proposals from five or more suppliers). This is intended to ensure more efficient budget execution through competitive bidding.

However, the recent inspection revealed a total of 1,937 cases (103.8 billion KRW) of divided purchasing. Additionally, 10 cases (800 million KRW) of fraudulent supply were detected, including delivering items different from those in the Public Procurement Service contract details or supplying low-priced imported goods.

The Anti-Corruption Promotion Team of the Office for Government Policy Coordination stated, "We will require the relevant institutions to take necessary measures such as disciplining those involved based on the confirmed inspection results, and we will continuously monitor the handling outcomes."

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