Public Procurement Direct Contract Limit for Small Business Owners Doubled from 50 Million to 100 Million Won

[Sejong=Asia Economy Reporter Son Seon-hee] The government will raise the limit for direct contracts with small businesses and small merchants from the existing 50 million won to 100 million won when concluding contracts for goods or services.

The Ministry of Economy and Finance announced on the 29th that the "Partial Amendment to the Enforcement Decree of the National Contract Act," which includes this content, was reviewed and approved at the Cabinet meeting. Since the current small-amount direct contract limit was revised in 2006, the amount standard has been raised to reflect changes in economic conditions over time.

In addition to small businesses and small merchants, the direct contract limit for women-owned, disabled-owned, and social enterprises was also raised from 50 million won to 100 million won. For comprehensive construction projects, the limit was doubled from 200 million won to 400 million won; for specialized construction projects, from 100 million won to 200 million won; and for other construction projects, from 80 million won to 160 million won.

Furthermore, the government expanded the scope of the National Contract Dispute Mediation System to enable procurement companies to resolve disputes arising from contracts with the state quickly and efficiently. The number of mediation targets increased from the current 7 to 10, and the monetary criteria were relaxed to about one-third of the current standard.

Additionally, although the direct contract system generally requires "submission of two estimates," in cases of infectious disease prevention or urgent/security purposes, direct contracts can be concluded with only one estimate. Also, "disaster safety certified products" that have received conformity certification under the "Disaster and Safety Management Basic Act" will be supported in market access through direct contracts.

The Ministry of Economy and Finance stated, "Through this system improvement, the business conditions of small-scale micro-enterprises will be somewhat improved, supporting the early overcoming of COVID-19, and the protection of the rights and interests of small and medium-sized enterprises is expected to be further strengthened."

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