Daegu's First 'Goods Selection Contract Review System' Leads to Increased Local Product Purchases and Reduced Financial Burden, Catching Two Rabbits at Once

Daegu City, First Among Nationwide Local Governments to Implement in 2019

Performance of System Operation.

[Asia Economy Yeongnam Reporting Headquarters Reporter Kim Yong-woo] Daegu City is seeing significant results from the 'Goods Selection Contract Review System,' the first of its kind implemented nationwide.

Since Daegu City first introduced this system among local governments in April 2019, the number of purchases of local products has increased by 40%, and it is estimated that 2 billion KRW in budget savings have been achieved.

This means that while supporting local businesses, the system has also contributed to the financial soundness of the local government.

Before the system was implemented, there were no clear standards for purchasing goods, which led to intentional designation and design of specific companies' products, resulting in naturally low purchases of products made by local companies and even depriving them of opportunities to participate in orders. This also caused controversies over improper solicitations and preferential treatment.

To address these issues, Daegu City established the Goods Selection Contract Review System, the first of its kind nationwide, to build a fair and transparent system for purchasing goods.

It is reported that the system has contributed not only to revitalizing the local economy through increased purchases of local products and budget savings that strengthen local finances but also to improving the integrity of public officials by eliminating controversies over preferential treatment.

After two years of operation, the proportion of purchases of products made by local companies increased significantly from 22% (based on the Public Procurement Service) before the system was implemented to 62% (as of June 2021), showing considerable effectiveness in purchasing local products.

Budget savings also increased from 0.7% (based on goods contract review) before the system to 5.4% (as of June 2021), resulting in budget savings of approximately 2 billion KRW through the Goods Selection Contract Review System.

Problems identified during the system's operation were improved and reflected as of September 1. Multiple evaluation methods were consolidated into a single Goods Selection Contract Review evaluation standard, and two-stage competitive review evaluations and administrative procedures for multiple supplier contracts were added to secure objectivity in various ways.

Cha Hyuk-kwan, Director of the Daegu City Autonomous Administration Bureau, said, “The Goods Selection Contract Review System is leading to increased purchases of local company products through expanded participation not only of local companies but also of companies located in industrial complexes.”

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