Lowering Qualification Standards for Apartment Repair and Service Contractors to Expand Entry of New Businesses... "In the Interest of Broadening New Entrants"

Fair Trade Commission and Ministry of Land, Infrastructure and Transport to Promote Revision of 'Guidelines for Selection of Housing Management Companies and Operators'
Recognition Period for Construction and Service Performance Extended from 3 to 5 Years

(Photo) [Image source=Yonhap News]

[Sejong=Asia Economy Reporter Joo Sang-don] The performance criteria, which have acted as a barrier to entry in bids for maintenance and repair work and services for apartment complexes and other multi-family housing, will be lowered. This aims to expand the entry of new operators and promote competition.

On the 15th, the Fair Trade Commission (FTC) and the Ministry of Land, Infrastructure and Transport (MOLIT) agreed to promote revisions to the 'Guidelines for Selection of Housing Management Companies and Operators' reflecting these changes.

The FTC, during its investigation of bid-rigging cases related to apartment repair work and services over the past several years, identified structural causes limiting competition under the current bidding system and has been discussing improvement measures with MOLIT.

In bids for repair work and services for apartments, 'performance' is a very important factor in determining participation and winning bids. If high performance standards are required as a qualification for participation, operators who do not meet these standards cannot participate from the outset. Even if they participate, if high performance standards are required as evaluation criteria, the FTC believes that operators with sufficient management capabilities such as technicians and equipment may still fail to win bids due to low evaluation scores.

Accordingly, the FTC and MOLIT have decided to relax the performance criteria starting next year. In restricted competitive bidding, when performance is required as a qualification for participation, the recognition period for performance will be extended from the recent 3 years to the recent 5 years. This allows participation even if there is no construction or service performance in the recent past. Additionally, the upper limit of the number of projects that can receive full marks in the evaluation of work performance during qualification screening will be reduced from 10 to 5.

An FTC official stated, "This institutional improvement is meaningful in that it expands the range of participating operators and reduces the possibility of collusion in small local markets," adding, "We will continue to identify and improve institutional factors that cause repeated legal violations, not just one-time sanctions."

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