Public Procurement Service Expands Subcontractor Protection Service

[Asia Economy (Daejeon) Reporter Jeong Il-woong] The Public Procurement Service announced that it will expand the implementation of the ‘Hadogup Jikimi’ service starting from the 4th.

Hadogup Jikimi was established in 2013 to improve the unfair subcontracting culture in the public procurement market, where the prime contractor fails to pay or support the subcontractors.

In addition, the Public Procurement Service plans to expand related services by strengthening the payment claim rights of material and equipment suppliers and simplifying procedures.

First, the system, which had been used only by subcontractors, will add functions so that material and equipment suppliers can also use Hadogup Jikimi.

Also, if the prime contractor goes bankrupt or delays payment more than twice, subcontractors will be able to directly claim payments from the ordering agency. Furthermore, the Public Procurement Service explained that invoices, which had to be prepared every time the prime or subcontractors prepaid material, equipment, or labor costs from their own funds, can now be prepared collectively after occasional prepayments.

As of last year, Hadogup Jikimi is used by 6,788 public institutions and 67,235 companies, and the payment amount through the system is estimated to reach 50.7 trillion won.

Lee Jong-wook, Administrator of the Public Procurement Service, said, “Due to recent increases in raw material prices and market interest rates, small and medium subcontractors are facing greater difficulties. The Public Procurement Service will ensure that Hadogup Jikimi contributes to establishing a transparent subcontracting culture in public facility construction and software sectors and to establishing a fair market order.”

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