[2022 National Audit] "Favoring Local Companies"... Bid Rigging in Daegu Research Special Zone

Democratic Party Rep. Jeong Pil-mo Points Out Issues at October 18 National Audit

[Asia Economy Reporter Kim Bong-su] The Research and Development Special Zone Promotion Foundation (Special Zone Foundation) under the Ministry of Science and ICT has been accused of manipulating the ranking of participating companies in a public offering project to ensure that a specific company was selected in the Daegu Research and Development Special Zone.

According to the National Assembly inspection data received by Jeong Pil-mo, a member of the Democratic Party of Korea (Science, ICT, Broadcasting and Communications Committee), the bidding for the "Daegu Startup Campus Operation Support Project" in the Daegu Research and Development Special Zone was conducted in April 2020. Three companies participated. The initial selection evaluation results showed Company A scored 86.6 points, ranking first (selected), and Company B scored 83.8 points, ranking second (reserve). However, the company actually selected for the project was Company B, reversing the results.

At that time, Kang Mo, the project team leader of the Daegu Special Zone, said, "I want an executing agency that can work closely in the Daegu area and has no financial problems to be selected," and unauthorizedly handed over the ID of the evaluation system manager to the evaluation committee chairperson, Choi Mo. Choi reversed the final evaluation results by modifying his individual evaluation scores. As a result, Company B received 85.8 points and was selected for the public offering project, surpassing Company A, which received 85.4 points.

They also tampered with the evaluation comments. Negative comments such as financial instability were added to Company A's evaluation, while positive comments like "Excellent cooperation network with local related organizations as a local startup support institution" were added to Company B's evaluation.

According to the audit report of the Special Zone Foundation, an audit of the Daegu Special Zone was conducted in May 2020 following a problem raised by a staff member. However, the foundation concluded the matter by issuing only a "reprimand" to Kang Mo, the team leader who ordered the manipulation. The reason was that they could not confirm whether there was any instruction or collusion from superiors or any quid pro quo. Choi Mo, the chairperson who directly manipulated the evaluation scores, was not even investigated because he was an external person.

However, the advisory committee that reviewed the problem in the company selection process decided to nullify the selection, stating that the procedure was unfair. Instead of re-announcing the recruitment, they decided to re-evaluate the existing three companies. Company A did not participate in the re-evaluation, and Company B, which had been involved in favoritism controversies, was finally selected as the top company in the re-evaluation.

According to the foundation's data, Company B is currently participating in other projects within the foundation in the form of a consortium and has been conducting project tasks since April this year. Kang Mo, who received the reprimand, is currently serving as the head of the Technology Evaluation Team at the foundation's headquarters. Choi, the evaluation committee chairperson, has continued to work as an evaluation committee member for the foundation and has received allowances. From 2020 to August 2022, he attended 29 evaluation committee meetings and received 8.2 million KRW. He is also serving as the project leader of the "Korean-style Science Park Education Project" organized by the foundation and is the vice president of a university in Daejeon. The foundation did not inform the university about the evaluation score manipulation case involving Choi.

Rep. Jeong said, "Although fraud occurred during the bidding process of the public offering project, only the project team leader received a light disciplinary action, while the evaluation committee chairperson who directly manipulated the scores and the favored company are openly participating in the foundation's projects," and “The Special Zone Foundation has downplayed the bidding corruption case and only issued a slap-on-the-wrist punishment to internal staff. The Ministry of Science and ICT must step in to conduct a thorough investigation to clarify the facts and punish those involved.”

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