Support for Procurement Companies Extended by 6 Months... Advance Payment Limit Increased from 70% to 80%

'COVID-19 Overcoming Contract Guidelines' Extended for 6 Months

[Asia Economy Sejong=Reporter Lee Junhyeong] The government will extend the application period of the 'Contract Guidelines for Overcoming COVID-19' introduced to support procurement companies by six months. As a result, all competitive bidding in the domestic public procurement market can be issued as emergency bidding until the first half of next year. The advance payment limit will also be expanded from the existing 70% to 80% until the first half of next year.

According to related ministries on the 30th, the Ministry of Economy and Finance recently decided to extend the 'Contract Guidelines for Overcoming COVID-19' until the first half of next year. The Ministry plans to announce the 'Notice on the Temporary Special Application Period of the Enforcement Decree of the Act on Contracts to Which the State is a Party,' which includes extending the application period of the guidelines until June 30 of next year, on the 1st of next month.

The Contract Guidelines for Overcoming COVID-19 were introduced by the government in 2020 to support procurement companies struggling due to COVID-19. The guidelines focus on the rapid execution of public procurement contracts by allowing emergency bidding for all competitive bids and shortening the advance payment period.

Originally, the contract guidelines were scheduled to expire at the end of this month. However, the Ministry of Economy and Finance judged that extending the contract guidelines was inevitable as COVID-19 is prolonged.

Accordingly, all competitive bidding in the procurement market can be issued as emergency bidding until June next year. To enhance the speed of national fiscal execution, the advance payment period for procurement companies will be shortened from within 14 days to within 5 days from the advance payment claim. The subcontract payment period will also be shortened from within 15 days to within 5 days from the payment date. Additionally, the advance payment limit will be expanded from 70% of the contract amount to 80%.

Procurement companies that experienced difficulties in contract fulfillment due to COVID-19 are also exempt from delivery responsibility. Therefore, procurement companies will not be charged delay penalties even if contracts are inevitably delayed due to the impact of COVID-19 until the first half of next year. According to the guidelines, if the direct cause of a procurement company's failure to fulfill a contract is COVID-19, the government will not forfeit the contract deposit to the treasury nor impose restrictions on bidding participation qualifications.

The Ministry of Economy and Finance stated that it may consider further extensions of the contract guidelines depending on the spread of COVID-19. A ministry official said, "Since this measure was started due to the pandemic, we will review additional extensions if deemed necessary while monitoring the situation."

Deputy Prime Minister Choo Kyung-ho Presiding Over Emergency Economic Ministers' Meeting
(Sejong=Yonhap News) Reporter Kim Juhyung = Choo Kyung-ho, Deputy Prime Minister and Minister of Economy and Finance (center), is speaking at the Emergency Economic Ministers' Meeting held at the Government Complex Sejong in Sejong City on the morning of the 29th. 2022.12.29
kjhpress@yna.co.kr
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