The Door Opens for Large Corporations to Enter Public SW Projects Exceeding 100 Billion Won

The government proposed a plan to allow large corporations to participate in major public software projects exceeding 100 billion won and gathered industry opinions.

On the 30th, the Ministry of Science and ICT held a forum regarding the improvement plan for the restriction system on large corporations' participation in public software projects. At the forum, the ministry announced the improvement plan and collected opinions from the software industry and ordering agencies.

Earlier this year, the Regulatory Innovation Promotion Team of the Office for Government Policy Coordination selected the restriction system on large corporations' participation in public software projects as a regulatory improvement task. The Ministry of Science and ICT and the Office for Government Policy Coordination have been working on improving the system. The Ministry of Science and ICT gathered opinions on the necessity and methods of system supplementation through sequential meetings with stakeholders including large, medium-sized, and small software companies.

The Ministry of Science and ICT reviewed improvement measures to promote competition and strengthen corporate autonomy and responsibility to enhance the quality of large public software projects that have significant social impact and importance. At the forum, discussions were held on ▲allowing large corporations to participate in large public projects and design/planning projects, ▲relaxing consortium restriction criteria for participating companies through improvements in win-win cooperation systems, and ▲technical evaluation methods to prevent excessive subcontracting by winning companies.

The government proposed an improvement plan that allows large corporations subject to mutual investment restrictions to participate in projects exceeding 100 billion won, while for other projects, participation approval will be decided through exception reviews as currently practiced. Applying this improvement plan is expected to activate competition between large and medium-sized enterprises in large projects, thereby enhancing quality and increasing predictability for ordering agencies and companies.

Among the exception review target projects (293 cases) over the past five years, only 6.5% (19 cases) were large projects exceeding 100 billion won, and the exception approval rate was 84.2% (16 cases). It was anticipated that the impact of the improvement plan on the market environment would be limited. Additionally, the government judged that small and medium-sized enterprises can maintain cooperative relationships with large corporations as consortium members in large projects.

Design and planning projects are excluded from software projects restricted for participation by large and medium-sized enterprises. Enhancing design and planning can improve the quality of the main project. For projects allowing large corporation participation and those exceeding 100 billion won, a differentiated evaluation based on subcontracting ratios will be introduced during technical evaluations. This aims to prevent excessive subcontracting practices by main contractors and encourage direct project execution to avoid quality degradation. Furthermore, corporate autonomy will be strengthened regarding the number of companies and participation rates to form optimal consortiums.

Oh Yong-su, Software Policy Officer at the Ministry of Science and ICT, stated, “Large public software projects involve high system complexity and technical difficulty, so it is important for companies with technical skills and expertise to participate without restrictions, form optimal consortiums, and collaborate.” He added, “Based on the improvement plan presented this time, we will thoroughly review the opinions raised by the industry and ordering agencies at the forum to derive the government's final system improvement plan.”

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