LH Imposes Maximum Penalty on Former Officials' Firms in Service Bids... Resumption of Suspended Services

Korea Land and Housing Corporation (LH) has established new evaluation criteria to eradicate the former official interest cartel, including imposing maximum penalty points on firms with former officials during service bid evaluations, and decided to resume suspended service projects.

View of Korea Land and Housing Corporation (LH) Gwacheon Uiwang Project Headquarters / Photo by Honam Moon munonam@

On the 22nd, LH announced that it will immediately apply the new evaluation criteria to the resumed service bid announcements and carry out public housing projects without disruption.

First, LH defined the former official criteria as those who are level 2 or higher under the Public Officials Ethics Act employment restriction, and who have retired within the past 3 years. Those re-employed as executives are considered former officials regardless of rank.

To completely block contracts awarded to firms with former officials, maximum penalty points (6 to 15 points) will be applied per service. Specifically, ▲Architectural design competition -15 points ▲Complex design competition -10 points ▲Service final evaluation system (design/supervision) -6 points ▲Qualification review (technical services) -10 points. Firms employing level 3 retirees as technical personnel for the relevant service will have 50% of the maximum penalty points deducted. The total score per service is 100 points.

Additionally, LH will establish an 'LH Retiree Status Database (DB)' including those subject to re-employment review and LH retirees participating in new bids. Bidding firms are required to submit the status of LH retirees, and failure to submit or false submission will result in contract cancellation and restrictions on bidding eligibility.

Furthermore, the previously suspended construction technology service contract procedures will be resumed. The newly established former official criteria and penalty application methods will be applied starting from new bid announcements, and suspended bids will be re-announced under the new criteria. After review completion, the 11 suspended bids will be sequentially processed with comprehensive examination of legality and fairness, and contracts will be canceled if illegal matters are found.

An LH official stated, "We will break the chain of the former official cartel and eliminate unreasonable practices," adding, "We will closely monitor market conditions such as bid participation status and prepare supplementary measures if necessary." He also added, "We will propose to the Ministry of Land, Infrastructure and Transport to strengthen employment restriction standards under the Public Officials Ethics Act and suggest legal amendments."

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