Small and Medium Enterprise Ombudsman Improves 736 Local Government Ordinances on Private Outsourcing of Administrative Affairs

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Standards and procedures related to the outsourcing of local government affairs to the private sector will become clearer.

The Small and Medium Business Ombudsman announced on the 1st that it has decided to improve 736 regulations related to the 'Basic Ordinance on Private Outsourcing' of local governments in order to resolve difficulties faced by small and medium-sized private companies participating in private outsourcing tenders.

Outsourcing of local government affairs is established and operated through ordinances of each local government, and there have been many criticisms that related standards and procedures are insufficient or unclear. Disputes often arose between local governments and private companies over the selection results of entrusted institutions.

Accordingly, since August, the Ombudsman has been consulting with 235 metropolitan and basic local governments on amendments to the 'Basic Ordinance on Private Outsourcing,' which stipulates the aforementioned contents, categorizing improvements into ▲expansion of transparency and fairness, ▲reduction of administrative and cost burdens on entrusted institutions, and ▲minimization of unreasonable outcomes.

The Ombudsman particularly focused on improving the transparency of the entrusted institution selection process and the composition and operation of the qualification selection committee, as well as expanding opportunities for raising objections such as appeals. As a result, 163 local governments announced that they would improve 736 regulations related to the 'Basic Ordinance on Private Outsourcing.'

First, each local government will establish clear grounds to provide private companies participating in tenders with the selection criteria for entrusted institutions in advance. This is a measure to secure the legitimacy of the selection process for entrusted institutions in private outsourcing.

In addition, it was decided to specify that the selection review committee will be composed mainly of qualified private experts, and that committee members with conflicts of interest will be excluded from participating in the review in advance.

Once the entrusted institution is decided, the selection results will be publicly announced on websites, etc., and private companies dissatisfied with the selection results will be guaranteed appropriate procedures to file objections.

Notarization of private outsourcing agreements only has the effect of preventing parties from denying that they drafted the document (presumption of authenticity), and since private outsourcing agreements are official documents presumed authentic under relevant laws, notarization is unnecessary.

However, some local governments maintain notarization regulations for agreements, causing local governments or entrusted institutions to bear unnecessary costs (up to 3 million KRW depending on the contract amount). The Ombudsman has agreed with local governments to delete notarization regulations.

When performance evaluations overlap with guidance, inspection, audits, etc., that entrusted institutions receive annually, or when performance evaluations are inappropriate depending on the type and scale of private outsourcing projects, performance evaluations can be simplified or omitted to reduce the burden on entrusted institutions caused by redundant procedures.

A Small and Medium Business Ombudsman official stated, "This regulatory improvement will establish a foundation for more transparent procedures and fair competition related to local government private outsourcing affairs."

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