Public Procurement Service Revises Contract Terms for Excellent Procurement Products... Effective from Next Month

The Public Procurement Service announced on the 28th that it will fully revise the 'Additional Special Conditions for Goods Purchase (Manufacturing) Contracts,' which are contract conditions for excellent procurement goods, and implement them starting from the 1st of next month.

The Excellent Procurement Goods system has been in place since 1996 to support public market access for products with outstanding technology, quality, and performance. The annual supply scale reaches 4 trillion won.

Products designated as excellent procurement goods become subject to negotiated contracts under the National Contract Act and can enter into third-party unit price contracts with the Public Procurement Service.

However, unnecessary regulations remained during the contract conclusion and execution process, causing issues such as demand agencies imposing unfair contract conditions.

Accordingly, the Public Procurement Service will fully revise the contract conditions focusing on regulatory improvements considering public welfare, prevention of unfair practices, and strengthening contract management.

The revised conditions include exempting contract deposit forfeiture to the treasury for bankrupt, insolvent, or closed companies with no prior delivery performance history, and improving the recovery amount for unfair acts from 10% of the contract amount to 10% of the actual delivery performance amount.

The prohibition on sales with a punitive nature will also be significantly reduced. The items for sales suspension due to direct production violations or unfair trade sanctions will be deleted, and sales suspension will be limited only to unavoidable cases where continuous sales of the product threaten public life and safety.

Additionally, the number of allowed discount events during the contract period will increase from a total of 5 to 9 times, and participation in various discount promotions such as the Nara Market Win-Win Sale will be permitted, reflecting regulatory improvements considering public welfare, the Public Procurement Service explained.

Strict standards will be applied to unfair acts during the contract process and illegal activities by brokers. In particular, products suspected of origin violations will be required to submit a domestic origin certificate to prove they are domestically produced.

Furthermore, the Public Procurement Service plans to fundamentally prohibit demand agencies from requesting separate purchase conditions when purchasing excellent procurement goods, as well as demand agencies requesting free provision of goods or companies providing additional goods free of charge.

Kim Ji-wook, Director of the Technology Service Bureau at the Public Procurement Service, said, “The core of the revision is to improve unnecessary regulations to support public welfare and alleviate the burden on small and medium-sized enterprises. The Public Procurement Service will do its utmost to support active procurement activities of SMEs and ensure that the excellent procurement goods contract system operates rationally.”

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