Public Procurement Service, Complete Overhaul of 'Direct Production Confirmation' Focused on Demanders

Revision and Implementation of Direct Production Verification Standards for Manufactured Goods on the 1st
Focus on Simplifying Document Submission and Securing Corporate Autonomy
"Blocking Companies Violating Direct Production, Supporting Growth of Sincere Enterprises"

The direct production inspection method will be completely revamped to be demand-oriented. Direct production verification has been operated since 2007 as a mechanism to protect sincere manufacturing companies by confirming whether manufacturers participating in public procurement directly produce and deliver contracted goods, thereby blocking unfair suppliers.

The Public Procurement Service announced that it will revise the "Public Procurement Service Direct Production Verification Standards" and implement them starting from the 1st.

Until now, in the field, there have been complaints that companies bear a heavy burden because they must submit materials necessary for direct production verification inspections (self-standard tables, detailed direct production verification standards by product name) in advance, even for general products rather than economic products among small and medium enterprises, and that the direct production standards such as production facilities and processes do not keep pace with the speed of changes in the industrial environment.

Accordingly, the Public Procurement Service will simplify the submission documents required for product manufacturing registration through the revision of standards to reduce the burden on companies, and improve the inspection method in line with government regulatory innovation policies to guarantee companies' autonomy by changing to a production method that ensures autonomy.

With the system improvement, the obligation to submit a self-standard table for direct production at the time of bidding participation will be abolished first, and document submission will be simplified by verifying factory registration certificates as stipulated in the National Contract Act.

Taking this opportunity, about 8,000 procurement companies annually will have reduced burdens and be guaranteed autonomy in manufacturing processes, enabling them to focus on technological innovation and management improvement, the Public Procurement Service expects.

The inspection method will also be improved. Whether direct production is implemented will be confirmed using the manufacturing process chart (materials prepared by manufacturers reflecting the actual production method necessary to produce finished products) presented by the target company during the direct production verification inspection. The criteria for judging direct production violations will be switched to a negative system, defining that if another company delivers finished products (including imported finished products) or the entire product manufacturing process is subcontracted, it constitutes a direct production violation.

In particular, the Public Procurement Service plans to strengthen inspections focusing on goods with a high possibility of direct production violations, especially those closely related to public safety, to fundamentally block unfair procurement practices.

Baek Hoseong, Director of the Procurement Quality Institute, said, “The revision of regulations related to direct production focuses on inducing a technology-driven manufacturing environment and supporting sound and sincere manufacturers with technological capabilities to grow in the public procurement market.” He added, “We will continue to support domestic manufacturing through continuous system improvements from the perspective of procurement companies and strive to respond flexibly to the rapidly changing industrial environment.”

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