Public Procurement Service: "39 Trillion KRW Public Procurement in H1, 65% of Annual Contracts Executed Quickly"

Inducing through commission reduction for ordering agencies
Proactive response to supply chain crisis factors
"Realizing public procurement faithful to principles and basics"

The Public Procurement Service (PPS) will facilitate the rapid execution of public procurement worth 39 trillion won in the first half of this year. This corresponds to 65% of the total annual procurement contract volume.

On the 13th, PPS finalized and announced the "2024 PPS Work Plan" containing these details. According to the work plan, PPS will pursue nine core tasks under three major strategies this year, with the banners of "Supporting the Livelihood Economy and Dynamic Economy," "Establishing the Basics of Public Procurement," and "Advancing Public Procurement Infrastructure."

Provided by Public Procurement Service

◆ "A Friend to Small, Venture, and Innovative Companies" = PPS will focus on making public procurement a friend to small, venture, and innovative companies to stabilize the livelihood economy and accelerate economic recovery.

To this end, it plans to ensure that 39 trillion won, equivalent to 65% of the annual procurement contract volume, is rapidly executed in the first half of the year.

By discounting procurement fees by up to 15%, introducing pre-review services for SOC orders, and omitting pre-qualification screening for construction bid participants, PPS will shorten and simplify procurement procedures to encourage rapid budget execution by public procurement demand (ordering) agencies in the first half of the year.

To reduce the burden on procurement companies, PPS will establish a "Procurement Companies Mutual Aid Association" to reduce guarantee fee burdens by about 20%. Additionally, it plans to strengthen support for regional and disadvantaged companies by easing entry barriers for youth, startup, and venture companies into the procurement market, exempting delivery performance requirements, and expanding contract opportunities.

PPS will also place emphasis on creating a business-friendly environment by boldly reforming killer regulations that require fundamental changes, such as punitive and uniform procurement sanctions, excessive certifications, and direct production obligations.

In particular, PPS will conduct a comprehensive investigation of procurement regulations to immediately improve hidden shadow regulations that restrict corporate activities or exhibit government superiority. From this month, it will operate the "Field Voice Responsibility Implementation TF" to thoroughly inspect, improve, and responsibly track reform tasks discovered in the field.

◆ "Back to the Basic in Public Procurement" = To proactively respond to the ongoing supply chain crisis, PPS will significantly strengthen raw material stockpiling capabilities and advance operational methods.

For six types of non-ferrous metals, including aluminum and nickel, the current stockpile of 50 days will be expanded to 60 days by 2027. The stockpile of economic security items closely related to citizens' lives, such as urea, will be more than doubled to secure at least two months' worth early on.

To increase stockpiles, key initiatives this year include the phased modernization of aging stockpile warehouses and the introduction of new stockpiling methods such as "annual supply contracts" to secure inventory.

PPS will also strengthen the management of procurement materials prioritizing quality and safety to prevent the recurrence of incidents causing inconvenience and anxiety to the public.

Furthermore, in the second half of this year, PPS plans to successfully launch the "Next-Generation Nara Marketplace" and expand and reallocate IT resources to ensure stable operation of the Nara Marketplace system. In the second half, the aging Nara Marketplace system will be completely rebuilt based on new technologies such as artificial intelligence, big data, and cloud computing, and convenience will be dramatically improved with AI chatbots and non-face-to-face processing.

Starting next year, 25 public institutions' own electronic procurement systems will be gradually integrated into the Next-Generation Nara Marketplace, creating a unified bidding system so that procurement companies can use all procurement services by registering with the Next-Generation Nara Marketplace.

Im Gi-geun, Administrator of PPS, said, "Public procurement is a policy frontline connecting about 70,000 demand agencies and 570,000 procurement companies, as well as the forefront of the economy. PPS will strive this year to implement work based on 'perception, field, action, and speed' so that the public and companies can tangibly feel the changes and innovations in the procurement field."

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