Public Procurement Service: "Public Stockpiling Utilized as a Key Measure to Address Supply Chain Crisis"

A plan to utilize public reserves as a key measure to respond to supply chain crises is being promoted.

On the 13th, the Public Procurement Service (PPS) announced that it will revise related systems, including the "PPS Stockpiling Project Operation Regulations (Directive)," based on this plan.

The purpose of the system revision is to enable the linkage and operation of public reserves within the national supply chain crisis response system in accordance with the "Basic Act on Supply Chain Stabilization," which will be enforced next month.

First, through the amendment, PPS will establish criteria for the release of stockpiled materials linked to the stages of supply chain crisis response.

This aims to secure the basis for emergency release of crisis items and emergency supply adjustment materials under the Supply Chain Stabilization Act, and to enable rapid response by allowing the release of all stockpiled inventory below purchase cost when a supply chain crisis occurs.

Separate procedures and standards will be applied when stockpiling economic security items, and grounds for supporting storage management fees for other consumers of stockpiled materials will also be established.

This is to activate public stockpiling of economic security items designated under the Supply Chain Stabilization Act, reflecting the fact that these items often require different consumption and storage conditions, such as shorter storage periods or special storage facilities, unlike existing stockpiled items like non-ferrous metals.

The system revision also includes conducting an annual full survey on the resale (resale) of stockpiled materials to enhance the fairness and effectiveness of the public stockpiling project.

Starting from April of this year, a full survey will be conducted on companies that used stockpiled materials in the previous year, and if resale is detected, penalties such as deregistration of the user company, recovery of resale profits, and imposition of penalties will be applied.

Article 29, Paragraph 3 of the Public Procurement Act stipulates that companies using PPS stockpiled materials cannot resell the materials to others without manufacturing or processing them. However, in cases where resale is unavoidable due to company bankruptcy, insolvency, or production suspension, resale may be exceptionally allowed with the approval of the PPS Administrator.

The revised system will be applied and enforced from the 27th of next month (with resale surveys starting from September 27). For more details, please refer to the PPS website or the National Law Information Center.

Im Gi-geun, Administrator of the Public Procurement Service, stated, "We will ensure that the public stockpiling project serves as a safety net during supply chain crises in line with the government's supply chain management policy," adding, "PPS will make every effort to create an environment that enables rapid response to supply chain crises through the revision of the stockpiling system."

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