Local Government Procurement Obligations to Be 'Autonomized'... Full Implementation After Pilot Program Next Year

The autonomy of procurement obligations for local governments will be promoted. The core of this policy is to move away from the traditional method, which required purchasing unit price contract goods exclusively through the Nara Marketplace, and instead allow demand institutions to purchase necessary goods outside the Nara Marketplace as well, thereby broadening their range of choices. This creates an opportunity for demand institutions to monitor the ever-changing market prices of goods and make more rational purchasing decisions.

However, to minimize negative side effects from the autonomy of procurement obligations, the autonomy of demand institutions will be expanded in stages, and safeguards will be implemented in parallel to prevent corruption and unfair practices.

The Public Procurement Service announced the 'Public Procurement Reform Plan' on November 19, which includes these measures. The reform plan will be implemented based on 70 tasks across four areas: ▲autonomy in procurement for demand institutions, ▲strengthening competitiveness and managing price and quality, ▲supporting the growth of new industries, and ▲socially responsible procurement.

Kang Sungmin, Vice Administrator of the Public Procurement Service, is explaining the direction of the 'Public Procurement Reform' initiative at the Government Daejeon Complex on the 18th. Photo by Public Procurement Service

The autonomy of procurement for demand institutions will be promoted by relaxing the procurement obligation of local governments for goods under unit price contracts with the Public Procurement Service. To minimize side effects from full implementation, this will be expanded in stages following a pilot program.

The pilot program will be conducted in Gyeonggi Province and North Jeolla Province, limited to 120 categories of electronic products, starting next year. After the pilot, the results and side effects of the autonomy policy will be comprehensively reviewed and analyzed, and additional measures will be prepared before expanding the policy to all local governments by 2027.

Existing policy support will remain in place even after procurement autonomy is introduced. The Public Procurement Service will allow autonomy for pilot local governments on the condition that they maintain the public procurement ratio for disadvantaged businesses such as small, women-owned, and disabled-owned companies.

Additionally, the purchasing trends of local governments regarding disadvantaged businesses will be analyzed. When expanding procurement autonomy to all local governments, the agency is considering measures to ensure compliance with the purchasing ratio for disadvantaged businesses. As part of this, the Public Procurement Service explained that it plans to enact the 'Public Procurement Act' to legislate basic procurement principles such as priority purchasing from disadvantaged businesses.

Countermeasures to prevent negative side effects from procurement autonomy will also be implemented. The Public Procurement Service will analyze its own procurement status and, if improper instructions or violations of regulations by ordering institutions are found, it will recommend corrections and improvements. In cases of unfair procurement practices such as false country-of-origin labeling or violations of direct production obligations, the Public Procurement Service will conduct investigations ex officio.

In particular, after the full implementation of procurement autonomy, if a local government is found to have committed bid or contract-related corruption, the 'one-strike-out' policy will be applied, revoking their autonomous purchasing authority and requiring them to use the Public Procurement Service's unit price contract goods as before.

Furthermore, by making all contract information, including private contracts, fully public through the Nara Marketplace, transparency in procurement autonomy will be enhanced.

The Public Procurement Reform Plan also includes improving the system so that more companies can participate in the public procurement market under a fair competitive structure, strengthening 'price adequacy verification' to increase the transparency and flexibility of procurement prices, and implementing a 'reasonable price guarantee policy' to help stabilize the management of small and medium-sized enterprises.

In addition, the plan includes supporting the quantitative and qualitative growth of innovative companies by expanding public procurement of innovative products, and strengthening restrictions on companies with repeated serious industrial accidents from participating in the procurement market to ensure public safety.

Baek Seungbo, Commissioner of the Public Procurement Service, stated, "We decided to pursue procurement autonomy in response to field demands for expanding purchasing autonomy for demand institutions and establishing a sound competitive structure," and added, "Procurement autonomy will first be piloted next year in Gyeonggi Province and North Jeolla Province."

He further explained, "During the pilot period, the Public Procurement Service will continue to communicate with demand institutions, industry associations, and procurement companies to analyze the outcomes of procurement autonomy and address issues identified in the field."

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