by Jeong Ilwoong
Published 12 May.2023 10:17(KST)
24 companies were caught engaging in unfair procurement practices. These companies are expected to face measures such as prosecution, restrictions on bidding participation qualifications, and recovery of unfair profits.
According to the Public Procurement Service on the 12th, the companies caught include 8 involved in bid rigging and 16 violating the obligation to maintain preferential prices (the obligation for multiple supplier contract counterparts to keep contract prices equal to or lower than market transaction prices).
Earlier, the Public Procurement Service received notification from the Fair Trade Commission regarding bid rigging by 8 companies. Among them, 4 companies have been requested for prosecution, and 4 companies will first face restrictions on bidding participation qualifications.
The companies requested for prosecution are suspected of colluding in bids for railway vehicles and optical multiplexing devices.
Investigation results revealed that Company A, between April 2019 and January 2020, participated in bids issued by the Public Procurement Service, Korea Railroad Corporation (KORAIL), and others, agreeing on the allocation of planned railway vehicle quantities and executing this agreement to conclude contracts.
Additionally, Companies B, C, and D, from July 2010 to June 2020, participated in bids issued by the Public Procurement Service, Korea Expressway Corporation, and others, agreeing in advance on the division of regions and predetermined successful bidders and bid prices before participating in the bids.
The 4 companies that received restrictions on bidding participation qualifications are accused of colluding in competitive bids for imported air pollution measurement equipment from 2017 to 2019, mutually agreeing in advance on the successful bidders, bid prices, and bid document contents, thereby restricting competition and engaging in unfair practices.
The Public Procurement Service has taken measures to prohibit these 4 companies from participating in all public bids issued by national agencies and local governments for periods ranging from 6 to 21 months, depending on whether they led the collusion.
For the 16 companies caught engaging in unfair procurement practices such as failing to maintain preferential prices, recovery of unfair profits amounting to 310 million KRW has been decided.
These companies sold products such as corrugated steel pipes, laptop computers, walking mats, and natural stone slabs below contract prices (14 companies) or supplied finished rebar products from other companies to demand institutions without producing rebar themselves (1 company).
Additionally, one company was caught delivering signboard hanging devices that did not meet contract specifications.
Lee Jong-wook, Administrator of the Public Procurement Service, stated, “The Public Procurement Service will continue to strictly respond to unfair procurement practices in the market to ensure that companies with innovative ideas and excellent technological capabilities do not suffer unjust harm in the public procurement market.”
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