Deputy Minister Heo Jang of the Ministry of Finance convened the second Procurement Policy Committee meeting on July 1, where three agenda items, including the rationalization of the public procurement bidding system, were reviewed and approved.
First, the evaluation method for bidders on public projects valued between 10 billion and 30 billion won will be changed from the existing simplified comprehensive evaluation system to a technical qualification evaluation system. The current evaluation method, which favors bids closer to the balanced price, will be altered to assess bids starting from the lowest price.
To strengthen the evaluation of construction capabilities, the criteria for assessing construction performance will be differentiated based on project difficulty. These improvements are set to take effect in January of next year.
A Ministry of Finance official stated, "The existing simplified comprehensive evaluation system has led to a reliance on bidding agencies, resulting in a phenomenon where bids are submitted at the same price, distorting fairness and losing the function of finding appropriate market prices. We focused on fundamentally restructuring this system to avoid disadvantages for those not using bidding agencies."
The meeting also addressed institutional improvements identified through national contract dispute cases. Since the introduction of the national contract dispute mediation system in 2014, the number of claims has been on the rise, with projections indicating over 100 cases this year.
In response, the government has prepared measures to protect the rights of companies. For software contracts, the national contract law will specify that changes in design will include 'changes in specifications and task contents' as a reason for contract amount adjustments.
Moreover, to prevent disputes over contract amounts, contracting agencies will be required to disclose reasons during the bidding process if they set unit prices below the standard price.
A Ministry of Finance official remarked, "We aim to fill gaps in the contract system, protect the rights of procurement companies, and eliminate outdated practices. Software contracts often involve intangible products, leading to many disputes due to verbal task instructions. By specifying changes in design and specifications, we hope to prevent disputes in advance."
Finally, a report on corrective inspections of self-initiated contracting agencies was presented. As of the end of May, 30,017 bidding announcements were reviewed, resulting in 1,252 corrective actions requested, of which 1,207 were accepted. Additionally, the national procurement system will be restructured to restrict the registration of announcements if legal requirements are not met. An AI-based monitoring system is also planned for implementation within the year to filter out legal violations in bidding announcements.
Deputy Minister Heo stated, "We have connected unreasonable practices raised in contract disputes to improvements in the contract system. This is significant for enhancing the convenience of public procurement participants and establishing a fair contracting environment."
* This article has been translated by AI.
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