Businesses that receive two corrective orders for bid rigging within a decade may soon face restrictions on their eligibility to participate in public tenders.
The Fair Trade Commission announced on September 21 that it will revise its guidelines on "unfair joint practices in bidding and requests for restrictions on bidding qualifications," with a public notice period set to end on October 12.
Under the current National Contract Act, if requested by the Fair Trade Commission, procurement agencies can restrict a business's eligibility to bid. As it stands, the Commission requests restrictions for businesses that have accumulated more than five penalty points for bid rigging in the past five years.
The key change in the proposed revision is to adjust this threshold to "four or more penalty points in the last ten years." The scope of penalty points will also expand to include all types of collusion that violate Article 40, Paragraph 1 of the Fair Trade Act, not just bid rigging.
This change aims to deter repeated collusion by certain businesses and enhance the effectiveness of sanctions. Currently, a business can receive two fines for bid rigging and still not exceed the five-point threshold. However, if the revision is implemented, receiving two corrective orders for collusion within ten years will result in four penalty points, making them subject to restriction requests.
Penalty points are assigned as follows: warning 0.5 points, corrective recommendation 1 point, corrective order 2 points, fine 2.5 points, and prosecution 3 points. The existing method of only applying the highest penalty point from different types of actions within a single case will remain unchanged.
The name of the guidelines will also change from "Guidelines for Reviewing Unfair Joint Practices in Bidding" to "Guidelines for Unfair Joint Practices in Bidding and Requests for Restrictions on Bidding Qualifications." This change expands the guidelines' role to include criteria for requests for restrictions on bidding qualifications due to all types of collusion.
However, transitional measures will be put in place to ensure predictability for businesses with existing penalty points. Businesses or business groups that have received penalty points from January 1, 2022, to December 31, 2026, will be subject to the previous restriction request regulations. This applies until the first request for restriction on bidding qualifications is made after the new guidelines take effect, which is expected to be by December 31, 2031.
The Fair Trade Commission plans to finalize and implement the revised guidelines after reviewing stakeholder opinions submitted during the public notice period and going through procedures such as deliberation and resolution at a plenary meeting. Individuals or organizations with opinions can submit their support, opposition, or suggestions along with reasons to the Commission by October 12.
* This article has been translated by AI.
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