Procurement agency to seek complaint against 1 firm, recoup 8.7bn won from 34 others
In short
South Korea's Public Procurement Service said on 22 October it decided to ask the Fair Trade Commission to file a complaint against one company over bid collusion. It also decided to recover about 8.7 billion won in unjust gains from 34 companies over unfair procurement practices.
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South Korea's Public Procurement Service (조달청) said on 22 October that it had decided to ask the Fair Trade Commission to file a complaint against one company and to recover about 8.7 billion won in unjust gains from 34 other companies. The agency said the 35 companies were caught in unfair procurement practices, including bid collusion, violations of direct-production standards and violations of specifications. [ 1 , 2 , 3 ]
According to the agency, the company referred for a complaint took part in a bid for an underwater survey service ordered by the Korea Authority of Land and Infrastructure Safety (국토안전관리원). It agreed bid prices and a price range in advance, which limited competition, the agency said. The Procurement Service said it weighed the seriousness of the conduct, the length of the collusion and its pattern in deciding to request the complaint. Asia Economy worded this as a suspicion, saying the company is suspected of restricting competition. [ 1 , 2 , 3 ]
The 34 companies facing recovery were investigated over conduct in 22 product names, including pervious concrete and air circulators. The violations cited were breaches of direct-production standards, breaches of contract specifications and breaches of the obligation to maintain preferential prices. The agency said it had already completed measures restricting these companies from taking part in bidding, and that it would recover unjust gains totalling about 8.7 billion won as a follow-up. [ 1 , 2 , 3 ]
Kim Ji-wook (김지욱), director general of the agency's digital fair procurement bureau, was quoted by Seoul Economic Daily and Newsis as saying the agency would use all legal and administrative means, including recovery of unjust gains and complaints, to build a fair and transparent procurement environment that the public can trust. Newsis also quoted him saying the agency would respond sternly to collusion and specification violations. Asia Economy quoted him saying only that the agency would keep working to create such an environment. [ 1 , 2 , 3 ]
Why it matters
The documents present this as an enforcement step by the procurement agency, which said it would use legal and administrative means to build a fair and transparent procurement environment. They give no figures beyond the 35 companies and the 8.7 billion won.
Key facts
- The Public Procurement Service announced on 22 October that it had decided to request a complaint against one company and to recover unjust gains from 34 companies. [ 1 , 2 , 3 ]
- The company referred to the Fair Trade Commission took part in a bid for an underwater survey service ordered by the Korea Authority of Land and Infrastructure Safety (국토안전관리원) and agreed bid prices and a price range in advance. [ 1 , 2 , 3 ]
- The 34 companies facing recovery were found to have violated direct-production standards, contract specifications and the obligation to maintain preferential prices, in 22 product names including pervious concrete and air circulators. [ 1 , 2 , 3 ]
- Total unjust gains to be recovered are about 8.7 billion won (87억 원). [ 1 , 2 , 3 ]
- Bid participation restrictions on the 34 companies have been completed. [ 1 , 2 , 3 ]
Confirmed by several sources
- The Public Procurement Service decided to ask the Fair Trade Commission to file a complaint against one company over agreeing bid prices and a price range in advance on an underwater survey service bid. [ 1 , 2 , 3 ]
- The agency decided to recover about 8.7 billion won in unjust gains from 34 companies. [ 1 , 2 , 3 ]
- Restrictions on the 34 companies' participation in bidding have been completed. [ 1 , 2 , 3 ]
Still unclear
- Whether the complaint has been filed and what the Fair Trade Commission will decide. The documents only say the agency decided to request a complaint.
- Which companies are involved and how the 8.7 billion won is divided among the 34 companies. No document names the companies or gives per-company amounts.
- Whether the single company is accused or found to have restricted competition. Seoul Economic Daily and Newsis state it as the agency's finding, while Asia Economy says the company is suspected of doing so.