Lee Jae-myung "Competition System Must Be Introduced in the Procurement Market"

[Asia Economy (Suwon) = Reporter Lee Young-gyu] Lee Jae-myung, Governor of Gyeonggi Province, stated that the current procurement market is monopolized by the Public Procurement Service (PPS) and emphasized the need to introduce a rational competitive system in the procurement market as well.

On the 8th, Governor Lee held an expert meeting at the Gyeonggi Provincial Government Office titled "Expert Meeting on Developing and Operating a Fair Procurement System to Improve the Local Procurement Monopoly of the National Procurement System (Nara Jangteo)." He said, "When competition is excluded, corruption inevitably arises," and asserted, "In the long term, competition must be introduced into the procurement system."

He continued, "After comparing prices of items on Nara Jangteo, we found 90 cases where prices were higher than the market price. Since purchases are made in bulk, prices should be lower, but they are forced to buy at higher prices," adding, "We need to create a fair procurement system. We will consult with the National Assembly and the government to prevent monopolistic overcharging and, if possible, revise laws to establish a rational competitive system."

Attending the meeting chaired by Governor Lee were Ahn Byung-yong, Chairman of the Gyeonggi Province Mayors and Governors Council (Mayor of Uijeongbu), Jeong Seung-hyun, Provincial Assembly member, Lee Wang-jae, Deputy Director of the Nara Sallim Research Institute, Shin Young-chul, Head of the National Project Monitoring Team at the Korea Federation for Environmental Movements, Park Kyung-chul, Research Fellow at the Gyeonggi Research Institute, and small business representatives including Choi Jong-won, CEO of Samil CTS, and Kim Ki-tae, CEO of iComax.

Earlier, on the 2nd, the province announced as its first fair policy in the second half of the 7th local government term the establishment of a provisional "Fair Procurement Organization" and the development of a fair procurement system to replace the PPS’s Nara Jangteo.

This meeting was arranged as a follow-up measure to gather expert opinions.

The participants agreed on the problems of the PPS monopoly and the necessity of a fair procurement system, proposing various improvement measures.

Deputy Director Lee Wang-jae stated, "The current collusion structure, which grants immunity simply because purchases were made through the PPS, reduces efficiency," and argued, "The public should be able to see the process of why a particular official selected a product and what the results were."

Shin Young-chul, Head of the National Project Monitoring Team at the Korea Federation for Environmental Movements, said, "It is meaningful that Gyeonggi Province raised the issue now because local governments have not previously challenged the PPS monopoly," but pointed out, "However, it is necessary to examine cost-effectiveness when creating a separate organization."

Kim Ki-tae, CEO of iComax, emphasized, "To ensure fair competition and purchase at reasonable prices, opportunities for general companies to participate must increase."

Park Kyung-chul, Research Fellow at the Gyeonggi Research Institute, said, "The problem lies in operating a single Nara Jangteo system that tries to achieve the difficult-to-reconcile goals of efficiency and public interest," adding, "The United States is reviewing changes to the law to allow private shopping malls to enter the procurement market."

He added, "If Gyeonggi Province takes the first step in creating a fair market and the PPS also considers a new system, it will be possible to establish a public procurement policy that aligns the policies pursued by Gyeonggi Province with national policies and returns benefits to the region."

Chairman Ahn Byung-yong of the council said, "The state has operated this monopoly system because it viewed local government officials as inexperienced or untrustworthy," and stated, "Now, after 30 years of local autonomy, it is time for us to make autonomous decisions and become independent through our monitoring and auditing functions."

He also expressed, "In that sense, Gyeonggi Province’s recent decision has great significance in bringing about new changes and readjusting decision-making authority between the central and local governments."