Public Procurement Service Focuses Support on Easing Management Difficulties of Small and Medium Procurement Companies

[Asia Economy (Daejeon) Reporter Jeong Il-woong] The Public Procurement Service (PPS) announced on the 2nd that it will provide focused support to small and medium-sized procurement companies facing double difficulties due to the spread of COVID-19 and soaring raw material prices.

First, the PPS will apply the Ministry of Economy and Finance’s ‘Temporary Contract Exception Measures,’ extended until the end of this year, on site to reduce the burden on small and medium enterprises.

This involves allowing emergency bidding as much as possible in all competitive bids and shortening the payment period for advance payments and subcontract payments to within 5 days from the application date.

In addition, if delivery is inevitably delayed or difficult due to the impact of COVID-19, various sanctions such as penalties for unfair business operators, delay damages, and forfeiture of contract deposits will be exempted or delivery deadlines extended.

Considering the recent surge in raw material prices that has worsened the management difficulties of small and medium procurement companies, the PPS will also improve the delivery price adjustment and stock raw material support system.

To this end, the PPS will immediately review and process requests for delivery price adjustments submitted by contractors with supporting evidence of raw material price surges, based on the delivery price adjustment criteria prepared in consultation with the Ministry of Economy and Finance.

Also, to reflect the price increase of construction materials in the total construction cost, in addition to the regular biannual price surveys (first and second half), the PPS will monitor price fluctuation trends and conduct additional price surveys as needed.

The recently improved credit and loan conditions for stock raw materials will continue until price stabilization. Previously, the PPS expanded the credit release limit from 2 billion KRW to 3 billion KRW annually, lowered the credit release interest rate from 2%~4.2% to 1%~4%, and reduced the overdue interest rate from 16% to 10%. The loan period for stock raw materials was extended from a maximum of 6 months to 9 months.

Furthermore, the PPS will support small and medium procurement companies in pioneering public market channels using non-face-to-face methods. The scale of the second half ‘Nara Market Win-Win Sale’ to be held from September 27 to October 22 will be expanded, and the ‘Korea Nara Market Expo 2021’ will be held from September 29 to October 1 to support small and medium enterprises in developing public market channels.

Kim Jeong-woo, Administrator of the PPS, said, “We plan to pursue various support measures to alleviate the management difficulties of small and medium procurement companies,” and added, “We will actively reflect field voices in procurement administration so that public procurement can help ease the management difficulties of procurement companies.”