Preemptive Crackdown on 'Bees Bidding' Lowers Gyeonggi-do Construction Bid Competition Rate by 35%

Public Bidding Competition Rate Drops from 544 to 1 to 349 to 1
395 Cases of Unfair Trade Detected Over Three Years Since Late 2019

Gyeonggi Provincial Government Northern Office

[Asia Economy Reporter La Young-chul] Gyeonggi Province recently uncovered a large number of construction companies that engaged in accounting fraud without capital, made false residential registrations in Gyeonggi Province, and borrowed construction technology career certificates and national technical qualifications by employing technicians part-time.

Among the detected companies, some created fake construction companies (paper companies) to increase their chances of winning bids and engaged in so-called "swarm bidding."

Gyeonggi Province announced on the 7th that "through preemptive crackdowns on paper companies in public construction bids, a total of 395 cases were detected over three years since the end of 2019, achieving a reduction of over 35% in public bid competition rates."

By year, the detected cases were ▲ 19 cases in 2019 (October to December) ▲ 104 cases in 2020 ▲ 160 cases in 2021 ▲ 112 cases in 2022 (as of November).

The public bid competition rates also decreased as follows: ▲ 544 to 1 in 2019 ▲ 483 to 1 in 2020 ▲ 431 to 1 in 2021 ▲ 349 to 1 in 2022 (as of September).

In particular, this year's competition rate dropped by 35.8% compared to 2019 when the crackdown began. The province analyzed that the restriction on so-called "swarm bidding" lowered competition rates, thereby increasing opportunities for sound construction companies to win public construction projects.

However, considering the emergency economic situation such as the decline in economic growth rate and rising prices, the province agreed with the construction industry to partially ease the preemptive crackdown criteria during Gyeonggi Province public construction bids to accommodate the industry's difficulties.

Bang Hyun-ha, Director of the Construction Bureau of Gyeonggi Province, said, "We will eradicate unfair trading companies through preemptive crackdowns and encourage construction companies to participate in the 'innovation' and 'opportunity' where sound construction companies have more chances to win bids," adding, "We hope that many construction companies will increase the employment of actual technical personnel and establish a virtuous cycle of direct construction."