Mapo-gu Changes Cleaning Service Provider Selection to 'Negotiated Contract'

Mapo-gu Puts a Stop to Improper Practices in Household Waste Collection Service Contracts

The District Changes Contractor Selection Method to ‘Negotiated Contract’ to Improve Cleaning Administration Services

Comprehensive Review of Household Waste Collection and Transportation Plans and Service Improvement Measures

Mapo-gu (Mayor Park Gang-su) has initiated a restructuring of the household waste collection and transportation service contract system as part of efforts to enhance the reliability and transparency of cleaning administration by correcting improper practices that have been in place.

Mapo-gu divides the entire district into four zones and selects contractors for household waste collection and transportation to handle general waste, food waste, and recyclable waste.

However, since some contractors have monopolized the household waste collection and transportation services in the district, it has been difficult to expect qualitative improvements in cleaning administration services relative to the service fees, which has been a persistent issue.

In particular, the investigation conducted by the Korea Fair Trade Commission (KFTC) in December last year into bid-rigging in the household waste collection and transportation service contracts in Mapo-gu was shocking.

According to the KFTC announcement, “When Mapo-gu first introduced competitive bidding to select contractors in 2017, four contractors agreed before the bidding to maintain their respective zones, which they had previously operated under private contracts, and to bid at a certain percentage of the base amount. In the 2017 bidding, they bid at 99.88% of the base amount, and in the 2019 bidding, at about 95%, winning the contracts accordingly.”

Additionally, the KFTC stated that “corrective orders and fines totaling 840 million KRW were imposed on the four contractors involved.”

The KFTC evaluated in its press release that “the imposition of fines for bid-rigging in household waste service contracts is the first case of its kind and is significant in that all involved businesses participated in the collusion that has now been rectified.”

Park Gang-su, the district mayor (left), cleaning the alley to create a clean urban environment

In response, Mapo-gu reflected the KFTC’s investigation results in the “2023 Mapo-gu Household Waste Collection and Transportation Contractor Selection” and changed the contractor selection method from ‘qualification screening’ to ‘negotiated contract’ to improve cleaning administration services. An evaluation committee composed of experts from various fields comprehensively assessed each contractor’s proposals and bid prices.

In the proposal evaluation, each contractor was required to present plans for ▲household waste collection and transportation ▲service improvement measures ▲responses to policies on waste reduction, among other items aimed at advancing residents’ cleaning administration services, thereby encouraging healthy competition among contractors.

This approach is widely regarded as inducing reasonable competition among contractors while also considering the long-term stability of cleaning administration.

However, a district official expressed regret, saying, “Although the selection of household waste collection and transportation contractors was successfully completed, cooperation and handover between the existing contractors, the unsuccessful contractors, and the new contractors have not been smooth, causing the residents to bear the brunt of the disruption. Some unsuccessful contractors are submitting petitions containing false claims, creating unnecessary gaps in cleaning administration.”

In response, the district plans to strictly deal with the dissemination of false information and will take strong measures according to relevant laws once the fines imposed on the four contractors found guilty of bid-rigging are finalized.

Furthermore, to minimize unavoidable cleaning service gaps, the district will mobilize all available personnel and equipment to create a clean and pleasant urban environment, strengthen management and supervision of the new contractors, and do its utmost to normalize household waste collection and transportation services.

Mayor Park Gang-su of Mapo-gu stated, “We will continue to coordinate swiftly to resolve the lack of cooperation between existing and new contractors. Going forward, we will promote fair competition among contractors and persistently work to eliminate the unreasonable and long-standing monopolistic practices in household waste collection and transportation.”