Coastal Architecture, Sharp Increase in Public Project Contracts After Hiring Former Officials

Haian Comprehensive Architecture Office (Haian Comprehensive Architecture), identified as a leading firm with former government officials in the design industry, has rapidly expanded its scale in recent years by successfully securing large-scale public procurement projects. Industry insiders believe that Haian Comprehensive Architecture's increase in public procurement volume is due to its aggressive recruitment of former officials from public institutions and local governments over the past 3 to 4 years.

According to the Financial Supervisory Service's electronic disclosure on the 11th, Haian Comprehensive Architecture's sales last year reached 192.1 billion KRW, nearly tripling from 67 billion KRW in 2013, ten years ago.

A bird's-eye view of 'KINTEX The Grand' by the consortium of Haean Comprehensive Architects Office, which was finally selected as the winning design in the basic design competition bid for KINTEX Exhibition Hall 3 in November 2021.
[Photo by KINTEX]

The annual sales figures are as follows: ▲2013 - 67 billion KRW ▲2014 - 70.5 billion KRW ▲2015 - 93.4 billion KRW ▲2016 - 110.4 billion KRW ▲2017 - 120.5 billion KRW ▲2018 - 129 billion KRW ▲2019 - 124.6 billion KRW ▲2020 - 153 billion KRW ▲2021 - 189.6 billion KRW ▲2022 - 192.1 billion KRW.

There are claims that the rapid growth of Haian Comprehensive Architecture is due to the influence of former government officials' vested interests. An industry insider stated, “While all large design firms employ former officials, Haian Comprehensive Architecture's case is particularly extreme,” adding, “Especially since they began aggressively recruiting former officials 3 to 4 years ago, Haian Comprehensive Architecture has continuously secured major public procurement projects.”

Currently, many former officials are known to be serving as executives such as vice chairman and vice president at Haian Comprehensive Architecture. About ten former officials from public institutions and local governments, including high-ranking personnel from Korea Land and Housing Corporation (LH) and the Seoul Metropolitan Government (Deputy Mayor for Administration), are working there.

It is claimed that these individuals, leveraging various connections such as academic ties, have led the efforts to secure public procurement volumes, resulting in the rapid increase in Haian Comprehensive Architecture's sales.

In fact, according to the LH Construction Technology Information System, Haian Comprehensive Architecture has secured 20 public procurement projects ordered by LH from 2013 to June this year, with a total contract value of 92 billion KRW. The contract value has surged significantly in recent years.

The annual contract amounts are ▲2013 (1 project) 6.35 billion KRW ▲2014 (1 project) 1.98 billion KRW ▲2015 (2 projects) 3.72 billion KRW ▲2016 (1 project) 3.36 billion KRW ▲2017 (2 projects) 6.72 billion KRW ▲2018 (2 projects) 9.1 billion KRW ▲2019 (3 projects) 17.68 billion KRW ▲2020 (2 projects) 13.1 billion KRW ▲2021 (2 projects) 13.65 billion KRW ▲2022 (3 projects) 12.76 billion KRW. However, amid the controversy over preferential treatment of former officials due to the LH rebar omission scandal, this year’s contract amount has remained at 3.57 billion KRW (1 project).

In addition, Haian Comprehensive Architecture has distinguished itself in several major public projects including local governments. In 2020, it secured six projects including the construction of Gyeonggi Province’s representative library, generating sales of 28.2 billion KRW. In 2021, it won five projects worth 27.64 billion KRW, including the basic design for Kintex Exhibition Center 3.

In the first half of this year, it also secured projects such as the construction of Incheon Metropolitan City’s new city hall, Busan BEXCO Exhibition Center 3, the relocation and new construction of the National Medical Center, and the Central Infectious Disease Hospital. It appears that Haian Comprehensive Architecture still exerts influence in public procurement projects by local governments and others, distancing itself from the LH preferential treatment controversy.

Accordingly, the design industry points out that to prevent vested interest cartels like the Haian Comprehensive Architecture case, comprehensive measures are needed to expand new evaluation criteria?such as the strengthened standards for former officials and penalty points per project for firms employing former officials, recently introduced by LH?to all projects ordered by public institutions and local governments.

Meanwhile, LH announced measures to prevent vested interest cartels involving former officials on the 22nd. LH defined former officials as those at grade 2 or higher under the Public Officials Ethics Act employment restriction level, within 3 years of retirement, and decided to apply stricter standards regardless of rank if rehired as executives.

Additionally, to block contracts with firms employing former officials, LH plans to impose maximum penalty points per project on such firms. LH will also build a database of retired LH employees and require bidding firms to submit information on retired LH employees. Non-submission or false submission will be penalized with contract cancellations and bidding disqualifications to strengthen the effectiveness of database management.