The Public Procurement Service (PPS) will support the high quality and localization of parts in the public sector drone market by leveraging public purchasing power.
On the 19th, PPS announced a plan to "Enhance Drone Technology and Quality in the Public Market." Since registering drone products consecutively on Venture Nara in 2018 and the comprehensive shopping mall of Nara Market in 2019, PPS has laid the foundation for domestic drone manufacturers to grow in the public market.
However, unlike the private sector where high-quality drone products led by global companies have rapidly expanded the market size, the public market has continuously faced the problem of increasing market share of low-priced, low-quality Chinese drones.
The drone technology and quality enhancement plan was prepared by gathering voices from the field, including manufacturers, specialized inspection agencies, and associations, to address these issues. The core is to induce technological development and quality improvement of domestic drone companies and to enhance the drone operation capabilities of public institutions. At the same time, the plan includes measures to expand sales channels through matching demand institutions and suppliers.
First, to encourage technological development by domestic drone manufacturers, PPS guarantees a maximum profit margin of 25% for companies supplying drones to the public sector. This measure aims to prevent falling behind in price competitiveness against low-cost drones. Additionally, incentives for companies will be strengthened by allowing specification changes when foreign components in excellent procurement products and innovative products are replaced with domestic ones or purchased on a trial basis to improve performance.
As a measure to improve quality, submission of test reports will be mandatory, and the scope of negotiation contracts, which include physical inspections, performance evaluations, and demonstrations during innovative product evaluations, will be expanded. Conversely, manufacturers participating in bids will be guaranteed a delivery period of at least 30 days to allow sufficient time for thorough manufacturing processes.
For demand institutions, support will be provided for drone users to obtain pilot qualifications to enable operation of high-performance drones, and the warranty period for defect repairs will be extended from the current one year to two years to prevent project disruptions due to product defects.
PPS expects that under an environment where high-quality drone production and the capabilities of demand institutions to operate them are supported, expanding sales channels through demand-supply matching will also be possible. In this process, enabling public procurement to facilitate the global expansion of domestic drone manufacturers is identified as an important task.
To this end, PPS plans to expand the discovery and supply of drone products in the public sector and diversify contract methods such as service contracts. This includes expanding shopping mall contracts (multiple supplier contracts) for commercial drones used in education and training, designating and purchasing innovative products, and diversifying service contract methods such as rentals and pilot training.
PPS expects that mass production and quality assurance of drones in the public sector will reshape the domestic drone market landscape, solve the problem of market encroachment by Chinese drone manufacturers, and contribute to domestic drone manufacturers using public procurement as a stepping stone to enter the global market.
Im Gi-geun, Administrator of PPS, said, "A revolutionary improvement in procurement methods is a prerequisite for supplying high-quality and localized drones to the public market. PPS will strive to support the startup and growth of domestic drone manufacturers based on public purchasing power and play a role as a catalyst for their entry into the global market."
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