"Exclusion of Former Officials' Companies" LH Public Housing Tasks Transferred to Public Procurement Service

The public housing-related tasks previously managed by LH Korea Land and Housing Corporation will be transferred to the Public Procurement Service. This transfer is part of the government’s ‘LH Innovation Plan’ announced after last year’s public housing rebar omission incident, aiming to adjust LH’s excessive authority and completely block any potential involvement in vested interests.

The Public Procurement Service announced on the 29th that starting from the 1st of next month, it will take over and perform the selection and contracting tasks for design, construction, and supervision companies of public housing projects that were previously handled by LH.

Key Points of the Public Housing Bid Evaluation System Improvement. Provided by Public Procurement Service

Along with the transfer of duties, the Public Procurement Service will identify and improve standards that have relatively favored LH through expert committees and other means, and significantly improve existing bidding evaluation criteria by easing excessive standards that block new entrants.

First, companies employing retired LH employees of grade 2 or higher who have retired within the last 3 years, or retired Public Procurement Service employees of grade 4 or higher, will be excluded from winning public housing project contracts. Additionally, companies employing retired LH employees of grade 3 or Public Procurement Service employees of grade 5 who are assigned as technical personnel participating in the project will receive penalty points.

Measures have also been established to prevent poorly performing companies from winning contracts. As a measure to prevent recurrence of incidents such as rebar omission, companies that have received penalty points for defects in major structural components (directly related to safety) such as columns within the last 6 months will be given penalty points severe enough to make it difficult for them to win contracts. The recent 6 months refers to the most recent half-year period based on the bid announcement date, according to penalty records registered in the Construction Industry Knowledge Information System.

To create a fair competitive environment, the practice of relatively favoring LH work experience has been improved by excluding experience as a site representative participating in supervision as an LH employee when calculating the ‘site representative experience’ of assigned technical personnel.

Also, the full score criteria for calculating ‘other experience’ has been relaxed from 20 years to 12 years, and the scope of recognition for the ‘new technology utilization performance’ item during the pre-qualification (PQ) for bidding has been expanded to include all new technologies, lowering entry barriers.

Previously, LH solely reviewed violations of laws and guidelines during design competitions, but going forward, if LH provides preliminary opinions, the Public Procurement Service will conduct expert reviews followed by a resolution from the evaluation committee, establishing a three-step verification system. This strengthened verification system aims to ensure the quality and safety of public housing.

After the transfer of duties, the Public Procurement Service plans to abolish the ‘contract quota system’ that limited the annual number of contracts per company to encourage capable companies to participate in projects. A representative example of easing measures to prevent project delays is changing the penalty for companies that apply for design competitions but do not submit their works from a 6-month ban on participation to a penalty point deduction.

Earlier, the Public Procurement Service completed all preparations for the transfer, including establishing and operating a ‘Public Housing Contract Team’ from the 26th of this month to ensure smooth transfer and uninterrupted public housing supply.

The Public Housing Contract Team will be responsible for establishing and revising public housing evaluation criteria, organizing and operating evaluation committees, evaluating companies, and selecting successful bidders, while LH will handle project management tasks after contract signing.

Lim Gi-geun, Administrator of the Public Procurement Service, said, “As all institutions have committed to innovation and made efforts, the Public Procurement Service will focus on fairness, quality, and speed to ensure that high-quality public housing is supplied to the public in a fair environment.”