Government Revises 10 National Contracting Systems to Reduce Corporate Burden

The government will revise the national contract system to alleviate the burden on businesses. It plans to expand the single-item price adjustment system to manufacturing contracts and improve certain contract procedures that had been burdensome to companies, such as preparing submission materials.

On the 20th, the Ministry of Economy and Finance held the '8th Procurement Policy Deliberation Committee' at the Korea Trade Insurance Corporation in Jongno-gu, Seoul, chaired by Vice Minister Kim Yoon-sang, to discuss improvements to the national contract system.

Amid concerns over the prolonged delay in the construction market recovery and increasing domestic and international uncertainties, the government has prepared 10 improvement tasks for the national contract system to support the recovery of the domestic economy.

First, the government will promote measures to promptly pay appropriate compensation for contracts and expand the single-item price adjustment system, which currently applies only to construction projects, to manufacturing contracts.

It will also improve certain contract procedures that had been burdensome to companies, such as preparing submission materials. The submission deadline for construction plans under the comprehensive evaluation bidding system will be extended from the existing 7 days to 15 days, allowing only the actual candidates subject to evaluation to prepare them, rather than all bidders as was customary.

The threshold amount for omitting the submission of estimates in negotiated contracts will be raised from the current 1 million KRW to 2 million KRW, reflecting the growth in economic scale.

The unfair practice sanctions system will be supplemented by adding certain service contracts subject to defect warranty periods, in addition to construction and goods contracts, to the scope of sanctions for poor contract performance.

During the meeting, measures to strengthen the performance evaluation system for procurement special cases, which are operated sporadically by each ministry, and the designation of an innovation product support center were also discussed.

Vice Minister Kim said, "With the preparation of the second national contract system improvement plan following July, the burden on businesses will be alleviated and vitality enhanced," adding, "We will promptly proceed with follow-up measures such as legislative amendments."