Gyeonggi Province Cracks Down on Public Bidding: 113 Unqualified Construction Companies Identified

Gyeonggi Province Cracks Down on Unqualified Construction Firms in Public Bidding
Preliminary Inspections Lead to Significant Drop in Bid Participation Rates
Urgent Need to Improve Unfair Practices in the Construction Industry

Gyeonggi Province announced on January 10 that it had identified 113 unqualified construction companies and taken administrative action against them last year, following 319 preliminary inspections of public bidding processes that uncovered issues such as failure to meet registration requirements.

Gyeonggi Provincial Government Building. Provided by Gyeonggi Province

The preliminary inspection targets companies that bid on public construction projects worth over 100 million won commissioned by the province. These inspections are conducted regardless of whether a company withdraws its bid. If an unqualified company is found, subsequent lower-ranked bidders are reviewed until a qualified company is identified.

Previously, inspection materials were submitted and reviewed on-site. However, starting in 2024, materials must be submitted one to two days before the inspection date, allowing for a more thorough pre-review process.

Unqualified construction companies, lacking construction capabilities, often cause unfair practices such as illegal subcontracting, license lending, and failure to assign on-site representatives. Since October 2019, the province has strictly reviewed offices, technical personnel, and capital during the bidding process for construction projects it commissions. Companies failing to meet registration requirements have faced administrative action, disqualification from bidding, and even criminal charges.

By thoroughly eliminating unqualified construction companies through preliminary inspections of public bids, the bid participation rate in 2024 dropped significantly-by 36.2% compared to 2019.

Seoul introduced preliminary inspections for public bidding in July 2021, and Chungcheongnam-do followed suit in January 2022. As a result, Gyeonggi Province's initiative is recognized as contributing to the spread of fair construction practices nationwide. Based on these achievements, the province received an institutional commendation in 2024 as an Excellent Department for Proactive Administration from the Board of Audit and Inspection.

Lee Myungseon, Director of Construction Policy at Gyeonggi Province, stated, "Due to the downturn in the construction market, it may be somewhat difficult for companies to maintain the registration requirements. However, Gyeonggi Province will continue to rigorously investigate and manage unqualified construction companies to provide more opportunities for honest and sound businesses."

Meanwhile, Gyeonggi Province is working to eradicate unqualified registered companies through various means, including public interest reports. Reports regarding unqualified construction companies can be submitted via the public interest report hotline (on the provincial government website or by phone) or through the report center (on the provincial government website, the national e-People portal, or by phone).