Public Procurement Service: "Smooth Transition of LH Public Housing Tasks... Ensuring Fairness and Transparency"

The Public Procurement Service (PPS) is seeing the public housing-related tasks transferred from Korea Land and Housing Corporation (LH) take root on the ground. Since April last year, PPS has taken over related tasks such as selecting contractors for public housing design, construction, and construction management (CM) projects from LH. The transfer of duties was carried out as part of the government’s ‘LH Innovation Plan’ announced after the 2023 public housing rebar omission incident. The background of the transfer is to adjust LH’s excessive authority and completely block any possibility of vested interest interference.

According to PPS on the 8th, after taking over public housing-related tasks from LH in line with government policy, a total of 139 contracts (36,677 housing units) were signed over the past year in fields including construction, design, and CM.

Provided by Public Procurement Service

By project type, these are classified as 58 construction contracts (KRW 7.291 trillion), 22 design service contracts (KRW 77.5 billion), and 59 CM service contracts (KRW 634.4 billion).

Since the transfer of public housing-related tasks, the period from bid announcement to actual contract signing has been shortened by 6.2 days, from 68.4 days under LH’s management to 62.2 days. Above all, the fairness and transparency of the contract and contractor selection process have been strengthened.

While handling public housing-related tasks, PPS excluded former LH officials’ affiliated companies from participating in public housing projects. As a result, it was confirmed that there were no cases of such affiliated companies signing public housing project contracts in the past year.

Additionally, PPS revised 11 types of bidding and evaluation systems related to public housing, including the application of major penalty points, improvement of site agent experience evaluation, incorporation of quality control evaluation, and abolition of limits on the number of winning design service bids, thereby enhancing fairness and transparency in the contracting process.

Noteworthy is the introduction of a ‘Integrity Ombudsman’ to oversee the overall evaluation process and a monitoring team to assess the professionalism and fairness of committee members, further strengthening transparency in contractor selection.

This year, PPS plans to focus its capabilities on improving the quality and fairness of public housing tasks and alleviating the burden on the industry.

First, the scale of public housing procurement this year is expected to be KRW 9.3 trillion (a 16% increase from the previous year), with 221 contracts to be issued. Of these, contracts worth KRW 5.5529 trillion are planned to be issued in the first half of the year. Considering this, PPS will strengthen communication with LH to prevent procurement requests from concentrating in specific periods.

Projects with poor management performance, such as those with rebar omissions, will be excluded from CM services. PPS will also promote a plan to award additional points to designers who secure excellent quality through post-evaluation of the design process and results in design competitions, while deducting points from designers responsible for poor designs.

PPS will also concentrate its efforts on fundamentally blocking the possibility of poor construction by ensuring fairness. For example, to reduce side effects caused by excessive competition among companies in construction management service bids, PPS plans to reduce the qualitative evaluation points of judges during the comprehensive evaluation stage, aiming to cut off excessive lobbying chains.

Furthermore, related regulations will be revised, such as extending the evaluation reference date from the existing bid announcement date to the ‘evaluation application deadline’ to prevent companies whose ‘Small and Medium Enterprise (SME) certificates’ are about to expire from suffering disadvantages due to missing the renewal period.

Im Gi-geun, Administrator of PPS, said, “Since taking over public housing tasks, PPS has focused on strengthening fairness and transparency by organizing regulations and procedures. Now that the new public housing task execution method has taken root on the ground, this year we will focus on supplying the public housing procurement volume of KRW 9.3 trillion to the market without delay, contributing to the revitalization of the construction economy.”