Limiting the Number and Total Amount of Negotiated Contracts with the Same Company,
Strengthening Requirements for Design Changes to Enhance Transparency
Guro District (District Mayor Jang Inhong) announced that it has developed and is now fully implementing measures to improve the single-quote negotiated contract system, aiming to create a transparent and fair contracting environment.
The main improvements include: △limiting the number and total amount of negotiated contracts with the same company, △restricting design changes that would exceed the negotiated contract amount, and △limiting requests to reflect only the required budget.
A negotiated contract refers to a contract in which the contracting party is selected arbitrarily, rather than through a competitive bidding process, according to the Local Contracts Act, for the procurement of goods or services.
In particular, due to the nature of negotiated contracts, where the person in charge can arbitrarily select the contracting party, the district has limited the total amount of negotiated contracts to 200 million won in order to prevent contracts from being concentrated among a small number of companies. This is a practical measure that adds a monetary limit to the previous policy, which only required a written explanation when entering into more than five negotiated contracts with the same company.
Additionally, to prevent the abuse of design changes as a loophole to avoid the monetary limit on negotiated contracts or to unfairly favor certain companies without competition, the district has made it mandatory to submit a policy statement specifying the reason and details of the design change. This applies when, after signing a negotiated contract, a contract amendment causes the contract amount to exceed the negotiated contract limit (an estimated 20 million won, or 50 million won for women-owned, disabled-owned, or social enterprises), or when the amendment increases the original contract amount by more than 50 percent.
Furthermore, when requesting a contract reflecting the required budget, the district plans to strengthen enforcement by stipulating in the Guro District contract regulations by June that a comparative estimate from at least three companies must be attached along with a written explanation.
Jang Inhong, Mayor of Guro District, stated, "The implementation of these improvements to the negotiated contract system will address operational shortcomings that allow for budget waste and corruption, and will enhance fairness. We will continue to do our utmost to make Guro District a trustworthy and transparent local government for our residents."
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