Regulations on the procurement of innovative products will be eased. The regulatory relaxation is focused on supporting corporate technological innovation and growth.
On June 10, the Public Procurement Service announced that it will fully implement the revised "Innovative Product Procurement Operation Regulations" as part of its public procurement regulatory reset initiative.
The innovative product system was introduced in 2019 to promote technological innovation by making the government a leading purchaser of innovative products and to contribute to the improvement of public services. Since the introduction of this system, the Public Procurement Service has designated a total of 2,320 innovative products to date, and last year, public procurement of over 1 trillion won annually supported the growth of innovative companies.
The newly revised regulations are aimed at creating a public procurement environment favorable to corporate growth and helping innovative products with technological competitiveness to raise their status in the market.
To support the growth of innovative companies, the Public Procurement Service will first boldly eliminate issues that have been identified as unnecessary regulations in each step of the innovative product procurement process, thereby reducing the burden on companies.
One notable change is that the number of collaborative manufacturing companies for innovative products, previously limited to one, will now be increased to up to three. In addition, if a collaborative manufacturer faces problems such as financial difficulties, business suspension, or closure, it can be replaced by another company, thereby ensuring continuity in contract performance.
For software convergence products, the requirements will be relaxed so that additional innovative product specifications can be added even if the detailed product names differ. The Public Procurement Service anticipates that this will give procurement companies in the software sector more flexibility to respond quickly to changing demand environments.
Another key area of interest for procurement companies, the requirements for pilot purchases of innovative products, will also be eased. Previously, innovative products designated as excellent procurement goods were restricted from all pilot purchase applications. However, going forward, new overseas pilot purchases will be allowed to encourage the export of procurement companies.
Additionally, the previous restriction that excluded products from pilot purchase applications if there were no applications more than four times after designation as an innovative product will be removed. This improvement will ensure that companies maintain and are guaranteed opportunities to participate during the designation period of innovative products.
Through these amendments, the Public Procurement Service will also strengthen the assurance of technological and quality excellence for innovative products. Products with the same detailed product name and the same core technology as those already in the procurement market will be excluded from designation as innovative products (to reinforce technological differentiation). Furthermore, if an innovative product classified as safety management equipment loses trust due to quality or safety issues, it will be excluded from designation extension as an innovative product.
In particular, if a company fails to take corrective action for defects identified during the inspection of a pilot-purchased innovative product, it will be prohibited from participating in the innovative product pilot purchase program for three years. The amendments also stipulate that if grounds for cancellation of designation arise, or if there are legal disputes such as lawsuits or administrative actions, the company will be restricted from entering into unit price contracts for innovative products.
Im Ki-keun, Commissioner of the Public Procurement Service, said, "We hope that this system improvement will help create a business-friendly environment for companies," and added, "The Public Procurement Service will continue to actively listen to and reflect the voices from the field from the perspective of companies, and will spare no effort in supporting innovative venture companies with technological capabilities to use the public procurement market as a stepping stone to enter the global market."
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