SMEs Urge Urgent Reform of Unfair Business Sanctions System

"2nd Public Procurement System Activation Committee" Held
Differentiated Application of Unfair Business Sanctions by Severity
Discussion on Side Effects of Local Government MAS Autonomy

The Korea Federation of Small and Medium Business announced on September 2 that it held the "2025 2nd Public Procurement System Activation Committee" meeting. The Public Procurement System Activation Committee was launched in June to promote the public procurement of small and medium-sized enterprise products and to explore ways to develop cooperatives through the public procurement system. Jang Kyujin, Chairman of the Korea Association of Machinery Industry Cooperatives, serves as the committee chair.

At the meeting, participants discussed issues such as improving the unfair business sanctions system and the direction for local governments to autonomously utilize the MAS (Multiple Award Schedule) system. The committee members argued that uniformly restricting bid participation for unfair business operators could cause irreparable harm to companies, and insisted that restrictions should be applied differently depending on the severity of the case. Specifically, they proposed restricting bids for all ordering agencies in cases of serious legal violations, while limiting restrictions to the relevant product and ordering agency for minor cases.

In addition, as the Public Procurement Service is currently pushing to abolish the mandatory use of MAS by local governments, concerns were raised that if local governments choose not to use MAS and instead sign their own unit price contracts, this could lead to increased administrative burdens due to separate contract procedures for each local government, as well as issues such as excessive price-cutting competition resulting in dumping and quality deterioration.

Chairman Jang Kyujin stated, "The small and medium-sized business sector is facing a 'perfect storm' and is on the brink of collapse due to the Russia-Ukraine war and tariff hikes under the Trump administration in the United States," adding, "Active administrative reforms, such as improving the unfair business sanctions system, are urgently needed so that the path for small and medium-sized enterprises participating in the procurement market does not become even more challenging."