South Korea limits bids from companies with poor performance
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The South Korean Public Procurement Service will begin enforcing new measures on November 16 to prevent companies unable to fulfill contracts from bidding on public projects.
The agency previously attempted improvements through manufacturing bids and direct performance requirements, but found these methods insufficient to curb reckless bidding. Starting in November, the service will require suspected shell companies to post bid bonds.
Next year, the agency will also require companies registering over 500 “other supply items” to submit current credit rating certificates, valid for one year. The Public Procurement Service will also strengthen oversight of companies that frequently waive evaluation, restricting their ability to bid if they fail to submit required documents or abandon evaluations without justification. They will lower the threshold for repeated evaluation abandonment from five times to two, starting in January.
A trial run of these measures, begun in August, reduced the average number of companies bidding per project by 83.9 percent. The Public Procurement Service plans to continuously monitor company registration data to prevent those lacking contract fulfillment capabilities from entering the public procurement market.
