Korea's procurement agency cracks down on unfair bidding practices

South Korea's Public Procurement Service is moving to prosecute companies involved in bid-rigging and recover illicit gains from others found to have engaged in unfair procurement practices.

The Public Procurement Service, led by Commissioner Baek Seung-bo, identified 28 companies engaged in unfair procurement practices — including bid-rigging, violations of direct-production standards and specification breaches. Of those, it referred two companies for prosecution and ordered 18 others to return a combined 860 million won ($557,000) in illicit gains.

The two companies referred to the Korea Fair Trade Commission had colluded ahead of a bid for a household waste collection and transport service contract, agreeing in advance on the intended winner, decoy bidders and bid amounts before executing the scheme to secure the contract. The agency cited the seriousness of the conduct and the scale of the contract secured through the collusion as grounds for the referral.

The 18 companies ordered to return illicit gains were found to have committed unfair procurement practices across 17 product categories — including lighting control devices and searchlights — through violations of direct-production standards, contract specification requirements and preferential pricing obligations.

The agency completed the process of barring those companies from future bid participation and decided, as a follow-up measure, to recover a total of 860 million won in illicit gains.

Kim Ji-wook, director general of the Digital Fair Procurement Bureau at the Public Procurement Service, said the agency would "respond firmly to unfair procurement practices that undermine healthy competition and do its utmost to establish a fair and orderly procurement market."