Public Procurement Service raises minimum bid rate for SME-exclusive contracts

The minimum bid award rate for goods and services reserved for small and medium-sized enterprises in the public procurement market has been raised for the first time in 12 years, as authorities move to guarantee fair compensation and support business stability amid high prices and interest rates.

The Public Procurement Service said Monday it will begin enforcing revised evaluation criteria that raise the minimum bid award rate by 2 percentage points for goods and services under SME-exclusive competition, effective for tender announcements issued Monday.

The revision follows a 2-percentage-point increase to the minimum bid rate for general goods and services that took effect in May, and is expected to provide meaningful relief to small businesses by lifting a threshold unchanged since 2014.

Under the revised criteria, the minimum bid award rate for goods under SME-exclusive competition rises from 87.995 percent to 89.995 percent. The same 2-percentage-point increase applies to general services subject to SME-exclusive competition, including software and passenger land transport services, also moving from 87.995 percent to 89.995 percent.

Baek Seung-bo, commissioner of the Public Procurement Service, said fair payment "not only helps procurement companies stabilize their operations, but also forms the foundation for improving the quality of public services that citizens experience." "We will continue to improve the public procurement system in ways that meet public expectations and deliver procurement administration that the public can trust," he said.