Group says reform will 'restore order to bidding process'

A construction site in central Seoul. [Herald DB]
A construction site in central Seoul. [Herald DB]

The Korea Contractors Association on Tuesday welcomed the Ministry of Economy and Finance's newly announced plan to overhaul the public construction bidding system, calling it "a much-needed policy that will restore order to the bidding process."

According to the association, the market governed by the simplified comprehensive evaluation bidding system — applied to construction projects valued between 10 billion won and 30 billion won (about $19.4 million) — had been suffering serious side effects from excessive intervention by cost-estimation agencies.

Under the existing structure, bids closer to the "equilibrium price" — the average bid price — receive higher scores, giving cost-estimation agencies enormous influence over how that price is set. The arrangement had repeatedly drawn criticism for enabling identical bids and other irregularities.

In response, the association had continuously urged the Ministry of Economy and Finance, the Public Procurement Service and other related ministries to abolish the simplified system. The ministry decided to scrap it and replace the 10 billion-to-30 billion won tier with a technology-based qualification review system.

The government also announced complementary measures to ensure adequate project compensation, including applying a 90 percent award rate to standard market price items within the relevant qualification review tier.

The association asked authorities to design the project performance evaluation criteria carefully when drafting detailed guidelines, noting that contracts below 30 billion won represent a market segment dominated by small and midsize regional contractors and that a smooth transition is essential.

Korea Contractors Association President Han Seung-gu said the reform "lays the groundwork for fair and transparent competition among small and midsize firms at a time of comprehensive crisis — marked by a decline in construction investment, soaring material and labor costs, and tightening labor and safety regulations." He added that the association "extends deep gratitude to the Ministry of Economy and Finance for recognizing the industry's difficulties and announcing improvement measures," and pledged that the construction sector would "continue striving to secure safety and quality through faithful project execution and to improve the quality of life for the public."


lucky@heraldcorp.com