[Effective as of October 31, 2023] [Amended by Act No. 19824, October 31, 2023]
① The Minister of SMEs and Startups may take necessary measures to increase the purchase of construction materials designated as competing products.
② In consultation with the heads of relevant central administrative agencies, the Minister of SMEs and Startups shall select and announce products necessary for a construction project for which any public institution has placed an order, and which is deemed suitable for the public institution's direct purchase and supply, to the extent not impairing the quality and efficiency of the construction project.
③ The head of a public institution who intends to place an order for the construction project in an amount equivalent to or larger than that prescribed by Presidential Decree shall examine whether he/she directly purchases the products announced by the Minister of SMEs and Startups under paragraph (2), and take measures necessary for directly purchasing such products: Provided, That the foregoing shall not apply where the Minister of SMEs and Startups has announced that direct purchase cannot be executed for a certain reason after consultation with the heads of relevant central administrative agencies.
[Effective as of December 12, 2023] [Amended by Presidential Decree No. 33913, December 12, 2023]
① "The construction project in an amount at least equivalent to that prescribed by Presidential Decree" in the main sentence of Article 12 (3) of the Act, means a construction project, the budget price of which is at least four billion won, in cases of general construction projects specified in attached Table 1 of the Enforcement Decree of the Framework Act on the Construction Industry; and a construction project, the budget price of which is at least 300 million won, in cases of specialized construction projects specified in attached Table 1 of the Enforcement Decree of the same Act; electrical construction projects under the Electrical Construction Business Act; information and communications construction projects under the Information and Communications Construction Business Act; or fire-fighting system installation projects under the Fire-Fighting System Installation Business Act.
② Where the head of a public institution places an order for a construction project referred to in paragraph (1), the purchase of any product selected and publicly announced by the Minister of SMEs and Startups pursuant to Article 12 (2) of the Act (hereinafter referred to as "product subject to direct purchase") shall be done by any of the following methods:
1. In cases of falling under any of the following: He/she shall directly purchase a product subject to direct purchase by reflecting it in the design as government-supplied materials for the relevant construction project: Provided, That in cases of falling under item (a), where the estimated price of a detailed item constituting a product subject to direct purchase is less than five million won, he/she may directly purchase such detailed item:
(a) Where the estimated price of a product (excluding an item falling under item (b)) is not less than 40 million won;
(b) Where the estimated price of a product subject to direct purchase falling under any of the following item is not less than ten million won:
1) A product to be preferentially purchased in accordance with statutes related to property and physical safety of the people; rationalization of energy use; promotion of technology development; environmental conservation, etc.;
2) A product designated by the Minister of SMEs and Startups after consultation with the heads of the relevant central administrative agencies, for which special performance, specifications, marks, etc. are deemed necessary;
2. In cases of not falling under any item of subparagraph 1: He/she may directly purchase a product subject to direct purchase.
③ Where the head of a public institution fails to make direct purchase under the proviso to Article 12 (3) of the Act for any reason, he/she shall publicize such reason when giving public notice of a tender.
④ Detailed matters for direct purchase of materials for construction projects, other than those prescribed in paragraph (1) through (3) shall be determined and publicly notified by the Minister of SMEs and Startups. < Newly Inserted on Sep. 19, 2017>
| Classification | Lump-sum Bidding | Multiple Award Schedule (MAS) | Excellent Products (Third-party Pricing) |
|---|---|---|---|
| Summary | A method in which an unspecified number of bidders participate in a competitive bid and the one who offers the most favorable conditions to the country is selected to conclude a contract | A contract system in which two or more contractors are involved, and the demand agency directly selects goods from those who meet certain criteria such as delivery performance and management status | After reviewing the first and second factory inspections and test reports through a review committee composed of expert members, excellent products are designated |
| Features | Based on the design documents provided by the client, the bidder reviews their capabilities and responsibilities before submitting a bid. | A system that selects multiple suppliers to promote fair competition in price and quality while enhancing the purchasing agency's choice. It is a system well-suited for the era of e-commerce. To meet the diverse needs of public institutions, this system allows the purchasing agency to select from two or more contractors who offer goods of equal or similar quality, performance, and efficiency. |
To improve the quality of procurement goods and support the market access of small and venture businesses, items with superior performance, technology, or quality are designated as "excellent procurement goods" and are supplied to various purchasing agencies through priority contracts. |
| Advantages | Expansion of market access through the participation of multiple companies Simplified bidding documentation process Easy document review for the client |
Expansion of market access through the participation of multiple companies Budget savings due to reduced construction costs |
Encouraged and protected by national contract law regarding product purchase and quality Possibility of shortened material delivery time Stable quality assurance with verified suppliers |
| Disadvantages | Participation of unverified suppliers makes product quality and after-sales service (A/S) uncertain, and the feasibility of construction is unclear. Products registered on the public procurement system are limited by total amount. | Winning bids may face challenges in product quality and construction. When contracts are awarded to small businesses, the management of defects, maintenance, and repairs can be uncertain. |
Comparatively more expensive than MAS pricing. |
