Period for Determining Repeated Public Bidding Collusion Expanded to 10 Years... Stricter Sanctions on Recurrent Collusion

The government is tightening the criteria for recurrent collusion that bars companies from participating in public bidding.

The Korea Fair Trade Commission (KFTC) announced that it has prepared an amendment to the Guidelines on Unfair Collaborative Acts in Bidding and Requests for Restriction of Bidding Eligibility, which will be subject to administrative notice starting today (the 21st) through October 12.

Under the current State Contract Act, public procurement agencies such as the Public Procurement Service can restrict a business operator's eligibility to participate in bidding upon a request from the KFTC.

The current guidelines stipulate that the Kftc can request a restriction on bidding participation when the "accumulated penalty points received for bidding collusion over the past 5 years exceed 5 years."

The revised guidelines focus on strengthening restrictions on public bidding eligibility for businesses that repeatedly engage in collusion.

First, the KFTC is extending the evaluation period for recurrent collusion from the past 5 years to 10 years.

In addition, it has decided to consider penalty points resulting from all types of collusion, not just bidding collusion.

The penalty point threshold that serves as the basis for requesting restrictions will be adjusted from "exceeding 5 points" to "4 points or more."

Current penalty points are set at: ▲ 0.5 points for a warning ▲ 1.0 point for a corrective recommendation ▲ 2.0 points for a corrective order ▲ 2.5 points for a surcharge ▲ 3.0 points for a criminal referral.

If the penalty point criteria are lowered, a business that has received a corrective order or higher for collusion and receives another corrective order or higher for collusion within 10 years could become a subject for a request to restrict bidding participation.

The KFTC expects this revision to enhance the effectiveness of sanctions against businesses that repeatedly engage in collusion.

However, to ensure predictability for businesses, a transitional measure has been established to apply the previous regulations until December 31, 2031, regarding requests to restrict bidding eligibility for businesses that accumulated penalty points for collusion before the revised guidelines take effect.

Detailed information on the administrative notice can be found on the KFTC website (http://www.ftc.go.kr).

Comments regarding the amendment can be submitted by mail, fax (044-200-5220), or email (suminb@korea.kr).
 
(Photo provided by the Fair Trade Commission, Yonhap News)
※ Please note: This article was translated by AI and may contain errors.