When national contracts are tied, companies in depopulation-prone areas and non-capital regions get priority

South Korea is set to implement new regulations favoring companies located in areas facing population decline and regions outside the capital when awarding national contracts. Under the revised National Contract Act enforcement decree and rules, if bidding companies achieve identical scores, those situated in depopulation-prone areas will receive preferential treatment.

If no companies from designated depopulation-prone areas are among the top bidders, the contract will then be offered to businesses located in non-capital regions. Only if neither of these conditions is met will the contract be decided by a lottery. Additionally, the limit for single-bidder discretionary contracts for companies in depopulation-prone areas will be raised from 20 million won to 50 million won.

These changes are part of a broader government effort to support regional economies and address the challenges posed by a declining birthrate and population concentration in Seoul. By providing an advantage to businesses in less developed areas, the government hopes to stimulate local economic activity and create more balanced regional development.

In parallel, the government is introducing measures to expedite research and development projects. The limit for single-bidder discretionary contracts for research equipment in national R&D projects will also be increased from 20 million won to 50 million won. Furthermore, research equipment specifically related to "super-innovative economic projects" designated by the Minister of Economy and Finance will be eligible for direct contract awards, bypassing the standard bidding process to shorten procurement times.

The revisions also include measures to ensure fair competition. Companies suspected of being shell corporations or engaging in bid rigging will be excluded from exemptions on bid bond payments. Those who fail to submit required documents without valid reasons will face restrictions on their bidding qualifications. To deter collusion, the period for disqualification from bidding will be extended for dominant participants in bid-rigging schemes from one year to 1.5 years, and for simple participants from six months to one year.