Transcript Document
The Fight against Bid-Riggings Sung-Keun KIM Director, International Cooperation Division Korea Fair Trade Commission 1 Recent Updates in the KFTC • Establishment of Bid-Rigging Investigation Division - The KFTC newly established Bid-Rigging Investigation Division in 2013 - After the establishment, the number of bid rigging cases has increased dramatically 2 In 2014, the KFTC detected 48 cartel cases, most of which were bid riggings, and imposed surcharges of more than one trillion won The KFTC’s experience to prevent bid-riggings • Introduction of a system to predetermine the amount of damages to be compensated by bid-riggers - This system requires bid participants to include obligatory damages clause to the contracts when they engage in rigging - The system relieves burden of proof by public procurement agencies by allowing them to presume 10 percent of bidding price as damages - Since 2010, the KFTC has encouraged public agencies to adopt the system and major public agencies including Korea Electric Power Corporation and Korea Railroad Corporation has the system in place 3 The KFTC’s experience to prevent bid-riggings • Strengthened cooperation with procurement agencies - Before 2014, the level of cooperation stayed at the minimum The procurement agencies requested the KFTC to investigate when bid rigging is suspected - In 2014, the KFTC and 23 major public procurement agencies including the Public Procurement Service and Defense Acquisition Program Administration have established cooperative mechanism 4 The mechanism involves : adoption of BRIAS(Bid Rigging Indicator Analysis System); provision of education program to officials in charge of public procurement; and personnel exchange The KFTC’s experience to prevent bid-riggings • Wider usage of BRIAS - The system quantifies the likelihood of bid riggings by taking into account bidding rates, number of bidders, bidding price and so on - The system was developed by the KFTC in 2006 and has been adopted by public agencies such as the Public Procurement Service, Korea Electric Power Corporation and Korea Hydro & Nuclear Power Corporation 5 The KFTC’s experience to prevent bid-riggings • Education program to prevent bid riggings - The KFTC has developed education program to prevent bid riggings for pubic procurement agency officers to enhance their awareness upon bid rigging - Recently the program is provided by the education institution run by the Korea Public Procurement Service to officials in charge of procurement 6 The KFTC’s experience to prevent bid-riggings • Personnel exchange - To strengthen cooperative ties, the KFTC has exchanged its officials with procurement agencies since 2013 - Officials of the KFTC are dispatched to procurement agency for competition advocacy activities where officials of procurement agency are dispatched to the KFTC to help investigation 7 8