Transcript Document

The Fight against Bid-Riggings
Sung-Keun KIM
Director, International Cooperation Division
Korea Fair Trade Commission
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Recent Updates
in the KFTC
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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
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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
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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
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The KFTC’s experience to
prevent bid-riggings
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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
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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
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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
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The KFTC’s experience to
prevent bid-riggings
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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
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