Korea Federation of SMEs Holds 'First Public Procurement System Activation Committee Meeting'

Discussion on the Significance and Necessity of the Competitive Bidding System among SMEs

The Korea Federation of SMEs announced on July 2 that it held the '2026 First Public Procurement System Activation Committee Meeting.' The Public Procurement System Activation Committee is an organization established in June of last year to discuss ways to improve systems aimed at facilitating SMEs' entry into the procurement market and invigorating public procurement. The committee is chaired by Jang Kyujin, Chairman of the Korea Association of Machinery Industry Cooperatives.

During the meeting, participants reviewed major improvements and supplementary tasks to the public procurement system in the first half of the year, such as raising the minimum bid price in the eligibility review system for purchasing goods. In particular, attendees discussed the significance and necessity of the competitive bidding system among SMEs.

The competitive bidding system among SMEs restricts the eligibility for public institution tenders for certain products—designated every three years by the Minister of SMEs and Startups—to SMEs that directly manufacture those products. Currently, a total of 616 products are designated, and the system's effectiveness will be maintained until 2027. Next year, a review will be conducted on the next round of designated items to be applied for three years from 2028.

Attorney Kim Kisoo of Law Firm Ije, who delivered the keynote presentation, stated, "Under the Government Procurement Agreement, policies that favor domestic firms or discriminate against foreign companies are prohibited. However, competitive bidding measures among SMEs are exceptionally permitted." He emphasized, "This system is virtually the only policy tool available to protect domestic industries." He went on to say, "Revitalizing SME support systems is a legitimate public task even under the Constitution, and if the absence of such systems leads to SME bankruptcies, resulting in unemployment benefits for workers and regional imbalances, it imposes a huge social welfare cost. Therefore, at the national level, the competitive bidding system among SMEs should be recognized as an investment, not an expense."

Chairman Jang Kyujin stated, "The competitive bidding system among SMEs is a crucial policy that utilizes the government's purchasing power to support SME growth and job creation, while also preserving the diversity of the domestic manufacturing base and industrial ecosystem." He added, "I hope that revitalizing this system will further facilitate SMEs' entry into the public procurement market."

This content was produced with the assistance of AI translation services.