2026.10.26. The Fair Economy — After criticism that some items on the KONEPS shopping mall were more expensive than market prices, the Public Procurement Service is rechecking the appropriateness of registered product prices and strengthening comparison and verification against market prices. It plans to operate an artificial intelligence (AI)-based price management system next year to respond swiftly to market price fluctuations. It also intends to expand procurement autonomy, allowing local governments to purchase KONEPS items on their own.
The Public Procurement Service said on the 26th that it would explain the purpose of public procurement and the principles of procurement pricing, and establish a price management system that the public can accept.
The AI-based price management system will quickly detect situations where the gap between market prices and procurement prices is large or where prices fluctuate sharply. It will support staff in intensively verifying the appropriateness of prices for such items, complementing the existing manpower-centered price monitoring. It is expected to improve response speed and management efficiency.
The related budget has already been reflected in next year's budget proposal. On September 1, the Public Procurement Service allocated 4.2 billion won (about $3 million) in the 2027 budget proposal to build a price comparison and survey system that collects, compares, and monitors public goods price information in real time using AI data. The budget proposal will be finalized in December after review by the National Assembly.
Market prices fluctuate frequently depending on market conditions and sales terms, so procurement prices that were appropriate at the time of contract can become higher than market prices during the contract period. To address this, the Public Procurement Service manages prices in three stages. First, it imposes an obligation on suppliers to maintain preferential prices. Second, it conducts regular checks through periodic verification of tax invoices, monitoring of market prices by dedicated staff, and operation of a procurement price reporting center. Third, if obligations are violated, it takes measures such as reducing contract unit prices, recovering unjust gains, and suspending transactions.
The Public Procurement Service is also pushing ahead without delay with the 'Public Procurement Reform Plan' announced on November 19 last year. It has converted procurement specifications to private-sector specifications as much as possible to make it easy to compare prices with private products. It has also allowed procurement companies to adjust prices autonomously below the contract unit price. It has also designated key price management items to establish a systematic price management foundation.
Procurement autonomy is a system in which local governments purchase KONEPS items on their own, tailored to regional conditions and demand. Since January this year, it has been piloted in Gyeonggi and North Jeolla. The Public Procurement Service plans to analyze the results of the pilot through joint public-private evaluation and collection of field opinions, and then expand it to all local governments in 2027.
The results of the procurement autonomy pilot are still mixed. Kim Sang-hun, a lawmaker of the People Power Party, pointed out at a National Assembly audit on October 15 that of 961 autonomous purchases in Gyeonggi and North Jeolla as of August 18, 927 (96.5%) were negotiated contracts. He said competitive contracts were only 34. Commissioner Baek Seung-bo responded that he would analyze the implementation results by the end of the year and then decide on future measures.
The price inspection was triggered by an audit by the Board of Audit and Inspection. The Board disclosed the results of its regular audit of the Public Procurement Service on March 19. The audit compared 370 registered shopping mall products with market prices and found that the supply prices of 157 (42%) were 20-297% higher than market prices. It also confirmed cases where specifications were partially different from commercial products to evade price management. Of about 780,000 registered products, 98% did not even receive basic price monitoring.
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