2024.06.12. The Fair Economy — Criteria for designating and operating "Innovation Product Support Centers" will be established to support public procurement of innovative products. The centers will be able to carry out tasks such as discovering and recommending innovative products, providing education and publicity for buyers and suppliers, helping procurement companies enter overseas procurement markets, and conducting policy research and studies of overseas cases.
The Public Procurement Service recently pre-announced a draft notice titled "Notice on the Designation and Operation of Innovation Product Support Centers" containing these provisions.
The agency explained that the notice is intended to set out detailed criteria for designating and operating the support centers, in line with revisions to the Act on Procurement Services. It added that the draft notice includes matters delegated under the enforcement decree and enforcement rules of the Act on Procurement Services, which are currently being revised, as well as detailed designation criteria and procedures for application and designation.
Looking at the main contents of the draft notice, it defines the scope of the support centers' work (Article 3 of the draft).
Under Article 27-2 of the Act, the support centers carry out: ▲discovering and recommending innovative products; ▲education, publicity and consulting for purchasing agencies and procurement companies; ▲support for procurement companies designated as innovative product makers to enter overseas procurement markets; and ▲policy research and studies of overseas cases.
It also sets out criteria for designating support centers (Article 4 of the draft).
Under Article 33-2(7) of the enforcement decree, the designation criteria set by the Commissioner of the Public Procurement Service for the assets, dedicated organization, specialized personnel and track record needed for a support center to carry out its work are as follows: ▲assets of at least 200 million won (about $145,000) as of the date of application; ▲a dedicated organization with at least 20 full-time staff; ▲at least 10 specialized personnel holding a master's degree or higher, or an engineer-level certification or higher under the National Technical Qualifications Act; and ▲a track record of at least 1 billion won (about $725,000) in combined research service contracts in the public procurement field over the past three years.
The draft also sets out procedures for evaluating and designating support centers (Articles 6 and 7).
When an application for designation is received, the Commissioner must examine whether the applicant meets the designation requirements and whether the information in the submitted documents is accurate, and must evaluate applicants that meet the requirements. For this examination and evaluation, the Commissioner may organize and operate a designation evaluation panel of five or more members.
The Commissioner must select, through deliberation by the Contract Review Council, the applicant best suited to carry out the work from among those that pass the evaluation as the candidate for designation, and must submit the selected candidate to the Procurement Policy Deliberation Committee or the Public Demand Discovery Committee for review of its suitability.
If the Procurement Policy Deliberation Committee or the Public Demand Discovery Committee determines that the candidate is suitable, the candidate will be designated as a support center and issued a certificate of designation.
The draft includes specific provisions on project delegation and contracts for support centers (Article 8 of the draft).
The Commissioner may entrust a support center with all or part of the work listed in Article 3 of the draft. In such cases, to ensure stable operation, the work must be entrusted in units of up to three years, and the Commissioner must notify the support center of the project plan, including the scope and budget of the work, before the start of each year's business.
The support center must then submit a business plan to the Commissioner within 30 days of receiving the notification, including ▲an organization and project management plan; ▲plans for related organizational operations and personnel deployment by field; ▲contract management measures; ▲a quality assurance plan and activities; and ▲a project schedule.
When entrusting work to a support center, the Commissioner must conclude a contract in accordance with Article 7 of the Act on Contracts to Which the State Is a Party and Article 26(1)5(e) of its enforcement decree.
If a support center that has been entrusted with work wishes to subcontract part of that work to a third party, it must first obtain the Commissioner's approval.
The draft specifically lists the obligations of support centers (Article 9 of the draft).
The Commissioner may issue any orders necessary for supervising a support center's performance of entrusted work, and may examine whether the support center continues to meet the designation requirements before concluding each year's contract or whenever otherwise necessary.
Within two months after the end of each year's business, the support center must report to the Commissioner on that year's project performance, budget execution, and the following year's project plan. It must also conduct satisfaction surveys of purchasing agencies and procurement companies regarding its innovative product public purchase support work, take ongoing steps to provide better service, and report the results to the Commissioner.
The draft establishes grounds for the cancellation of designation or suspension of business for support centers (Article 10 of the draft).
The Commissioner may revoke a support center's designation or order a suspension of operations for a period of up to six months if the center ▲obtained its designation by fraud or other improper means; ▲has lost the ability to carry out its work or projects; or ▲falls short of the designation criteria. In particular, revocation of designation is mandatory if the designation was obtained by fraud or improper means.
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