2024.07.06. The Fair Economy — The Public Procurement Business Mutual Aid Cooperative has been founded. The cooperative is expected to help ease the guarantee fee burden on procurement companies, including early-stage startups and small, medium-sized and venture businesses.
The Public Procurement Service said Administrator Lim Gi-geun attended the cooperative's founding general meeting, held on the 5th at ELTOWER in Seocho-gu, Seoul, and offered thanks and congratulations to the industry for its efforts to establish the cooperative.
The cooperative is a corporation established under the Act on Public Procurement Projects. Its purpose is to promote economic activity by operating guarantee, mutual aid and loan financing programs for procurement companies through mutual cooperation among businesses that have signed procurement contracts.
The cooperative plans to obtain approval for establishment from the Public Procurement Service and complete corporate registration by August, and will run a range of programs to support the independent economic activities and economic standing of procurement companies.
First, it plans to build a business foundation, including a guarantee system, and begin full-scale guarantee operations from December this year.
When issuing guarantees for contracts, bids, and advance payments, it will offer guarantee fees at least 20% lower than private guarantee companies, easing the cost burden on procurement companies.
Until now, procurement companies that signed procurement contracts had to rely on private guarantee institutions with high fees, but going forward they will be able to receive guarantee services at lower rates through the cooperative.
For its members, the cooperative also plans to provide financial support through low-interest loans.
Through its mutual aid program, covering liability for damages arising from business operations and compensation for losses from work-related injuries, the cooperative is expected to reduce the economic burden on procurement companies from accidents.
It will also support the growth of procurement enterprises through management consulting, diagnosis and education, as well as technology enhancement and training programs.
In his congratulatory remarks, Administrator Lim Gi-geun said, "I hope the cooperative will prepare thoroughly so it can play its part in helping procurement companies overcome the difficulties they face, by providing high-quality guarantee and mutual aid products and services. The Public Procurement Service, too, will spare no effort in actively supporting the cooperative's smooth operation and successful establishment."
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