2026.10.19. The Fair Economy — In the process of selecting a contractor for Songdo Severance Hospital, the ordering party has repeatedly acted in ways that appear to lower the threshold for large companies while blocking mid-sized construction firms from winning contracts. Confirmed actions include easing the debt ratio requirement for bidding, resolving to re-tender only to contractors ranked within the top 30, and instructing a sole contract the day after the winning bidder was notified. Although unfairness is suspected — favoring large firms and discriminating against SMEs — the Educational Foundation, Yonsei University and Yonsei University Health System have not issued a public statement.
Future City Construction Bids Solely Repeatedly… Health System Keeps Declaring Failures or Cancellations
In December last year, the policy board of directors of the Educational Foundation planned to select a construction contractor in March this year and complete the project by March 2028. Accordingly, on Feb. 13, just before the Lunar New Year holiday, the Yonsei University Health System announced the bidding for the above-ground construction of Songdo Severance Hospital. Eligibility required firms to have experience with a single general hospital project worth at least 100 billion won within the past 10 years. Only Future City Construction, ranked No. 306 in the contractor ranking, submitted a bid, causing the bidding to fail.
In a second announcement on April 16, the Health System broadened eligibility to firms ranked within No. 20 or those with the required experience. It also relaxed the upper limit for bidders' debt-to-asset ratio from 200% to 250%. GS E&C Corp., ranked No. 5 in the contractor ranking, attended the site briefing held on April 28 of that month. GS E&C Corp., whose debt-to-asset ratio was known to be 239.9% as of the third quarter last year, could not have participated under the previous criteria but met the requirements under the relaxed standard.
Several media outlets raised suspicions that this change to the debt-to-asset ratio cap was intended to grant a special favor to GS E&C Corp. The construction industry also interpreted it as an adjustment made with a specific major corporation in mind.
The fact that the Educational Foundation's executives came from GS further spread the suspicions. Heo Dong-su, chairman of the Educational Foundation, has served as honorary chairman of GS Caltex since 2016. Kim Eung-sik, head of the foundation headquarters, took up the post in January last year after serving as CEO of GS Power and CEO of GS EPS.
The bidding announced on April 16 failed again when only Future City Construction submitted a bid by the application deadline of May 29, as GS E&C Corp. ultimately did not participate.
The medical center issued a re-notice on June 4. The site briefing held on June 12 was attended by only Future City Construction, and only that firm submitted a bid. This marks three consecutive sole bids from the first notice through this re-notice.
However, the Health System repeatedly declared the tenders failed or cancelled them, preventing the company from winning the project.
'Only re-bid within the top 30' resolution… blocks small and medium enterprises' bids at the source
On June 23, the foundation held an extraordinary board meeting in the conference room of its headquarters. Chairman Heo presided, with 8 of 12 directors attending. The Health System reported that the underground frame construction was 99% complete as of June 17 and that only Future City Construction had submitted a sole bid for the re-notice issued on June 4.
One director pointed out that from an outside perspective, it appeared conditions were adjusted to allow a specific firm to participate. Keum Gi-chang, vice president for medical affairs at Yonsei University and head of the Yonsei University Health System, replied that the debt-to-asset ratio standard was not relaxed with that firm in mind and that the fluctuation in its debt-to-asset ratio was unknown at the time. However, the construction industry notes that the Health System could have known GS E&C Corp.'s third-quarter debt-to-asset ratio from last year if it had been willing to check.
Other directors noted that proceeding with a negotiated contract with the sole bidder, a company ranked around 300th, could deepen misunderstandings about fairness. Some suggested re-bidding among contractors ranked within the top 30 or 50.
Chairman Heo asked the three Health System staff members to leave the room before discussing the agenda. The directors decided not to proceed with the ongoing tender process and unanimously resolved to re-bid among contractors ranked within the top 30, without any other conditions.
The re-notice tender issued on June 4 was cancelled before the scheduled opening on June 30, and Future City Construction, ranked 306th, could no longer bid on its own. Head Kim explained that the top 30 includes major construction companies, so setting the limit at 30 was appropriate.
One week after the resolution, on June 30, the Health System issued an emergency rebidding announcement. A site briefing was held on July 13, and applications closed on Aug. 13. Two firms, Kyeryong Construction (ranked No. 15) and Kumho Engineering and Construction (ranked No. 24), presented proposals on Sept. 17, and Kumho Engineering and Construction was selected as the preferred negotiation partner. Price negotiations were settled on the 23rd, and Kumho Engineering and Construction was notified of the award on the 28th.
'Sole contract' ordered the day after award… no stance despite suspected unfairness
According to emergency meeting minutes obtained by The Fair Economy, the Educational Foundation held an emergency meeting in a conference room at the foundation headquarters on Sept. 29, the day after the award notification. Five directors, including Chairman Heo, and officials from the foundation and Health System attended. The meeting was convened to confirm the circumstances behind Kumho Engineering and Construction's disclosure that it had secured only 60% of the total construction cost.
At the meeting, the Health System explained that it had consulted with the foundation to remove the clause allowing joint supply from the initial announcement but did not include a prohibition clause. It also stated that at the July 13 site briefing, participants were informed that proposing collaboration plans would not result in evaluation disadvantages. Head Kim said that answering that joint supply was possible at the site briefing did not align with the intent of the June 23 extraordinary board decision. However, no content prohibiting joint supply is found in the minutes of that day's meeting.
Chairman Heo ordered that the final contract with Kumho Engineering and Construction be pursued as a sole contract, in which Kumho Engineering and Construction bears 100% responsibility for the total construction amount, rather than through split bidding or joint supply, to avoid violating the June 23 decision. He also ordered the Health System to share the original contract draft with the foundation before signing and to obtain the chairman's final confirmation.
Legal experts point out that these orders lack reasonable grounds. The June 23 resolution is difficult to view as prohibiting joint supply, and even in a joint performance format, members bear joint liability to the client, meaning Kumho Engineering and Construction's 100% responsibility is achieved.
Taken together, the series of events shows decisions continuing in a direction that lowers participation requirements for major corporations while narrowing the path to orders for small and medium-sized construction firms. The relaxation of the debt-to-asset ratio allowed GS E&C Corp. to meet the requirements, and the rebidding limited to within No. 30 blocked Future City Construction's path to sole bidding. The day after the award, an order for a sole contract was issued, even blocking participation through joint supply. These are points where unfairness is suspected in favoring major firms and discriminating against small and medium enterprises.
The main contract has not yet been signed. The Health System had said it would sign the contract and begin construction between late September and early October, but it missed the schedule. Park Seong-jin, head of the investment attraction division at Incheon Free Economic Zone, said at a press briefing on April 29, "If the hospital does not open by the end of 2028, the Yonsei Science Park site can be reclaimed, and Yonsei University could suffer losses of over 100 billion won."
The Educational Foundation and the Yonsei University Health System have not disclosed their stance on the incident. The Health System said it is preparing the main contract but explained that it is difficult to disclose the issues, adding that the goal of completion and opening by the end of 2028 remains unchanged. Jung Il-yeong, a Democratic Party of Korea lawmaker representing Incheon Yeonsu-eul district on the National Assembly's Committee on Land, Infrastructure and Transport, recently sent an inquiry to Chairman Heo demanding clarification of responsibility for the hospital construction delay and measures for normalization.
With the National Assembly audit underway, calls are growing to summon Chairman Heo as a witness to question him about the unreasonable discrimination against SMEs and the push for large-company-oriented projects.
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