“Lowering barriers to public procurement of commercial software” ... Public Procurement Service overhauls MAS

[Financial News] Administrative burdens on commercial software companies will be reduced, and barriers to entering the public procurement market will be lowered.
 The Public Procurement Service announced on the 21st that it had comprehensively revised and put into effect the “Regulations on the Operation of Multiple Award Schedule (MAS) Contracts for Commercial Software and Special Conditions.” The revision focuses on providing tangible benefits that companies can feel through regulatory reform in the public procurement market.
 The key aims of the revised rules are to “make things easier for businesses” and “lower barriers to entry.” First, single-supplier registration will be allowed for purchases of innovative software, including artificial intelligence (AI), where policy-driven procurement needs to be promoted, for amounts of KRW 20 million or less. This is expected to open the way for small startups and innovative companies with strong technological capabilities to enter the public market.
 The delivery-performance requirements previously applied to social solidarity economy organizations, such as social enterprises, community businesses and self-sufficiency enterprises, have also been completely abolished to actively support disadvantaged businesses’ participation in the market. The deadline for completing mandatory preliminary training has also been moved from “before the eligibility assessment” to “before the contract is signed,” enabling companies to prepare for contracts more quickly.
 A flexible operating system suited to changing market conditions has also been introduced. The restricted period for adding items has been sharply reduced from 90 days to 50 days, and the restriction period has been eliminated entirely for major upgrades. For minor upgrades that do not change prices, amended contracts can be signed immediately, laying the groundwork for the timely supply of the latest software versions to the public sector.
 Protections against unreasonable sanctions and unfair practices have also been strengthened. The previous practice of immediately suspending transactions with companies that failed to apply for interim inspections has been revised, with a new one-month grace period before sales are suspended. In addition, if a procuring agency proposes unreasonable contract terms or engages in unfair practices, the Public Procurement Service may demand corrective action, which the agency is then obligated to carry out.
 Lim Heon-eok, Director General of the Public Procurement Service’s Technology Services Bureau, said, “We will shift the paradigm of public procurement from ‘management’ to ‘support,’” adding, “We will continue to create a business-friendly procurement environment.”
 Meanwhile, industry stakeholders expect this measure to be an important turning point in resolving the long-standing problem of “crackdowns on outdated software” in public IT projects. Public institutions have long faced criticism for being exposed to security vulnerabilities because lengthy contract procedures and strict restrictions on changes have prevented them from adopting in a timely manner security patches and feature-enhanced versions already available on the market. With the latest versions now able to be supplied promptly, information security across the public sector is also expected to be strengthened further.

[email protected] Kim Won-jun Reporter