Public procurement chief committed to sweeping reform for transparency, local autonomy, AI-driven innovation

Public Procurement Service (PPS) Administrator Baek Seung-bo / Courtesy of PPS

The Public Procurement Service (PPS) will undergo a sweeping reform to implement President Lee Jae Myung’s principle of transparent, sustainable and growth-driven state management, PPS Administrator Baek Seung-bo said, Thursday.

The PPS chief explained that the reform will allow local governments to purchase frequently demanded goods independently, marking a significant shift toward openness and decentralization.

Such goods have been purchased mandatorily through PPS, which operates under the Ministry of Economy and Finance.

The reform is also expected to attract more capable suppliers to support the government’s artificial intelligence (AI) and other future growth initiatives.

“PPS is committed to keeping in step with the government’s core value of transparency for people-centered economic growth and sustainable development,” Baek said.

The commitment comes as PPS is tasked with procuring goods and services for all public organizations more responsibly, managing a market worth 225 trillion won ($153.38 billion) that includes 620,000 suppliers and 75,000 end-user institutions.

Baek said the reform will “completely restructure the public procurement system and strengthen strategic procurement” through 70 tasks under four main goals: autonomy, expanded competition, innovation and social responsibility.

To minimize side effects from the policy shift, the PPS chief emphasized that the road map was formed after actively gathering opinions from various stakeholders, including industry associations, organizations and procurement-focused companies.

A pilot program to give municipal governments greater control over their procurement will begin in 2026, starting with 120 electronic devices and components in Gyeonggi Province and North Jeolla Province.

The program is scheduled to expand to all local governments by 2027.

To prevent corruption and unfair practices during the expansion, a “one strike, you’re out” policy will be introduced, punishing and removing from the market any party caught committing even a single illicit act.

Contract information will also be fully disclosed through the PPS-operated e-procurement system, KONEPS.

The reform will support disadvantaged businesses, such as small and medium-sized enterprises, women-led companies and businesses employing disabled workers, helping them retain their procurement shares and protecting them from being pushed out of the market.

“The reform also aims to open opportunities for promising companies in future growth sectors that struggle to find sales channels,” Baek said.

Accordingly, the scale of innovative procurement focusing on AI, climate tech, robotics and other future technologies is set to expand to 2.5 trillion won or more by 2030, with up to 5,000 relevant products expected to be sourced.

In particular, the policy aims for a rapid, AI-driven transformation (AX) of the procurement administration.

“PPS will actively serve as the first buyer to stimulate public AX by facilitating the entry and market access of AI products and services,” he said.