Korea Abolishes Sales Cap System for Ready-Mixed Concrete, Asphalt

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By Park Hee-yoon
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Abolition of the upper limit system for ready-mixed concrete and asphalt concrete association performance - Seoul Economic Daily Society News from South Korea
Abolition of the upper limit system for ready-mixed concrete and asphalt concrete association performance

The Public Procurement Service (PPS) is abolishing the cooperative sales performance cap system for ready-mixed concrete and asphalt concrete while mandating priority delivery for government supplies to ensure stable supply.

The PPS announced on the 3rd that it has decided to implement a customized system reflecting the product characteristics of ready-mixed concrete and asphalt concrete, with comprehensive revisions to related regulations taking effect from the 1st of this month.

Previously, ready-mixed concrete and asphalt concrete were managed under unified regulations despite differences in market size and product characteristics, limiting the ability to adequately reflect each product's unique features in supply management and system operations.

The PPS initiated these revisions to address such structural limitations while simultaneously pursuing quality enhancement, fair competition establishment, and supply stability improvement.

First, the agency separated regulations for ready-mixed concrete and asphalt concrete to establish quality management systems tailored to each product's characteristics.

For ready-mixed concrete, quality inspections were strengthened by expanding testing frequency and establishing new standards requiring random selection of test vehicles during delivery.

The agency also clarified grounds for additional transportation cost payments based on delivery site conditions to prevent disputes that may arise during the delivery process.

For asphalt concrete, standards for additional cost payments were improved to reflect the reality of frequent late-night and holiday deliveries. New requirements were established for immediate notification and sales suspension when business suspension orders are issued for environmental law violations.

In particular, management standards were newly established for recycled additives requiring hazardous substance control, strengthening quality and safety management.

To secure supply stability, the cooperative sales performance cap system was abolished, which had caused purchasing inconvenience through repeated sales suspensions and resumptions based on supply performance.

For ready-mixed concrete, priority delivery for government supplies was made mandatory to prevent public construction projects from being halted during supply disruptions.

Additionally, improvements to the two-stage competition system were implemented to enhance competitiveness.

Standards for two-stage competition exemptions during raw material supply instability were established, and selection procedures were reorganized to allow follow-up competition for remaining quantities after initial selection and for items receiving no bids.

To expand order opportunities for small and medium enterprises, the number of companies passing the first round of two-stage competition was increased from 5 to 10, with more than 80% of total volume restricted to SMEs.

Furthermore, warranty responsibilities for cooperative contracts were clarified, and procedures for swift sales suspension and delivery changes in case of serious accidents were established, strengthening procurement companies' accountability and safety management systems.

PPS Commissioner Baek Seung-bo stated, "This regulatory revision establishes a foundation for rational system operation reflecting product characteristics for ready-mixed concrete and asphalt concrete, which are major government-supplied materials valued at 5 trillion won." He added, "We will establish a government-supplied materials management system that manages quality more strictly, operates competition fairly, and maintains stable supply."

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AI-translated from Korean. Quotes from foreign sources are based on Korean-language reports and may not reflect exact original wording.