The Korea Land and Housing Corporation (LH) and the Public Procurement Service have uncovered 20 architectural firms that engaged in bid rigging by pre-selecting winners or recruiting proxy firms in a bid for construction supervision services.
The Fair Trade Commission announced on the 29th that it imposed a total penalty surcharge of 23.7 billion won along with corrective orders on 20 businesses, including KD Engineering, Tomoon Engineering, and Gunwon Engineering.
According to the Fair Trade Commission, these firms participated in a total of 92 bids for construction supervision services worth approximately 556.7 billion won from December 2019 to January 2023, having agreed to select winners and avoid competition through meetings before the bids. Additionally, in some bids, they executed their collusion by recruiting proxy firms in advance to participate in the bidding to prevent rejections.
In particular, when LH announced plans for large-scale supervision service bids in May 2020, five firms, including KD Engineering, Tomoon Engineering, Gunwon Engineering, Muyeong CM, and Mokyang Comprehensive Architecture Office, gathered in a location in Seongnam. They divided 50 projects with large planned amounts into five lists through a lottery and pre-assigned winners for each list. They later shared this agreement and implemented it with other businesses forming a consortium.
Additionally, investigations revealed that since 2021, they had expanded their collusion by pre-determining winners or coordinating consortium formation in bids for supervision services commissioned by the Public Procurement Service. After 2022, it was found that a systematic agreement structure had been established, where consortium representatives decided on participation through prior consultations for each bidding announcement.
The Fair Trade Commission pointed out that these collusion activities had been organized over several years in the public facilities construction sector, which is closely related to the lives of citizens. As a result, 17 of the 20 businesses have been referred to the prosecution, and criminal trials are ongoing for 17 related employees.
A Fair Trade Commission official noted, "It is significant that strict measures have been taken against extensive bid rigging involving major businesses over several years in the public construction supervision sector" and added, "We will continue to strengthen monitoring of collusion in areas closely related to citizens' lives."