Procurement Service opens global resource market

The state procurement agency has unveiled its strategy to widen exports of its procurement system to about 20 countries, paving the way for local suppliers to find deals abroad.

The Public Procurement Service, tasked to manage state-owned land and properties, has put its priority in selling Narajangteo, an electronic procurement system developed by Samsung SDS.

“Korean companies need to take advantage of the business opportunities opening up with trade pacts across the globe,” Choy Kyu-yun, chief of PPS told The Korea Herald.

Narajangteo, also known as MER-Link, manages government’s contracts with private suppliers by processing electronic bidding, certification, payment settlements, document distribution and workforce planning. Roughly translated as “national marketplace,” the homemade e-system helps to integrate and standardize procurement process. It has been sold to Costa Rica and Vietnam and Mongolia are scheduled to adopt the system within a year or so. Choy is confident he can expand this to Europe and Africa.

“Export of Narajangteo lays the groundwork for local suppliers to find deals from foreign governments. Selling the system widens Seoul’s network with foreign officials, which helps us share information with local companies,” Choy said.

“(Importing countries) having the same system as we do is a great advantage to Korean suppliers trying to channel resources there,” he added.

Public procurement market has been difficult to penetrate for local companies as many authorities have placed restrictions on foreign ownership and subsidies reserved for local suppliers. But regulations favoring domestic firms are being lifted with more trade pacts, creating level-playing field for companies to bid for deals from overseas.

PPS is tasked to manage government-owned land and other state properties. It oversees state financed projects and fiscal spending by government agencies.

PPS, in partnership with Samsung SDS, sold Narajangteo to Costa Rica at 11.3 billion won ($10.02 million) August last year. Samsung SDS had built nine different interfaces to adopt the system there and had offered training and other services for four months.

Mongolian authorities are scheduled to ink a memorandum of understanding to adopt the system later this month. PPS said it will complete training services and other operational support for their Mongolian counterpart by January 2012. 

Choy last Friday held a meeting with Uzbekistan Vice Finance Minister Bakhrom Asrafkhanov in Seoul to accelerate a deal to export Narajangteo. He is scheduled to go on a tour to visit state procurement agencies in Southeast Asia and Eastern Europe starting this weekend. 

Choy has created a task force to handle the overseas promotion in August. The team works with the Korea Federation of Small and Medium Businesses to brainstorm ways to secure fair and stable business contracts for smaller players.

“PPS is ready to provide all necessary support to help local suppliers going abroad. Contracts with governments will secure long-term business deals,” Choi said.

By Cynthia J. Kim and Lee Kwon-hyong
(cynthiak@heraldcorp.com)