Busan is good

Mayor Park Heong-joon Sets Sights on 70% Local Product Procurement Rate: First in the Nation to Introduce Continuous Public Contract Monitoring

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Busan Metropolitan City, led by Mayor Park Heong-joon, announced that it will hold the “2026 Comprehensive Strategy Report Meeting for Expanding Local Product Procurement” at 9:00 a.m. today (26th) in the City Hall Grand Conference Room.

This meeting was organized to review the progress made over the two months since declaring the expansion of local product procurement as a key economic policy for Busan Metropolitan City in January this year, and to share the results of diagnosing blind spots in local procurement derived from a full analysis of 300,000 public procurement contract data records, along with comprehensive measures to address them.

Within two months of implementing the policy, the local product procurement rate surged to 63%, generating approximately KRW 260 billion in new added value and initiating a virtuous cycle in the local economy.

The memorandum of understanding signed on February 10 with around 100 related organizations, including the Public Procurement Service, has led to tangible improvements in performance indicators. The local product procurement rate, which stood at 41.5% in 2024, has risen sharply to 63.0% this year.

The city assessed that these achievements have resulted in tangible benefits for the local economy, including the creation of approximately KRW 260 billion in additional regional production value. Accordingly, it plans to raise its initial target procurement rate from 60% to 70% and continue its proactive efforts.

This comprehensive strategy is distinguished by being based on an objective analysis of 300,000 procurement contract data records.

The analysis identified three major blind spots: the marginalization of local firms in large-scale projects commissioned by national institutions (6.8% contract award rate), the concentration of high value-added services such as IT and engineering in the capital region, and the conventional practice of purchasing out-of-region products despite the availability of local alternatives.

To address these issues, the city plans to implement institutional reforms, including proposing the introduction of additional evaluation points for local firm participation in national projects exceeding KRW 30 billion, mandating the strategic segmentation of long-term continuing contracts, and inducing local restrictions by converting IT maintenance projects into construction projects.

In addition, Busan Metropolitan City will operate a “digital watchdog” that tracks contract details of 2,405 institutions in real time by linking with public procurement data—becoming the first local government in the country to do so. This initiative aims to fundamentally block the outflow of public contracts from the region at the pre-contract stage.

The core of this comprehensive strategy is the real-time public contract monitoring system developed by Busan Metropolitan City for the first time in the nation. By linking with Public Procurement Service data, the system tracks contract details of 2,405 public institutions in Busan around the clock.

The system features include real-time disclosure of regional contract award rankings by institution, automatic matching of local companies for items prone to out-of-region procurement, and real-time detection and automatic alerts for announcements where regional restriction bidding is not applied—thereby functioning as a digital watchdog that prevents out-of-region leakage at the contract formation stage.

Furthermore, the city will mandate the preferential use of local companies for approximately KRW 552.5 billion in private subsidies and entrusted funds, and elevate local product procurement to a “social responsibility” subject to systematic management.

For the annual KRW 552.5 billion in private subsidies and entrusted funds, the city will require the preferential use of local products and manage procurement of local products in private transfer expenditures as a social responsibility beyond mere recommendation.

Meanwhile, this report meeting will serve as an opportunity to integrate previously dispersed practical strategies across sectors such as construction, public procurement, and private architecture into a unified comprehensive strategy, thereby strengthening execution and momentum for expanding local product procurement.

In the construction sector, the city aims to achieve a 90% local subcontracting rate for public works by building a database of local companies’ technology, equipment, and construction performance and providing it directly to prime contractors to encourage the use of local firms. In the private construction sector, the goal is to raise subcontract participation to 70% by expanding the management scope from simple construction to the entire lifecycle, including sales and occupancy services, and shifting to a monthly continuous monitoring system.

For public procurement of goods and services by public corporations, the city will introduce a pre-review system for procurement contract appropriateness, prioritizing local companies before project initiation and requiring justification when purchasing out-of-region products, thereby fundamentally blocking conventional external procurement practices.

Mayor Park Heong-joon emphasized, “Expanding local product procurement is not merely about promoting consumption, but is a core economic policy for Busan that enhances the self-sustainability of local businesses,” adding, “By combining the nation’s first real-time public contract monitoring system with tailored measures for each institution, we will successfully achieve a 70% contract award rate for local companies in 2026.”