Public procurement represents a significant share of countries’ economies, on average over 13% of GDP among OECD members. For many years, the OECD has assisted governments in reforming their public procurement systems through sharing international good practices, comparative data and conducting peer reviews at the national, sectorial and institutional level. Focus on public procurement has expanded from initial efforts on enhancing integrity to an overarching view of strategic public procurement as an essential mechanism for achieving government policy objectives, building citizen trust and fostering inclusive growth.

Representing EUR 4.3 trillion per year in OECD countries, public procurement is a crucial pillar of strategic governance. As a substantial nexus between the public and private sphere as well as a critical channel for services delivery to citizens, public procurement conducted with integrity, transparency and accountability is essential to developing public trust. With governments facing continued budgetary pressures and demands to “do more with less,” focus has increasingly turned to public procurement reform as a means of increasing efficiency and effectiveness for public services delivery.

Established in 1949 as the Provisional Office of Foreign Supply, the Public Procurement Service (PPS) took on its current role as a central procurement agency of Korea in 1961. PPS has a variety of responsibilities related to the purchase and management of resources needed for public administration, all of which are undertaken with a focus on transparent and effective delivery of services while also contributing to savings through consolidation and centralisation as well as furthering economic development in Korea. The present chapter provides an introduction to public procurement in Korea generally, and a more detailed examination of the various roles undertaken by PPS. This includes presentations of the legal authorities that govern public procurement in Korea, the responsibilities and organisation of PPS, and detailed information regarding the scope of public procurement activities.

A central responsibility of the Public Procurement Service (PPS) involves management of the Korean ON-line E-Procurement System (KONEPS), which involves both policy and purchasing dimensions. KONEPS processes nearly two-thirds of all public procurement in Korea, and responsibility for the system is undertaken in an integrated and strategic manner, driving continuous improvements for public procurement. Within this context, the present chapter presents an analysis of the e-procurement experience in Korea, centred on the Korea ON-line E-Procurement System (KONEPS). As an integrated system developed over many years, KONEPS offers many lessons for countries considering the development or expansion of e-procurement tools and systems. By examining the history, functions and capacities of KONEPS, these good practices are identified, as are recommendations and considerations for additional improvements.

An important mandate for the Public Procurement Service (PPS) involves the operation of framework agreements – contracts containing set terms from which individual orders can then be placed. Framework agreements are an important driver of efficiency in public procurement, allowing for reduced administrative duplication as well as potential savings from centralised purchasing. This chapter presents the PPS implementation of the Multiple Award Schedules (MAS) system of framework agreements, including a detailed look at their current function and future directions.

Korea utilises public procurement to support the furtherance of policy objectives through a broad and complex array of support mechanisms. These are primarily implemented by the Public Procurement Service (PPS) with support from other relevant ministries. This chapter presents an analysis of the use of public procurement to foster secondary policy objectives in Korea in three primary areas: support for particular types of enterprises, innovation and support for green public procurement.