Immoral Conduct for Cost Cut

The Fair Trade Commission of Korea will inform the prosecution against Doosan Heavy Industries & Construction for lowering prices of supplies by repeating competitive bids.
The Fair Trade Commission of Korea will inform the prosecution against Doosan Heavy Industries & Construction for lowering prices of supplies by repeating competitive bids.

 

The Fair Trade Commission will inform the prosecution against Doosan Heavy Industries & Construction for lowering prices of supplies by repeating competitive bids, fining the company.

The FTC announced on November 7 that they fined the company 323 million won for lowering prices through additional bids without a justifiable reason even after signing a subcontract at the lowest price and ordered the company to correct the violation. The FTC added that they will report the fact to the prosecution for an investigation.

According to an FTC investigation, Doosan Heavy Industries & Construction carried out additional competitive bids while signing subcontracts with 82 suppliers from January 2011 to October 2013 in order to cut costs. As a result, they were able to cut a total of 421.67 million won off from the first lowest bid prices.

It was found that Doosan Heavy Industries & Construction held additional bids to further lower the prices even though there was no need for additional bidding as the successful bid prices fell within the scope of the preset purchase budget.

“We imposed a fine on Doosan Heavy Industries & Construction in consideration of the fact that the company seriously violated law," the FTC said. "We also decided to lodge a complaint against the company at the prosecution as we considered the fact that such violations had occurred over a long period of time, a large number of suppliers had suffered damage, and a voluntary correction had been delayed.”

 

 

 

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