Posco will abolish the lowest bidding system for the first time as a large domestic company.

Posco revealed on March 28 that it will abolish the `lowest bid price system` because it is likely to lead to poor profitability and equipment and material quality due to excessive competition between small and medium enterprises.

Instead, Posco has decided to adopt a "low-price-limit bidding system" as a basic bidding method when purchasing equipment and materials from steel mills in April. The lowest bidding system is the way in which a supplier who offers the lowest bidder with competitive bidding receives a bid. From the perspective of the purchasing company, it is possible to purchase at a low price and to select the supplier in a transparent manner. However, there was a situation where the bidders had to give up their profits in order to win orders.

On the other hand, the low-price-limit bidding system automatically excludes bidding companies that write down the average price of the bidding and less than 85% of the average price, and prevents excessive low-cost bidding. POSCO explained that SMEs will be able to earn profits by participating in bidding at prices that reflect appropriate margins.

A representative of POSCO said, "We will abide by the three principles of 100% implementation of information disclosure, competitive bidding, It is open to anyone who can know the registration information and bid details of all trading companies for goods and services. Also, any qualified company can participate in the bidding, and all the requests related to delivery are recorded.

Daedong Yong-Dong, who has been doing business with POSCO since the 1980s, stated, "Posco will abolish lowest bidding system and the adoption of the low-price bidding system. ”

By Ye Jin Soo jinye@


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