Introduction
Purpose
The “Innovative Product Designation System” aims to facilitate the initial market entry and procurement of products that have been commercialized using technologies developed through the Ministry of Land, Infrastructure and Transport’s Science and Technology R&D programs, or products recognized for their public value and innovation that are linked to innovation policies.
Legal Basis
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Article 27(1) of the “Act on Public Procurement” and Article 33(1) of the “Enforcement Decree of the Act on Public Procurement”
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Article 26(1)(5)(d) of the “Enforcement Decree of the Act on Contracts to Which the State Is a Party”
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Article 25(1)(8)(c) of the “Enforcement Decree of the Act on Contracts to Which Local Governments Are a Party”
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“Regulations on the Designation and Promotion of Purchases of Innovative Products” (Ministry of Economy and Finance Directive No. 672)
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“Ministry of Land, Infrastructure and Transport Guidelines for the Designation of Innovative Products” (Ministry of Land, Infrastructure and Transport Notice No. 2024-296)
Key Points
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Products developed through the Ministry of Land, Infrastructure and Transport’s Science and Technology Research and Development (R&D) program―including those commercialized from R&D outcomes, products recognized for their innovation, and products linked to innovation policies―are designated as “Innovative Products” following an evaluation of their public interest and innovative value.
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“Innovative Products” receive support, such as eligibility for direct contracts in “contracts to which the state is a party” (designation period: 3 years).
Designation Benefits
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Permission for Direct Contracts: Permission to enter into direct contracts with the national government, local governments, and public institutions for three years following designation as an innovative product
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Purchaser Liability Exemption: The procurement officer of a purchasing agency that acquires an innovative product is exempt from liability for losses arising from the purchase, unless intentional misconduct or gross negligence is proven
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Participation in Pilot Procurement Programs: Opportunities to participate in pilot procurement programs where the Public Procurement Service directly purchases innovative products using its own budget and provides them to demand agencies; successful completion of the pilot program grants eligibility to apply for designation as an “Excellent Procurement Product.”
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Registration on the Innovation Marketplace: Support for promotion and linkage to procurement by all public institutions through registration in a dedicated store on the “Innovation Marketplace,” the Public Procurement Service’s innovation procurement platform.
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Innovative Procurement Target System: Requires central government agencies, local governments, and public institutions to allocate a certain percentage of their total goods procurement budget to innovative products, thereby promoting the creation of initial public demand