Launch of “Private Investment Software Business” with the participation of large companies

Discussion of ‘3 cases’ between public institutions and large companies
For projects with more than 50% private load
From the first half of next year, the “first fruits”

The “Private Investment Type SW Project” to increase opportunities for large companies to participate in the public software (SW) industry has taken the first step. The first results are expected in the course of next year. According to the Ministry of Science and ICT, three private investment software projects (hereinafter referred to as private investment SW projects) are under discussion between public institutions and large IT service companies.

The target of ‘Private Investment SW Projects’ is a SW development project in which the proportion of the private sector is more than 50% of the total project cost. It was introduced at the end of last year by improving the system to restrict the participation of large companies (Track 3). The expected effect is to ensure an insufficient budget for public institutions to improve services to the public and to increase the opportunities for large companies to participate in public projects.

Since this is the first case, we know that the project in question is not large-scale since it is a pilot project. Once the discussion is over, a deliberation will take place on whether it is possible to participate in large companies as a ‘private investment SW project’. The first contract is expected to be signed in the first half of next year at the earliest, with follow-up procedures such as tenders.

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Recognition of exceptions to the large business participation restriction is only made in the areas of national security or equivalent matters (track 1) and the introduction of new technologies such as artificial intelligence (AI) ( lane 2). If the case materializes in the “private investment SW project”, large enterprises are expected to participate in various ways. The Ministry of Science and ICT plans to support the expansion of results from privately invested SW projects to many institutions. They plan to use the “digital service professional contract system”.

The Digital Services Specialized Contract System, introduced last year, is a system that allows cloud-related products and services that have passed deliberation to be registered at the Public Procurement Service Mall and introduced through research and over-the-counter contracts. Although the “private investment SW project” is the development of customized software for a specific institution, it can be converted into commercial software with some modifications. It is possible to upgrade from a “private investment SW project” to a “private investment commercial SW project”, and larger companies can realize additional profits. It also coincides with the Ministry of Science and ICT’s keynote speech, “SW Industry-Centered Business Innovation”. On the 3rd, Min-young Cho, responsible for SW industry in the Ministry of Science and ICT, said, “The concern of large enterprises for the ‘private investment SW project’ is to expand and deliver the results of the development not only of specific institutions but also of other institutions. Liaison with the specialized digital service contract system will help to spread the SW project to private investment.”

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The Ministry of Science and ICT will also prepare guidelines for privately invested SW projects during this year. The objective is to revitalize the system by informing the principal and the major IT services companies of SDI projects with private investment, and to provide them with a reference during the realization of the project. Necessary details for private investment SW projects such as procedure, method and period will be included. They have also started discussions with the Korea IT Service Industry Association. Hyo-geun Chae, Vice President of IT Service Association, said, “There are many government-led projects, and because the role of the private sector needs to be strengthened, the privately invested SW project has a lot of meaning in this regard. ” He continued, “Various activities aimed at revitalizing the ecosystem and improving private profits should be possible based on the system, such as the creation of an investment association or the formation and participation in a consortium with SMEs”.

Private Investment Type SW Project System Overview

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By staff reporter Ho-cheon An (hcan@etnews.com)

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