Public procurement

Requirements for a Direct Production Confirmation Certificate — Holding Production Facilities and Verifying Regular Employees

Direct production confirmation is a system under Article 9 of the Act on Facilitation of Purchase of Small and Medium Enterprise-Manufactured Products and Support for Development of Their Markets. It confirms that a company actually produces the goods itself when it supplies public institutions with competing products among small and medium enterprises (SME competing products). Leased production facilities are also recognized unless the detailed standards for the item exclude leasing, and production personnel are verified through enrollment records for the 4 major social insurance schemes. The certificate is valid for 2 years from the date of issue.

Procedure

  1. 1. Check the standards for the item

    In the direct production confirmation standards for the detailed item name you want to supply, check the essential production facilities, the essential processes and the number of regular employees. For example, the fence item requires cutting, forming, drilling, welding and inspection equipment and at least 3 regular employees, excluding the representative.

  2. 2. Prove that you hold production facilities

    Leased production facilities are also recognized unless the detailed standards for the item exclude leasing. Owned facilities are verified by proof of purchase, and leased facilities by the lease contract and proof of rent payments. Writing the relevant item code at the time of factory registration makes it easier to move on to the confirmation procedure.

  3. 3. Prepare documents and apply

    Gather the work process chart, raw material purchase records for the most recent 1 year, monthly electricity usage records, the confirmation certificate for the list of production facilities held, and proof of enrollment in the 4 major social insurance schemes, and apply online.

  4. 4. On-site inspection

    After the application, the place of business, the production personnel and whether the equipment is in operation are checked on site. If the equipment or personnel on site differ from the documents, it is difficult to obtain the certificate.

  5. 5. Manage the validity period

    The certificate is valid for 2 years from the date of issue, and renewal must be applied for at least 30 days before expiry. If the factory is moved, you must return the existing certificate and apply again within 30 days from the date the cause arose.

Required documents

  • Application for direct production confirmation
  • Business registration certificate and factory registration certificate (stating the relevant item code)
  • Proof of purchase of production facilities (if leased: lease contract, tax invoices for the lease and proof of rent payments) and the confirmation certificate for the list of production facilities held
  • List of persons enrolled in the 4 major social insurance schemes (to verify production personnel)
  • Work process chart
  • Raw material purchase records for the most recent 1 year and monthly electricity usage records
  • Lease contract for the place of business (if the premises are leased)

Fees

For micro enterprises, small enterprises and similar applicants, the application fee is waived for the first 2 products, and after that it is charged according to the number of products. The office's fee for preparing procurement and public bidding documents starts at 500,000 won and varies with the number of items and whether the factory registration needs to be brought up to date. We will review the situation of your place of business and advise you on the fee after a consultation.

Legal basis and review date

  • Act on Facilitation of Purchase of Small and Medium Enterprise-Manufactured Products and Support for Development of Their Markets, Article 9
  • Act on Facilitation of Purchase of Small and Medium Enterprise-Manufactured Products and Support for Development of Their Markets, Article 11
  • Enforcement Rule of the Act on Facilitation of Purchase of Small and Medium Enterprise-Manufactured Products and Support for Development of Their Markets, Article 5
  • Enforcement Rule of the Act on Facilitation of Purchase of Small and Medium Enterprise-Manufactured Products and Support for Development of Their Markets, Article 7
  • Standards for Confirmation of Direct Production of Competing Products among Small and Medium Enterprises, Article 10
  • Standards for Confirmation of Direct Production of Competing Products among Small and Medium Enterprises, Article 12

Checked against the statutes on

Statutes and public notices change, so each case needs to be checked individually. Statute titles are given in English for reference. The Korean statutes are the authoritative text.

Check these first

  • If you do not return the certificate and re-apply within 30 days after moving a factory, you may face sanctions such as cancellation of the confirmation or a restriction on applications.
  • Apply for renewal at least 30 days before the validity period expires.

Frequently asked questions

Do I have to buy production equipment to obtain a Direct Production Confirmation Certificate?
Not necessarily. Leased production facilities are also recognized unless the detailed standards for the item exclude leasing. Owned facilities are verified by proof of purchase, and leased facilities by the lease contract and proof of rent payments. First check in the detailed standards for the item you want to supply whether leasing is recognized.
How is the number of employees checked for direct production confirmation?
Production personnel are verified, in principle, through enrollment records for the 4 major social insurance schemes. A required number of regular employees, excluding the representative, is set for each item.
How long is a Direct Production Confirmation Certificate valid?
It is valid for 2 years from the date of issue, and you must apply for renewal at least 30 days before expiry. If you move the factory, you return the existing certificate and apply again within 30 days.
Will I win a public bid just by holding a Direct Production Confirmation Certificate?
No. The certificate is only a qualification requirement for taking part in the bid, and the successful bidder is decided by separate criteria such as the qualification evaluation. Some service bids also require a separate performance record.
Are service items such as cleaning also subject to direct production confirmation?
Service items such as building cleaning services are also covered. In that case, the certificate is a bidding requirement together with a building sanitation management business report and an SME confirmation certificate.

Contact us

Hwang Yunsang Administrative Office in Songdo, Incheon prepares and submits administrative documents and explains the procedure. If your situation is similar, send us a message.

📍 2697, 26F POSCO Tower-Songdo, 165 Convensia-daero, Yeonsu-gu, Incheon, Republic of Korea · 📞 010-3374-2687 · 🌐 hwangadmin.com

This guide is general information based on public sources. Requirements, documents and deadlines differ by case and by the competent agency, so please confirm them before you proceed.