[G2B-Lens] Government Procurement Spends 360 Trillion Won in 3 Months, Yet Number of Contracts Actually Falls to 510,000

Total public procurement in Q1 was 360.7268 trillion won. Although it increased by 39% in a year, the number of contracts actually decreased by 3% to 514,104. The average contract amount was 700 million won, but when lining up the 510,000 contracts, the median contract stood at 13.37 million won. The gap between the two figures widened to 52.5 times, and less than 1% of registrations took 72% of the Q1 amount.

On January 12, 2026, the Public Procurement Service registered 2.5503 trillion won for a single unit price contract for ready-mixed concrete. Two days later, on January 14, another contract worth 2.6318 trillion won was registered under the same notice number. On February 25 and 27, and March 12 and 14 — over two months, 6 registrations of similar amounts were captured under the same notice (20231226064), totaling about 16.3 trillion won.

These 6 cases represent 0.001% of the 514,104 public procurement contracts in Q1 of 2026. However, they account for 4.5% of the total Q1 amount of 360.7268 trillion won.

Public procurement refers to all contracts for goods, construction, and services purchased by the government, local governments, and public institutions. All orders are registered on the Public Procurement Service's KONEPS system, and the scale for a single quarter alone reaches hundreds of trillions of won. From paper and consumables for administrative operations to SOC construction and information system establishment, it is the largest trading area where government finances meet the market.

In the same quarter, half of the contracts processed by the government were 13.37 million won or less. The average contract amount was 702 million won, jumping 44% from 488 million won a year ago, but the median contract remained almost the same, going from 13.24 million won to 13.37 million won. The result of an average of 700 million won per contract does not reflect the reality of general government transactions, but rather is the result of a very small number of top contracts driving up the overall average.

While the Average Triples, the Median Contract Remains in the 13 Million Won Range

In Q1 2024, there was an 18.7-fold difference between the average and the median contract. In just two years, the gap widened to 52.5 times. While the scale of general contracts remained almost unchanged, the speed at which only the top registrations drove up the average accelerated.

5,405 Contracts Over 10 Billion Won Account for 72% of Q1 Amount

Lining up the 514,104 cases by price range makes the concentration at the top clear. 437 registrations of 100 billion won or more (0.09% of the total) accounted for 140.77 trillion won. This is 39% of the quarterly amount. Expanding the scope to 10 billion won or more, 5,405 cases (1.06%) took up 259 trillion won, or 72% of the quarterly amount. On the other end, 424,410 registrations of 100 million won or less (83.5%) totaled only 6.77 trillion won, making up just 1.9%.

The majority of government transactions are small amounts of 100 million won or less. The average figure of 700 million won is a result created by the top 1%.

Where Did That 1% Come From? — Material Unit Prices, Communication Networks, and Construction

The largest chunk is the 6 unit price contracts for ready-mixed concrete and asphalt concrete materials by the Public Procurement Service mentioned earlier. A unit price contract is a method used when purchasing the same item repeatedly over a certain period, and a phased contract is a method of dividing a multi-year project into annual units. Six phased contracts tied to the same notice number were dispersedly registered between January and March, accounting for a total of 16.3 trillion won.

The second chunk is the Public Procurement Service's Disaster and Safety Communications Network project with 17 cases totaling 1.5838 trillion won. Among these, 4 cases of new construction in business zones A and B account for the majority at 1.2046 trillion won. This is the result of phased contracts for the main project (totaling 1.7 trillion won), which was ordered in August 2018, being registered together in a single quarter.

The third is the strong advance of major construction companies. Government orders in Q1 for four companies—Daewoo E&C (2.73 times), POSCO E&C (2.52 times), DL E&C (1.91 times), and Lotte E&C (1.66 times)—all increased by 1.5 to 2.7 times. Amid the real estate PF (Project Financing) freeze, public SOC acted as a safety net for the construction companies' revenue.

Adding the 16 trillion won in material unit price contracts and the 1.6 trillion won in communication networks totals about 18 trillion won. These two items alone account for 5% of Q1's 360 trillion won and 12% of January's 144 trillion won. The accumulation of phased contracts and single large-scale projects formed the axis that created the top-heavy concentration this quarter.

The Number of Negotiated Contracts Remains the Same; What Decreased Are Negotiated Contracts for Large Projects

The proportion of negotiated contract amounts in the same quarter was 12.8%, down nearly 5 percentage points from the peak of 17.6% in Q1 2024 (it had been even lower, around 10%, in Q1 from 2016 to 2020). On the surface, it appears that "negotiated contracts decreased and limited competition increased."

Looking closer, a different picture emerges. The number of negotiated contracts is still the highest at 427,151. Regular small contracts such as general administration, cleaning, and disinfection are still being processed as negotiated contracts. What has changed is the amount of limited competition. It increased by 71% from 121 trillion won to 207 trillion won, and its proportion rose to 57%. Newly entered large-scale infrastructure and material contracts at the top were grouped into limited competition, increasing its share.

In other words, the concentration at the top shows the same pattern in contract methods. The bifurcated structure—where daily contracts are still negotiated contracts, and large new contracts are limited competition—has become stronger.

What the Average Figure of 700 Million Won Hides

The government order market has developed a structure that cannot be described by a single average value. The average figure of 700 million won is the result of 16 trillion won in material unit price contracts and 1.6 trillion won in communication network projects being registered in a single quarter, not the reality of the market faced by general companies. The vast majority of the general market remains small contracts of 13.37 million won or less.

This structure calls for a new interpretation in three aspects.

First, the government order market has split in two. The 5,405 cases over 10 billion won at the top are an area taken by predetermined players such as the three major telecom companies, the Big 5 construction companies, and material cooperatives. The 420,000 cases under 100 million won at the bottom are mostly routine administrative and operational contracts at the eup, myeon, and dong (town/township/neighborhood) levels. If a general company aims to enter based solely on the average figure of 700 million won, there are practically only two places to enter: joining the material unit price contract pool, or attaching as a subcontractor in a consortium.

Second, interpreting the quarterly total amount of government procurement simply as a macro indicator is dangerous. If one reads the fact that 360 trillion won increased by 39% year-on-year solely as "government orders are boosting domestic demand," they miss the fact that a significant portion of that increase is due to the accumulation of phased contracts from projects started 8 years ago and a single communication network project. The average jumped by +44%, but the median contract increased by +1%, meaning everyday government transactions remained almost the same.

Third, the issue of statistical reliability is also worth pointing out. The Public Procurement Service needs to clearly explain whether the pattern of the same notice number being registered separately 6 times in one quarter, capturing 16 trillion won, is a simple system duplication or a proper separation of the main contract and phased contracts. If the registration rules are not organized, quarterly time-series comparisons themselves will be undermined.

Ultimately, the 360 trillion won government procurement market is not one where market entry can be gauged by an average figure of 700 million won. Less than 1% takes 72% in a single quarter, and that 1% is the domain of predetermined players like the three major telecom companies, the Big 5 construction companies, and material cooperatives. For general companies, the room for entry is not somewhere in between, but narrowed down to two paths: the material unit price contract pool and consortium subcontracting.

This article was written by News Epoch by analyzing public contract data collected through the Public Procurement Service's KONEPS (G2B) Contract Information Service API.