Understanding the Scope of “Local Supplier” in Korean Public Contracts
(A Complete Guide for Government and Public Procurement Bidders)
When participating in public tenders or negotiated (non-bid) contracts in Korea, one of the most frequently mentioned terms is “local supplier” (관내업체).
But what exactly does “local” mean? Does it refer to the entire metropolitan area or just a specific district or county? This article explains the concept clearly, using real administrative and legal examples.
What Does “Local Supplier” Mean?
A local supplier (관내업체) refers to a business whose head office or branch office is located within the administrative boundary of the contracting (issuing) authority.
In other words, the scope of “local” depends on the administrative level of the ordering agency.
| Contracting Authority | Scope of “Local Area” |
|---|---|
| Seoul Metropolitan Government | Entire Seoul City |
| Gangnam-gu Office (Seoul) | Gangnam District only |
| Gyeonggi Provincial Government | Entire Gyeonggi Province |
| Saha-gu Office (Busan) | Saha District only |
| ○○ County Office (Jeollanam-do) | Entire County |
Thus, “local” can mean a metropolitan-level area (city/province) or a basic-level area (city, county, district), depending on the issuing organization.
Examples by Administrative Level
| Type of Agency | Scope of Local Area | Notes |
|---|---|---|
| Metropolitan City Hall (e.g., Seoul, Busan) | Entire metropolitan city | Includes all districts and counties under it |
| Provincial Government (e.g., Gyeonggi-do, Jeonnam) | Entire province | Covers all cities and counties within the province |
| City Hall (basic municipality) | Entire city | Includes all towns and neighborhoods |
| County Office (gun청) | Entire county | Includes all villages and townships |
| District Office (gu청) | Entire district | Includes all neighborhoods (dong) |
Common Confusions in Practice
1. Metropolitan city vs. district offices
- Example: Busan Saha-gu Office → Only Saha District is considered local; other Busan districts are not.
- But: If the Busan Metropolitan Government is the contracting authority, then the entire Busan area is regarded as local.
2. Provincial agencies and sub-offices
- Gyeonggi Provincial Office of Education → Entire Gyeonggi Province.
- City or county education offices → Only the specific city or county area.
3. Joint or consortium tenders
- When multiple cities or counties jointly issue a tender, all participating regions may be treated as “local.”
- Always check the tender notice for exact definitions.
Why Checking the Tender Notice Is Crucial
There is no single national law defining “local supplier.”
Each local government ordinance or procurement rule may use slightly different definitions.
Hence, bidders must verify the exact scope in the tender document, which usually states:
“A local supplier refers to a company whose head office or branch is located within the jurisdiction of ○○ City (County/District).”
Key Takeaways
✅ The “local” scope follows the administrative boundary of the ordering institution.
✅ Metropolitan or provincial governments → cover the entire city/province.
✅ City, county, or district offices → cover only their specific local jurisdictions.
✅ Always confirm in the official tender announcement or work order.
By understanding this distinction, you can determine quickly whether your company qualifies as a local supplier, avoid unnecessary disqualification, and improve your chances in public bidding.
About the Author
