A Meat Restaurant Wins a Military Inspection Equipment Contract: Military Procurement Turns into a “Lottery”

1. Overview

On October 25, 2026, MBC Newsdesk and the investigative program Straight exclusively reported that a Korean BBQ restaurant in Uijeongbu, Gyeonggi Province, had won a contract in May to supply the Army with microbial testing equipment worth 130 million won. They also reported that a pharmacy in Yeouido, Seoul, had won bids for 250 million won worth of military supplies over three years, including a Navy noise and vibration meter. The reports revealed a system in which companies with no connection to military supplies win bids, then pass the orders on to actual suppliers and collect a fee.

This was possible because the Public Procurement Service’s public bidding system is open to any business with a business registration certificate, regardless of its line of business. As the perception spread that winning a bid meant making a large profit, military procurement bids came to be called a “lottery” in the industry, and the phrase became part of the report’s title. The report also covered concerns about the quality of supplied goods and the safety of military personnel.

2. Bids Won by a Korean BBQ Restaurant and a Pharmacy

According to MBC, the Uijeongbu restaurant is an ordinary butcher shop and restaurant where customers buy meat on the first floor and grill it on the second. The “automated microbial identification system” it won the bid to supply is laboratory equipment used to identify microorganisms in samples and costs 130 million won per unit. Nothing inside the restaurant suggested any connection to specialized equipment. A restaurant representative, whose voice was altered, reportedly said that the restaurant was working with an outside sales team to “join in,” and that because it wanted to expand despite being a restaurant, it had bid on the equipment, after which someone else would connect it with a supplier.

A pharmacy in Yeouido won a 42 million won contract in a bid two years ago for a Navy noise and vibration meter. When reporters visited the address listed on its business registration, they found a pharmacy in the basement of a high-rise building, with only pharmaceuticals on its shelves. The pharmacy won three bids in total, worth 250 million won, including for an Army bacterial detection equipment set and a patient monitoring device. A pharmacy representative, whose voice was altered, explained that even businesses that do not handle military products can participate in bids, and that since the pharmacy could not manufacture the products, it usually ordered them and supplied them.

There have been other similar cases. In May, an online clothing store won a bid to supply the Marine Corps with more than 100 chainsaws at 450,000 won each, but it had no products for sale and its most recent purchase review dated back four years, leaving it effectively dormant. The phone number on its website belonged to a promotional office for an officetel development, while its registered corporate address was an empty unit in an underground restaurant arcade in Dongjak District, Seoul. Other examples included a vocational training center winning a bid for Marine Corps buoyancy control devices, a banner-making company winning one for automatic oxygen resuscitators, and a construction machinery company winning one for dental equipment. MBC said that its review of more than 5,200 military procurement bids on the KONEPS system since 2021 found numerous cases like these.

3. A System for Collecting Fees

A pharmacy representative said that once a bid is won, manufacturers are the first to call and offer help. The winning bidder sets its fee, and a company capable of supplying the goods procures them for the remaining amount. Bid consultant A described it as being like subcontracting construction work: “We’ll take a percentage of the 100 million, and you supply the rest.” The fee collected by the winning bidder is said to be around 10%, and as high as 20%. Another consultant said that making 5–8% just by sitting down and clicking on bids was practically free money.

As a result, people flocked to the system because it offered easy money. Nearly 500 companies on average bid on each tender, and consulting firms proliferated with claims such as “Easy to participate, even for bidding beginners” and “Five bids won in three months.” Maeil Shinmun reported that specialized brokers were also active, bringing together hundreds of businesses to bid all at once. Some consulting firms reportedly charged just 2% of the winning bid, while other operators offered to bid on multiple contracts at once if given only a business registration certificate. One military procurement dealer said that, when you looked at the winning bidders, their business addresses were all either apartments or villas.

4. Reporters Bid Directly

The reporters tested whether the system really worked this way. They rented the address of a half-pyeong (1.65 m²) “non-resident office” in a shopping complex in Sinchon, Seoul, for 40,000 won a month, attached a lease agreement, and applied for business registration. In less than an hour, they had become sole proprietors. Although the bid notice said bidders had to be businesses related to the goods, it was enough to add the relevant business category just before bidding, and there was no process for verifying an actual connection.

The reporters submitted a bid slightly below the benchmark price for a contract to supply the Navy with 20 portable satellite navigation devices, and received notice that they had been selected for a “qualification review.” Less than a day passed between registering the business and receiving the qualification notice. A post on FM Korea described this as “done in a day.”

5. Quality Issues and the Public Procurement Service’s Position

Money was not the only concern. Life jackets supplied to the Navy had their buckles fitted backwards and were poorly stitched, while the bottoms of new Army canteens fell off when they were sterilized with hot water. Aju Business Daily, citing a preview of Straight, reported that defect complaints had also been filed for container bags and other items, and that some companies had won military procurement contracts again even after being sanctioned from bidding for supplying defective goods or failing to properly fulfill contracts. Maeil Shinmun reported concerns that when the winning bidder takes a fee, the amount paid to the actual supplier decreases, which could affect quality.

Last year, the Public Procurement Service supplied military goods worth 2.8 trillion won. According to Aju Business Daily, in 2020, procurement of general military goods excluding weapons was transferred from the Defense Acquisition Program Administration to the Public Procurement Service, and suppliers have since been selected through the KONEPS system. According to Maeil Shinmun, the Public Procurement Service has maintained its lottery-based bidding system for 25 years. It says the reason is that adopting a lowest-price bidding system could lead to collusion among a small number of companies or other controversy. The Public Procurement Service has identified more than 67,000 businesses whose substance is unclear, including one-person shell companies suspected of having been established to win bids and businesses with overlapping phone numbers. The agency’s position is that it is difficult to intervene in contracts between winning bidders and actual suppliers because these are private transactions, and that the company awarded the contract must take responsibility if the goods are defective.

6. Similar Cases in the Past

Maeil Shinmun noted that this is not a recent problem. In July 2019, more than 200 companies bid on a 540 million won Army contract to supply explosive detectors, but the winning bidder was a cardboard box manufacturer with no connection to explosive detectors. In February 2020, a real estate agency in Gwangju won a bid for a Marine Corps explosive compound analyzer, while a massage business in South Gyeongsang Province won one for a Navy ultrasonic flaw detector. A stationery distributor won a contract for powered paragliders worth 2.8 billion won.

7. Authenticity debate

The central issue is whether the practice of companies unrelated to military supplies winning bids and collecting only a fee should be seen as a loophole in the system or as a legitimate form of distribution.

7.1. The system has a loophole

This side sees the very structure that allows winning bidders to earn an intermediary profit without manufacturing or supplying the goods themselves as problematic. Critics say that when money is divided among the winning bidder, broker, and actual supplier, the amount going to the actual supplier decreases, potentially affecting quality; the reports also cited the cases of life jackets with reversed buckles and canteens whose bottoms fell off. It is also argued that when hundreds of businesses bid at once, companies that actually manufacture military supplies may be less likely to win contracts. According to this side, the fact that a reporter became a bidder in less than a day using an address costing 40,000 won a month—and that there was no verification of relevance if a business category was added just before bidding—shows that this is a systemic loophole, not merely misconduct by a few companies. This side also sees a problem in the Public Procurement Service’s position that it cannot intervene in contracts between winning bidders and suppliers because they are private transactions, despite having identified more than 67,000 businesses whose substance is unclear.

7.2. A legal transaction

The opposing side sees participation by any business with a business registration certificate as consistent with the requirements set by the current system. It also says the Public Procurement Service has maintained the lottery-based system for 25 years to prevent collusion and controversy associated with lowest-price bidding. Even when the winning bidder does not supply the goods itself and instead delivers them through another company, the budget is paid as long as the goods required under the contract are supplied; from this perspective, it is difficult to conclude that the law has been violated. A military procurement dealer’s comment—“Isn’t it enough for the supplier selection process to be transparent? Isn’t it enough for it to be legal?”—reflects this position. A pharmacy representative also said that the pharmacy did not make much profit, that things did not always work out, and that it came down to luck. The reports alone do not establish whether the quality defects resulted from the bidding structure or from individual suppliers’ actions, and the Public Procurement Service’s position is that the company awarded the contract is responsible if defects occur.

No report has been confirmed as definitively concluding that the winning bidders committed illegal acts.

8. Trivia

• A post on FM Korea introduced the report under the title “The latest on military supply contractors pulling off legendary tax-money scams.” The poster described the flow of money to the winning bidder, broker, and actual supplier as a “triple act.” This was the poster’s own summary, not wording used by MBC.
• The bid notice for the noise and vibration meter won by the pharmacy was from two years earlier, and the pharmacy won three contracts in total over three years.
• A YouTube video described the broadcast as having the subtitle “It’s a lottery as long as you win the bid” and as covering defective life jackets and canteens. The same episode also covered the JoongAng Ilbo acquisition battle and the controversy following the acquisition of the Gangwon Province private broadcaster G1.