ENFORCEMENT DECREE OF THE ACT ON CONTRACTS TO WHICH THE STATE IS A PARTY
Presidential Decree No. 14710, Jul. 6, 1995 Amended by Presidential Decree No. 14973, Apr. 8, 1996 Presidential Decree No. 15186, Dec. 31, 1996 Presidential Decree No. 15433, Jul. 10, 1997 Presidential Decree No. 15582, Dec. 31, 1997 Presidential Decree No. 15581, Dec. 31, 1997 Presidential Decree No. 15614, Feb. 2, 1998 Presidential Decree No. 15661, Feb. 24, 1998 Presidential Decree No. 16308, May 13, 1999 Presidential Decree No. 16448, jun. 30, 1999 Presidential Decree No. 16548, Sep. 9, 1999 Presidential Decree No. 16682, Dec. 31, 1999 Presidential Decree No. 16919, Jul. 27, 2000 Presidential Decree No. 16943, Aug. 5, 2000 Presidential Decree No. 17019, Dec. 27, 2000 Presidential Decree No. 17344, Aug. 25, 2001 Presidential Decree No. 17546, Mar. 25, 2002 Presidential Decree No. 17585, Apr. 20, 2002 Presidential Decree No. 17688, Jul. 30, 2002 Presidential Decree No. 17791, Dec. 5, 2002 Presidential Decree No. 17824, Dec. 30, 2002 Presidential Decree No. 18155, Dec. 11, 2003 Presidential Decree No. 18359, Apr. 6, 2004 Presidential Decree No. 18666, Dec. 31, 2004 Presidential Decree No. 18903, jun. 30, 2005 Presidential Decree No. 19035, Sep. 8, 2005 Presidential Decree No. 19321, Feb. 8, 2006 Presidential Decree No. 19463, Apr. 28, 2006 Presidential Decree No. 19483, May 25, 2006 Presidential Decree No. 19494, May 30, 2006
Presidential Decree No. 19806, Dec. 29, 2006 Presidential Decree No. 19782, Dec. 29, 2006 Presidential Decree No. 20319, Oct. 10, 2007 Presidential Decree No. 20323, Oct. 15, 2007 Presidential Decree No. 20720, Feb. 29, 2008 Presidential Decree No. 20789, May 21, 2008 Presidential Decree No. 20947, Jul. 29, 2008 Presidential Decree No. 21202, Dec. 31, 2008 Presidential Decree No. 21480, May 6, 2009 Presidential Decree No. 21565, jun. 26, 2009 Presidential Decree No. 21578, jun. 29, 2009 Presidential Decree No. 21692, Aug. 18, 2009 Presidential Decree No. 21698, Aug. 21, 2009 Presidential Decree No. 21834, Nov. 20, 2009 Presidential Decree No. 22282, Jul. 21, 2010 Presidential Decree No. 22493, Nov. 15, 2010 Presidential Decree No. 22525, Dec. 13, 2010 Presidential Decree No. 22626, Jan. 17, 2011 Presidential Decree No. 22637, Jan. 24, 2011 Presidential Decree No. 22638, Jan. 26, 2011 Presidential Decree No. 22660, Feb. 9, 2011 Presidential Decree No. 23267, Oct. 28, 2011 Presidential Decree No. 23282, Nov. 1, 2011 Presidential Decree No. 23313, Nov. 23, 2011 Presidential Decree No. 23477, Dec. 31, 2011 Presidential Decree No. 23778, May 14, 2012 Presidential Decree No. 24130, Oct. 8, 2012 Presidential Decree No. 24317, Jan. 16, 2013 Presidential Decree No. 24441, Mar. 23, 2013 Presidential Decree No. 24601, jun. 17, 2013 Presidential Decree No. 24728, Sep. 17, 2013 Presidential Decree No. 25033, Dec. 30, 2013 Presidential Decree No. 25050, Dec. 30, 2013 Presidential Decree No. 25358, May 22, 2014 Presidential Decree No. 25679, Nov. 4, 2014 Presidential Decree No. 25751, Nov. 19, 2014
Presidential Decree No. 26108, Feb. 23, 2015 Presidential Decree No. 26321, jun. 22, 2015 Presidential Decree No. 26829, Dec. 31, 2015 Presidential Decree No. 26975, Feb. 11, 2016 Presidential Decree No. 27205, May 31, 2016 Presidential Decree No. 27401, Jul. 28, 2016 Presidential Decree No. 27475, Sep. 2, 2016 Presidential Decree No. 27524, Sep. 29, 2016 Presidential Decree No. 27751, Dec. 30, 2016 Presidential Decree No. 27807, Jan. 26, 2017 Presidential Decree No. 27958, Mar. 27, 2017 Presidential Decree No. 28211, Jul. 26, 2017 Presidential Decree No. 28586, Jan. 16, 2018 Presidential Decree No. 28690, Mar. 6, 2018 Presidential Decree No. 29318, Dec. 4, 2018 Presidential Decree No. 29360, Dec. 11, 2018 Presidential Decree No. 30078, Sep. 17, 2019
CHAPTER I GENERAL PROVISIONS
Article 1 (Purpose)
The purpose of this Decree is to provide for matters delegated by the Act on Contracts to Which the State is a Party and matters necessary for the enforcement thereof. <Amended by Presidential Decree No. 19035, Sep. 8, 2005>
Article 2 (Definitions)
The terms used in this Decree shall be defined as follows: <Amended by Presidential Decree No. 15186, Dec.
31, 1996; Presidential Decree No. 16548, Sep. 9, 1999; Presidential Decree No. 19035, Sep. 8, 2005; Presidential Decree No. 20319, Oct. 10, 2007; Presidential Decree No. 20720, Feb. 29, 2008>
1. The term "estimated price" means a price calculated in accordance with Article 7 before determining a budget price so as to take the price as a criterion for deciding whether a contract shall undergo an international tendering procedure under the provisions of Article 4 of the Act on Contracts to Which the State is a Party (hereinafter referred to as the "Act"), in making a contract for the procurement of goods, construction works, or services, etc.;
2. The term "budget price" means a value prepared in advance and made available so as to be held as a criterion for determining a successful tenderer or a contract price before commencing a tendering procedure or concluding a contract, which is formulated pursuant to the provisions of Article 8;
3. The term "publicly notified amount" means an amount publicly notified by the Minister of Strategy and Finance under the main body of Article 4 (1) of the Act;
4. The term "performance bond for a construction project" means a bond by which the issuer guarantees to perform contractual obligations on behalf of the counter-party to a contract for a construction project, where the counter-party to the contract fails to perform contractual obligations, or to pay a specified amount, if the guarantor fails to perform such obligations;
5. Deleted. <by Presidential Decree No. 22282, Jul. 21, 2010>
Article 3 (Relationship with Other Statutes)
(1) Except as otherwise provided for in any other statute, contracts to which the State is a party shall be governed by the provisions of this Decree.
(2) Provisions applicable only to government procurement contracts subject to international tendering procedures shall be prescribed separately by Presidential Decree.
Article 4 (Principle of Contracting)
When the head of a central government agency or a public official to whom the contracting is delegated or entrusted by the head of a central government agency (hereinafter referred to as “contracting officer”) intends to conclude a contract, he/she shall not attach to the contract any special term or condition that unfairly restricts the counter-party’s interest specified in the Act, this Decree, or any other relevant statute.
Article 4-2 (Provisions of Integrity Agreement and Procedure for Execution)
(1) The specific provisions that shall be included in an integrity agreement under Article 5-2 (1) of the Act (hereinafter referred to as “integrity agreement”) shall be as follows: <Amended by Presidential Decree No.
30078, Sep. 17, 2019>
1. Provisions regarding prohibition of demanding, promising, offering and receiving money, goods, entertainment, jobs and job search assistance, or other benefit;
2. Provisions regarding prohibition of an act of hindering fair competition, such as prior agreement on a tendering price and collusion for a specific person’s successful tendering;
3. Provisions regarding prohibition of an act of demanding or obtaining particular information relevant to tendering or contracting through an arrangement or solicitation that hinders impartiality in performance of duty.
(2) The head or a contracting officer of a central government agency shall require each tenderer to submit an integrity agreement signed by the tenderer pursuant to Article 5-2 of the Act, when the tenderer submits a written tender. <Amended by Presidential Decree No. 30078, Sep. 17, 2019>
Article 4-3 (Continuous Performance of Contract while Integrity Agreement is Breached)
When the head of a central government agency approves the continuous performance of a contract pursuant to the proviso to Article 5-3 of the Act while the relevant integrity agreement is breached, he/she shall take into consideration the criteria determined by the Minister of Strategy and Finance with regard to the nature of the subject matter of the contract, the progress and duration of performance of the contract, etc.
Article 5 (Appointment of Acting or Assistant Contracting Officer and Notice of Appointment)
(1) When the head of a central government agency appoints a public official as an acting or assistant contracting officer to act on behalf of a public official that is appointed to take charge of contracting under Article 6 (1) of the Act (hereinafter referred to as “contracting officer”) or to take charge of part of administrative affairs assigned to such contracting officer, he/she shall notify the appointment to a finance officer and an expenditure officer specified in Article 22 of the Management of the National Funds Act and the Board of Audit and Inspection. <Amended by Presidential Decree No. 19035, Sep. 8, 2005>
(2) A public official that shall act on behalf of a contracting officer with regard to all administrative affairs assigned to the contracting officer under Article 6 (1) of the Act shall be referred to as an “acting contracting officer”, a public official that shall take charge of part of administrative affairs assigned to the contracting officer as an “assistant contracting officer”, and a public official that shall act on behalf of an assistant contracting officer as an “acting assistant contracting officer”, respectively.
(3) When the head of a central government agency intends to entrust administrative affairs that are assigned to the contracting officer to a public official in another central government agency pursuant to Article 6 (2) of the Act, he/she shall obtain consent of the public official, to whom such administrative affairs are to be entrusted, and the head of the central government agency concerned to the scope of administrative affairs that he/she intends to entrust before entrusting such administrative affairs and shall notify the Board of Audit and Inspection of his/her intention. The procedure prescribed above shall also apply to the case where it is intended to appoint a public official that shall act on behalf of a contracting officer with regard to all administrative affairs assigned to the contracting officer or who shall take charge of part of such administrative affairs.
(4) Paragraph (3) shall also apply mutatis mutandis to cases where the head of a central government agency intends to entrust administrative affairs relating to contracts within his/her jurisdiction to another government agency pursuant to Article 6 (3) of the Act.
Article 6 (Financial Guarantee for Contracting Officers)
(1) Pursuant to Article 6 (5) of the Act, the head of each central government agency shall establish and enforce regulations on financial guarantee for the contracting officer of the central government agency.
(2) Common regulations necessary for the financial guarantee under paragraph (1) shall be established by the Minister of Strategy and Finance. <Amended by Presidential Decree No. 16548, Sep. 9, 1999; Presidential Decree No. 20720, Feb. 29, 2008>
CHAPTER II ESTIMATED PRICE AND BUDGET PRICE
Article 7 (Calculation of Estimated Price)
The head or a contracting officer of a central government agency shall determine an estimated price based on the amount, etc. that is appropriated in the budget, with the formula prescribed in one of the following subparagraphs:
1. If the contract is for a construction project, the price for the portion for which materials are to be supplied by the Government shall be excluded from the estimated price;
2. If the contract is a unit price contract, the estimated price shall be calculated by multiplying the estimated unit price of the goods involved by the estimated quantity of goods to be procured;
3. If the contract is executed to meet demands made individually for procurement or made in installments, the amount calculated in accordance with either of the following subparagraphs shall be chosen as the estimated price:
(a) The amount determined by adjusting the total amount of similar contracts made during one fiscal year, or 12 months, immediately before the fiscal year in which the relevant contract is to be executed by estimating changes in the quantity and amount during the immediately following 12 months;
(b) The total amount of contracts to be executed during the same fiscal year or immediately following 12 months;
4. If the contract is for the lease, rental, or installment purchase of goods or services with no fixed total contract price, the estimated price shall be determined in accordance with either of the following items, whichever is relevant:
(a) If the contract has a fixed contract term, the price shall be estimated for the entire contract term;
(b) If the contract term is not fixed or indefinite, the estimated price shall be determined by multiplying the estimated payment for one month by 48;
5. If the subject matter to be procured involves optional items, the estimated price shall be determined with the maximum amount of the subject matter, including such optional items.
Article 7-2 (Safekeeping of Budget Price)
(1) The head or a contracting officer of a central government agency shall determine a budget price according to relevant specifications, design documents, etc. for a transaction to be made through competitive tenders or by a negotiated contract, seal the price tightly so as to prevent the budget price from being divulged, and keep the price in a place where tenders are to be opened or the price for the contract is to be negotiated. <Amended by Presidential Decree No. 16548, Sep. 9, 1999>
(2) When the head or a contracting officer of a central government agency intends to execute a negotiated contract pursuant to Article 26 (1) 5 (a) or (f) (excluding cases where it is required to submit a written quotation pursuant to Article 30 (2)), a contract made through negotiations pursuant to Article 43, competitive dialogue pursuant to Article 43-3, or a contract based on rough estimate pursuant to Article 70, he/she may omit to determine the budget price therefor, and when he/she intends to call for tenders for a turnkey project pursuant to Article 79 (1) 5 or tenders for a technical proposal of basic plans pursuant to subparagraph 3 of Article 98, he/she shall not determine a budget price. <Amended by Presidential Decree No. 20319, Oct. 10, 2007; Presidential Decree No. 22282, Jul. 21, 2010; Presidential Decree No. 25033, Dec. 30, 2013; Presidential Decree No. 29318, Dec. 4, 2018>
Article 8 (Methods for Determining Budget Price)
(1) A budget price shall be determined regarding the total price of the subject matter of the contract to be executed: Provided, That a budget price may be determined for a unit price where the contract is for continual manufacturing, construction works, repair, processing, trading, supply, or rental during a specific term.
(2) In cases of a contract for a construction project, in which the performance takes years and the scope of the entire project is fixed in accordance with design documents, etc. (hereinafter referred to as “long-term continuing project”), or a contract for the manufacture of goods, in which the performance takes years and the scope of subject matters of the contract is fixed in accordance with design documents or specifications (hereinafter referred to as “long-term manufacture of goods”), the budget price for the entire construction project or for total production, etc. shall be determined within the maximum of the total construction cost (excluding the amount of materials supplied by the Government) or the total manufacturing cost (excluding the amount of materials supplied by the Government) on the relevant budget. <Amended by Presidential Decree No. 21202, Dec. 31, 2008>
Article 9 (Criteria for Determining Budget Price)
(1) The head or any contracting officer of a central government agency shall determine a budget price based on any of the following prices: <Amended by Presidential Decree No. 25679, Nov. 4, 2014>
1. The price of actual transactions (referring to the price of actual transactions not exceeding a determined price, if the price is determined under the provisions of a statute), if reasonable transactions have been made;
2. The price calculated by cost accounting where no reasonable price of actual transactions exists due to the nature of the contract, such as a contract for special goods, for example, a newly developed product or a product with special specifications or special features, or special construction works or services. In such cases, the price by cost accounting shall be calculated with material cost, labor cost, expenses, overhead expenses, and profits for the goods, construction works, or services, which constitute the subject matter of the contract;
3. The price approved by the head of the competent central government agency for a construction project as the standard market unit price based on the market transaction price, etc. by type of construction project that has been already performed;
4. The appraised price or the price of actual transactions of similar goods, construction works, or services, or a quoted price, where it is impracticable to apply the price specified in any provision of subparagraphs 1 through 3.
(2) Notwithstanding paragraph (1), where it is intended to execute a contract with a business entity that has successfully localized components for military supplies that have been imported from abroad, the budget price therefor may be determined on the basis of the price approved by the Administrator of the Defense Acquisition Program, considering the price for importing such components. <Newly Inserted by Presidential Decree No. 18155, Dec. 11, 2003; Presidential Decree No. 19321, Feb. 8, 2006; Presidential Decree No.
20319, Oct. 10, 2007>
(3) Where the head or any contracting officer of a central government agency determines a budget price pursuant to paragraph (1), he/she shall take into account the quantity of contract, the period for performance, the current status of supply and demand, terms and conditions of contract, and other circumstances.
(4) Except as otherwise expressly provided for in paragraphs (1) through (3), necessary matters concerning the determination of a budget price shall be determined by the Minister of Strategy and Finance. <Amended by Presidential Decree No. 16548, Sep. 9, 1999; Presidential Decree No. 18155, Dec. 11, 2003; Presidential Decree No. 20720, Feb. 29, 2008>
CHAPTER III METHOD OF CONTRACTING
Article 10 (Methods of Competition)
(1) The competition under Article 7 of the Act shall be conducted by inviting tenders or by holding an auction in a manner similar to a tendering procedure. <Amended by Presidential Decree No. 21202, Dec. 31, 2008>
(2) If the head or a contracting officer of a central government agency deems it necessary for the sale of a chattel, he/she may put the chattel to auction in a manner similar to the tendering procedure prescribed in the provisions of this Decree.
(3) If the head or a contracting officer of a central government agency deems it necessary for the purchase of goods, he/she may put such goods to reverse auction in a manner similar to the tendering procedure prescribed in the provisions of this Decree. <Newly Inserted by Presidential Decree No. 21202, Dec. 31, 2008>
Article 11 (Effectuation of Competitive Tendering Procedures)
A competitive tendering procedure shall become effective when two or more persons make valid tenders.
Article 12 (Qualifications for Participation in Competitive Tendering Procedures)
(1) The head or a contracting officer of a central government agency shall allow only the persons who meet the following requirements to participate in a competitive tendering procedure: <Amended by Presidential Decree No. 15186, Dec. 31, 1996; Presidential Decree No. 16548, Sep. 9, 1999; Presidential Decree No.
20720, Feb. 29, 2008>
1. Deleted; <by Presidential Decree No. 16548, Sep. 9, 1999>
2. A person shall hold a valid permit, authorization, or license, have completed registration or reporting, or meet the requirements for qualification, if a person is required to hold a valid permit, authorization, or license, complete registration or reporting, or meet the requirements for qualification in accordance with provisions of any other statutes;
3. A person shall successfully pass an examination conducted by the competent authority, where an examination for measurement of security is required;
4. A person shall meet other requirements prescribed by Ordinance of the Ministry of Economy and Finance.
(2) Paragraph (1) 2 shall not apply to cases where a small and medium enterprise cooperative under the Small and Medium Enterprise Cooperatives Act participates in a competitive tendering procedure for the manufacture or purchase of goods or for providing services (limited to cases where such a small and medium enterprise cooperative allows its members that meet the requisites prescribed in paragraph (1) 2 to manufacture and purchase relevant goods or to perform services). <Newly Inserted by Presidential Decree No.
16548, Sep. 9, 1999; Presidential Decree No. 19035, Sep. 8, 2005; Presidential Decree No. 19494, May 30, 2006;
Presidential Decree No. 20319, Oct. 10, 2007; Presidential Decree No. 24601, Jun. 17, 2013>
1. and 2. Deleted; <by Presidential Decree No. 20319, Oct. 10, 2007>
(3) “Persons prescribed by Presidential Decree, who have evaded taxes, etc.” in Article 27-5 (1) of the Act means any of the following: <Newly Inserted by Presidential Decree No. 25033, Dec. 30, 2013; Presidential Decree No. 27958, Mar. 27, 2017; Presidential Decree No. 29318, Dec. 4, 2018; Presidential Decree No. 30078, Sep.
17, 2019>
1. Aperson whose amount of evasion, refund, or deduction of taxes under Article 3 of the Punishment of Tax Offenses Act is not less than five hundred million won;
2. A person whose amount of reduction, exemption, evasion, or refund of customs duties under Article 270 of the Customs Act is not less than five hundred million won;
3. A person whose amount of evasion, refund, or deduction of local taxes under Article 102 of the Framework Act on Local Taxes is not less than five hundred million won;
4. A person who fails to comply with his/her obligation to report an overseas financial account under Article 34 of the Adjustment of International Taxes Act and whose amount of violation of his/her obligation to report exceeds the amount referred to in Article 16 (1) of the same Act;
5. A person who fails to comply with his/her obligation to report capital transactions under Article 18 of the Foreign Exchange Transactions Act and whose amount of violation of his/her obligation to report is the amount provided in Article 29 (1) 3 of the same Act.
(4) The head or a contracting officer of a central government agency shall confirm whether the counter- party to a contract falls under any subparagraph of paragraph (3), by means of requiring the counter-party to submit verification documents, such as a reply to request of criminal history records under subparagraph 5 of Article 2 of the Act on the Lapse of Criminal Sentences or a written judgment, or by other similar means. <Newly Inserted by Presidential Decree No. 25033, Dec. 30, 2013>
(5) Where it is impracticable for the counter-party to a contract participating in the tender procedures to submit verification documents under paragraph (4), the head or a contracting officer of a central government agency may require the counter-party to submit a written oath stating the fact that the counter- party does not fall under any subparagraph of paragraph (3). In such cases, the written oath shall include that, if facts that are different from the statement on the written oath are found, the contract may be cancelled or terminated, and disposal of sanctions for improper businessman may be imposed on the counter-party. <Newly Inserted by Presidential Decree No. 25033, Dec. 30, 2013>
(6) Article 76 (4), (5), (7) and (8) shall apply mutatis mutandis to restrictions on qualification for participation by a person falling under paragraph (3). <Newly Inserted by Presidential Decree No. 25033, Dec.
30, 2013; Presidential Decree No. 27475, Sep. 2, 2016>
Article 13 (Pre-qualification for Participation in Tendering)
(1) The head or a contracting officer of a central government agency may pre-qualify participants in a tendering procedure to select persons qualified for the participation in a competitive tendering procedure, and shall notify the qualified persons of results of the selection, when he/she selects the qualified persons.
<Amended by Presidential Decree No. 22282, Jul. 21, 2010; Presidential Decree No. 26829, Dec. 31, 2015;
Presidential Decree No. 30078, Sep. 17, 2019>
(2) Where the head or a contracting officer of a central government agency pre-qualifies participants in a tendering procedure pursuant to paragraph (1), he/she shall establish standards for pre-qualification, comprehensively taking into account the factors necessary for the evaluation of capabilities of performing the contract, including the level of difficulty in performing the contract, performance records, technical capacity, financial position, social reputation, and the level of fidelity to the performance of the contract.
<Amended by Presidential Decree No. 22282, Jul. 21, 2010; Presidential Decree No. 30078, Sep. 17, 2019>
(3) If a relevant statute prescribes the procedure, etc. for selecting business entities competent for services, etc., the head or a contracting officer of a central government agency may select persons qualified for the participation in a competitive tendering procedure in accordance with the procedure, etc. so prescribed, notwithstanding paragraph (2). <Amended by Presidential Decree No. 22282, Jul. 21, 2010; Presidential Decree No. 30078, Sep. 17, 2019>
(4) The head or a contracting officer of a central government agency shall keep documents stating the following matters so that persons intending to participate in a tendering procedure can inspect such documents before tendering, and shall provide access to and issue such documents to the persons intending to participate in the tendering procedure, upon receipt of a request therefor: Provided, That providing access to or issuing of such documents may be substituted by publishing such documents through the Korea On-line E-Procurement System under subparagraph 4 of Article 2 of the Electronic Procurement Utilization and Promotion Act (referring to information processing systems designated and publicly notified by the Minister of Trade, Industry and Energy pursuant to the former part of Article 31 of the State Property Act in cases of competitive tendering procedures that become a source of revenue, and hereinafter referred to as “E-Procurement System”): <Newly Inserted by Presidential Decree No. 22282, Jul. 21, 2010; Presidential Decree No. 24728, Sep. 17, 2013; Presidential Decree No. 29318, Dec. 4, 2018; Presidential Decree No. 30078, Sep. 17, 2019>
1. Standards for pre-qualification under paragraph (2);
2. Methods for preparing and submitting relevant evidential documents necessary for the pre- qualification for participation in a tendering procedure;
3. Matters regarding the pre-qualification for participation in a tendering procedure, in addition to matters prescribed in subparagraphs 1 and 2.
(5) The procedure for pre-qualification for participation in a tendering procedure under paragraph (1) and necessary matters regarding factors that shall be taken into consideration in evaluating the level of fidelity to the performance of a contract under paragraph (2) shall be prescribed by Ordinance of the Ministry of Economy and Finance. <Newly Inserted by Presidential Decree No. 22282, Jul. 21, 2010>
Article 14 (Tendering for Construction Projects)
(1) When the head or a contracting officer of a central government agency calls for tenders for a construction project, he/she shall prepare the following documents (hereinafter referred to as “tender documents”): Provided, That, in cases of a tendering procedure for a construction project pursuant to Article 42 (4) 1 and 2, a person intending to participate in such tendering procedure may be allowed to prepare a bill of quantity specified in subparagraph 2 by himself/herself (including the cases of preparing referring to basic data on quantity of materials issued by the head or a contracting officer of a central government agency). <Amended by Presidential Decree No. 22282, Jul. 21, 2010; Presidential Decree No. 26829, Dec. 31, 2015; Presidential Decree No. 29318, Dec. 4, 2018; Presidential Decree No. 30078, Sep. 17, 2019>
1. Design documents;
2. A bill of quantity of materials for each type of work (hereinafter referred to as "bill of quantity");
3. Documents specified by Ordinance of the Ministry of Economy and Finance as relevant to tendering, in addition to documents specified in subparagraphs 1 and 2.
(2) The head or a contracting officer of a central government agency shall provide access to and issue tender documents to persons intending to participate in a tendering procedure: Provided, That the head or a
contracting officer of a central government agency may not provide access or issue a bill of quantity of materials where a person intending to participate in a tendering procedure is required to prepare a bill of quantity pursuant to the proviso to paragraph (1). <Amended by Presidential Decree No. 22282, Jul. 21, 2010;
Presidential Decree No. 26829, Dec. 31, 2015; Presidential Decree No. 30078, Sep. 17, 2019>
(3) Notwithstanding paragraph (2), the head or a contracting officer of a central government agency may publish tender documents through the E-Procurement System in substitution for giving access to or issuing of tender documents. <Amended by Presidential Decree No. 22282, Jul. 21, 2010; Presidential Decree No. 24728, Sep. 17, 2013>
(4) and (5) Deleted. <by Presidential Decree No. 19483, May 25, 2006>
(6) A person intending to participate in a tendering procedure for a construction project shall submit a calculation sheet along with a written tender when making a tender to the head or a contracting officer of the competent central government agency: Provided, That in cases of a construction project for which the estimated price is less than ten billion won, or a construction project for which re-tenders are called for pursuant to Article 20 (1), the calculation sheet shall be submitted along with a commencement report submitted by a person who is determined as a successful tenderer for the construction project: <Amended by Presidential Decree No. 26829, Dec. 31, 2015; Presidential Decree No. 30078, Sep. 17, 2019>
(7) The calculation sheet specified in paragraph (6) shall be prepared by describing unit prices in a bill of quantity: Provided, That if a person intending to participate in a tendering procedure is required to prepare a bill of quantity pursuant to the proviso to paragraph (1), such person shall state only unit prices in the bill of quantity prepared by himself/herself: <Amended by Presidential Decree No. 26829, Dec. 31, 2015;
Presidential Decree No. 30078, Sep. 17, 2019>
(8) If a contract is for a long-term continuing construction project, tenders shall be invited for the entire project. <Amended by Presidential Decree No. 30078, Sep. 17, 2019>
Article 14-2 (On-site Presentation of Construction Projects)
(1) Where the head or a contracting officer of a central government agency intends to call for tenders for a construction project, he/she may hold an on-site presentation session in the actual project site so as to ensure proper performance of works by participants in tendering, taking into consideration the nature, scale, etc. of the project. <Amended by Presidential Decree No. 30078, Sep. 17, 2019>
(2) Deleted. <by Presidential Decree No. 30078, Sep. 17, 2019>
(3) An on-site presentation session under the paragraph (1) shall be held before the period specified in any of the following subparagraphs, which shall be counted from the date immediately before the deadline for the submission of written tenders depending upon the scale of each construction project: Provided, That such period may be shortened in cases of Article 35 (4): <Amended by Presidential Decree No. 30078, Sep. 17, 2019>
1. Seven days, if the estimated price is less than one billion won;
2. 15 days, if the estimated price is more than one billion won and less than five billion won;
3. 33 days, if the estimated price is more than five billion won.
(4) Deleted. <by Presidential Decree No. 22282, Jul. 21, 2010>
Article 15 Deleted. <by Presidential Decree No. 30078, Sep. 17, 2019>
Article 16 (Tendering for Manufacture or Purchase of Goods or for Services, etc.)
(1) When the head or a contracting officer of a central government agency intends to call for tenders for the manufacture or purchase of goods or for services, etc., he/she shall prepare and keep documents specified for tendering by Ordinance of the Ministry of Economy and Finance and shall allow a person intending to participate in tendering to inspect such documents at the person’s request during a period from the date of public notice of a tender until the closing date for registration of tenderers: Provided, That such documents shall be distributed to a person intending to participate in tendering at the person’s request, where tenders are called for with regard to the manufacture or purchase of goods or for services, etc., if the estimated price for goods or services, etc. is not less than the publicly notified amount.
<Amended by Presidential Decree No. 22282, Jul. 21, 2010>
(2) Notwithstanding paragraph (1), the head or a contracting officer of a central government agency may publish documents for tendering through the E-Procurement System in substitution for giving access to or issuing of such documents. <Newly Inserted by Presidential Decree No. 22282, Jul. 21, 2010; Presidential Decree No. 24728, Sep. 17, 2013>
(3) If the head or a contracting officer of a central government agency deems it necessary in the light of the nature of a contract for a software project under the provisions of subparagraph 3 of Article 2 of the Software Industry Promotion Act, he/she may call for tenders for goods and services on a turnkey basis.
<Amended by Presidential Decree No. 17019, Dec. 27, 2000; Presidential Decree No. 19035, Sep. 8, 2005;
Presidential Decree No. 22282, Jul. 21, 2010>
(4) Where the head or a contracting officer of a central government agency intends to call for tenders for goods and services on a turnkey basis pursuant to paragraph (3), he/she shall choose a method deemed proper for the nature of the subject matter of the contract, among the methods for determining a successful tenderer under Article 42 (1), Article 42 (3), and Articles 43 and 43-3, and shall expressly state the method in the relevant public notice of a tender. <Amended by Presidential Decree No. 16548, Sep. 9, 1999; Presidential Decree No. 19483, May 25, 2006; Presidential Decree No. 22282, Jul. 21, 2010; Presidential Decree No. 29318, Dec.
4, 2018>
(5) Tendering for the manufacture or purchase of goods or for services, etc. shall be made by submitting a written tender in the form prescribed by Ordinance of the Ministry of Economy and Finance, and the tender price of a tender that shall be made for total amount shall indicate the total amount, while the tender price of a tender that shall be made for unit price shall indicate the unit price. <Amended by Presidential Decree No. 16548, Sep. 9, 1999; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 22282, Jul.
21, 2010>
(6) Article 14 (8) shall apply mutatis mutandis to the long-term manufacture, etc. of goods. <Amended by Presidential Decree No. 22282, Jul. 21, 2010>
Article 17 (Tendering for Large Quantity of Goods)
(1) In a general competitive tendering procedure for the sale of goods in a large quantity, a user may be allowed to make a tender with the quantity that he/she desires to purchase and the unit price therefor within the maximum of the quantity of goods to be sold.
(2) In a general competitive tendering procedure for the manufacture or purchase of goods in a large quantity, a supplier may be allowed to make a tender with the quantity that he/she desires to supply and the unit price therefor within the maximum of the required quantity of goods.
(3) The scope of subject matters of a competitive tendering procedure in a desired quantity under paragraph (1) or (2) shall be prescribed by Ordinance of the Ministry of Strategy and Finance. <Amended by Presidential Decree No. 16548, Sep. 9, 1999; Presidential Decree No. 20720, Feb. 29, 2008>
Article 18 (Tendering in Two-Step Competitions, etc.)
(1) If the head or a contracting officer of a central government agency finds it impracticable to prepare proper specifications, etc. in advance for a contract for the manufacture or purchase of goods or for services (excluding contracts for services specified by Ordinance of the Ministry of Economy and Finance as simple labor services), or finds it necessary in the light of the nature of such a contract, he/she may call for tenders for specifications or technology first and then may call for tenders again for pricing. <Amended by Presidential Decree No. 19483, May 25, 2006; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 29318, Dec. 4, 2018>
(2) In cases of paragraph (1), only persons determined as qualified as a result of opening tenders for specifications or technology shall be qualified for participation in the tendering procedure for pricing.
(3) Notwithstanding paragraphs (1) and (2), if the head or a contracting officer of a central government agency deems it necessary in the light of the nature of a contract for the manufacture and purchase of goods or for services (excluding contracts for services specified by Ordinance of the Ministry of Economy and Finance as simple labor services), he/she may simultaneously call for tenders for both specifications and pricing or for both technology and pricing, and, in such cases, shall open price tenders submitted only by persons confirmed as qualified as a result of opening tenders for specifications or technology.
<Amended by Presidential Decree No. 15186, Dec. 31, 1996; Presidential Decree No. 19483, May 25, 2006;
Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 29318, Dec. 4, 2018>
(4) When the head of a central government agency intends to call for tenders pursuant to paragraphs (1) through (3), he/she shall determine the criteria, procedures, etc. for evaluation before tendering, and shall make such criteria, procedures, etc. available to persons intending to participate in tendering for inspection. <Amended by Presidential Decree No. 15186, Dec. 31, 1996>
(5) When it is impracticable to determine a successful tenderer as a result of opening price tenders pursuant to paragraph (3), and the number of persons qualified in the aspect of specifications or technology is two or more persons, such persons qualified in the aspect of specifications or technology may be required to submit a price tender once again. <Newly Inserted by Presidential Decree No. 15614, Feb. 2, 1998>
Article 19 (Incidental Tender)
(1) When the head or a contracting officer of a central government agency calls for tenders for a construction project that meets the standards prescribed by Ordinance of the Ministry of Strategy and Finance, he/she shall require each tenderer to submit a calculation sheet that describes matters regarding subcontracting, such as the portion to be subcontracted out of the construction project constituting the tender price, the amount of subcontract, and subcontractors: Provided, That the foregoing shall not apply to any of the following cases: <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
1. Where re-tenders are invited pursuant to the provision of Article 20 (1);
2. Where tendering for a construction project is urgently required;
3. Where special technology is required or tenders are called for a construction project for which no specialized constructor competent for subcontracting is available due to particular local conditions;
4. Where tenders are invited for a construction project for which subcontracting is deemed inappropriate in the light of performance of obligations when a defect is discovered from construction works, work process management, or requirements for security.
(2) Where each tenderer is required to describe matters regarding subcontracting pursuant to paragraph (1) and the project on tender is a long-term continuing project, each tenderer shall be required to state a tender price for the entire project: Provided, That if it is deemed necessary in the light of the period for the execution of a construction project, each tender may be allowed to state only the tender price for the construction works to be executed during the first year.
(3) The procedure of the incidental tender under paragraph (1) and other necessary matters therefor shall be determined and publicly notified by the Minister of Strategy and Finance. <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
Article 20 (Re-Tendering and Re-Public Notice of Tenders)
(1) If two or more valid tenders have not been submitted or there is no successful tenderer in a competitive tendering procedure, re-tenders may be called for. In such cases, re-tenders shall not be deemed new tenders, and shall not be subject to any restriction on tenders or to the number of repeated tendering procedures. <Amended by Presidential Decree No. 30078, Sep. 17, 2019>
(2) If no person submits a tender, if there is no successful tenderer, or if the successful tenderer does not execute the contract, the request for re-tendering may be given again. <Amended by Presidential Decree No.
30078, Sep. 17, 2019>
(3) When re-tenders are called for or the request for re-tendering is given pursuant to paragraphs (1) or (2), no change shall be made to the price and other terms and conditions prescribed when tenders were initially called for, except for the deadline thereof. <Newly Inserted by Presidential Decree No. 15614, Feb. 2, 1998;
Presidential Decree No. 30078, Sep. 17, 2019>
Article 21 (Contract Subject to Limited Competitive Tendering, Limitations, etc.)
(1) Cases where limitations may be placed on the qualification of participants in competition pursuant to the proviso to Article 7 (1) of the Act and such limitations shall be as follows. In such cases, specific criteria for restriction on the limitations under subparagraphs 1 through 6 and 9 shall be prescribed by Ordinance of the Ministry of Economy and Finance: <Amended by Presidential Decree No. 15186, Dec. 31, 1996; Presidential Decree No. 15433, Jul. 10, 1997; Presidential Decree No. 16548, Sep. 9, 1999; Presidential Decree No. 19035, Sep. 8, 2005; Presidential Decree No. 19483, May 25, 2006; Presidential Decree No. 20319, Oct.
10, 2007; Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 21834, Nov. 20, 2009; Presidential Decree No. 22282, Jul. 21, 2010; Presidential Decree No. 22626, Jan. 17, 2011; Presidential Decree No. 23267, Oct.
28, 2011; Presidential Decree No. 24130, Oct. 8, 2012; Presidential Decree No. 25358, May 22, 2014; Presidential Decree No. 27475, Sep. 2, 2016; Presidential Decree No. 27524, Sep. 29, 2016; Presidential Decree No. 28211, Jul.
26, 2017; Presidential Decree No. 28690, Mar. 6, 2018; Presidential Decree No. 29318, Dec. 4, 2018>
1. In the case of a contract for a construction project in the amount prescribed by Ordinance of the Ministry of Economy and Finance, the capabilities of construction and past records of performance of projects of the same type as the project concerned;
2. In the case of a contract for a construction project which requires special technology or construction methods, the status of technology in possession necessary for the execution of the construction project concerned, or past records of performance of construction projects of the same type as the project concerned;
3. In the case of a contract for manufacturing goods which requires a special technology or construction methods, the status of equipment and technology in possession necessary for manufacturing the goods concerned, or past records of the manufacture of goods of the same type as the goods concerned;
4. Whether the quality of goods has been certified, where goods certified for their quality specified in any of the following items are to be purchased, because special performance or quality is required:
(a) Goods certified under Article 15 of the Industrial Standardization Act or excellent collective standard products under Article 25 of the same Act;
(b) Deleted; <by Presidential Decree No. 27807, Jan. 26, 2017>
(c) Goods certified as eligible for the Environment Mark under Article 17 of the Environmental Technology and Industry Support Act;
(d) Recycled products that conform to the standards under Article 33 of the Act on the Promotion of Saving and Recycling of Resources, the quality of which has been certified under Article 17 (1) 3 of the Enforcement Decree of the Industrial Technology Innovation Promotion Act;
5. In the case of a service contract which requires special technology, the status of technology in possession necessary for providing such services, or past records of performance of the services of the same type as the services concerned;
6. In the case of a contract whose estimated value is less than the amount prescribed by Ordinance of the Ministry of Economy and Finance, the location of the head office in the corporate register (in the case of a self-employed individual, referring to the location of the place of business mentioned in the business registration certificate or documents related to permission, approval, license, registration, report, etc. under the relevant statutes; hereinafter the same shall apply);
7. Where a contract for a construction project is subject to limitations under Article 22, the criteria for such limitations;
8. Where it is intended to manufacture and purchase goods designated and publicly announced by the Minister of SMEs and Startups pursuant to Article 6 of the Enforcement Decree of the Act on Facilitation of Purchase of Small and Medium Enterprise-Manufactured Products and Support for Development of their Markets, small and medium enterprises defined under Article 2 of the Framework Act on Small and Medium Enterprises;
8-2. Where it is intended to sign a goods manufacturing or purchasing contract or a service contract following the limited competitive tendering procedure stipulated in Article 7-2 (2) 1 of the Act on Facilitation of Purchase of Small and Medium Enterprise-Manufactured Products and Support for Development of Their Markets, small or micro enterprises that have participated in the joint venture business referred to in the same subparagraph;
9. Where the head or a contracting officer of a central government agency finds it necessary particularly for preventing poor performance of a contract, the financial position of each participant in the competition;
10. In cases of the manufacture and purchase of goods or of services, for which the estimated price is less than the amount publicly notified or services (excluding engineering projects defined under subparagraph 3 of Article 2 of the Engineering Industry Promotion Act and construction technology services defined under subparagraph 3 of Article 2 of the Construction Technology Promotion Act), any of the following persons:
(a) In cases of the manufacture and purchase of goods or of services for which the estimated price is less than 100 million won, small enterprises defined in Article 2 (2) of the Framework Act on Small and Medium Enterprises, micro enterprises defined in Article 2 of the Act on the Protection of and Support for Micro Enterprises, venture businesses defined in Article 2 (1) of the Act on Special Measures for the Promotion of Venture Businesses, or founders defined in subparagraph 2 of Article 2 of the Support for Small and Medium Enterprise Establishment Act;
(b) In cases of the manufacture and purchase of goods or of services for which the estimated price is more than 100 million won, small and medium enterprises defined in Article 2 of the Framework Act on Small and Medium Enterprises;
11. Where it is intended to purchase goods produced by a person in a particular area, whether the person falls under any of the following:
(a) A person that has his/her business relocated to a special region designated for the support of local small and medium enterprises under Article 62-23 of the Small and Medium Enterprises Promotion Act (applicable only during the period designated under paragraph (2) of the same Article);
(b) A person that has his/her business relocated to an agro-industrial complex under the Agricultural and Fishing Villages Improvement Act.
(2) When the head or a contracting officer of a central government agency intends to place limitations on the qualification of participants in a competition pursuant to paragraph (1), he/she shall clearly state such limitations and the criteria for limitations in the relevant public notice of a tender.
(3) When the head or a contracting officer of a central government agency deems it necessary for placing limitations on the qualification of participants in a competitive tendering procedure for a construction project pursuant to paragraph (1) 6, the public notice of a tender under paragraph (2) may be substituted by a notice of the matters specified in each subparagraph of Article 36 to persons qualified for participation in the relevant tendering procedure, as prescribed by Ordinance of the Ministry of Economy and Finance.
<Amended by Presidential Decree No. 15186, Dec. 31, 1996; Presidential Decree No. 16548, Sep. 9, 1999;
Presidential Decree No. 20720, Feb. 29, 2008>
Article 22 (Tendering Procedures subject to Limitations By Nature or Scale of Construction Project) (1) The head or a contracting officer of a central government agency shall classify construction projects according to the nature and scale of each project into categories, establish criteria for limitations on a competition for each category, and publicly notify the criteria in advance through the E-Procurement System so that persons qualified for participation in a competition can file an application for registration.
<Amended by Presidential Decree No. 17688, Jul. 30, 2002; Presidential Decree No. 19483, May 25, 2006;
Presidential Decree No. 24728, Sep. 17, 2013>
(2) Upon receipt of applications for registration under paragraph (1), the head or a contracting officer of a central government agency shall examine such applications, select and register persons qualified for participation in a competition for each category and grade, and notify matters specified in Article 36 to the persons qualified for participation in a competition whenever tenders are called for a construction project so that they can file an application for participation in tendering.
(3) When the head of a central government agency intends to formulate criteria for limitations on a competition pursuant to paragraph (1), he/she shall consult with the Minister of Strategy and Finance thereon. <Amended by Presidential Decree No. 16548, Sep. 9, 1999; Presidential Decree No. 20720, Feb. 29, 2008>
Article 23 (Contracts Subject to Selective Competitive Tendering Procedures)
(1) The cases where tenders shall be invited through a selective competitive tendering procedure under the proviso to Article 7 (1) of the Act are as follows: <Amended by Presidential Decree No. 15614, Feb. 2, 1998;
Presidential Decree No. 16548, Sep. 9, 1999; Presidential Decree No. 17019, Dec. 27, 2000; Presidential Decree No.
18155, Dec. 11, 2003; Presidential Decree No. 19035, Sep. 8, 2005; Presidential Decree No. 20319, Oct. 10, 2007;
Presidential Decree No. 20789, May 21, 2008; Presidential Decree No. 21480, May 6, 2009; Presidential Decree No.
21834, Nov. 20, 2009; Presidential Decree No. 23267, Oct. 28, 2011; Presidential Decree No. 27807, Jan. 26, 2017;
Presidential Decree No. 28211, Jul. 26, 2017; Presidential Decree No. 28690, Mar. 6, 2018; Presidential Decree No.
29318, Dec. 4, 2018>
1. Where it is impracticable to accomplish the purpose of a contract without a person that has special equipment, technology, materials, goods, or past records of performance in the light of the nature or purpose of the contract, but the number of persons eligible for tendering is not more than ten persons;
2. Where a construction project defined under the Framework Act on the Construction Industry (excluding specialized construction projects), the estimated price of which is not more than 300 million won, a specialized construction project under the Framework Act on the Construction Industry, the estimated price of which is not more than 100 million won, or a construction project under any other statute relating to construction projects, the estimated price of which is not more than 100 million won is carried out, or goods are manufactured, the estimated price of which is not more than 100 million won;
3. Where an asset is sold or purchased, the estimated price of which is not more than 50 million won;
4. Where goods are leased to or from someone, if the total amount of rent on the budget is not more than 50 million won;
5. Where a contract is not for a construction project, manufacture of goods, sale of an asset, or lease of goods, and the estimated price therefor is not more than 50 million won;
6. A product certified pursuant to Article 15 of the Industrial Standardization Act or excellent collective standard products under Article 25 of the same Act;
7. Deleted; <by Presidential Decree No. 16548, Sep. 9, 1999>
8. Where it is permitted to make a negotiated contract pursuant to the proviso to Article 7 of the Act and Article 26 of this Decree;
9. Where an order is placed for manufacturing or purchasing a recycled product meeting the standards prescribed under Article 33 of the Act on the Promotion of Saving and Recycling of Resources and the quality of which has been certified pursuant to Article 17 (1) 3 of the Enforcement Decree of the Industrial Technology Innovation Promotion Act, or a product certified as eligible for the Environment Mark under Article 17 of the Environmental Technology and Industry Support Act;
10. Where goods designated and publicly announced by the Minister of SMEs and Startups pursuant to Article 6 of the Enforcement Decree of the Act on Facilitation of Purchase of Small and Medium Enterprise-Manufactured Products and Support for Development of their Markets are manufactured or purchased from small and medium enterprises defined under Article 2 of the Framework Act on Small and Medium Enterprises;
11. Where small or micro enterprises (small or micro enterprises that can deliver relevant goods, etc.) recommended by the Small and Medium Enterprise Cooperatives referred to in Article 3 (1) of the Small and Medium Enterprise Cooperatives Act are made to manufacture goods or perform services at the request of the head of each central government agency pursuant to Article 7-2 (2) 2 of the Act on Facilitation of Purchase of Small and Medium Enterprise-Manufactured Products and Support for Development of Their Markets.
(2) When a public official executes a contract through a selective competitive tendering procedure with the authority delegated by the head of a central government agency pursuant to paragraph (1) 1, he/she shall report the details thereof to the head of the central government agency, who shall notify the Board of Audit and Inspection thereof. <Amended by Presidential Decree No. 15614, Feb. 2, 1998>
Article 24 (Designation of Persons Eligible for Tendering in Selective Competitive Tendering Procedures)
(1) In order to succeed in inviting tenders to a selective tendering procedure pursuant to Article 23, the head or a contracting officer of a central government agency shall designate at least five persons eligible for tendering, and at least two persons out of them shall file an application for participation in tendering:
Provided, That if the number of persons eligible for designation is less than five persons, all such persons shall be designated. <Amended by Presidential Decree No. 15614, Feb. 2, 1998>
(2) In cases of paragraph (1), each person eligible for tendering shall be notified of the matters specified in each subparagraph of Article 36.
(3) When the head or a contracting officer of a central government agency intends to designate persons eligible for tendering pursuant to paragraph (1), he/she shall notify each of them thereof, as prescribed by Ordinance of the Ministry of Strategy and Finance, and make sure whether each of them intends to participate in tendering. <Amended by Presidential Decree No. 16548, Sep. 9, 1999; Presidential Decree No.
20720, Feb. 29, 2008>
Article 25 (Multiple Competitions for Similar Goods)
Where the head or a contracting officer of a central government agency intends to designate and purchase goods, the quality, performance, or efficiency of which is not lower than a certain level, from among similar kinds of goods with different quality, performance, or efficiency, he/she may put a contract therefor into multiple competitions. In such cases, the tenderer who calls the lowest ratio of price to the budget price set for the similar kind of goods shall become the successful tenderer.
Article 26 (Cases Applicable to Negotiated Contract)
(1) The cases for which a negotiated contract is permissible under the proviso to Article 7 (1) of the Act are as follows: <Amended by Presidential Decree No. 22282, Jul. 21, 2010; Presidential Decree No. 23267, Oct. 28, 2011; Presidential Decree No. 23313, Nov. 23, 2011; Presidential Decree No. 23778, May 14, 2012; Presidential
Decree No. 25033, Dec. 30, 2013; Presidential Decree No. 25358, May 22, 2014; Presidential Decree No. 26829, Dec. 31, 2015; Presidential Decree No. 29318, Dec. 4, 2018; Presidential Decree No. 30078, Sep. 17, 2019>
1. The following cases where there is no time to put a contract into a competition or it is found impractical to accomplish the purpose of the contract through competition:
(a) Where a natural disaster occurs, military forces are to be mobilized for a military operation, a ceremony is urgently required, urgent relief from a flood or other emergency situation is required, raw material prices rapidly rise, emergency safety diagnosis or facility improvement is required for preventing any accident, etc., or any other similar event occurs;
(b) Where it is necessary for security, such as the national security, a national defense plan, intelligence service, management of military installations, diplomatic relationship, or any other similar case is concerned, or it is necessary to keep a state agency’s activities confidential;
(c) Where the Administrator of the Defense Acquisition Program places an order with a business entity engaging that researched and developed standardized products for military use or a business entity subject to priority management under the Emergency Resources Management Act to manufacture and purchase standardized goods for military use (limited to items designated by the Administrator of the Defense Acquisition Program in cases of a business entity subject to priority management);
(d) Where it sells materials owned by the State for recovery from disasters to persons that have sustained damage caused by an emergency disaster;
2. The following cases where a fair competition is impractical, such as a particular person’s technique is required, or there is only one person who can produce the goods concerned:
(a) Where it is impracticable to identify who is liable for a defect that is likely to be discovered in the future from facilities in a construction project and it executes a contract with the immediately preceding or current contractor;
(b) Where a contract is made with the current contractor because confusion is likely to arise in work process otherwise or it is impracticable for two or more contractors to work together in an identical job-site;
(c) Where a contract for finish works is made with the immediately preceding or current contractor;
(d) Where it is impracticable in fact to conduct competition because the project concerned is to be implemented in an area contiguous to the enemy or any other extraordinary area;
(e) Where it is actually impracticable to conduct a competition because the construction project requires a patented construction method, new technology designated and publicly notified pursuant to Article 14 of the Construction Technology Promotion Act, a new technology certified or a technology tested pursuant to Article 7 of the Environmental Technology and Industry Support Act, a new electric technology designated and publicly notified under Article 6-2 of the former Electric Technology Management Act (referring to the Act before it was amended to Act No. 13741), or a new technology for disaster prevention (limited to a new technology within the protection period or
effective period designated under each relevant Act) designated and publicly notified under Article 61 of the Countermeasures against Natural Disasters Act;
(f) Where a person who manufactured and supplied the goods concerned installs, assembles, or repairs such goods;
(g) Where it is required to procure goods in order to exchange parts of goods already procured or to extend facilities, and such goods are likely to be incompatible if they are manufactured and supplied by any person, other than the person that manufactured and supplied the goods concerned;
(h) Where it is intended to place an order to manufacture or purchase goods patented or goods registered as a utility model or design and no appropriate substitute therefor is available;
(i) Where the producer or possessor of the goods concerned is only one person and it is impracticable to accomplish the purpose of the project by placing an order to manufacture or purchase other goods;
(j) Where a contract is for survey, designing, supervision, special land survey, or training, which requires a particular person’s technique, quality, experience, or qualification; for services for scientific research with a particular person; or for designing services to be entered with a person who won a prize in an open design competition conducted pursuant to a relevant statute;
(k) Where it purchases real estate, such as a parcel of land or a building, from a particular person, or leases an asset to or from a particular person;
3. Where any of the following products produced by small and medium enterprises defined under subparagraph 1 of Article 2 of the Small and Medium Enterprises Promotion Act is manufactured or purchased from the small or medium enterprises concerned:
(a) Products, which have been certified for its performance pursuant to Article 15 of the Act on Facilitation of Purchase of Small and Medium Enterprise-Manufactured Products and Support for Development of their Markets;
(b) Products, which have been certified for its quality pursuant to Article 13 of the Software Industry Promotion Act;
(c) Products completely developed with support under Article 9 (1) 3 of the Act on the Promotion of Technology Innovation of Small and Medium Enterprises, the purchase of which is agreed upon with a person relating to its initial demand;
(d) Products certified as new products under Article 16 of the Industrial Technology Innovation Promotion Act;
(e) Products that have been manufactured by applying a new technology certified or designated and publicly notified under Article 15-2 of the Industrial Technology Innovation Promotion Act, Article 7 of the Environmental Technology and Industry Support Act, Article 14 of the Construction Technology Promotion Act, or Article 61 of the Countermeasures against Natural Disasters Act, and the performance of which has been confirmed by the competent Minister at the stage of commercialization;
(f) Products designated and publicly notified as excellent goods for procurement under Article 18 of the Enforcement Decree of the Government Procurement Act;
(g) Goods with a joint trademark designated and publicly notified as excellent procurement under Article 18-2 of the Enforcement Decree of the Government Procurement Act (limited to cases where the prices of purchased goods are less than the prices publicly notified by the Minister of Economy and Finance);
(h) Products acknowledged for innovation of technology in accordance with standards and procedures determined by the Minister of Economy and Finance upon hearing opinions from the heads of the relevant central government agencies, among products developed through research and development projects pursuant to statutes, including the Framework Act on Science and Technology;
(i) Products acknowledged by the Minister of Science and ICT that conform to the standards for performance and reliability of information protection systems under Article 38 of the Framework Act on National Informatization and that comply with the requirement for introduction of information protection systems by type determined by the Director of the National Intelligence Service pursuant to Article 69 of the Presidential Decree of the Electronic Government Act;
4. Where it executes a contract with any of the following organizations and entities that are established for the purpose of providing persons of distinguished service to the State or disabled persons with jobs or services for veterans or welfare services, for the manufacture or purchase of goods or for services (limited to goods directly produced by such organizations and entities and services directly provided by such organizations and entities), or sells or leases goods directly to any of such organizations and entities:
(a) A welfare factory in a collective village designated by the Minister of Patriots and Veterans Affairs for self-support of persons of distinguished service to the State;
(b) An association comprised of wounded persons, which is established pursuant to the Act on the Establishment of Associations by Persons, etc. of Distinguished Service to the State;
(c) A production facility designated as a facility of producing products by persons with severe disabilities under Article 9 (1) of the Special Act on the Preferential Purchase of Products Manufactured by Persons with Severe Disability;
(d) A social welfare corporation established pursuant to Article 16 of the Social Welfare Services Act;
5. The following cases where it is found inefficient to enter into a contract through a competition in the light of the purpose or nature of the contract, except the cases specified in subparagraphs 1 through 4:
(a) Any of the following contracts:
a) Female-owned businesses pursuant to subparagraph 1 of Article 2 of the Act on Support for Female-Owned Businesses;
b) Disabled persons’ enterprises pursuant to subparagraph 2 of Article 2 of the Act on the Facilitation of Entrepreneurial Activities of Persons with Disabilities;
c) Any person who meets the qualification determined by the Minister of Economy and Finance, from among social enterprises pursuant to subparagraph 1 of Article 2 of the Social Enterprise Promotion Act, social cooperatives pursuant to subparagraph 3 of Article 2 of the Framework Act on Cooperatives, self-support companies pursuant to Article 18 of the National Basic Living Security Act, or community companies defined in Article 2 (1) 9 of the Special Act on Promotion of and Support for Urban Regeneration;
(b) Where an overseas diplomatic or consular mission purchases goods from a local market for its own use;
(c) Where it is found disadvantageous for the processing, loading and unloading, transportation, or storage of goods through a competition;
(d) Where it manufactures or purchases defense supplies under the Defense Acquisition Program Act from a defense contractor;
(e) Where it makes a contract for a national project with a person to whom such national project can be entrusted or delegated under any other statute;
(f) Where it makes a contract with another state agency or a local government;
(g) Where it intends to procure products designated and registered as prototypes subject to pilot procurement under Article 7-3 (3) of the Presidential Decree of the Government Procurement Act, pursuant to paragraph (1) or (4) of the same Act.
(2) Where the head or a contracting officer of a central government agency intends to purchase a product specified under paragraph (1) 3, he/she may make a negotiated contract for such product only during three years (only during the period in which the certification or designation of the product remains valid) from the date on which the product is certified or designated by the competent Minister (including a person delegated by the competent Minister): Provided, That if the competent Minister extends the period of certification or designation, a negotiated contract may be made only for the extended period of certification or designation or for three years from the date of extension, whichever is shorter. <Newly Inserted by Presidential Decree No. 22282, Jul. 21, 2010>
(3) Where the head or a contracting officer of a central government agency makes a negotiated contract pursuant to paragraph (1) 4, he/she shall check the following matters: <Newly Inserted by Presidential Decree No. 19483, May 25, 2006; Presidential Decree No. 22282, Jul. 21, 2010; Presidential Decree No. 30078, Sep. 17, 2019>
1. Whether the person with whom it is intended to make the negotiated contract meets the requirements for qualification;
2. Whether the person directly produces the goods to be procured through the negotiated contract.
(4) The head or a contracting officer of a central government agency may request the head of the competent government agency responsible for supervision over a person with whom he/she intends to make a negotiated contract to cooperate with him/her, as necessary for checking the matters specified in paragraph (3). <Amended by Presidential Decree No. 19483, May 25, 2006; Presidential Decree No. 22282, Jul. 21,