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ACT ON CONTRACTS TO WHICH A LOCAL GOVERNMENT IS A PARTY

Act No. 7672, Aug. 4, 2005

Amended by Act No. 8173, Jan. 3, 2007

Act No. 8423, May 11, 2007

Act No. 8852, Feb. 29, 2008

Act No. 9423, Feb. 6, 2009

Act No. 9685, May 21, 2009

Act No. 11690, Mar. 23, 2013

Act No. 11784, May 22, 2013

Act No. 11794, May 22, 2013

Act No. 12000, Aug. 6, 2013

Act No. 12844, Nov. 19, 2014

Act No. 14197, May 29, 2016

Act No. 14194, May 29, 2016

Act No. 14839, Jul. 26, 2017

Act No. 15296, Dec. 26, 2017

Act No. 16042, Dec. 24, 2018

Act No. 17348, jun. 9, 2020

Act No. 17555, Oct. 20, 2020

Act No. 17523, Oct. 20, 2020

 Article 1 (Purpose)
The purpose of this Act is to smoothly implement the conclusion of contracts to which local governments are a party, by prescribing basic matters concerning such contracts.
[This Article Wholly Amended on Feb. 6, 2009]
 Article 2 (Scope of Application)
This Act shall apply to contracts, etc., which are a source of revenues and expenditures, concluded between local governments (referring to the local governments under Article 2 of the Local Autonomy Act; hereinafter the same shall apply) and parties to the contracts.
[This Article Wholly Amended on Feb. 6, 2009]
 Article 3 (Applying Matters concerning Education, Science, and Sports)
"Heads of local governments" or "Special Metropolitan City Mayor/Metropolitan City Mayors/Do Governors" shall be deemed "superintendents of offices of education", "Minister of the Interior and Safety" shall be deemed "Minister of Education", and "Ministry of the Interior and Safety" shall be deemed "Ministry of Education" in this Act concerning matters relating to education, science, and sports. <Amended on Feb. 29, 2008; Mar. 23, 2013; Nov. 19, 2014; Jul. 26, 2017>
 Article 4 (Relationship to Other Acts)
Unless prescribed otherwise in other Acts, this Act shall apply to the contracts to which local governments are a party.
[This Article Wholly Amended on Feb. 6, 2009]
 Article 5 (Extent of Contracts of Local Governments by International Tender)
(1) The contracts of local governments by international tender shall be announced in accordance with the treaties, conventions, agreements, etc. concerning government procurement to which the Republic of Korea is a party and with other international standards (hereinafter referred to as "government procurement agreements, etc.") by the Minister of the Interior and Safety after specifying local governments, amounts and the extent of construction works, goods and services subject to the application thereof among the contracts for construction works, goods and services to be concluded by local governments: Provided, That where any of the following occurs, it shall be excluded from the contracts of local governments by international tender: <Amended on May 21, 2009; Mar. 23, 2013; Nov. 19, 2014; Jul. 26, 2017>
1. Where goods and services necessary for manufacture for resale or sale are procured;
2. Where products of small and medium enterprises are manufactured and purchased according to the Act on Facilitation of Purchase of Small and Medium Enterprise-Manufactured Products and Support for Development of Their Markets;
3. Where agricultural products, fishery products or livestock products are purchased in accordance with the Grain Management Act, the Act on Distribution and Price Stabilization of Agricultural and Fishery Products, or the Livestock Industry Act;
4. Other details specified in government procurement agreements, etc., prescribed by Presidential Decree.
(2) Matters necessary for the principles of international tender under the main sentence of paragraph (1), tender announcement, tender methods, selection of successful bidders, etc. shall be prescribed by Presidential Decree.
(3) Where the heads of local governments or those who have been commissioned or entrusted to handle contracting duties as prescribed in Article 7 (1) (hereinafter referred to as "contracting officer") acknowledge it necessary in consideration of the purposes, character, etc. of contracts, they may conclude a contract by international tender even when it is not subject to international tender under paragraph (1), as prescribed by Presidential Decree.
[This Article Wholly Amended on Feb. 6, 2009]
 Article 6 (Principles of Contracts)
(1) Contracts shall be concluded on equal terms by mutual agreement, and both parties shall implement the terms of contracts in good faith, and no head of any local government nor contracting officer shall make any special contract or specify conditions unreasonably restricting the interests of the other party to contracts prescribed by this Act and other related statutes.
(2) In cases of international tenders under Article 5 (1), no head of any local government nor contracting officer shall, on the principle of reciprocity, make any special contract or specify conditions discriminating against goods or services manufactured by the people of the countries participating in the government procurement agreements, etc. or manufactured in such countries compared to goods or services manufactured by the people of the Republic of Korea or manufactured in the Republic of Korea.
[This Article Wholly Amended on Feb. 6, 2009]
 Article 6-2 (Integrity Pledge System)
(1) To enhance the transparency and fairness of contracts, the head of a local government or a contracting officer shall require participants in tendering or the other parties to negotiated contracts to submit a written integrity pledge.
(2) A written integrity pledge under paragraph (1) shall include the following matters:
1. Matters concerning the prohibition of direct or indirect gratitude, donation, and the provision of money or other valuables and entertainments related to tenders, successful tenders, the conclusion and performance of contracts, supervision under Article 16, and inspection under Article 17;
2. Matters concerning the prohibition of any act that interferes with free competition in tender or any unfair act, such as conference for successful tender of a specific person;
3. Other matters prescribed by Presidential Decree for the purpose of enhancing the transparency and fairness of contracts.
[This Article Newly Inserted on Aug. 6, 2013]
 Article 6-3 (Compliance with Statutes Related to Labor Relations)
When concluding a contract, the head of a local government or a contracting officer may include the terms that require the other party to the contract to comply with labor-related statutes such as Labor Standards Act regarding working condition for workers (including workers hired by a subcontract under the Fair Transactions in Subcontracting Act) who execute the relevant contract.
[This Article Newly Inserted on Oct. 20, 2020]
 Article 7 (Commissioning or Entrustment of Contracting Duties)
(1) Unless prescribed otherwise by other statutes, the heads of local governments may commission or entrust all or some of contracting duties to public officials involved with accounting under the Local Accounting Act, the heads of central administrative agencies, the heads of other local governments, or specialized institutions prescribed by Presidential Decree and have them handle contracting duties if acknowledged as necessary to handle contracting duties under their jurisdiction. <Amended on May 29, 2016>
(2) The contracting officer of the agency commissioned or entrusted with contracting duties as prescribed in paragraph (1) shall handle contracting duties as prescribed by this Act unless special provisions exist in other Acts: Provided, That the head of a central administrative agency to which the Act on Contracts to which the State is a Party is applicable or specialized institutions are commissioned or entrusted with contracting duties, he/sge shall handle contracting duties as prescribed by this Act.
(3) Entrusting contracting duties under paragraph (1), procedures for entrustment, agency fees, and other necessary matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Feb. 6, 2009]
 Article 8 (Vicarious Performance of Contracts)
(1) Where deemed specially necessary, such as where requests of residents for the vicarious performance of contracts for the installation, maintenance, and management of facilities in the administrative districts under jurisdiction and for the purchase of goods, etc. exist, the head of a local government may accept requests for the vicarious performance of contracts from persons, other than such local government, and perform such duties vicariously.
(2) The head of a local government vicariously performing contracts as prescribed in paragraph (1) shall claim direct expenses for performing contracts and other expenses necessary for the management of such duties to the persons who have requested for the vicarious performance of contracts before performing such contracts, and settle accounts ex post facto.
(3) The expenses claimed and received by the head of a local government as prescribed in paragraph (2) may be managed aside from the revenue budget and expenditure budget, notwithstanding the Local Finance Act.
[This Article Wholly Amended on Feb. 6, 2009]
 Article 9 (Method of Contracting)
(1) Where the head of a local government or a contracting officer intends to conclude a contract, he or she shall announce such fact and call for open tenders: Provided, That where he or she deems it necessary in consideration of the purpose, character, and scale of contracts, regional particularities, etc., he or she may call for tenders by designating participants or conclude negotiated contracts. <Amended on Aug. 6, 2013>
(2) Where the head of a local government or a contracting officer calls for open tenders as prescribed in the main sentence of paragraph (1), he or she shall examine the qualifications of participants in advance, as prescribed by Presidential Decree, and invite only qualified participants, or call for tenders by restricting qualifications for participating in such tenders with construction capability, accomplishments, conditions of technology in possession, or location of the head office in the corporate register (for individual business entities, referring to the location of a business indicated in the business registration certificate or documents related to permission, authorization, licensing, registration, or reporting under the relevant statutes or regulations; hereinafter the same shall apply). <Amended on Dec. 24, 2018>
(3) The standards and procedures for designation, extent of subject matter of negotiated contracts, procedures for selecting parties to negotiated contracts under the proviso to paragraph (1), and other necessary matters shall be prescribed by Presidential Decree.
(4) Where the head of a local government or a contracting officer has concluded a negotiated contract as prescribed in the proviso to paragraph (1), he or she shall disclose to the public the terms of negotiated contracts, as prescribed by Presidential Decree.
(5) Where several preferential purchases concurrently exist pursuant to other Acts in the process of the contract under paragraph (1), the other party to the contract shall be selected based on the purpose and scale of the contract, and the degree of consideration given to the socially underprivileged people. <Newly Inserted on Dec. 26, 2017>
[This Article Wholly Amended on Feb. 6, 2009]
 Article 9-2 (Prior Disclosure of Purchase Specification)
(1) When calling for tenders, the head of a local government or a contracting officer shall disclose purchase specification of goods and services before the call for tenders to relevant business enterprises so that they can peruse the purchase specification and present their opinions" Provided, That such prior disclosure may be omitted where goods and services specified by Presidential Decree are put out to tender, such as urgently needed supplies, secret supplies, or goods and services the estimated prices of which are lower than fifty million won.
(2) Methods, content, timing, and other matters necessary for the prior disclosure of purchase specification under paragraph (1) shall be specified by Presidential Decree.
[This Article Newly Inserted on May 29, 2016]
 Article 10 (Public Announcement of Tenders)
(1) Where the head of a local government or a contracting officer calls for tenders, he or she shall publicly announce or notify matters concerning such tenders.
(2) The methods, details, and time of announcing or notifying tenders as prescribed in paragraph (1), and other necessary matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Feb. 6, 2009]
 Article 11 (Preparation of Estimated Price)
(1) The head of a local government or a contracting officer shall prepare in advance the estimated price of an item for which tenders will be invited, or a negotiated contract will be concluded, in accordance with the relevant specifications, drawings, etc. in order to use it as a standard for determining a successful tenderer and the contract price: Provided, That in cases prescribed by Presidential Decree, including cases where he or she enters into a contract with another local government, he or she may choose not to prepare or may omit the estimated price. <Amended on Aug. 6, 2013>
(2) Where the head of a local government or a contracting officer prepares the estimated price under the main sentence of paragraph (1), he or she shall determine it appropriately in consideration of all conditions, such as the contract quantity, the period of performance, the conditions of demand and supply and the terms and conditions of contract. <Newly Inserted on Aug. 6, 2013>
(3) The timing of preparing estimated price under the main sentence of paragraph (1), methods of determining estimated price, standards therefor, and other necessary matters shall be prescribed by Presidential Decree. <Amended on Aug. 6, 2013>
[This Article Wholly Amended on Feb. 6, 2009]
 Article 12 (Tender Deposits)
(1) The heads of local governments or a contracting officers shall have persons intending to participate in tenders submit bid bonds: Provided, That in cases of participants in tenders prescribed by Presidential Decree, such as other local governments, public institutions under the Act on the Management of Public Institutions (hereinafter referred to as "public institutions"), and local public enterprises under the Local Public Enterprises Act (hereinafter referred to as "local public enterprises"), they may be exempted from submitting bid bonds.
(2) The amount of bid bonds and method of submitting bid bonds under paragraph (1), and other necessary matters shall be prescribed by Presidential Decree.
(3) Where a successful bidder fails to conclude a contract, the head of a local government or a contracting officer shall transfer such bid bond to the relevant local government: Provided, That where the submission of a bid bond is exempted as prescribed in the proviso to paragraph (1), he or she shall require such successful bidder pay an amount equivalent to the bid bond to the relevant local government, as prescribed by Presidential Decree.
[This Article Wholly Amended on Feb. 6, 2009]
 Article 13 (Selection of Successful Bidders)
(1) In tenders which are a source of revenues of a local government, a bidder with the highest price shall become the successful bidder: Provided, That in cases where standards are prescribed by Presidential Decree in consideration of the purpose of contracts, tender price, volume, etc., such standards shall prevail.
(2) In tenders which place a burden on the budget of a local government, a bidder falling under any of the following subparagraphs shall become the successful bidder:
1. A person who has submitted a tender with the lowest price: Provided, That a successful bidder may be selected after examining the ability to fulfill a contract or the appropriateness of tender price of those who have submitted tenders with the lowest price;
2. A person who has submitted a tender most favorable to the relevant local government in consideration of the tender price, quality, technology, details of proposal, period of contract, etc.;
3. A person who has won a design competition when design service requiring symbolism, monumentality, artistry, etc. is procured;
4. A person who has submitted a tender most appropriate to the standards, where standards were prescribed by Presidential Decree in consideration of the character, scale, etc. of contract.
(3) Persons subject to paragraph (2), standards and procedures for selecting successful bidders, and other necessary matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Feb. 6, 2009]
 Article 14 (Preparation of Written Contract and Formation of Contract)
(1) Where the head of a local government or a contracting officer intends to enter into a contract, he or she shall prepare a written contract stating clearly the purpose of the contract, the contract amount, the period of performance, an earnest money deposit, risk bearing, liquidated damages and other necessary matters: Provided, That in cases prescribed by Presidential Decree, he or she may omit the preparation of a written contract. <Amended on Aug. 6, 2013>
(2) Where the head of a local government or a contracting officer intends to enter into a contract, he or she shall prepare a written contract in an electronic form under subparagraph 1 of Article 2 of the Digital Signature Act by means of a data processing system designated by the Minister of the Interior and Safety with the exception of cases prescribed by Presidential Decree, such as a natural disaster. <Newly Inserted on Aug. 6, 2013; Nov. 19, 2014; Jul. 26, 2017>
(3) Where the head of a local government or a contracting officer prepares a written contract pursuant to the main sentence of paragraph (1), the contract shall be confirmed when the head of such local government or a contracting officer and the other party to the contract affix their names and seals, or signatures (including digital signatures under subparagraph 2 of Article 2 of the Digital Signature Act; hereinafter the same shall apply) on the written contract. <Amended on Aug. 6, 2013>
[This Article Wholly Amended on Feb. 6, 2009]
 Article 15 (Contract Deposits)
(1) The head of a local government or a contracting officer shall have any person who intends to enter into a contract pay a contract deposit: Provided, That parties to a contract prescribed by Presidential Decree, such as other local governments, public institutions, and local public enterprises, may be exempted from paying a contract deposit.
(2) The amount, method of payment of contract deposits under paragraph (1), and other necessary matters shall be prescribed by Presidential Decree.
(3) If parties to a contract fails to fulfill contractual obligations, the head of a local government or a contracting officer shall transfer contract deposits to the relevant local governments: Provided, That where the payment of contract deposits is exempted as prescribed in the proviso to paragraph (1), he or she shall make parties to a contract pay an amount equivalent to such contract deposits to the relevant local government, as prescribed by Presidential Decree.
[This Article Wholly Amended on Feb. 6, 2009]
 Article 16 (Supervision)
(1) Where the head of a local government or a contracting officer has concluded contracts for construction works, goods, services, etc. and acknowledges it necessary to have such contracts implemented appropriately, he or she shall supervise such contracts in accordance with contract documents, design or other related documents, or delegate such duties to the affiliated public officials, etc. for supervision: Provided, That in cases of contracts prescribed by Presidential Decree, specialized institutions may be separately designated for supervision.
(2) As for construction works relating to the livelihood of residents, such as waterworks, sewerage works, and opening of access roads to villages, the head of a local government or a contracting officer shall entrust the representative of residents relating to such construction works or a person recommended by the representative of residents, as a supervisor (hereinafter referred to as "resident supervisor") for the supervision of such construction works, in addition to supervision under paragraph (1).
(3) Any resident supervisor may communicate the suggestions of residents relating to construction works in the process of implementing construction contracts to the head of a local government or a contracting officer, or request the head of a local government or a contracting officer to correct illegal or unjust acts, etc.
(4) The head of a local government or a contracting officer may reimburse actual expenses incurred in the performance of supervision to resident supervisors, as prescribed by Presidential Decree.
(5) Construction works subject to supervision, extent of supervision and qualifications of resident supervisors, and other necessary matters shall be prescribed by Presidential Decree.
(6) Those who supervise as prescribed in paragraphs (1) and (2) shall prepare a record of supervision.
[This Article Wholly Amended on Feb. 6, 2009]
 Article 17 (Inspections)
(1) When the other party to a contract has completed the implementation of a contract in whole or in part, the head of a local government or a contracting officer shall inspect it in accordance with the contract, design, and other related documents, or entrust affiliated public officials, etc. with inspection: Provided, That where a contract falls under any of the following subparagraphs, the head of a local government or a contracting officer may separately designate a specialized institution for inspection: <Amended on May 22, 2013>
1. Construction works that require construction management pursuant to Article 39 (2) of the Construction Technology Promotion Act;
2. Contracts acknowledged as requiring specialized knowledge or technology to inspect the quality of materials, capability, specification, etc.
(2) Notwithstanding paragraph (1), the head of a local government or a contracting officer may choose not to conduct inspections under paragraph (1) on commodities prescribed by Presidential Decree, such as commodities that have received quality certification under other statutes or commodities manufactured by a person whose quality management ability has been certified. <Newly Inserted on Aug. 6, 2013>
(3) Any person who conducts inspections pursuant to paragraph (1) shall prepare an inspection report: Provided, That where it is unnecessary to prepare an inspection report in light of the nature of contracts, such as contracts or sale contracts of which amount is below the amount prescribed by Presidential Decree, supply of electric power, gas, and running water, etc., he or she may omit the preparation of an inspection report. <Amended on Aug. 6, 2013>
(4) In case of a contract for purchasing commodities or contract for manufacturing commodities, the other party to a contract shall bear expenses incurred in conducting inspections, such as necessary tests due to the nature of commodities, or expenses incurred in deformation, damage, etc. due to inspections. <Newly Inserted on Aug. 6, 2013>
[This Article Wholly Amended on Feb. 6, 2009]
 Article 18 (Payment of Consideration)
(1) As for contracts for construction works, goods or services, or other contracts placing a burden on the budget, the head of a local government or a contracting officer shall pay the consideration therof after inspection or preparing a record of inspection: Provided, That in cases where advance payment is made as prescribed in the Local Accounting Act or inevitable reasons are acknowledged to exist, such as international practices, the same shall not apply. <Amended on May 29, 2016>
(2) The consideration under paragraph (1) shall be paid by the deadline prescribed by Presidential Decree from the date a request for the payment thereof is received from the other party to a contract, and if payment by such deadline is impossible, interest for each day of delay shall be paid, as prescribed by Presidential Decree: Provided, That consideration for the portion constructed in excess of budget of the relevant year as prescribed in Article 24 (2) shall be paid as agreed upon between parties to the contract.
(3) Interest under paragraph (2) and compensation for delay under Article 30 arising under the same contract may be offset.
[This Article Wholly Amended on Feb. 6, 2009]
 Article 19 (Prepayment of Consideration)
In cases of sale or lease of property, supply of services, or other contracts which are a source of revenues, the head of a local government or a contracting officer shall require other party to a contract to pay the consideration thereof in advance unless prescribed otherwise in other statutes. In such cases, such party to a contract may not pay a contract deposit under Article 15.
[This Article Wholly Amended on Feb. 6, 2009]
 Article 20 (Obligation to Guarantee Performance of Contracts)
(1) When the head of a local government or a contracting officer makes contracts for construction works, he or she shall specify the duration of obligation to guarantee performance of such contracts.
(2) When the head of a local government or a contracting officer make contracts of goods, services, etc., he or she may specify the duration of obligation to guarantee performance of such contracts, if necessary in view of the nature of such contracts.
(3) When defects have occurred in the subject goods within the duration of obligation to guarantee performance of contracts, the head of a local government or a contracting officer shall request for the repair of defects by specifying an appropriate period or repair such defects.
(4) Durations of obligation to guarantee performance of contracts under paragraphs (1) and (2) shall not exceed the period prescribed by the Civil Act.
(5) Durations of obligation to guarantee performance of contracts under paragraphs (1) and (2), procedures for and methods of inspecting defects, and other necessary matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Feb. 6, 2009]
 Article 21 (Deposits for Repair of Defects)
(1) Where the heads of a local government or a contracting officer has specified the duration of obligation to guarantee performance of contracts under Article 20 (1) and (2), he or she shall request the parties to contracts to furnish deposits for repair of defects in order to guarantee the repair of defects of such contracts: Provided, That parties to a contract prescribed by Presidential Decree, such as other local governments, public institutions, and local public enterprises, may be exempted from the payment of deposits for repair of defects.
(2) The amount, timing and methods of payment, period for deposit, calculation of amount of deposits for repair of defects under paragraph (1), and other necessary matters shall be prescribed by Presidential Decree.
(3) Where parties to a contract have failed to fulfill the responsibilities for repair of defects, the head of a local government or a contracting officer shall transfer an amount necessary for such repair of defects from the deposits for repair of defects to the relevant local governments: Provided, That where such parties to a contract have been exempted from the payment of deposits for repair of defects under the proviso to paragraph (1), the heads of a local government or a contracting officer shall have the exempted persons furnish the relevant local governments with an amount necessary for the repair of defects, as prescribed by Presidential Decree.
(4) Where budget for the repair of defects does not exist or is insufficient, notwithstanding paragraph (3), the head of a local government or a contracting officer is not required to transfer such amount to the relevant local governments, but may use it directly.
[This Article Wholly Amended on Feb. 6, 2009]
 Article 22 (Adjustment of Contract Price due to Price Fluctuation)
(1) If needs arise to adjust contract price due to price fluctuation, changes in design, or other changes in the terms of contracts after concluding contracts for construction works, goods and services, and other contracts which become grounds for budgetary expenditures, the head of a local government or a contracting officer shall adjust the contract price, as prescribed by Presidential Decree. <Amended on Dec. 24, 2018>
(2) Where the head of a local government or a contracting officer intends to extend a contract period due to typhoons, floods, earthquakes, fires, or other grounds exceeding the scope of control of the party to the contract, he or she shall adjust the contract price, as prescribed by Presidential Decree, to the extent of not exceeding the scope of the cost incurred by the change. <Newly Inserted on Dec. 24, 2018>
[This Article Wholly Amended on Feb. 6, 2009]
 Article 23 (Concluding Contracts before Beginning of Fiscal Year or Allocation of Budget)
In cases of contracts that cannot be suspended from the nature thereof, such as contracts for urgent recovery from disasters, lease contracts, transportation contracts, safekeeping contracts, etc., the head of a local government or a contracting officer may conclude such contracts in advance within the extent of confirmed budget for the relevant fiscal year, even before the beginning of such fiscal year or the allocation of budget, as prescribed by Presidential Decree.
[This Article Wholly Amended on Feb. 6, 2009]
 Article 24 (Long-Term Continuous Contracts and Ongoing Expenditure Contracts)
(1) The head of a local government or a contracting officer shall conclude contracts for construction works, manufacture, services, etc. requiring several years to complete according to the following classification:
1. Long-term continuous contracts concluded annually for part of a tender which has been called for in total and accepted within the extent of budget for each fiscal year;
2. Ongoing expenditure contracts for which budget is compiled as ongoing expenditure under Article 42 of the Local Finance Act and which are concluded for the whole amount of tenders.
(2) Where parties to a contract request while implementing construction works being performed as ongoing expenditure contracts under paragraph (1) 2, such construction works may be implemented as annual construction works in excess of the budget for the relevant fiscal year.
(3) When the head of a local government or a contracting officer concludes contracts requiring several years to complete, he or she shall endeavor not to postpone such contracts.
[This Article Wholly Amended on Feb. 6, 2009]
 Article 25 (Unit Price Contracts)
(1) When the need exists to conclude a contract of manufacture, purchase, repair, mending, restoration, processing, sale, purchase, supply, use, etc. in succession for a certain period, the head of a local government or a contracting officer may conclude a unit price contract in advance within the extent of budget for the relevant fiscal year.
(2) The scope, procedures and standards for unit price contracts under paragraph (1), and other necessary matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Feb. 6, 2009]
 Article 26 (Unit Price Contracts for Third Parties)
(1) Where contracts of manufacture, purchase, processing, etc. of goods needed jointly by Sis/Guns/Gus (referring to autonomous Gus; hereinafter the same shall apply) within the jurisdiction of the Special Metropolitan City Mayor, Metropolitan City Mayors, or Do Governors are requested by such Sis/Guns/Gus, the Special Metropolitan City Mayor, Metropolitan City Mayors, or Do Governors may conclude contracts (hereafter referred to as "unit price contracts for third parties" in this Article) specifying only the unit price in advance whereby Sis/Guns/Gus may request the delivery of such goods and pay the consideration thereof directly.
(2) The procedures and standards for unit price contracts for third parties and other necessary matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Feb. 6, 2009]
 Article 27 (Contracts by Estimation)
(1) When it is impossible to determine price in advance for contracts falling under any of the following subparagraphs, the heads of a local government or a contracting officer may conclude contracts by estimation, as prescribed by Presidential Decree:
1. Contracts for the manufacture of prototypes for development;
2. Contracts for testing, inspection and research services;
3. Contracts for entrustment, vicarious performance, etc. under related statutes concluded with central administrative agencies, other local governments, public institutions, local public enterprises, organizations contributed or invested by local governments or the local government association under Article 159 of the Local Autonomy Act (hereinafter referred to as "local government association").
(2) Where necessary for urgent recovery from disasters while under time constraints, the head of a local government or a contracting officer may conclude contracts by estimation notwithstanding paragraph (1). In such cases, subject matter of such contracts, methods of tender, and other necessary matters shall be prescribed by Presidential Decree.
(3) Deleted. <Dec. 24, 2018>
(4) Where the heads of local governments or contracting officers conclude contracts by estimation under paragraphs (1) and (2), they shall inform tender participants of the procedures, standards, etc. for ex post facto settlement of payment prescribe by Presidential Decree, through tender announcement, etc. <Amended on Dec. 24, 2018>
[This Article Wholly Amended on Feb. 6, 2009]
 Article 28 (Integrated Contracts)
(1) The head of a local government or a contracting officer may conclude an integrated contract for construction works, etc. relating to central administrative agencies, other local governments, public enterprises, and quasi-government institutions under the Act on the Management of Public Institutions, local public enterprises, institutions contributed or invested by local governments, the local government association, etc. jointly with such institutions.
(2) The head of an institution relating to the conclusion of integrated contracts under paragraph (1) shall cooperate in terms of matters necessary for the conclusion of such contracts.
(3) Where the head of a local government or a contracting officer deems it necessary to save expenses and implement projects efficiently, he or she may enter into an integrated contract in a lump by placing orders for contracts for construction works, commodities, services, etc. that the relevant local government intends to enter into. <Newly Inserted on Aug. 6, 2013>
[This Article Wholly Amended on Feb. 6, 2009]
[Title Amended on Aug. 6, 2013]
 Article 29 (Joint Contracts)
(1) If deemed necessary, the heads of a local government or a contracting officers may conclude joint contracts, the parties to contracts of which are two or more persons.
(2) In cases of a joint contract under paragraph (1), which is a call for tenders not restricting any area as qualifications for participation in tendering, where the head of a local government or a contracting officer deems it necessary for the balanced development of the construction industry, etc., he or she shall designate at least one person from among the persons who have the location of the head office in the corporate register in the Special Metropolitan City, a Metropolitan City, a Metropolitan Autonomous City, a Do or Special Self-governing Province having jurisdiction over a construction site as a constituent member of the parties to the joint contract: Provided, That in case of a joint contract by an international call for tenders pursuant to Article 5, the foregoing shall not apply where a foreign construction contractor (referring to a foreigner or foreign corporation that has registered as a construction contractor pursuant to Article 9 of the Framework Act on the Construction Industry) is included in the other party to the contract. <Amended on May 22, 2013; Dec. 24, 2018>
(3) Notwithstanding paragraph (2), the foregoing shall not apply where less than ten persons who possess qualification necessary to perform construction exist in the relevant area having jurisdiction over a construction site. <Newly Inserted on May 22, 2013>
(4) Where joint contracts are concluded as prescribed in paragraph (1), contracts shall be concluded when the heads of the relevant local governments or a contracting officers and parties to contracts collectively affix their names and seal on or sign the contract documents. <Amended on May 22, 2013>
(5) Necessary matters concerning joint contracts, such as methods for concluding joint contracts, shall be prescribed by Presidential Decree. <Newly Inserted on May 22, 2013>
[This Article Wholly Amended on Feb. 6, 2009]
 Article 30 (Liquidated Damages)
(1) The head of a local government or a contracting officer shall require the other party to a contract who has delayed implementing contracts without justifiable reasons to pay liquidated damages.
(2) The amount of liquidated damages under paragraph (1), method of payment, and other necessary matters shall be prescribed by Presidential Decree.
(3) Where the other party to a contract fails to pay liquidated damages, the head of a local government or a contracting officer may offset liquidated damages by the payment of consideration under Article 18.
(4) Where a reason for collection of liquidated damages under paragraph (1) occurs and the amount of such liquidated damages is at least 10/100 of the contract price, and the head of a local government or a contracting officer fails to cancel or terminate the contract pursuant to Article 30-2, he or she shall require the other party to the contract to pay an additional earnest money deposit on the amount for the performance of the remaining contract. <Newly Inserted on Aug. 6, 2013>
[This Article Wholly Amended on Feb. 6, 2009]
[Title Amended on Aug. 6, 2013]
 Article 30-2 (Cancellation and Termination of Contracts)
(1) Where a reason that constitutes any of the following occurs, the head of a local government or a contracting officer may cancel the determination of a successful bidder, or cancel or terminate a contract:
1. Where he or she treats an earnest money deposit or the amount equivalent to the earnest money deposit as revenue of the relevant local government pursuant to Article 15 (3) on the ground of non-performance of contractual obligations by the other party to the contract;
2. Where a reason for collection of liquidated damages under Article 30 occurs and the amount thereof is at least 10/100 of the contract price, and he or she evidently deems that the other party to the contract is unlikely to perform the contract for reasons imputable to him or her;
3. Where the successful bidder is awarded a contract unlawfully by submitting false documents in the tendering process;
4. Where the successful bidder violates the content of a written integrity pledge under Article 6-2, such as direct or indirect gratitude, donation, the provision of money or other valuables, or entertainments to related public officials, etc. in the tendering process, and the process of performing a negotiated contract or contract;
5. Where the other party to the contract fails to comply with the urging of the contracting officer to perform the contract, without justifiable ground;
6. Where the other party to the contract is deemed to face difficulties in performing the contract due to its insolvency, bankruptcy, dissolution, suspension of business, revocation of registration, approval, permission, etc. on enterprise or business, or for other reasons;
7. Where other reasons for cancellation or termination of the contract included in the contract occur.
(2) In cases under paragraph (1) 2, the head of a local government or a contracting officer shall cancel or terminate a contract, and in cases under subparagraphs 1, 3, and 4 of the aforementioned paragraph, he or she shall cancel the determination of a successful bidder, or cancel or terminate a contract, except in any of the following cases: <Amended on Nov. 19, 2014; Jul. 26, 2017>
1. Where the cancellation of the determination of the successful bidder, or the cancellation or termination of the contract is particularly prohibited by other Acts;
2. Cases prescribed by Ordinance of the Ministry of the Interior and Safety, such as cases where it is difficult to achieve the purpose of the contract or losses are incurred by the local government where he or she cancels the determination of a successful bidder, or cancels or terminates the contract.
[This Article Newly Inserted on Aug. 6, 2013]
 Article 31 (Restrictions on Qualifications for Participation of Unjust Enterprisers in Tendering)
(1) The head of a local government (where the head of a local government deals with affairs concerning contracts by delegating or entrusting such affairs to the head of a central administrative agency or the head of another local government pursuant to Article 7 (1), including the head of a central administrative agency or the head of another local government to whom such affairs are delegated or entrusted; hereafter the same shall apply in paragraphs (6) and (7), Article 31-2 (1) and (5), and Article 31-5 (1) or (3)) shall restrict qualifications for participation of those in tendering within two years, who fall under any of the following cases (hereinafter referred to as "unjust enterprisers"), as prescribed by Presidential Decree. <Amended on Dec. 24, 2018; Jun. 9, 2020; Oct. 20, 2020>
1. A person who acts in a poor, coarse, or unfair manner or has engaged in an illegal act in the course of fulfilling a contract;
2. A person who agrees on the tender price, order amount, contract contents, or other matters with tenderers or the other party to the contract in advance or colludes for tender acceptance of a specific person or selection of the subject of delivery of goods in the process of a competitive tender, or conclusion or fulfillment of a contract;
3. A person who subcontracts in violation of the restrictions on subcontracts under the Framework Act on the Construction Industry, the Electrical Construction Business Act, the Information and Communications Construction Business Act, the Software Promotion Act, or other Acts (referring to violation by fraud or other improper means in cases of violating the duty of notifying subcontracts) or a person who subcontracts without the approval of the ordering agency or changes the condition of subcontracts approved by the ordering agency;
4. A person who causes damage to a local government in relation to the tendering or acceptance of tendering or the conclusion or fulfillment of the contract by fraud or other improper acts;
5. A person for whom the Fair Trade Commission requested to restrict qualifications for participation in tendering, due to the violation of the Monopoly Regulation and Fair Trade Act or Fair Transactions in Subcontracting Act;
6. A person for whom the Minister of the SMEs and Startups requested to restrict qualifications for participation in tendering pursuant to Article 27 (7) of the Act on the Promotion of Collaborative Cooperation between Large Enterprises and Small-Medium Enterprises;
7. A person who offers money or other financial benefits to the relevant public official or any of the following persons in relation to the tendering or acceptance of tendering or conclusion or fulfillment of the contract;
(a) A person who performs affairs concerning contracts of an institution commissioned or entrusted pursuant to Article 7 (1) which handles contracting duties (including members of a committee where a committee, etc. is established in regard to the handling of the contracting duties);
(b) A resident supervisor referred to in Article 16 (2);
(c) A member of the Penalty Surcharge Imposition Deliberative Committee referred to in Article 31-3 (1);
(d) A member of a contract deliberation committee referred to in Article 32 (1);
(e) A member of a contract dispute conciliation committee for local governments referred to in Article 35 (1);
(f) A person responsible for evaluation in a specialized organization referred to in Article 42;
(g) A member of a Central Deliberation Committee on Construction Technology and a consultative committee on technology referred to in the Construction Technology Promotion Act;
(h) Other members of a committee, prescribed by Presidential Decree, to perform evaluation of tendering or acceptance of tendering or conclusion or fulfillment of a contract;
8. A person who signs a contract in violation of Article 33;
9. Any of the following persons, as prescribed by Presidential Decree:
(a) A person who is likely to hinder a fair execution of competition by forging or falsifying documents relevant to tendering or contract or disturbing tendering or contract;
(b) A person who is likely to interfere with a proper fulfillment of a contract by failing to conduct or disturbing acts relevant to conclusion or fulfillment of a contract;
(c) A person deemed inappropriate to be allowed to participate in tendering due to his or her violation of other statutes or regulations or other grounds.
(2) Where the head of a local government (where the head of a local government deals with affairs concerning contracts by delegating or entrusting such affairs to the head of another local government pursuant to Article 7 (1), including the head of another local government to whom such affairs are delegated or entrusted) intends to restrict qualifications for participation in tendering pursuant to paragraph (1), he or she shall undergo deliberation by a contract deliberation committee under Article 32: Provided, That where there is a ground prescribed by Presidential Decree, he or she may choose not to undergo deliberation by the contract deliberation committee. <Newly Inserted on Aug. 6, 2013>
(3) Where the head of a central administrative agency restricts qualifications for participation in tendering pursuant to paragraph (1), procedures necessary therefor shall be prescribed by Presidential Decree. <Newly Inserted on Aug. 6, 2013>
(4) Those subject to restrictions on qualifications for participation in tendering pursuant to paragraphs (1) through (3) shall be subject to restrictions on qualifications for participation in all tenders invited by all local governments during the period of such restrictions. The same shall also apply to those subject to restrictions on qualifications for participation in tendering pursuant to other statutes. <Amended on Aug. 6, 2013>
(5) The head of a local government or a contracting officer shall not enter into a negotiated contract with a person subject to restrictions on qualifications for participation in tendering pursuant to paragraphs (1) through (4): Provided, That the foregoing shall not apply where there are compelling reasons, such as cases where there is no suitable contractor or manufacturer except for a person subject to restrictions on qualifications for participation in tendering. <Newly Inserted on Aug. 6, 2013>
(6) Notwithstanding paragraph (1), the head of a local government shall not restrict qualifications for participation in tendering where five years (seven years for acts falling under subparagraph 2 or 7 of the same paragraph) has lapsed from the time of termination of acts under each subparagraph of the same paragraph (referring to the time a request was made by the Fair Trade Commission or the Minister of SMEs and Startups in cases falling under subparagraph 5 or 6). <Newly Inserted on Dec. 24, 2018>
(7) Where the head of a local government restricts the qualifications for participation in tendering pursuant to paragraphs (1) through (3), he or she shall disclose details of such restrictions, as prescribed by Presidential Decree. <Newly Inserted on Dec. 24, 2018>
[This Article Wholly Amended on Feb. 6, 2009]
 Article 31-2 (Penalty Surcharges)
(1) Where the head of a local government shall restrict qualifications for participation of unjust enterprisers in tendering pursuant to Article 31 (1), which fall under any of the following, he or she may impose penalty surcharges not more than the amounts based on the following classification in lieu of restrictions on qualifications for participation in tendering at the request of unjust enterprisers:
1. Where an unjust enterpriser bears minor responsibility for his or her offense, which is attributable to changes in economic conditions obviously unpredictable, cases prescribed by Presidential Decree: the amount equivalent to 10/100 of the contract price (where the contract has not been concluded, referring to the estimated price prescribed by Presidential Decree; hereafter the same shall apply in this paragraph) of the contract related to his or her offense;
2. Where effective competitive tendering is not concluded obviously due to restrictions on qualifications for participation in tendering, cases prescribed by Presidential Decree: the amount equivalent to 30/100 of the contract price of the contract related to an offense.
(2) Where the head of a Si/Gun/Gu (referring to the head of an autonomous Gu; hereinafter the same shall apply), and the head of a central administrative agency or the head of a local government entrusted with affairs concerning contracts by the head of a Si/Gun/Gu intends to impose a penalty surcharge pursuant to paragraph (1), he or she shall undergo deliberation by a contract deliberation committee (in cases of the head of a central administrative agency or the head of a local government entrusted with affairs concerning contracts by the head of a Si/Gun/Gu, referring to a contract deliberation committee of a City/Do having jurisdiction over a Si/Gun/Gu which has entrusted him or her with affairs concerning contracts) established in a Special Metropolitan City, Metropolitan City or Do (hereinafter referred to as "City/Do") pursuant to Article 32: Provided, That the foregoing shall not apply to cases prescribed by Presidential Decree.
(3) Where the Mayor of a Special Metropolitan City, a Mayor of a Metropolitan City, a Special Self-Governing City Mayor, a Do Governor, or a Special Self-Governing Province Governor (hereinafter referred to as the "Mayor/Do Governor"), and the head of a central administrative agency or the head of a local government to whom affairs concerning contracts have been delegated or entrusted by the Mayor/Do Governor intends to impose a penalty surcharge pursuant to paragraph (1), he or she shall undergo deliberation by the Penalty Surcharge Imposition Deliberative Committee under Article 31-3: Provided, That the foregoing shall not apply to cases prescribed by Presidential Decree.
(4) The amount of penalty surcharges under paragraph (1), procedures for imposition, payment of fees following the imposition and collection of penalty surcharges, and other necessary matters shall be prescribed by Presidential Decree.
(5) Where a person on whom a penalty surcharge has been imposed pursuant to paragraph (1) fails to pay such penalty surcharge by the deadline for payment, the head of a local government may collect the penalty surcharge in the same manner as local taxes in arrear are collected.
(6) Penalty surcharges that the head of a central administrative agency or the head of a local government to whom affairs concerning contracts have been delegated or entrusted pursuant to Article 7 (1) imposes or collects pursuant to paragraphs (1) and (5) shall be the revenue of a local government which has delegated or entrusted affairs concerning contracts to him or her.
[This Article Newly Inserted on Aug. 6, 2013]
 Article 31-3 (Penalty Surcharge Imposition Deliberative Committee)
(1) In order to deliberate on whether to impose a penalty surcharge which the Mayor/Do Governor, or the head of a central administrative agency or the head of a local government to whom the Mayor/Do Governor has delegated or entrusted affairs concerning contracts intends to impose, and the appropriateness of the amount of the penalty surcharge, the Penalty Surcharge Imposition Deliberative Committee shall be established in the Ministry of the Interior and Safety. <Amended on Nov. 19, 2014; Jul. 26, 2017>
(2) Necessary matters concerning the composition and operation of the Penalty Surcharge Imposition Deliberative Committee under paragraph (1) shall be prescribed by Presidential Decree.
[This Article Newly Inserted on Aug. 6, 2013]
 Article 31-4 (Participation in Tendering on Condition of Direct Payment of Subcontract Price)
(1) Where the head of a local government discovers the fact that the other party to a contract has violated Article 34 (1) of the Framework Act on the Construction Industry or Article 13 (1) or (3) of the Fair Transactions in Subcontracting Act, he or she shall notify the head of a central administrative agency and the head of other local government of the relevant other party to the contract and his or her offense without delay.
(2) Where the other party to a contract notified pursuant to paragraph (1) intends to participate in tendering the publicly announced closing date for which comes within one year from the date of final notification, the head of a local government or a contracting officer shall allow him or her to participate in tendering only where the relevant other party to the contract submits a letter of comfort that indicates that he or she agrees to the owner's direct payment of the subcontract price to a subcontractor when the owner pays consideration under Article 18 (1).
[This Article Newly Inserted on Aug. 6, 2013]
 Article 31-5 (Restriction on Qualifications for Participation of Persons Who Have Evaded Taxes in Tendering)
(1) The head of a local government shall restrict qualifications for participation of a person who has been found guilty of evading taxes, etc. in a judgment, as prescribed by Presidential Decree, and where two years has not passed since the date when the judgement became final and conclusive.
(2) Article 31-5 shall apply mutatis mutandis to signing negotiated contracts with a person whose qualifications for participation in tendering have been restricted in accordance with paragraph (1).
(3) The head of a local government or a contracting officer may request the head of a related administrative agency, such as the National Tax Service, Public Procurement Service, or Korean National Police Agency, to submit data or inquire fact as prescribed by Presidential Decree to confirm whether a person is subject to restriction on qualifications for participation in tendering pursuant to paragraph (1).
(4) The head of a related administrative agency who received a request under paragraph (3) shall comply with such request unless there is a compelling reason not to do so.
[This Article Newly Inserted on Dec. 24, 2018]
 Article 32 (Establishment and Operation of Contract Deliberation Committees)
(1) In order to deliberate on the relevance and legality of any of the following matters, the head of a local government shall establish and operate a contract deliberation committee: <Amended on Aug. 6, 2013; May 29, 2016>
1. The following matters related to a contract larger than the scale prescribed by Presidential Decree:
(a) Matters concerning restrictions on qualification of participants in tendering;
(b) Matters concerning the method for concluding a contract;
(c) Matters concerning the method for determining a successful bidder;
(d) Matters raised by relevant business enterprises objecting to the prior disclosure of purchase specification under Article 9-2;
2. Matters concerning restrictions on qualifications for participation of unjust enterprisers in tendering;
3. Matters concerning penalty surcharges which the head of a Si/Gun/Gu, or the head of a central administrative agency or the head of a local government entrusted with affairs concerning contracts by him or her intends to impose pursuant to Article 31-2 (1);
4. Other matters on which the head of a local government deems deliberation necessary.
(2) A contract deliberation committee under paragraph (1) shall notify the head of a local government (in cases under paragraph (1) 3, referring to the head of a central administrative agency or the head of a local government who has requested it to deliberate on such matters; hereinafter the same shall apply in this paragraph) of the results of deliberation without delay, and the head of the local government shall reflect the results of such deliberation in tenders, the conclusion of contracts, restrictions on participation of unjust enterprisers in tenders, the imposition of penalty surcharges, etc. unless any extenuating circumstances exist. <Amended on Aug. 6, 2013>
(3) The composition and operation of contract deliberation committees, and other necessary matters shall be prescribed by Municipal Ordinance of the relevant local governments within the extent prescribed by Presidential Decree.
[This Article Wholly Amended on Feb. 6, 2009]
 Article 33 (Restrictions on Participation in Tenders and Conclusion of Contracts)
(1) No head of any local government or local council member shall conclude any contract with such local government for a money-making purpose.
(2) Where any person falling under any of the following subparagraphs is an enterpriser (referring to the representative in cases of a juristic person), no negotiated contract for a money-making purpose shall be concluded with the relevant local government:
1. Spouse of the head of a local government;
2. Spouse of a local council member of a local government;
3. Lineal ascendant or descendant of the head of a local government or his or her spouse;
4. Lineal ascendant or descendant of a local council member of a local government or his or her spouse;
5. Enterpriser (including a juristic person; hereinafter the same shall apply) in a relationship under the following items with the head or a local council member of a local government:
(a) Affiliated company under subparagraph 3 of Article 2 of the Monopoly Regulation and Fair Trade Act;
(b) Enterpriser in which 50/100 or more of the total capital thereof is possessed by the head or a local council member of a local government in actuality irrespective of the name of possessor, who is subject to registration under Article 4 (1) of the Public Service Ethics Act;
6. Enterpriser in which the total amount of capital possessed by the head of a local government and a person falling under subparagraph 1, 3, or 5 accounts for 50/100 or more of the total capital of such enterpriser;
7. Enterpriser in which the total amount of capital possessed by a local council member of a local government and a person falling under subparagraph 2, 4, or 5 accounts for 50/100 or more of the total capital of such enterpriser.
(3) Matters necessary for restrictions on participation in a tender and for prohibiting conclusion of contracts under paragraphs (1) and (2) shall be prescribed by Presidential Decree.
[This Article Wholly Amended on Feb. 6, 2009]
 Article 33-2 (Request for Submission of Data)
(1) The head of a local government or a contracting officer shall request related administrative agencies, etc. (including local councils) to submit data or inquire facts, as prescribed by Presidential Decree, in order to confirm whether a person cannot enter into a negotiated contract pursuant to Article 33 (2). <Amended on Dec. 24, 2018>
(2) Related administrative agencies, etc. requested to submit data or inquire facts pursuant to paragraph (1) shall submit data or notify the head of a local government or a contracting officer of the result of inquiry unless any extenuating circumstance exists.
[This Article Newly Inserted on Aug. 6, 2013]
 Article 34 (Raising Objections)
(1) A person who has been disadvantaged due to matters falling under any of the following subparagraphs in the process of concluding contracts with a local government by international tender or contracts by a tender of a scale above that prescribed by Presidential Decree may raise an objection for the cancellation or rectification of such acts:
1. Matters concerning the extent of contracts with local governments by international tender under Article 5 (1);
2. Matters concerning qualifications for participation in a tender under Article 9;
3. Matters concerning tender announcement under Article 10;
4. Matters concerning the selection of successful bidders under Article 13 (2);
5. Other matters specified by Presidential Decree.
(2) Objections shall be raised within 15 days from the date he or she was disadvantaged or within ten days from the date he or she knew that he or she had been disadvantaged due to matters falling under any of the subparagraphs of paragraph (1) to the head of the relevant local government.
(3) The head of the relevant local government shall examine objections within ten days after receiving such objections, take measures of rectification, etc., and notify the requesters of the result thereof without delay.
(4) A person who is dissatisfied with the measures under paragraph (3) shall request a reexamination for conciliation by the contract dispute conciliation committee of the relevant local government under Article 35 within 15 days after receiving such notification.
[This Article Wholly Amended on Feb. 6, 2009]
 Article 34-2 (Agreement on Methods of Dispute Settlement)
(1) The head of a local government or a contracting officer may decide a method of settling disputes between parties to the contract in signing a contract to efficiently settle disputes which may arise from contracts to which a local government is a party.
(2) The method of dispute settlement under paragraph (1) shall be determined by mutual agreement between parties to the contract from any of the following methods:
1. Conciliation by a contract dispute conciliation committee for local governments pursuant to Article 35;
2. Arbitration under the Arbitration Act.
(3) Parties to the contract who have chosen conciliation under subparagraph 1 of paragraph (2) as the method of dispute settlement between parties to the contract may request a contract dispute conciliation committee for local governments for conciliation of disputes.
[This Article Newly Inserted on Dec. 24, 2018]
 Article 35 (Establishment of Contract Dispute Conciliation Committee of Local Governments)
(1) In order to examine and conciliate requests for reexamination under Article 34 (4) and applications for conciliation under Article 34-2 (3), a contract dispute conciliation committee for local governments (hereinafter referred to as "Committee"; hereafter the same shall apply in Articles 35-2, 36, and 37) shall be established within the Ministry of the Interior and Safety. <Amended on Mar. 23, 2013; Nov. 19, 2014; Jul. 26, 2017; Dec. 24, 2018>
(2) Deleted. <May 29, 2016>
[This Article Wholly Amended on Feb. 6, 2009]
 Article 35-2 (Composition and Operation of Committee)
(1) The Committee shall be composed of up to 15 members including a chairperson.
(2) The chairperson of the Committee shall be nominated by the Minister of the Interior and Safety from among the members of the Senior Executive Service and members of the Committee shall be commissioned by the Minister of the Interior and Safety from among public officials of relevant central administrative agencies and local governments specified by the Minister of the Interior and Safety, who are nominated by the head of a relevant institution, and any of the following persons: <Amended on Jul. 26, 2017>
1. A person with at least five years' experience as an associate professor or a higher position in law, finance, trade, or accounting in any of the schools set forth in subparagraphs 1 through 6 of Article 2 of the Higher Education Act;
2. A person with at least ten years' experience in legal practice as an attorney-at-law;
3. A person with abundant knowledge and experience regarding accounting and procurement contract.
(3) Commissioned members under the subparagraphs of paragraph (2) shall serve two-year term and may be consecutively reappointed, and a substitute member shall serve the remainder of his or her predecessor's term.
(4) Commissioning of members under the subparagraphs of paragraph (2) shall not be cancelled against the will of such commissioned members during their term, except where they are sentenced to imprisonment without labor or greater punishment, or they are no longer able to perform their duties due to a long period of mental or physical breakdown.
(5) Members of the Committee shall not participate in review or coordination of agenda items directly affecting their interests.
(6) Except as provided in paragraphs (1) through (5), the operation of the Commission, procedures for review and coordination, and other necessary matters shall be prescribed by Presidential Decree.
[This Article Newly Inserted on May 29, 2016]
 Article 36 (Suspension of Contracting Procedures, etc.)
(1) Where the Committee commences examination and conciliation, it shall notify the requesters and the relevant local governments of such fact.
(2) Where acknowledged as necessary, the Committee may order to postpone the procedures for tender, or suspend concluding or implementing contracts until conciliation is complete, by request of interested parties or ex officio by the Committee. In such cases, it shall consider opinions of the head of the relevant local government.
[This Article Wholly Amended on Feb. 6, 2009]
 Article 37 (Examination and Conciliation)
(1) The Committee shall make examination and conciliation within 50 days from the date when it receives each request for reexamination and application for conciliation unless special reasons exist to the contrary. <Amended on Dec. 24, 2018>
(2) Where the Committee has made examination and conciliation under paragraph (1), it shall notify the requesters and the head of the relevant local government of the result thereof without delay.
(3) Where a requester and the head of the relevant local government fails to raise an objection to the Committee within 15 days from the date they receive notification under paragraph (2), conciliation under paragraph (1) shall have the same effect as the consent judgment. <Amended on Aug. 6, 2013>
[This Article Wholly Amended on Feb. 6, 2009]
 Article 38 (Legal Fiction as Public Officials in Applying Penalty Provisions)
Any of the following persons shall be deemed public officials, even if he or she is not actually a public official, where penalty provisions under the Criminal Act or other Acts apply to their duties.
1. A person who performs affairs concerning contracts of an institution commissioned or entrusted pursuant to Article 7 (1) which handles contracting duties (including members of a committee where the committee, etc. is established in regard to the handling of contracting duties);
2. A resident supervisor under Article 16 (2);
3. A member of a committee under Article 31 (1) 7 (h);
4. A member of the Penalty Surcharge Imposition Deliberative Committee under Article 31-3 (1);
5. A member of a contract deliberation committee under Article 32 (1);
6. A member of a contract dispute conciliation committee for local governments under Article 35 (1);
7. A person responsible for evaluation in a specialized organization under Article 42.
[This Article Wholly Amended on Dec. 24, 2018]>
 Article 39 (Education of Local Contracting Officers)
(1) The Minister of the Interior and Safety may provide education necessary to upgrade the capability of local contracting officers. <Amended on Mar. 23, 2013; Aug. 6, 2013; Nov. 19, 2014; Jul. 26, 2017>
(2) The head of a local government or a contracting officer may request institutions designated by the Minister of the Interior and Safety in consideration of the current status of the retention of professionals in contract and accounting among specialized institutions under Article 7 (1) to provide advice and suggestions relating to dealing with affairs concerning contracts or provide information related to affairs concerning contracts. <Newly Inserted on Aug. 6, 2013; Nov. 19, 2014; Jul. 26, 2017>
(3) The Minister of the Interior and Safety may conduct education under paragraph (1) by entrusting education to specialized institutions designated pursuant to paragraph (2). <Newly Inserted on Aug. 6, 2013; Amended on Nov. 19, 2014; Jul. 26, 2017>
(4) Where an institution designated pursuant to paragraph (2) falls under any of the following cases, the Minister of the Interior and Safety may cancel the designation thereof or order the suspension of its business by fixing a period not exceeding six months: Provided, That in cases of falling under subparagraph 1, the designation shall be cancelled. <Newly Inserted on Dec. 24, 2018>
1. Where the designation is obtained by fraud or other improper means;
2. Where the institution fails to comply with the designation standards under paragraph (2);
3. Where the institution violates this Act or other statutes or regulations and is deemed inappropriate to perform affairs as a specialized institution.
(5) The Minister of the Interior and Safety shall hold a hearing to cancel designation or order suspension of business pursuant to paragraph (4). <Newly Inserted on Dec. 24, 2018>
(6) Matters necessary for designation standards under paragraph (2) and detailed standards and procedures for cancellation of designation and disposition of business suspension under paragraph (4) shall be prescribed by Presidential Decree. <Newly Inserted on Dec. 24, 2018>
[This Article Wholly Amended on Feb. 6, 2009]
[Title Amended on Aug. 6, 2013]
 Article 40 (Submission of Statements on Results of Contracts)
The head of a local government shall submit statements on results of contracts to the Minster of the Interior and Safety, as prescribed by Presidential Decree. <Amended on Mar. 23, 2013; Nov. 19, 2014; Jul. 26, 2017>
[This Article Wholly Amended on Feb. 6, 2009]
 Article 41 (Consultation on Acts and Subordinate Statutes concerning Contracts)
When the head of a central administrative agency draft statutes concerning the contracts of local governments, he or she shall consult with the Minster of the Interior and Safety in advance. <Amended on Mar. 23, 2013; Nov. 19, 2014; Jul. 26, 2017>
[This Article Wholly Amended on Feb. 6, 2009]
 Article 42 (Evaluation)
(1) Where contracts concluded by local governments fall under any of the following subparagraphs, the head of a local government shall make an evaluation of construction process, construction quality, etc. or recommend specialized organizations for evaluation thereof: <Amended on May 22, 2013>
1. Supply of goods and services of a scale above the one prescribed by Presidential Decree;
2. Construction works of a scale above the one prescribed by Presidential Decree: Provided, That cases of making an evaluation of construction under Article 50 of the Construction Technology Promotion Act shall be excluded.
(2) Evaluations under paragraph (1) shall be made after the implementation of contracts have been completed in principle: Provided, That this shall not apply to cases prescribed by Presidential Decree.
(3) When the head of a local government or a contracting officer performs acts falling under any of the following subparagraphs, he or she may reflect the results of evaluations under paragraph (1) and the results of construction evaluations under Article 50 of the Construction Technology Promotion Act therein: <Amended on May 22, 2013>
1. Prior examination of qualifications to participate in a tender under Article 9 (2);
2. Designation of tender participants and selection of parties for negotiated contracts under Article 9 (3);
3. Selection of successful bidders under Article 13.
(4) The standards for evaluation, methods thereof under paragraph (1), and other necessary matters shall be prescribed by Presidential Decree.
[This Article Newly Inserted on Feb. 6, 2009]
 Article 43 (Disclosure of Contracting Procedures)
(1) The head of a local government or a contracting officer shall disclose matters prescribed by Presidential Decree among the matters related to tendering, contracts, and the performance of contracts, such as a plan to place an order, tendering, contract, design change and the adjustment of the contract price resulting therefrom, supervision, inspection, and the payment of consideration.
(2) Procedures for, the period and method of disclosure under paragraph (1) and other necessary matters concerning disclosure shall be prescribed by Presidential Decree.
[This Article Newly Inserted on Aug. 6, 2013]
ADDENDA <Act No. 7672, Aug. 4, 2005>
(1) (Enforcement Date) This Act shall enter into force on January 1, 2006.
(2) (Transitional Measures concerning Tenders or Contracts) Where tenders are made to participate or contracts are concluded under the previous Local Finance Act before this Act enters into force, the previous Local Finance Act shall govern.
(3) (Relationship with other Statutes) Where the provisions of the previous Local Finance Act have been cited in relation to contracts with local governments in other Atatutes at the time this Act enters into force, this Act or the corresponding provisions of this Act shall be deemed to have been cited, if provisions corresponding thereto exist in this Act.
ADDENDUM <Act No. 8173, Jan. 3, 2007>
This Act shall enter into force on the date of its promulgation.
ADDENDA <Act No. 8423, May 11, 2007>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 13 Omitted.
ADDENDA <Act No. 8852, Feb. 29, 2008>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 7 Omitted.
ADDENDA <Act No. 9423, Feb. 6, 2009>
(1) (Enforcement Date) This Act shall enter into force six months after the date of it promulgation: Provided, That the amended provisions of Articles 7, 18 (2), 24, and 27 (3) shall enter into force on the date of it promulgation.
(2) (Period of Validity) The amended provisions of Article 27 (3) shall remain valid until October 31, 2009.
(3) (Transitional Measures concerning Tenders or Contracts) The previous provisions shall be applicable to the tenders announced or contracts concluded before this Act enters into force.
ADDENDA <Act No. 9685, May 21, 2009>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 through 8 Omitted.
ADDENDA <Act No. 11690, Mar. 23, 2013>
Article 1 (Enforcement Date)
(1) This Act shall enter into force on the date of its promulgation.
(2) Omitted.
Articles 2 through 7 Omitted.
ADDENDA <Act No. 11784, May 22, 2013>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Article 2 (Transitional Measures concerning Call for Tenders or Contracts)
Notwithstanding the amended provisions of Article 29, the former provisions shall apply to a contract for which a call for tenders has been publicly announced or which has been concluded before this Act enters into force.
ADDENDA <Act No. 11794, May 22, 2013>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation.
Articles 2 through 26 Omitted.
ADDENDA <Act No. 12000, Aug. 6, 2013>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Article 2 (Applicability to Submission of Written Integrity Pledge)
The amended provisions of Article 6-2 shall apply beginning with the cases where the head of a local government or a contracting officer makes the first public announcement of a call for tenders or enters into the first negotiated contract after this Act enters into force.
Article 3 (Applicability to Restrictions on Qualifications for Participation of Unjust Enterprisers in Tendering)
The amended provisions of Article 31 shall apply beginning with the cases where the head of a local government or a contracting officer makes the first public announcement of a call for tenders or enters into the first negotiated contract after this Act enters into force.
Article 4 (Applicability to Imposition of Penalty Surcharges)
The amended provisions of Article 31-2 shall apply beginning with the cases where the first reason for restrictions on qualifications for participation in tendering occurs after this Act enters into force.
Article 5 (Applicability to Participation in Tendering on Condition of Direct Payment of Subcontract Price)
The amended provisions of Article 31-4 shall apply beginning with the cases where the head of a local government or contracting officer discovers the first offense after this Act enters into force.
Article 6 (Transitional Measures concerning Restrictions on Qualifications for Participation of Unjust Enterprisers in Tendering)
Notwithstanding the amended provisions of Articles 31 and 32 (1), the former provisions shall apply to restrictions on qualifications for participation in tendering for reasons which have occurred before this Act enters into force.
ADDENDA <Act No. 12844, Nov. 19, 2014>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 7 Omitted.
ADDENDUM <Act No. 14194, May 29, 2016>
This Act shall enter into force six months after the date of its promulgation.
ADDENDA <Act No. 14197, May 29, 2016>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 4 Omitted.
ADDENDA <Act No. 14839, Jul. 26, 2017>
Article 1 (Enforcement Date)
(1) This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 6 Omitted.
ADDENDUM <Act No. 15296, Dec. 26, 2017>
This Act shall enter into force on the date of its promulgation.
ADDENDA <Act No. 16042, Dec. 24, 2018>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation: Provided, That the amended provisions of Article 31 (6) shall enter into force on the date of its promulgation.
Article 2 (Applicability to Restriction on Qualifications for Participation in Tendering)
The amended provisions of subparagraph 7 (c), (f), and (g) of Article 31 (1) shall begin to apply where any reason for restriction on qualifications for participation in tendering pursuant to the same amended provisions first occurs after this Act enters into force.
ADDENDA <Act No. 17348, Jun. 9, 2020>
Article 1 (Enforcement Date)
This Article shall enter into force six months after the date of its promulgation.
Articles 2 through 15 Omitted.
ADDENDUM <Act No. 17523, Oct. 20, 2020>
This Act shall enter into force on the date of promulgation.
ADDENDA <Act No. 17555, Oct. 20, 2020>
Article 1 (Enforcement Date)
This Article shall enter into force six months after the date of its promulgation.
Articles 2 through 3 Omitted.