Act On Contracts To Which A Local Government Is A Party


Published: 2013-03-23

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 Article 1 (Purpose)   print
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 by Act No. 9423, Feb. 6, 2009]
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 Article 2 (Extent of Application)   print
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 contracts.
[This Article Wholly Amended by Act No. 9423, Feb. 6, 2009]
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 Article 3 (Applying Matters concerning Education, Science and Sports)   print
"Heads of local governments" or "Special Metropolitan City Mayor/Metropolitan City Mayors/Do Governors" shall be deemed "superintendents of offices of education", "Minister of Security and Public Administration" shall be deemed "Minister of Education", and "Ministry of Security and Public Administration" shall be deemed "Ministry of Education" in this Act concerning matters relating to education, science and sports. <Amended by Act No. 8852, Feb. 29, 2008; Act No. 11690, Mar. 23, 2013>
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 Article 4 (Relationship with other Acts)   print
Unless prescribed otherwise in other Acts, this Act shall apply to contracts to which local governments are a party.
[This Article Wholly Amended by Act No. 9423, Feb. 6, 2009]
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 Article 5 (Extent of Contracts of Local Governments by International Tender)   print
(1) The contracts with 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 Security and Public Administration 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 with local governments by international tender: <Amended by Act No. 9685, May 21, 2009; Act No. 11690, Mar. 23, 2013>
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, marine products and livestock products are purchased in accordance with the Grain Management Act, the Act on Distribution and Price Stabilization of Agricultural and Fishery Products, and 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 by Act No. 9423, Feb. 6, 2009]
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 Article 6 (Principles of Contracts)   print
(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 Acts and subordinate 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 by Act No. 9423, Feb. 6, 2009]
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 Article 7 (Commissioning or Entrustment of Contracting Duties)   print
(1) Unless prescribed otherwise by other Acts and subordinate 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 Finance 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.
(2) The contracting officers of the agencies 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 heads of central administrative agencies 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, they 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 by Act No. 9423, Feb. 6, 2009]
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 Article 8 (Vicarious Performance of Contracts)   print
(1) Where acknowledged as 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 heads of local governments 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 heads of local governments 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 by Act No. 9423, Feb. 6, 2009]
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 Article 9 (Contracting Methods)   print
(1) Where the head of a local government or contracting officer intends to conclude a contract, he/she shall announce such fact and call for open tenders: Provided, That where it is acknowledged as necessary in consideration of the purpose, character and scale of contracts, regional particularities, etc., he/she may call for tenders by designating participants or conclude negotiated contracts.
(2) Where the head of a local government or contracting officer calls for open tenders as prescribed in the main sentence of paragraph (1), he/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, financial status, location of main office, etc.
(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 contracting officer has concluded a negotiated contract as prescribed in the proviso to paragraph (1), he/she shall disclose to the public the terms of negotiated contracts, as prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9423, Feb. 6, 2009]
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 Article 10 (Tender Announcement)   print
(1) Where the head of a local government or contracting officer calls for tenders, he/she shall 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 by Act No. 9423, Feb. 6, 2009]
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 Article 11 (Preparation of Estimated Price)   print
(1) The heads of local governments or contracting officers shall prepare estimated price of matters for which tenders, negotiated contracts, etc. shall be called in accordance with the relevant books of standards, drawings, etc.: Provided, That in cases prescribed by Presidential Decree, such as where contracts are concluded with other local governments, estimated price may not be prepared or may be omitted.
(2) 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.
[This Article Wholly Amended by Act No. 9423, Feb. 6, 2009]
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 Article 12 (Tender Deposits)   print
(1) The heads of local governments or 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 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/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 by Act No. 9423, Feb. 6, 2009]
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 Article 13 (Selection of Successful Bidders)   print
(1) In tenders which are a source of revenues of local governments, 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, bidding price, volume, etc., such standards shall prevail.
(2) In tenders which place a burden on the budget of local governments, 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 bidding 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 bidding 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 by Act No. 9423, Feb. 6, 2009]
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 Article 14 (Preparation of Contract Documents and Conclusion of Contracts)   print
(1) When the heads of local governments or contracting officers intend to enter into a contract, they shall prepare contract documents (including contract documents by electronic documents under subparagraph 1 of Article 2 of the Digital Signature Act; hereinafter the same shall apply) stating clearly the purpose, amount, period of performance, contract deposit, bearing of risk, compensation for delay and other necessary matters: Provided, That in cases prescribed by Presidential Decree, the preparation of contract documents may be omitted.
(2) Where a contract document is prepared as prescribed in the main sentence of paragraph (1), a contract shall be concluded when the head of the relevant local government or contracting officer and the other party to the contract affix their names and seals on, or sign the contract document.
[This Article Wholly Amended by Act No. 9423, Feb. 6, 2009]
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 Article 15 (Contract Deposits)   print
(1) The head of a local government or 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 contracts fail to fulfill contractual obligations, the heads of local governments or contracting officers 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), they shall make parties to contracts pay an amount equivalent to such contract deposits to the relevant local governments, as prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9423, Feb. 6, 2009]
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 Article 16 (Supervision)   print
(1) Where the heads of local governments or contracting officers have concluded contracts for construction works, goods, services, etc. and acknowledge it necessary to have such contracts implemented appropriately, they 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 heads of local governments or contracting officers 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 contracting officer, or request the head of a local government or contracting officer to correct illegal or unjust acts, etc.
(4) The heads of local governments or contracting officers 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 by Act No. 9423, Feb. 6, 2009]
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 Article 17 (Inspections)   print
(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 contracting officer shall inspect it in accordance with the contract, design and other related documents, or delegate affiliated public officials, etc. for inspection: Provided, That where a contract falls under any of the following subparagraphs, the head of a local government or contracting officer may separately designate a specialized institution for inspection:
1. Construction works subject to responsible supervision under Article 27 of the Construction Technology Management Act;
2. Contracts acknowledged as requiring specialized knowledge or technology to inspect the quality of materials, capability, specification, etc.
(2) Those who inspect as prescribed in paragraph (1) shall prepare a record of inspection: Provided, That where it is unnecessary to prepare a record of inspection 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., the preparation of records of inspection may be omitted.
[This Article Wholly Amended by Act No. 9423, Feb. 6, 2009]
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 Article 18 (Payment of Consideration)   print
(1) As for contracts for construction works, goods or services, or other contracts placing a burden on the budget, the heads of local governments or contracting officers 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 Finance Act or inevitable reasons are acknowledged to exist, such as international practices, the same shall not apply.
(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 the 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 by Act No. 9423, Feb. 6, 2009]
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 Article 19 (Prepayment of Consideration)   print
In cases of sale or lease of property, supply of services or other contracts which are a source of revenues, the heads of local governments or contracting officers shall require other parties to contracts to pay the consideration thereof in advance unless prescribed otherwise in other Acts and subordinate statutes. In such cases, such parties to contracts may not pay a contract deposit under Article 15.
[This Article Wholly Amended by Act No. 9423, Feb. 6, 2009]
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 Article 20 (Obligation to Guarantee Performance of Contracts)   print
(1) When the heads of local governments or contracting officers make contracts for construction works, they shall specify the duration of obligation to guarantee performance of such contracts.
(2) When the heads of local governments or contracting officers make contracts of goods, services, etc., they 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 heads of local governments or contracting officers 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 by Act No. 9423, Feb. 6, 2009]
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 Article 21 (Deposits for Repair of Defects)   print
(1) Where the heads of local governments or contracting officers have specified the duration of obligation to guarantee performance of contracts under Article 20 (1) and (2), they 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 contracts 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 contracts have failed to fulfill the responsibilities for repair of defects, the heads of local governments or contracting officers 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 contracts have been exempted from the payment of deposits for repair of defects under the proviso to paragraph (1), the heads of local governments or contracting officers 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 heads of local governments or contracting officers are not required to transfer such amount to the relevant local governments, but may use it directly.
[This Article Wholly Amended by Act No. 9423, Feb. 6, 2009]
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 Article 22 (Adjustment of Contract Price due to Price Fluctuation, etc.)   print
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 heads of local governments or contracting officers shall adjust the contract price, as prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9423, Feb. 6, 2009]
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 Article 23 (Concluding Contracts before Beginning of Fiscal Year or Allocation of Budget)   print
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 heads of local governments or contracting officers 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 by Act No. 9423, Feb. 6, 2009]
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 Article 24 (Long-Term Continuous Contracts and Ongoing Expenditure Contracts)   print
(1) The heads of local governments or contracting officers 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 contracts 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 heads of local governments or contracting officers conclude contracts requiring several years to complete, they shall endeavor not to postpone such contracts.
[This Article Wholly Amended by Act No. 9423, Feb. 6, 2009]
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 Article 25 (Unit Price Contracts)   print
(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 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 by Act No. 9423, Feb. 6, 2009]
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 Article 26 (Unit Price Contracts for Third Parties)   print
(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 by Act No. 9423, Feb. 6, 2009]
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 Article 27 (Contracts by Estimation)   print
(1) When it is impossible to determine price in advance for contracts falling under any of the following subparagraphs, the heads of local governments or contracting officers 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 Acts and subordinate 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 heads of local governments or contracting officers 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) Where a need for early and urgent budget execution due to financial and economic policy is acknowledged, the head of a local government or contracting officer may conclude a contract for construction works or services by estimation notwithstanding paragraph (1). In such cases, the methods of tender and other necessary matters shall be prescribed by Presidential Decree:
1. Construction works below two billion won by estimation, which falls under any of the following items: Provided, That in cases where a construction work for the same structure or single construction work above two billion won by rough estimation is concluded after sequential division or dividing the volume of construction work, this shall not apply:
(a) Road construction works, and construction works of road expansion and road pavement;
(b) River construction works;
(c) Construction works of water supply and sewerage pipeline;
2. Design and supervision services relating to subparagraph 1 below 200 million won by estimation.
(4) Where the heads of local governments or contracting officers conclude contracts by estimation under the provisions of paragraphs (1) through (3), 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.
[This Article Wholly Amended by Act No. 9423, Feb. 6, 2009]
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 Article 28 (Integrated Contracts)   print
(1) The heads of local governments or contracting officers may conclude integrated contracts 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 heads of institutions relating to the conclusion of integrated contracts under paragraph (1) shall cooperate in matters necessary for the conclusion of such contracts.
[This Article Wholly Amended by Act No. 9423, Feb. 6, 2009]
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 Article 29 (Joint Contracts)   print
(1) Where acknowledged as necessary, the heads of local governments or contracting officers may conclude joint contracts, the parties to contracts of which are two or more persons.
(2) For the balanced regional development and efficient implementation of construction works, etc., matters necessary for joint contracts between large enterprises and small and medium enterprises or between small and medium enterprises among joint contracts under paragraph (1) shall be prescribed by Presidential Decree.
(3) Where joint contracts are concluded as prescribed in paragraph (1), contracts shall be concluded when heads of the relevant local governments or contracting officers and parties to contracts collectively affix their names and seal on or sign the contract documents.
[This Article Wholly Amended by Act No. 9423, Feb. 6, 2009]
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 Article 30 (Compensation for Delay)   print
(1) The heads of local governments or contracting officers shall require parties to contracts who have delayed implementing contracts without justifiable reasons to pay compensation for delay.
(2) The amount of compensation for delay under paragraph (1), method of payment and other necessary matters shall be prescribed by Presidential Decree.
(3) If parties to contracts fail to pay compensation for delay, the heads of local governments or contracting officers may offset it by the payment of consideration under Article 18.
[This Article Wholly Amended by Act No. 9423, Feb. 6, 2009]
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 Article 31 (Restrictions on Qualifications of Unjust Enterprisers to Participate in Tenders)   print
(1) The heads of local governments shall restrict qualifications to participate in a tender within two years after deliberation by a contract deliberation committee under Article 32 of those who are apprehended to damage the fair performance of competition or appropriate implementation of contracts, or are acknowledged as inappropriate to allow participation in a tender (hereinafter referred to as "unjust enterprisers"), as prescribed by Presidential Decree: Provided, That where reasons prescribed by Presidential Decree exist, such qualifications to participate in a tender may be restricted without deliberation by a contract deliberation committee.
(2) Those who have been restricted from participating in a tender as prescribed in paragraph (1) shall be restricted from participating in all tenders implemented by all local governments during such restricted period. The same shall apply to those who have been restricted from participating in a tender under other Acts and subordinate statutes.
[This Article Wholly Amended by Act No. 9423, Feb. 6, 2009]
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 Article 32 (Establishment and Operation of Contract Deliberation Committees)   print
(1) In order to deliberate on the relevance and legality of matters in the following subparagraphs concerning contracts of a scale above that prescribed by Presidential Decree, the head of a local government shall establish and operate a contract deliberation committee:
1. Matters concerning restrictions on qualifications of tender participants;
2. Matters concerning the methods of concluding contracts;
3. Matters concerning the methods of selecting successful bidders;
4. Matters concerning restrictions on participation of unjust enterprisers in a tender;
5. Other matters acknowledged by the heads of local governments as necessary to deliberate on.
(2) Contract deliberation committees under paragraph (1) shall notify the heads of local governments of the results of deliberation without delay, and the heads of local governments shall reflect such results of deliberation in tenders, conclusion of contracts, restrictions on participation of unjust enterprisers in tenders, etc. unless special reasons exist to the contrary.
(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 by Act No. 9423, Feb. 6, 2009]
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 Article 33 (Restrictions on Participation in Tenders and Conclusion of Contracts)   print
(1) No head of any local government or local council member shall conclude any contract with such local governments 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 local government;
2. Spouse of a local council member of local government;
3. Lineal ascendant or descendant of the head of local government or his/her spouse;
4. Lineal ascendant or descendant of a local council member of local government or his/her spouse;
5. Enterpriser (including a juristic person; hereinafter the same shall apply) in a relationship under the following items with the head or local council members of 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 local council member of 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 local government and persons falling under subparagraphs 1, 3 and 5 occupy 50/100 or more of the total capital of such enterpriser;
7. Enterpriser in which the total amount of capital possessed by local council members of local government and persons falling under subparagraphs 2, 4 and 5 occupy 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 by Act No. 9423, Feb. 6, 2009]
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 Article 34 (Raising Objections)   print
(1) Those who have been disadvantaged due to matters falling under any of the following subparagraphs in the process of concluding contracts with local governments by an 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 prescribed by Presidential Decree.
(2) Objections shall be raised within fifteen days from the date they were disadvantaged or within ten days from the date they knew that they had been disadvantaged due to matters falling under any of the subparagraphs of paragraph (1) to the heads of the relevant local governments.
(3) The heads of the relevant local governments shall examine objections within ten days after they received such objections, take measures of rectification, etc. and notify the requesters of the result thereof without delay.
(4) Those who are 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 fifteen days after they received such notification.
[This Article Wholly Amended by Act No. 9423, Feb. 6, 2009]
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 Article 35 (Establishment of Contract Dispute Conciliation Committee of Local Governments)   print
(1) In order to examine and conciliate requests for reexamination under Article 34 (4), a contract dispute conciliation committee of local governments (hereinafter referred to as "Committee") shall be established within the Ministry of Security and Public Administration. <Amended by Act No. 11690, Mar. 23, 2013>
(2) The composition and operation of the Committee and other necessary matters shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9423, Feb. 6, 2009]
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 Article 36 (Suspension of Contracting Procedures, etc.)   print
(1) Where the Committee commences examination and conciliation, it shall notify the requesters and 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 by Act No. 9423, Feb. 6, 2009]
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 Article 37 (Examination and Conciliation)   print
(1) The Committee shall make examination and conciliation within fifty days from the date it receives each request for reexamination unless special reasons exist to the contrary.
(2) Where the Committee has made examination and conciliation under paragraph (1), it shall notify the requesters and the heads of relevant local governments of the result thereof without delay.
(3) If the requesters and the heads of relevant local governments fail to raise an objection to the Committee within fifteen days from the date they receive notification under paragraph (2), an agreement to conciliation shall be deemed to have been reached.
[This Article Wholly Amended by Act No. 9423, Feb. 6, 2009]
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 Article 38 (Deemed Public Officials in Applying Penal Provisions)   print
Contracting officers of specialized institutions under Article 7 (1), resident supervisors under Article 16 (2) and members of the contract deliberation committees under Article 32 (1) shall be deemed public officials in applying to their duties penal provisions under the Criminal Act or other Acts.
[This Article Wholly Amended by Act No. 9423, Feb. 6, 2009]
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 Article 39 (Training of Local Public Officials in Charge of Contracting)   print
The Minister of Security and Public Adminstration may conduct training necessary to upgrade the caliber of local public officials in charge of contracting. <Amended by Act No. 11690, Mar. 23, 2013>
[This Article Wholly Amended by Act No. 9423, Feb. 6, 2009]
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 Article 40 (Submission of Statements on Results of Contracts)   print
The heads of local governments shall submit statements on results of contracts to the Minster of Security and Public Administration, as prescribed by Presidential Decree. <Amended by Act No. 11690, Mar. 23, 2013>
[This Article Wholly Amended by Act No. 9423, Feb. 6, 2009]
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 Article 41 (Consultation on Acts and Subordinate Statutes concerning Contracts)   print
When the heads of central administrative agencies draft Acts and subordinate statutes concerning the contracts of local governments, they shall consult with the Minster of Security and Public Administration in advance. <Amended by Act No. 11690, Mar. 23, 2013>
[This Article Wholly Amended by Act No. 9423, Feb. 6, 2009]
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 Article 42 (Evaluation)   print
(1) Where contracts concluded by local governments fall under any of the following subparagraphs, the heads of local governments shall make an evaluation of construction process, construction quality, etc. or recommend specialized organizations for evaluation thereof:
1. Supply of goods and services of a scale above that prescribed by Presidential Decree;
2. Construction works of a scale above that prescribed by Presidential Decree: Provided, That cases of making an evaluation of construction under Article 36 of the Construction Technology Management Act shall be excluded.
(2) Evaluations under paragraph (1) shall be made after the implementation of contracts have been completed in principle: Provided, That to cases prescribed by Presidential Decree, this shall not apply.
(3) When the heads of local governments or contracting officers perform acts falling under any of the following subparagraphs, they may reflect the results of evaluations under paragraph (1) and the results of construction evaluations under Article 36 of the Construction Technology Management Act therein:
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 Wholly Amended by Act No. 9423, Feb. 6, 2009]
ADDENDA
(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 Acts and subordinate Statutes) Where the provisions of the previous Local Finance Act have been cited in relation to contracts with local governments in other Acts and subordinate statutes 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.