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ENFORCEMENT DECREE OF THE GOVERNMENT PROCUREMENT ACT
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ENFORCEMENT DECREE OF THE GOVERNMENT PROCUREMENT ACT
ENFORCEMENT DECREE OF THE GOVERNMENT PROCUREMENT ACT
INTRODUCTION
Details of Enactment and Amendment
- This Decree was enacted in 1994 and amended in 1998, 2000, 2002 and 2004 in order to prescribe the detailed contents regarding procedures,
scope, etc. of procurement business delegated by the Government Procurement Act.
Main Contents
- This Decree prescribes that the Administrator of the Supply Administration may conclude a contract whereby he fixes unit price in
advance when acknowledged necessary for contract of manufacture, purchase, processing, etc. required jointly by user agencies, and
the user agency may handle the request for delivery of the material concerned and payment thereof directly, where such contracted
is concluded, he shall inform the user agencies of the contents.
- This Decree prescribes that in purchasing the material jointly required by user agencies, where it is acknowledged as necessary
to satisfy the diversified demand of the user agencies, the Administrator of the Supply Administration may conclude a contract in
which 2 or more persons are other party to contract so that user agencies may choose material with the same or similar quality, performance
or efficiency.
- This Decree prescribes that where it is acknowledged as necessary to secure quality in purchasing Government material, the Administrator
of the Supply Administration may examine bidders' qualification and select qualified person who can participate in the competitive
bidding, in this case he shall lay down the standards of examination to participate in the bidding concerned in advance and let the
participants in the bidding read it before bidding.
- This Decree prescribes that for the following cases of purchasing, storing, managing and supplying the reserved material, the Administrator
of the Supply Administration may conclude a free contract:
1. Where a purchase and supply contract is concluded with a person who owns or manufactures material for which competition does not
exist;
2. Where a purchase and supply contract is concluded with a person who owns or manufactures material for which price difference or
price fluctuation is extreme by region or by quality;
3. Where a contract for entrustment of the business of purchase and supply is concluded in 1 and 2 above; and
4. Where a purchase and supply contract is concluded with a person who is equipped with special facility or equipment.
- This Decree prescribes that where it is acknowledged as necessary to conclude a contract in which 2 or more qualified persons are
other party to contract by dividing a large quantity of material in purchasing, storing, managing and supplying the reserved material,
the Administrator of the Supply Administration may conclude split contracts by means of general competitive bidding or designated
competitive bidding by limiting the quantity where it is acknowledged as necessary to conclude contract with 2 or more other parties.
ENFORCEMENT DECREE OF THE GOVERNMENT PROCUREMENT ACT
Presidential Decree No. 14435, Dec. 23, 1994
Amended by Presidential Decree No. 15831, Jul. 9, 1998
Presidential Decree No. 17011, Dec. 5, 2000
Presidential Decree No. 17689, Jul. 30, 2002
Presidential Decree No. 18634, Dec. 31, 2004
Presidential Decree No. 18903, Jun. 30, 2005
Article 1 (Purpose)
The purpose of this Decree is to provide for matters delegated by the Government Procurement Act (hereinafter referred to as the
Act ) and other matters necessary for enforcing the Act.
Article 2 (Scope for Demand Commodities)
The term commodities which are prescribed by the Presidential Decree in subparagraph 2 of Article 2 of the Act means the commodities
and service (including lease and loan) that the Administrator of the Public Procurement Service purchases and supplies from home
and abroad.
Article 3 (Scope for Reserved Commodities)
The term commodities which are prescribed by the Presidential Decree in subparagraph 3 of Article 2 of the Act means the following
commodities that the Minister of Finance and Economy puts in public notice after consulting with the head of the central administrative
agency concerned: <Amended by Presidential Decree No. 15831, Jul. 9, 1998>
1.Commodities with a high dependence toward overseas;
2.Indispensible commodities for the people s life stability; and
3.Other commodities that are recognized necessary for emergency measures for the purpose of price stability and control of demand
and supply.
Article 4 (Scope of Demanding Administrative Agency)
The term administrative agency which shall be prescribed by the Presidential Decree in subparagraph 4 (c) of Article 2 of the Act
means the institutions where the State or the local government has invested or contributed the fund or other institutions that the
Administrator of the Public Procurement Service recognizes as the demanding administrative agencies upon their request for the purchase
and supply of commodities or for the conclusion of facility construction contract.
Article 5 (Disposition of Security Deposits and Compensations for Delay)
Security deposits for bids and contracts, and compensations for any delay in connection with contracts for procurement commodities
and facility construction to be reverted to the National Treasury as damages for breach of such contracts, shall be the revenue of
demanding administrative agencies in question.
[This Article Wholly Amended by Presidential Decree No. 15831, Jul. 9, 1998]
Article 6 (Futures Trading)
(1)The Administrator of the Public Procurement Service may deal in the futures through the futures market in a case where he deems
it necessary for the stability in securing the reserved commodities and the efficiency of management thereof under Article 4 (1)
of the Act.
(2) Deleted. <by Presidential Decree No. 18634, Dec. 31, 2004>
Article 7 (Special Case for Contracting Methods concerning Demand Commodities)
(1)When the Administrator of the Public Procurement Service deems it necessary with regard to the contract for manufacture, purchase
or processing of commodities commonly used by the demanding administrative agencies under Article 5 of the Act, he may conclude a
contract where the unit price is determined in advance, but the supply order of the pertinent commodities and price payment may be
directly handled by the respective demanding administrative agencies (hereinafter referred to as unit price contract for third party
).
(2)When having concluded the unit price contract for third party under paragraph (1), the Administrator of Public Procurement Service
shall notify the contents thereof to the demanding administrative agencies.
(3)When having placed a supply order under paragraph (1), the head of the demanding administrative agency shall notify the contents
to the Administrator of the Public Procurement Service. <Amended by Presidential Decree No. 17689, Jul. 30, 2002>
(4)When procuring the commodities pursuant to paragraph (1), the head of the demanding administrative agency shall pay the fees referred
to in Article 10 to the Administrator of the Public Procurement Service.
(5) The Administrator of the Public Procurement Service may conclude a long term contract in spite of fiscal year, if necessary, for
the stable supply under Article 5 of the Act.
Article 7-2 (Contract for Goods with Many Suppliers)
(1) The Administrator of the Public Procurement Service may, if deemed necessary to satisfy diverse demands of the demanding administrative
agencies, conclude a supply contract which makes 2 or more persons the partners of contract so as to enable the said agencies to
be able to select the goods that are equal or similar in their quality, performance or efficiency, etc., in purchasing the goods
jointly required by each demanding administrative agency under the provisions of Article 5 of the Act. <Amended by Presidential
Decree No. 18634, Dec. 31, 2004>
(2) The partners of contract as referred to in paragraph (1) shall be the persons who have been decided to be the successful bidders
through the price negotiations, and who satisfy the criteria set by the Administrator of the Public Procurement Service in consultation
with the Minister of Finance and Economy, after evaluating the financial status and the records of delivery of goods, etc. of bidders.
<Newly Inserted by Presidential Decree No. 18634, Dec. 31, 2004>
(3)Notwithstanding the provisions of paragraph (2), if deemed necessary pursuant to the peculiarity of contract, the successful bidder
may be decided in the order of bidders whose ratio of bidding amounts to the estimated prices fixed by goods (in the case of joint
sizes, one is fixed) is low. <Amended by Presidential Decree No. 18634, Dec. 31, 2004>
(4)Criteria and procedures as referred to in paragraphs (1) through (3) shall be determined by the Administrator of the Public Procurement
Service in consultation with the Minister of Finance and Economy. <Amended by Presidential Decree No. 18634, Dec. 31, 2004>
[This Article Newly Inserted by Presidential Decree No. 17689, Jul. 30, 2002]
Article 8 (Prior Examination for Qualification of Bid Participation)
(1)The Administrator of the Public Procurement Service may select the eligible persons to participate in the public tender through
prior examination of the bid price in a case where he acknowledges that it is particularly necessary for the quality warranty in
purchasing the procurement commodities under Article 5 of the Act.
(2)When intending to examine the qualification of the bid participants under paragraph (1), the Administrator of the Public Procurement
Service shall prepare the guidelines for the examination of the qualification of bid participation in advance, and offer them for
the bid participants perusal.
Article 9 (Special Case of Contracting Methods concerning Reserved Commodities)
(1)With regard to purchase, storage, handling or supply of the reserved commodities under Article 5 of the Act, the Administrator
of the Public Procurement Service may do so by way of a free contract in spite of the provisions of other Acts and subordinate statutes
in case of any of the following subparagraphs:
1.Conclusion of a contract for purchase or supply with the person who owns or manufactures non-competitive commodities;
2.Conclusion of a contract for purchase or supply with the person who owns or manufactures the commodities the difference or fluctuations
of price of which depending upon the region or quality is very unusual;
3.Conclusion of a contract to entrust purchase or supply with others in case of subparagraphs 1 and 2; or
4.Conclusion of a contract for storage, handling or supply with a person holding particular facilities or equipment.
(2) When the Administrator of the Public Procurement Service acknowledges that it is necessary to conclude the contracts with two
or more persons with a certain qualification by splitting a large quantity of commodities with regard to purchase, storage, handling,
or supply of the reserved commodities under Article 5 of the Act, he may conclude the split contracts for a limited quantity by way
of a typical competition or a competition among the pre-nominees notwithstanding the provisions of other Acts and subordinate statutes.
(3) When having concluded a contract referred to in paragraph (1), the Administrator of the Public Procurement Service shall report
it to the Board of Audit and Inspection.
Article 10 (Determination of Fees)
The service fees as referred to in Article 6 of the Act shall be determined by the Administrator of the Public Procurement Service
in consultation with the Minister of Finance and Economy.
[This Article Wholly Amended by Presidential Decree No. 18634, Dec. 31, 2004]
Article 11 (Determination, etc. of Supply Price for Procurement Commodities)
(1)The Administrator of the Public Procurement Service shall determine the supply price of demand commodities (excluding stored commodities)
by adding a purchasing commission to the purchasing cost (including the expenses directly necessary for management such as commodity
prices and handling charges): Provided, That if the supply of demand commodities is delayed by any cause other than a cause for which
a demanding administrative agency is responsible, a purchasing commission may not be added to the purchasing cost. <Amended by
Presidential Decree No. 15831, Jul. 9, 1998>
(2)The Administrator of the Public Procurement Service shall determine the selling price of reserved commodities and the supply price
of stored commodities among demand commodities in consideration of the purchasing cost (including the expenses directly necessary
for management such as commodity prices and handling charges), and the trend of demand and supply and price of such commodities,
etc. <Newly Inserted by Presidential Decree No. 15831, Jul. 9, 1998>
(3) If the selling price of reserved commodities as provided in paragraph (2) exceeds the purchasing cost, the balance amount shall
be the revenue of the special accounts for the government procurement. <Amended by Presidential Decree No. 15831, Jul. 9, 1998>
Article 12 (Payment Period, etc. of Purchase Price for Procured Commodities and Fees)
(1) The head of the demanding administrative agency shall directly pay the purchase price for the demand commodities to the other
party to the contract in case where a delivery of demand commodities has been normally performed under the contract concluded by
the Administrator of the Public Procurement Service. In this case, the head of the demanding administrative agency shall notify the
Administrator of the Public Procurement Service of the details of paying the purchase price, after the completion of such payment.
<Amended by Presidential Decree No. 17689, Jul. 30, 2002>
(2) Notwithstanding the provisions of paragraph (1), in case where the demanding administrative agency requests the Administrator
of the Public Procurement Service to preferentially pay the purchase price for procured commodities on account of its fund situations,
the said Administrator may pay the said price to the other party to the contract. <Newly Inserted by Presidential Decree No. 17689,
Jul. 30, 2002>
(3) In case where the Administrator of the Public Procurement Service intends to collect from the demanding administrative agency
the fees under the provisions of Article 10 or the purchase price for procured commodities preferentially paid under the provisions
of paragraph (2), he shall make in advance the notice of payment to the demanding administrative agency. <Newly Inserted by Presidential
Decree No. 17689, Jul. 30, 2002>
(4)The head of the demanding administrative agency shall pay the fees for procured commodities or the purchase price for procured
commodities preferentially paid by the Administrator of the Public Procurement Service, within 15 days from the day the said Administrator
has made a notice of payment under the provisions of paragraph (3). <Newly Inserted by Presidential Decree No. 17689, Jul. 30,
2002; Presidential Decree No. 18634, Dec. 31, 2004>
(5) The Administrator of the Public Procurement Service shall have the demanding administrative agency pay the selling price for the
reserved commodities before their delivery: Provided, That in case where it is necessary for a smooth performance of the reserving
service, including where the fund of demanding administrative agency is insufficient, etc., the said Administrator may have the selling
price paid after the delivery of reserved commodities. <Amended by Presidential Decree No. 18634, Dec. 31, 2004>
(6) The Administrator of the Public Procurement Service may have the demanding administrative agency add the amount equivalent to
one hundredth of the purchase price for procured commodities and the fees therefor to the original price and fees as the arrearages
and pay it, if the demanding administrative agency fails to pay the original price and fees within the payment period.
Article 13 (Entrustment of Facilities Maintenance)
The Administrator of the Public Procurement Service may entrust any of those persons listed in the following subparagraphs with the
maintenance and operation of the warehouse, open storage yard, and other facilities under Article 7 of the Act:
1.A state agency in charge of handling the commodities and storage thereof; and
2.Other persons who are recognized by the Administrator of the Public Procurement Service as a suitable person for the performance
of maintenance and operation of the facilities.
Article 14 (Procedure and Scope, etc. of Purchase of Demand Commodities)
The head of the demanding administrative agency shall request the purchase and supply of the commodities to the Administrator of the
Public Procurement Service in case of the necessity of demand commodities: Provided, That the head of the demand administrative agency
may directly purchase the demand commodities in any case of the following subparagraphs: <Amended by Presidential Decree No. 15831,
Jul. 9, 1998>
1.Where he urgently purchases the necessary commodities for natural disasters, urgent event, and other similar cases;
2.Where he purchases the necessary commodities related to the national defense service or other circumstances where any operation
of the State shall be kept in secret;
3.Where the demanding administrative agency has been entrusted with the purchase from the Administrator of the Public Procurement
Service pursuant to the Ordinance of the Ministry of Finance and Economy;
4.With regard to the service referred to in Article 2, where it is recognized that direct purchase thereof by the demanding administrative
agency would be appropriate;
5.With regard to the commodities other than the construction materials commonly used by the demanding administrative agencies, where
the head of the local government acknowledges that such commodities would be of cheaper price and of higher quality, if directly
purchased from the local suppliers, and wishes so purchase without delay; and
6.Where the demanding administrative agency as referred to in Article 4 purchases the commodities (excluding the case where the demanding
administrative agency shall request the Administrator of the Public Procurement Service to purchase as prescribed by the other Acts
and subordinate statutes).
Article 15 (Procedure and Scope, etc. of Construction Contract)
(1) The head of the demanding administrative agency shall request the Administrator of the Public Procurement Service to conclude
a contract for the construction under his control, which falls under any of the following subparagraphs: Provided, That in the case
of subparagraph 2, the same shall not be applicable after January 1, 2010: <Amended by Presidential Decree No. 15831, Jul. 9,
1998; Presidential Decree No. 17011, Dec. 5, 2000; Presidential Decree No. 18634, Dec. 31, 2004>
1.State agencies: Any construction whose estimated price, as provided in Article 2 of the Enforcement Decree of the Act on Contracts
to Which the State is a Party, is not less than three billion won (three hundred million won in case of electric construction, and
information and communication construction);
2.Local governments: Any construction subject to an advance examination of a qualification to participate in a bid as provided in
Article 13 of the Enforcement Decree of the Act on Contracts to Which the State is a Party, and any construction subject to a bid
by an alternative plan, a bid on a package deal basis as provided in Article 79 of the same Enforcement Decree; and
3.Administrative agencies as provided in Article 4: Any construction for which the Administrator of the Public Procurement Service
is requested to conclude a contract under other Acts and subordinate statutes.
(2) The demanding administrative agency may directly conclude the contract for construction in spite of paragraph (1) in a case of
the following subparagraphs:
1.For natural disasters or emergency events and other similar cases;
2.For emergency restoration work on disasters or accidents;
3.For national defense service or any operation of the State agencies to be kept in secret; and
4.For the special construction for which, considering the technical characteristics on working, superintendence, defect repair, etc.,
the demanding administrative agency deems it appropriate to directly conclude a contract and consulted in advance with the Administrator
of the Public Procurement Service.
(3) Even if the head of the demanding administrative agency may directly conclude a contract for construction under paragraphs (1)
and (2), he may request the Administrator of the Public Procurement Service to conclude such contract when deemed necessary.
(4)The Administrator of the Public Procurement Service may set up and enforce the detailed criteria concerning the procedure for construction
contract and post administration when deemed necessary.
(5)The head of the demanding administrative agency shall submit to the Administrator of the Public Procurement Service a written performance
plan for the constructions under his control for which he will ask the Administrator of the Public Procurement Service within the
pertinent fiscal year in the form as prescribed by the Ordinance of the Ministry of Finance and Economy by January 20 of every year:
Provided, That, with regard to the project for which a budget has been assigned in terms of an aggregate amount requiring a performance
plan per each unit project to be established, the head of the demanding administrative agency shall submit it within 20 days after
the establishment thereof. <Amended by Presidential Decree No. 15831, Jul. 9, 1998>
(6) The Administrator of the Public Procurement Service may conduct the design service, the examination of construction costs and
the construction management, etc. on behalf of the head of the demanding administrative agency with regard to the facility construction
pursuant to subparagraph 2 of Article 3 of the Act, when so requested by the said head. <Amended by Presidential Decree No. 18634,
Dec. 31, 2004>
Article 15-2 (Prior Examination of Construction Costs of Local Governments)
(1)With regard to the construction whose estimated costs are not less than 10 billion won, the heads of local governments shall request
the Administrator of the Public Procurement Service to make a prior examination of its construction costs: Provided, That if it falls
under any one of the following subparagraphs, he may refrain from requesting him to do so:
1.Natural disaster, urgent events and other cases corresponding thereto;
2.In case where restoration works are made due to disasters or accidents; and
3.Other cases needed due to the peculiarity or urgency, etc. of construction works.
(2) In case where the Administrator of the Public Procurement Service has been requested to make a prior examination of construction
costs as referred to in paragraph (1), he shall notify the heads of local governments concerned of the results thereof within 10
days from the date of receiving the said request, unless he has any special reasons.
[This Article Newly Inserted by Presidential Decree No. 18634, Dec. 31, 2004]
Article 16 (Handling of Accident to Procurement Commodities)
If any accident happens to the ship which is loaded with the procurement commodities imported from abroad, the Administrator of the
Public Procurement Service shall handle it according to the international practice and notify the results to the demanding administrative
agency.
Article 17 (Utilization of Electronic Procurement)
(1) The Administrator of the Public Procurement Service may perform the government procurement projects as referred to in Article
3 of the Act by the electronic procurement mode (referring to the transaction mode in which the whole or part of the procurement
projects are dealt with by the digital documents under subparagraph 1 of Article 2 of the Framework Act on Electronic Commerce; hereinafter
the same shall apply).
(2) The Administrator of the Public Procurement Service may create and operate the information processing apparatus (hereinafter referred
to as the national comprehensive electronic procurement systems ) that is designated and publicly notified by the Minister of Finance
and Economy as referred to in Article 22 (1) of the Enforcement Decree of the Act on Contracts to Which the State is a Party, in
order to execute the procurement projects under the electronic procurement mode as referred to in paragraph (1) and to support the
contracting affairs of the demanding administrative agencies.
(3)In case where any demanding administrative agency intends to request a conclusion of contract for the purchase or provision of
procurement commodities, or facility construction, it shall utilize the national comprehensive electronic procurement systems as
referred to in the provisions of paragraph (2): Provided, That the same shall not be applicable in case where the national comprehensive
electronic procurement systems cannot be utilized due to inevitable causes, including natural disaster and electronic impediments.
(4)The Administrator of the Public Procurement Service may take necessary measures, including educational and technological supports
so as to make the demanding administrative agencies utilize the national comprehensive electronic procurement systems.
(5)In order to support the smooth performance of contracting affairs of the demanding administrative agencies, the Administrator of
the Public Procurement Service may collect the information, etc. concerning the contract within the limit of required scope and provide
them, or provide the service required for electronic transactions.
(6) The Administrator of the Public Procurement Service may set the standards for the matters required for the creation and operation
of the national comprehensive electronic procurement systems and the execution of the electronic procurement services, and operate
them.
[This Article Wholly Amended by Presidential Decree No. 18634, Dec. 31, 2004]
Article 18 (Designation of Excellent Procurement Commodities)
(1) The Administrator of the Public Procurement Service may, in order to improve the quality of procurement commodities, designate
and publicly notify those commodities which fall under any of the following subparagraphs, and whose performance, technology or quality
is excellent, as the excellent procurement commodities: <Amended by Presidential Decree No. 18903, Jun. 30, 2005>
1.Commodities produced by executing the patented invention under the Patent Act, the registered utility model under the Utility Model
Act, and the registered design under the Design Protection Act;
2.Commodities applying the new technology, those of excellent quality, environment-friendly commodities or those of resource-recycling
which are recognized or recommended by the competent Minister or the person under his delegation; and
3.Other commodities which the Administrator of the Public Procurement Service recognizes as pertinent to be designated as the excellent
procurement commodities.
(2)Matters necessary for the detailed selection criteria, selection procedures, post-management, etc. of the excellent procurement
commodities under paragraph (1) shall be designated and publicly notified by the Administrator of the Public Procurement Service.
[This Article Newly Inserted by Presidential Decree No. 17011, Dec. 5, 2000]
ADDENDA
(1) (Enforcement Date) This Decree shall enter into force on January 1, 1995.
(2) (Repeal of other Acts and Subordinate Statutes) The Enforcement Decree of the Government Procurement Fund Act shall be repealed.
ADDENDA <Presidential Decree No. 15831, Jul. 9, 1998>
(1) (Enforcement Date) This Decree shall enter into force on the date of its promulgation.
(2) (Applicable Examples of Provisions concerning Disposition of Security Deposits and Compensations for Delay) The amended provisions
of Article 5 shall be applicable starting from the portion of security deposits for bids and contracts, and compensations for any
delay which have any cause to be reverted to the National Treasury after this Decree enters into force.
(3) (Applicable Examples of Provisions concerning Price of Construction for Which Conclusion of Contract shall be Required) The amended
provisions of Article 15 (1) 1 shall be applicable starting from the portion of the construction for which demanding administrative
agencies require the Administrator of the Public Procurement Service to conclude a contract after this Decree enters into force.
ADDENDUM <Presidential Decree No. 17011, Dec. 5, 2000>
This Decree shall enter into force on the date of its promulgation.
ADDENDA <Presidential Decree No. 17689, Jul. 30, 2002>
(1) (Enforcement Date) This Decree shall enter into force on the date of its promulgation: Provided, That the amended provisions of
Article 12 shall enter into force on September 30, 2002.
(2) (Transitional Measures for Payment of Prices) The previous provisions shall govern the payment of prices under the contract concluded
before the enforcement of this Decree, notwithstanding the amended provisions of Article 12.
ADDENDA <Presidential Decree No. 18634, Dec. 31, 2004>
(1)(Enforcement Date) This Decree shall enter into force on the date of its promulgation.
(2)(Application Example concerning Payment Time Limit of Purchase Price for Procured Commodities) The amended provisions of Article
12 (4) shall be appliable starting from the portion of payment notification after the enforcement of this Decree.
(3) (Application Example concerning Prior Examination of Construction Costs) The amended provisions of Article 15-2 shall be appliable
starting from the portion of requesting the prior examination of construction costs after the enforcement of this Decree.
(4) (Special Cases concerning Self-Order of Local Governments Construction) The local governments may make a self-conclusion of construction
contracts without requesting the Administrator of the Public Procurement Service after the period pursuant to construction scales
falling under each of the following subparagraphs, notwithstanding the proviso of Article 15 (1):
1.Construction subject to prior examination of qualification for participating in bidding for less than 20 billion won: January 1,
2005;
2.Construction subject to prior examination of qualification for participating in bidding for less than 50 billion won: January 1,
2007;
3.Construction subject to prior examination of qualification for participating in bidding for not less than 50 billion won: January
1, 2008; and
4.Construction subject to alternative bidding or package bidding: January 1, 2010.
ADDENDA <Presidential Decree No. 18903, Jun. 30, 2005>
Article 1 (Enforcement Date)
This Decree shall enter into force on July 1, 2005.
Article 2 Omitted.
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