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Act on contracts to which a local government is a party

제13편 지방제도 지방자치단체를 당사자로 하는 계약에 관한 법률

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

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 by Act No. 9423, Feb. 6, 2009]

Article 2 (Extent 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 contracts.

[This Article Wholly Amended by Act No. 9423, Feb. 6, 2009]

Article 3 (Applying Matters concerning Education, Science and Sports) Heads of local governments<.. image removed ..> or Special Metropolitan City Mayor/Metropolitan City Mayors/Do Governors<.. image removed ..> shall be deemed superintendents of offices of education , Minister of Public Administration and Security shall be deemed Minister of Education, Science and Technology , and Ministry of Public Administration and Security shall be deemed Ministry of Education, Science and Technology in this Act concerning matters relating to education, science and sports. <Amended

by Act No. 8852, Feb. 29, 2008>

Article 4 (Relationship with other Acts)

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]

Article 5 (Extent of Contracts of Local Governments by International

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ACT ON CONTRACTS TO WHICH A LOCAL GOVERNMENT IS A PARTY

Tender)

(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 Public
Administration and Security 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: <AmendedbyActNo.9685,May21,2009>
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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제13편 지방제도 지방자치단체를 당사자로 하는 계약에 관한 법률

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 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]

Article 7 (Commissioning or Entrustment of Contracting Duties)

(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]

Article 8 (Vicarious Performance of Contracts)

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ACT ON CONTRACTS TO WHICH A LOCAL GOVERNMENT IS A PARTY

(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]

Article 9 (Contracting Methods)

(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

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제13편 지방제도 지방자치단체를 당사자로 하는 계약에 관한 법률

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]

Article 10 (Tender Announcement)

(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]

Article 11 (Preparation of Estimated Price)

(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]

Article 12 (Tender Deposits)

(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

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ACT ON CONTRACTS TO WHICH A LOCAL GOVERNMENT IS A PARTY

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]

Article 13 (Selection of Successful Bidders)

(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]

Article 14 (Preparation of Contract Documents and Conclusion of

Contracts)

(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

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제13편 지방제도 지방자치단체를 당사자로 하는 계약에 관한 법률

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]

Article 15 (Contract Deposits)

(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]

Article 16 (Supervision)

(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,

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ACT ON CONTRACTS TO WHICH A LOCAL GOVERNMENT IS A PARTY

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]

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 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

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제13편 지방제도 지방자치단체를 당사자로 하는 계약에 관한 법률

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]

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 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]

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 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]

Article 20 (Obligation to Guarantee Performance of Contracts)

(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

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ACT ON CONTRACTS TO WHICH A LOCAL GOVERNMENT IS A PARTY

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]

Article 21 (Deposits for Repair of Defects)

(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

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제13편 지방제도 지방자치단체를 당사자로 하는 계약에 관한 법률

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]

Article 22 (Adjustment of Contract Price due to Price Fluctuation, etc.) 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]

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 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]

Article 24 (Long-Term Continuous Contracts and Ongoing Expenditure

Contracts)

(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.

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ACT ON CONTRACTS TO WHICH A LOCAL GOVERNMENT IS A PARTY

(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]

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
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]

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 DoGovernors 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]

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 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

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제13편 지방제도 지방자치단체를 당사자로 하는 계약에 관한 법률

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 expostfactosettlement of payment prescribe by Presidential Decree,
through tender announcement, etc.

[This Article Wholly Amended by Act No. 9423, Feb. 6, 2009]

Article 28 (Integrated Contracts)

(1) The heads of local governments or contracting officers may conclude

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ACT ON CONTRACTS TO WHICH A LOCAL GOVERNMENT IS A PARTY

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]

Article 29 (Joint Contracts)

(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]

Article 30 (Compensation for Delay)

(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]

Article 31 (Restrictions on Qualifications of Unjust Enterprisers to

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제13편 지방제도 지방자치단체를 당사자로 하는 계약에 관한 법률

Participate in Tenders)

(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]

Article 32 (Establishment and Operation of Contract Deliberation

Committees)

(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,

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ACT ON CONTRACTS TO WHICH A LOCAL GOVERNMENT IS A PARTY

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]

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 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

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제13편 지방제도 지방자치단체를 당사자로 하는 계약에 관한 법률

be prescribed by Presidential Decree.

[This Article Wholly Amended by Act No. 9423, Feb. 6, 2009]

Article 34 (Raising Objections)

(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]

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), a contract dispute conciliation committee of local governments
(hereinafter referred to as Committee ) shall be established within the
Ministry of Public Administration and Security.
(2) The composition and operation of the Committee and other necessary

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ACT ON CONTRACTS TO WHICH A LOCAL GOVERNMENT IS A PARTY

matters shall be prescribed by Presidential Decree.

[This Article Wholly Amended by Act No. 9423, Feb. 6, 2009]

Article 36 (Suspension of Contracting Procedures, etc.)

(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 exofficio 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]

Article 37 (Examination and Conciliation)

(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]

Article 38 (Deemed Public Officials in Applying Penal Provisions) 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]

Article 39 (Training of Local Public Officials in Charge of Contracting) The Minister of Public Adminstration and Security may conduct training necessary to upgrade the caliber of local public officials in charge of contracting.

[This Article Wholly Amended by Act No. 9423, Feb. 6, 2009]

Article 40 (Submission of Statements on Results of Contracts)

The heads of local governments shall submit statements on results of contracts to the Minster of Public Administration and Security, as prescribed

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제13편 지방제도 지방자치단체를 당사자로 하는 계약에 관한 법률

by Presidential Decree.

[This Article Wholly Amended by Act No. 9423, Feb. 6, 2009]

Article 41 (Consultation on Acts and Subordinate Statutes concerning

Contracts)

When the heads of central administrative agencies draft Acts and subordinate statutes concerning the contracts of local governments, they
shall consult with the Minister of Public Administration and Security in
advance.

[This Article Wholly Amended by Act No. 9423, Feb. 6, 2009]

Article 42 (Evaluation)

(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]

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ACT ON CONTRACTS TO WHICH A LOCAL GOVERNMENT IS A PARTY

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

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제13편 지방제도 지방자치단체를 당사자로 하는 계약에 관한 법률

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.

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