[1] Where a special measure is taken to cancel the validity of a amnesty or a disciplinary measure after a disciplinary measure was taken, whether such a special measure affects the effectiveness or illegality of the relevant disciplinary measure (negative)

[2] Where a disposition is taken by a disposition that restricts participation of unjust enterprisers in bidding, whether its effect is naturally extended to a State agency, a local government, or another public institution pursuant to Article 76(8) of the former Enforcement Decree of the Act on Contracts to which the State is a Party, Article 92(8) of the former Enforcement Decree of the Act on Contracts to which a Local Government is a Party, and Article 15(11) of the former Rules on Contracts Affairs of Public Corporations and Quasi

[3] Whether the Administrator of the Public Procurement Service, who was entrusted by the head of a central government agency with the affairs concerning contracts in the form of a request procurement contract pursuant to Article 6 (3) of the Act on Contracts to Which the State is a Party, may impose a restriction on qualification for participation in bidding against the contracting party pursuant to Article 27 (

[1] Articles 1 [General Administrative Disposition] and 19 of the Administrative Litigation Act / [2] Article 76 (8) (see current Article 76 (11)) of the former Enforcement Decree of the Act on Contracts to Which the State is a Party (Amended by Presidential Decree No. 21202, Dec. 31, 2008); Article 92 (8) of the former Enforcement Decree of the Act on Contracts to Which a Local Government Is a Party (Amended by Presidential Decree No. 21098, Oct. 29, 2008); Article 15 (1) (see current Article 15) of the former Rules on Contracts to Public Corporations and Quasi-Governmental Institutions (Amended by Ordinance of the Ministry of Strategy and Finance No. 230, Aug. 23, 201) / [3] Article 6 (3) of the former Act on Contracts to Which the State Is a Party (Amended by Presidential Decree No. 11547, Dec. 18, 2012)

[2] Supreme Court Decision 2015Du50313 Decided April 7, 2017 (Gong2017Sang, 988) / [3] Supreme Court Decision 2014Du14389 Decided June 29, 2017 (Gong2017Ha, 1578)

Non-Nez Co., Ltd. and three others (Attorneys Kim full-time et al., Counsel for the plaintiff-appellant)

The Administrator of Public Procurement Service

Seoul High Court Decision 2015Nu36739 decided May 26, 2016

All appeals are dismissed. The costs of appeal are assessed against the plaintiffs.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. Regarding ground of appeal No. 1

The court below rejected the plaintiffs' assertion that "the special amnesty and special reduction and exemption measures (hereinafter "the special measure of this case") in 2015, which were previously taken by construction companies, etc. as of August 14, 2015, should be revoked both on the ground that the "the special measure of 2015 (hereinafter "the special measure of this case") was in progress on August 13, 2015 when the judgment of the court below was in progress, and each restrictive measure of participation in bidding against the plaintiffs (hereinafter "the disposition of this case") should be revoked." The court below rejected the plaintiffs' assertion on the ground that the special measure of this case is not subject to the special measure of this case

However, even if there is a special measure to cancel the validity of amnesty or sanctions after a disciplinary measure has been taken, such a special measure may not affect the effectiveness or illegality of the relevant disciplinary measure.

Although the lower court erred in determining whether the Plaintiffs constituted a person subject to the instant special measure, it is justifiable to have rejected the allegation that the instant measure is invalid as a matter of course due to the said special measure.

2. Regarding ground of appeal No. 2

In the final appeal, the plaintiffs have reached the final appeal. ① Article 76(8) of the former Enforcement Decree of the Act on Contracts to Which the State is a Party (amended by Presidential Decree No. 21202, Dec. 31, 2008); ② Article 92(8) of the former Enforcement Decree of the Act on Contracts to Which a Local Government is a Party (amended by Presidential Decree No. 21098, Oct. 29, 2008); ③ Article 15(11) of the former Rules on Contracts to Public Corporations and Quasi-Governmental Institutions (amended by Ordinance No. 230, Aug. 23, 201) (hereinafter referred to as the “instant extension restriction provision”) of the above Articles 15(1) and (3) of the former Rules on Contracts to Which a Public Corporation or Quasi-Governmental Institutions is a Party (amended by Ordinance No. 21098, Aug. 23, 2011); thus, the defendant’s right to participate in the bidding becomes null and void.

However, the instant provision does not apply directly to a disposition of restriction on participation in bidding for the first time, but is merely a basis provision that allows another disposition authority to impose a new sanction on the basis of such disposition after a disposition of restriction on participation in bidding for the first time. Since a disposition of restriction on participation in bidding for the first time under the above extended provision does not extend naturally to a State agency, local government, or other public institution under the above extended provision, the validity of the first restriction on participation in bidding for the first time is not naturally expanded by a State agency, local government, or other public institution, it cannot be deemed that the legality or validity of the disposition itself against the plaintiffs is affected by any unconstitutional or illegality of the above provision (see,

Ultimately, the grounds of appeal on different premise with respect to the instant extension restriction provision are without merit.

3. As to the third ground for appeal

The Administrator of the Public Procurement Service is merely performing the contractual work requested by a procuring entity upon receipt of a request for contract from a procuring entity pursuant to Article 5-2 (1) or (2) of the Act on the Procurement Business (hereinafter “request procurement contract”). However, in order for the Administrator of the Public Procurement Service to impose restrictions on qualification for participation in bidding under Article 27 (1) of the Act on Contracts to Which the State is a Party on behalf of a procuring entity, it is necessary to separately provide for the grounds for delegation of work, including the grounds for the right of access or the purport of the right of access (see Supreme Court Decision 2014Du14389, Jun. 29, 2017).

Article 6(3) of the former Act on Contracts to Which the State is a Party (amended by Act No. 11547, Dec. 18, 2012; hereinafter “State Contracts Act”) provides that “The head of each central government agency may entrust another government agency with the affairs concerning contracts under his/her jurisdiction, as prescribed by the Presidential Decree.” The purpose of separate provision of the Act regarding the entrustment of contractual affairs under the State Contracts Act is to ensure complete use of the professional and systematic procurement system operated by the Public Procurement Service. ② The requesting procuring entity of the instant procurement contract was the head of the central government agency, and ③ the head of the central government agency held the authority to impose restrictions on the independent qualification to participate in the contract before being entrusted; ③ insofar as the contract affairs are entirely entrusted to the Administrator of the Public Procurement Service, the Administrator of the Public Procurement Service must perform the affairs related to the contract in accordance with the procedures prescribed by the State Contracts Act.” In full view of the foregoing, the “entrustment of contracts” under Article 6(3) of the State Contracts Act can be deemed to include the authority to impose restrictions on the right to participate in the contract.

In light of the aforementioned legal principles and the contents and purport of the relevant provisions, it is reasonable to deem that the Defendant, who was entrusted by the Commissioner General of the National Police Agency, the head of a central government agency with the contract duties in the form of a request procurement contract pursuant to Article 6(3) of the State Contracts Act, has the authority to take the instant disposition against the Plaintiffs

Therefore, although the reasoning of the court below is somewhat insufficient, the conclusion of the court below that the defendant was entitled to take the disposition of this case is just, and there is no error of law by misapprehending the legal principles on the entrustment of contract duties and the limitation of participation in bidding.

4. As to the fourth ground for appeal

The lower court determined that the instant collaborative act constitutes “the case where it is deemed that the instant collaborative act would prejudice the fair enforcement of competition or the appropriate implementation of a contract” under Article 27(1) of the State Contracts Act, taking into account the following circumstances: (a) the instant collaborative act was committed on a national scale more than 95 occasions from November 3, 2005 to September 30, 2008; (b) the business entities participating in collusion concluded a contract for installing an unmanned transport monitoring device in an area they wanted without actual competition at a higher price; and (c) if a substantial competition has occurred between the business entities participating in the bidding at the time, the bid price is presumed to have been reduced.”

In light of the relevant legal principles and records, the judgment of the court below is just, and contrary to the allegations in the grounds of appeal, there were no errors by misapprehending the legal principles on Article 27(1) of the State Contracts Act

5. Ground of appeal No. 5

The lower court determined that the instant disposition was not deemed to be a deviation or abuse of discretionary authority, considering the following: (a) the degree of illegality of the instant collaborative act is not somewhat weak; and (b) the period of sanction is set within the scope of the disposition standards

Examining the reasoning of the lower judgment in light of the relevant legal principles, the lower court did not err by misapprehending the legal doctrine on deviation and abuse of discretionary power, as alleged in the grounds of appeal.

6. Conclusion

Therefore, all appeals are dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Shin (Presiding Justice)