(영문) 서울행정법원 2018.1.12. 선고 2016구합83297 판결

The Defendant’s revocation of the Plaintiff’s eligibility to participate in competitive tendering process open only to small and medium entrepreneurs on December 8, 2016 and the restriction on the acquisition of eligibility to participate (six months) shall be revoked.

Reasons

1. Details of the disposition;

A. On December 20, 2012, the Plaintiff was established on December 20, 2012, and is engaged in the production, sales, etc. of high-Robbery concrete files (PHC files). Meanwhile, on February 1, 2013, the Plaintiff entered into a contract to acquire all rights and obligations related to the production and sales of PHC files, and assets and liabilities from B (hereinafter “B”).

B. The Korea Won-Seung concrete industrial cooperative (hereinafter referred to as the "cooperative of this case") is a non-profit corporation established mainly with the purpose of developing the concrete industry and promoting the welfare of its members by domestic small and medium enterprises that produce the main text of the concrete for telecommunication, including the 17th unit file production and distribution business (the plaintiff, New Asia-Se Industrial Development Co., Ltd., Oil Industry Development Co., Ltd., Simjin Industry Co., Ltd., Ltd., Simjin Industries Co., Ltd., Ltd., Simsan Industries Co., Ltd., Ltd., Ltd., Masan, Seomsan, Seosan Co., Ltd., Ltd., Ltd., Mawon-Seng Co., Ltd., Ltd., Ltd., Ltd., Mawon-Seng Co., Ltd., Ltd., the members of the cooperative of this case, including the plaintiff, referred to as the "members of the cooperative of this case") around February 190.

C. The prosecutor, in collusion with 23 executives and employees of the instant member companies, including C and D, the representative director of the Plaintiff, from July 201 to May 24, 2016, the instant union and the instant member companies, designated a successful bidder in advance (the instant union or the instant member companies) and designated a successful bidder with respect to the purchase of government-grade PHC files between the instant member companies from July 24, 2011 to May 24, 2016, the instant association and the instant member companies, and participated in the bid at a higher price than the pre-determined bid price, and the remaining company had the successful bidder be awarded a successful bidder in the manner of not participating in the relevant tender, or had the authority awarding the contract by intentionally failing to select a successful bidder in excess of the initial bid price or the estimated price so as not to have the successful bidder be selected by a negotiated bid, and then had a certain company change the contract method by a negotiated contract, and then prosecuted the bid price of 365,3729,3639.

D. C was sentenced to three years of suspended sentence on September 21, 2016, while D was sentenced to two years of suspended sentence on October 10 (Seoul Central District Court Decision 2016Da4187, 5376 (merged)). C and D appealed appealed against them, but the Seoul Central District Court dismissed the above appeal on February 3, 2017 (Seoul Central District Court Decision 2016No3816), and C and D appealed appealed to the Supreme Court (Supreme Court Decision 2017Do3426).

E. On December 8, 2016, the Defendant issued a disposition to revoke the qualification to participate in competitive bidding and to restrict the acquisition of participation eligibility (hereinafter referred to as “instant disposition”) on the ground that the instant collaborative act against the Plaintiff constitutes “an unfair act, such as collusion,” as prescribed by Article 8(3)3 of the Act on Promotion of Purchase of Small and Medium Enterprise Products and Development Support (hereinafter referred to as the “Distribution Support Act”).

F. Meanwhile, on September 1, 2016, the Administrator of the Public Procurement Service: (a) led the Plaintiff to the instant collusion with the instant member companies on a total of 109 occasions, ordered a government-funded PHC file purchase contract under the Plaintiff’s name or awarded a bid for a total of 169 times; (b) subsequently dismissed the Plaintiff’s lawsuit against the Plaintiff on September 1, 2016 on the ground that it was awarded a government-funded PHC file purchase contract equivalent to KRW 62,381,652,50 in total by distributing the Plaintiff’s shares; (c) Article 27(1) of the former Act on Contracts to Which the State Is a Party (amended by Act No. 14038, Mar. 2, 2016; hereinafter “former State Contracts Act”); (d) Article 27(1) of the former Enforcement Decree of the Act on Contracts to Which the State Is a Party (amended by Presidential Decree No. 27475, Sept. 2, 2016).7

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, 2, 4, 5, 6, Eul evidence Nos. 1, 2, and 3, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

In full view of the following circumstances, the instant disposition was an error of deviation from or abuse of discretionary power.

1) Since the Plaintiff acquired all rights and obligations related to the PHC file production and sales business from B only on February 1, 2013, it shall not be subject to sanctions against the Plaintiff, which is only the transferee, on the ground of the collusion conducted by B prior thereto. Since February 1, 2013, the number of winning the contract after the Plaintiff formed an individual bidding and joint contractors is 85 times, and the price of the PHC file, including the portion of the partnership tender, supplied by the Plaintiff is 50,607,74,189 won in total.

2) PHC files are multi-varietyed small quantity products, and their types are 792 kinds depending on length intensity, etc., and their weight reaches approximately 1-5.6 tons, require more than one week of production, and require a timely supply for follow-up operations, so it is difficult for one company to supply all contract quantities, and only companies in the vicinity of the construction site are not allowed to participate in the tender, and there was a special feature that only one company in the construction site can not participate in the tender, and if the bid failure is continued, PHC files are likely to be excluded from competing products between small and medium enterprises. In order to avoid the bid failure and supply contract quantities, there was an inevitable part of the instant collaborative act.

3) Following the instant disposition, if the instant member companies, including the Plaintiff, are revoked the eligibility to participate in competitive tendering process open only to small and medium enterprises, the existence of the company itself is difficult to protect small and medium enterprises, resulting in a consequence contrary to the legislative intent of the Act on the Development of Market Businesses which designates PHC files as competing products

4) In the case of government-funded tendering for PHC files, which had been the instant collaborative act, the market price of the private-class market formed mainly by large enterprises is based on the market price of the private-class market. Accordingly, small and medium enterprises falling short of the price competitiveness were difficult to make profits from the low bid price rate. In the case of government-funded work, which is higher in the percentage of infrastructure construction works, such as plants, roads, and bridges, compared to the private-class work, it is merely a kind of PHC file (B/C) with a higher unit price than the supply rate, and thus, it cannot be deemed that the successful bid rate was higher than the other items or large enterprises. Therefore, it cannot be deemed that the Plaintiff was engaged in unjust enrichment through the instant collaborative act.

5) It goes against the principle of proportionality to equally dispose of the plaintiff who is only a single member of the instant union and a single member that led the instant collusion.

6) If the Plaintiff was omitted from the mixed collusion, it is clear that the Plaintiff would be at a disadvantage from the instant partnership, and it was inevitable to participate in the instant collusion for the existence of the company.

7) The instant disposition and the instant disposition are identical only to the disposition agency, and thus constitutes double disadvantage. The instant disposition is unnecessary as long as there is a restriction on qualification for participation in bidding in the instant case.

B. Relevant statutes

It is as shown in the attached Form.

1) Designation of competing products between small and medium entrepreneurs

PHC file was designated as a competitive product open only to small and medium entrepreneurs pursuant to Article 6 of the Act on the Support of Development of Agricultural and Fishing Villages, and accordingly, the opportunity to participate in the government-level PHC file purchase bid ordered by public institutions such as the defendant only to small and medium entrepreneurs was given. In particular, the number of PHC file files increased due to the fact that public corporations and quasi-government agencies mandatorily entrusted to the Administrator of the Public Procurement Service pursuant to Article 44 of the Act on the Management of Public Institutions established on December 29, 2009.

2) Organization of working-level council, representative council, etc.

A) The instant member companies, including B (hereinafter referred to as “Plaintiffs, including B and the Plaintiff,”) were established on or around April 2009 through the instant association, and continued consultation on the allocation of the quantity and price maintenance in the entire PHC file supply market including the private supply market.

B) The instant member companies, through the presence, etc. of the instant association, regularly held a working-level council (hereinafter referred to as the “working-level council”), representative council, file subcommittee, and national file council, etc. to exchange information on monthly production and sales performance and inventory status among members, and set up a plan to maintain the supply unit price of the PHC file in the government-funded market at a higher level than other small and medium-sized enterprises competing products, and implement a Saturday-free project as a practice method, and implement a plan to jointly calculate the production and shipment volume of the government-funded PHC file by controlling the production and shipment volume of the government-funded PHC file.

3) Method of the instant collusion

A) The instant member companies regularly held meetings, such as working-level councils, etc. at the site of the instant association office, etc. in relation to the public-class PHC file purchase bid, and allocated the members’ activity areas, production and inventory quantity, tender eligibility points, etc., taking into account and delivered the allocated data to the employees of the instant association, and had them manage the fair distribution of the contract amount by each company. The instant member companies: (a) failed to participate in the bid in a bid in a way that they do not participate in the bid; (b) failed to participate in the bid; and (c) failed to enter into the bid bid in various forms, such as “in response, single bid, and excess bid price”, “in order to raise the basic amount publicly announced by the authority awarding the contract; and (d) failed to enter into a private contract by a specific member company.

B) (1) In the case of a bid of at least one billion won, a joint contractor shall be organized, and the bid price was awarded in the name of the instant cooperative. The instant cooperative divided the successful bid price into shares of each joint contractor and allocated it to the relevant member, and due to statutory management, etc., allowed members who are not qualified to participate in the joint contractor to participate in the bidding. (2) In the case of a bid of at least one billion won, a joint contractor shall be organized, a joint contractor shall be selected and participated in the bidding in the name of the principal contractor, and each company shall be circulated, and a manager and a manager shall be assigned.

C) The specific process of individual bidding is as follows. A specific member determined whether to participate in the bidding internally, and then decided whether to participate in the final bid at the Consultative Council of Working-Levels of this case, which is regularly held. Accordingly, if a specific member is determined as a scheduled winner of a successful bid, the member requested a successful bidder to submit a bid in color of the other member companies to inform him/her of his/her bid price or the bid price for such a bid. The member selected as a scheduled winner of a successful bid by conducting a bid in excess of the bid price of the scheduled winner of the successful bid.

4) The main contents of the instant operational rules are as follows.

The PHC Working Council under Article 5 of the Operating Rules of the PHC File Working Council (the duties of the Council) shall deliberate and decide on, and execute, the following paragraphs.1. 1. The coordination of the fair co-operation system and the reasonable price through mutual consultation, and the head of the agency 2. The head of the agency 3. The head of the agency : (a) joint response to the monitoring of unfair practices and the bidding of government officials; (b) the head of the agency ; and (c) the representative director’s meeting; and (d) the representative director’s meeting to submit the execution of all acts for the stabilization of the file industry to the representative director’s meeting for the purpose of Article 2, in violation of the following subparagraphs: (b) the relevant representative director shall be allowed to have the visit to the organization; (b) the relevant representative director at the time of detection of the violation; (c) the number of violations shall be excluded from twice the number of violations in government-level and private bidding.

Article 7 (Detailed Matters 1.1. Serials Nos. 1. 1. Serials (1) shall be set by setting forth the sequences of each company (basic once), production capacity industries 1 and 2, and the large companies of the first and second categories shall set by mutual agreement and separately recognized by the member companies may set the sequences 1.5 times (as for the approval of 2/3 of all the members companies), and the selection of the first order companies (as for the first order), shall be made on the basis of tender(s) and on the basis of the basic order, the first order of priority negotiation shall be set before the beginning of the base order, and the second order of priority shall also be set by rule. 3 (3) Each member company shall have the duty to notify within the prescribed time limit, and shall, if so, remain at any disadvantage in the tender (s) and shall, if so, be notified at any time in accordance with the first order of each tender (s) and shall be notified at any time within the highest order of each tender (s).

5) The Plaintiff’s award, etc. through the instant collusion

A) Through the instant collusion, the Plaintiff was awarded a contract for the purchase of government-funded materials PC files equivalent to KRW 26,375,789,346 on a total of 109 occasions in total.

B) The instant cooperative was awarded a contract for the purchase of government-funded materials PHC file equivalent to KRW 281,264,025,739, in total, on 169 occasions from July 18, 201 to December 16, 2015, by participating in the bidding after forming a joint contractor through the instant collusion. Of them, the Plaintiff received a contract for the purchase of government-funded materials PHC file equivalent to KRW 36,005,863,155, which is part of the Plaintiff’s share.

6) Plaintiff’s takeover of business

A) Article 6(1) of the Business takeover Agreement prepared by the Plaintiff and B on February 1, 2013 provides that “All responsibilities of a business operator, including the responsibility to manage and operate a PHC file plant after February 1, 2013, and the payment of public charges, shall be reverted to the assignee.”

B) The Plaintiff’s representative director C was on February 1, 2013 and was in office as a director in-house B.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1, 4, 5, 10, 11, Eul evidence Nos. 1, 2 and 3, the purport of the whole pleadings

D. Determination

1) Even if the criteria for imposing sanctions are prescribed in the form of a Ministerial Ordinance, it has no effect to externally bind citizens or courts, and whether such disposition is legitimate or not must be determined in accordance with the contents and purport of the relevant Acts and subordinate statutes, not only the above criteria for disposition, but also with the content and purport of the relevant Acts and subordinate statutes. Therefore, the pertinent disposition cannot be deemed legitimate as soon as it conforms to the above criteria for disposition. However, barring any reasonable ground to believe that the pertinent disposition is not in itself inconsistent with the Constitution or laws, or that the pertinent disposition is considerably unreasonable in light of the content and purport of the relevant Acts and subordinate statutes, and the content and purport of the relevant Acts and subordinate statutes, it shall not be determined that the disposition is an abuse of discretionary authority (see, e.g., Supreme Court Decision 2007Du6946, Sept. 20, 2007).

2) In light of the aforementioned legal principles, it is difficult to find that the instant disposition was an unlawful act of deviating from and abusing discretion when comprehensively taking into account the following circumstances known through the facts acknowledged earlier and the purport of the entire pleadings. Accordingly, the Plaintiff’s assertion is rejected.

A) If the transferee succeeds to the status of the transferor through the transfer of business, the effects of the violation of the laws and regulations that existed before the transfer of business may also be succeeded as they were and subject to sanctions against the transferee due to the cause that existed before the transfer (see, e.g., Supreme Court Decision 2001Du1611, Jun. 29, 2001). The Plaintiff agreed from B to take over all rights and duties related to the production and sale of the PHC file, assets and liabilities, and take over all responsibilities related to the above business. Furthermore, since the Plaintiff, the representative director of the Plaintiff, was in office as B from February 1, 2013, the Plaintiff was deemed to have taken over the status related to the production and sale of the PHC file from B before the Plaintiff was fully aware of the collusion with the instant member company on or before February 1, 2013, it is reasonable to deem that the Defendant can be subject to sanctions against the Plaintiff on the ground of the collusion act.

B) Therefore, from July 201 to April 2016, the Plaintiff was awarded a bid price of 26,375,789,346 won in total through the instant collaborative act on a total of 109 occasions through the instant collaborative act. The instant cooperative formed a joint venture through the instant collaborative act, and participated in the bidding and received a total of 281,264,025,739 won in total from 169 times to 36,05,863,155 won in total among the government-funded materials PH file purchase contracts awarded a bid price. It is highly necessary to punish the Plaintiff by taking into account the following factors: the period, number, and scale of the instant collaborative act; the instant collaborative act was organized systematically; the instant collaborative act resulted in a significant possibility of excluding competition solely from the purpose of designation in the PH file designated as a competing product by small and medium enterprises.

C) The instant disposition conforms to the sanctions standards set forth in Article 4 [Attachment 1] 3 of the Enforcement Rule of the former Act on the Development of Market Support.

D) Since the instant member companies, including the Plaintiff, reached 17 parts of the instant member companies, and the bidding method of joint supply and demand companies are also permitted, the characteristics of the PHC file market in which transportation and storage costs are relatively large, and individual small and medium enterprises are difficult to cope with the contract volume, alone is difficult to deem that the instant collusion was inevitable in order to prevent the occurrence of the risk of continuing bid for government-funded construction works to be excluded from competing products open only to small and medium entrepreneurs, and even if there were such circumstances, it cannot be viewed as a justifiable purpose.

E) The purpose of the Act on the Promotion of Development of Agricultural and Fishing Villages is to contribute to the improvement of competitiveness and management stability of small enterprises by facilitating the purchase of products of small and medium enterprises and supporting markets, while the State Contracts Act aims at facilitating the smooth performance of contractual affairs by prescribing basic matters concerning contracts to which the State is a party. Thus, the instant disposition based on the Act on the Support of Development of Agricultural and Fishing Villages differs from its purpose. The instant disposition based on the Act on the Support of Development of Agricultural and Fishing Villages is to revoke the eligibility to participate in competitive bidding between small and medium enterprises or restrict the acquisition of eligibility to participate in the competitive bidding. However, the instant disposition based on the Act on the Support of Development of Agricultural and Fishing Villages is different from its scope of application. Furthermore, the period of restriction on the acquisition of eligibility to participate in the instant disposition (from December 8, 2016 to June 7, 2017) falls within the scope of the instant disposition of restriction on participation (from September 9, 2016 to September 8, 2018).

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.