2015Nu35040 Revocation of corrective order

A Manager of the Dadong Construction Corporation, a lawsuit taking over the lawsuit of the Kudong Construction Corporation A

Fair Trade Commission

May 12, 2016

June 30, 2016

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

The Defendant’s corrective order stated in attached Form 1, which was issued by the plenary session Resolution No. 2014-203 on September 17, 2014, against Kudong Construction Co., Ltd. (hereinafter “Plaintiffs” both the Plaintiff and Kudong Construction Co., Ltd.) is revoked.

1. Details of the disposition;

A. Status of the plaintiff, etc.

Modern Construction Co., Ltd. (hereinafter referred to as "Modern Construction") (hereinafter referred to as "Modern Construction") (hereinafter referred to as "Co., Ltd." in the name of all the companies; hereinafter referred to as "Co., Ltd."), Daewoo Heavy Industries, Samsung C&S construction, SS construction, z., Large Construction, Modern Industries and Hyundai Industrial Development (hereinafter referred to as "seven large Construction Co., Ltd.") (hereinafter referred to as "three large Construction Co., Ltd."), Kcck Construction, Kukdong Construction, Jin Global Global, Jinjin Heavy Industries, T&T construction, joint-use construction, dong Construction, F&T construction, Gyeongnam Co., Ltd., Ltd., (hereinafter referred to as "Modern Construction") and 14 construction companies including the above 7 large Construction Co., Ltd., Ltd. (hereinafter referred to as "14 construction companies including the above 7 large Construction Co., Ltd."), the Plaintiff, 21 construction companies including the Plaintiff, 17 construction companies under the Monopoly Regulation and Fair Trade Act (hereinafter referred to as "Plaintiff Co.").

(b) Construction works for high-speed high-speed railroads and outline of their bidding;

(i) Summary of construction works for high-speed railroads in South Korea;

The construction work for Honam High-speed Railroad is a construction work for building a high-speed rail network of 184.534 km in total length which is a large-scale local government project which is promoted to form a axis for traffic and life as a large-scale local government project, along with the low-speed rail. The construction work has been ordered for approximately KRW 8.352.9 billion by dividing into 19 sections. Of them, the construction work for the 1-1 sections and 3-2 sections were conducted by means of design and construction package tender, the bid for the 1-2 sections, 1-4 sections, 2-3 sections and 4-2 sections, including the 2-1 sections, and the remaining construction works for the 2-1 sections, and the bid price for the 9 billion won in total, including the bid price for the 9.5 billion won in total.

2) The outline and method of the instant tender and the Plaintiff’s participation tools

A) The instant bid is selected as a successful bidder by examining the appropriateness of the bid price from the person who bided at the lowest price as a successful bidder under Article 42(1) and (4) of the Enforcement Decree of the Act on Contracts to Which the State Is a Party, and selecting a bidder who passed a certain standard of examination as a successful bidder. The instant bid was conducted in the order of ① public announcement of tender, ② prior examination of qualifications for bidding (hereinafter “PP Q Q Qu examination”), ③ receipt of tender documents and relevant documents, ④ examination of propriety of tender prices, ⑤ determination of successful bidder.

B) The minimum cost of construction work is subdivided into 30 units of construction work, and the successful bidder is determined through the adequacy review of tender amount by type of construction work, consisting of 1 and 2 stages of construction work.2) The first step test is an objective review of bidder's tender amount by type of construction work, and the number of improper types of construction work is less than 20% of the total number of construction work units. In this context, improper types of construction work is 80% of the total number of construction work units or more or 110% of the total number of construction work units. If the tender amount exceeds 110% of the total construction work units of construction work, the number of improper types of construction work units of construction work is calculated as one, and if the total construction cost is less than 80% of the base amount of construction work units of construction work, the number of improper types of construction work units of construction work is calculated differently in order of the base amount of construction work units of construction work, and the number of inappropriate types of construction work units of construction work is less than 5.5.

C) The instant bid was conducted by dividing the total 13 sections into five sections (the first bid) and eight sections (the second bid). The method of determining successful bidder was subject to the “1st construction section successful bid scheme that does not permit a successful bidder to be awarded in more than one section.” This is applicable to the first tender and the second tender, and thus, one construction company in the instant tender could be awarded the highest two sections.

D) The first bidding, including Section 2-1 and Section 5-2, in which the Plaintiff participated, was publicly announced on July 31, 2009 and conducted a PP Q evaluation on August 15, 2009. The bidding date was September 22, 2009; the second bidding including Section 2-2 and Section 5-1 was publicly announced on September 24, 2009; the second bidding was conducted on October 8, 2009; the bidding date was November 11, 2009. The result of the bidding by Section 1 of the instant construction project was as follows:

A person shall be appointed.

A person shall be appointed.

C. The defendant's disposition

As of September 17, 2014, the defendant decided No. 2014-203, the plaintiff agreed and implemented a bid bid at the price set by the successful bidder in order to help the successful bidder successful bid in the above 4 construction sections, and issued a corrective order in attached Form 1 against the plaintiff on the ground that the act (hereinafter referred to as "the act in this case") constitutes an unfair collaborative act prohibited under Article 19 (1) 8 of the Fair Trade Act (hereinafter referred to as "disposition in this case"). [The grounds for recognition] The fact that there is no dispute, Gap evidence No. 1, Eul evidence No. 14-1 to 4, the purport of the whole pleadings, and the purport of the whole pleadings.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

In the beginning, the Plaintiff expressed his intention to refuse the notification from seven large construction companies to participate in the construction section division agreement, and did not perform the instant act, such as P Q evaluation, in accordance with its own judgment. Accordingly, the instant disposition based on the premise that the Plaintiff committed the instant act is unlawful.

B. Relevant statutes

Attached Form 2 shall be as listed in attached Table 2.

C. Determination

1) Facts of recognition

The following facts are either disputed between the parties, or acknowledged according to the contents of Gap evidence 1, Eul evidence 1, 2, and 10, and the purport of the whole pleadings.

A) Agreement on the division of sections by 7 large constructors

(1) On June 7, 2009, the date of the first public announcement of the tender, the project managers in charge of the seven large construction companies commenced discussions to determine the successful bidder of the 13 construction sections, and around July 2009, there was an agreement on the method of the division of sections to determine the successful bidder of each construction section in advance by gathering several times in the first public announcement of the tender.

(2) Specifically, seven major construction companies divided into groups A, B, and C with the following sections, taking into account the number of tools, the performance of railroad construction works, the order of appraisal of execution capacity, etc., and divided into two groups A, B, and C with the following sections divided. The 13 companies scheduled the successful bid for each 13 sections to be selected by drawing each group. Accordingly, the agreement on the division of sections as set forth therein is as follows:

A person shall be appointed.

B) the participation in the agreement on the division of sections and the selection of successful bidders;

After the construction section division of the instant construction project was completed, on July 2009, 17 companies belonging to the Haman and B and C Group were informed of their agreement by wire and whether they will be present. The Plaintiff, which belongs to the C Group, expressed his intent to refuse to participate in the agreement on the division of the said construction section together with consideration development, sc construction, and the 17 companies belonging to the B and C Group, with the intention to participate in the agreement not to participate in the agreement on the division of the said construction section. The remaining 14 construction companies, excluding the three companies among the 17 companies belonging to the B Group and C Group, were selected by lot for each group, and then the 21 construction companies selected the scheduled will to participate in the successful bid of the instant construction section, and to give priority to the participation of joint contractors or other construction companies, which have not been allocated a construction section. Accordingly, the agreement on the 21 construction companies determined accordingly is as follows:

A person shall be appointed.

(C) the formal participation in tendering and agreement on the bid price by section;

(1) After the registration of PP evaluation was made with respect to the instant construction project, seven companies, including the Plaintiff, etc., who did not participate in the agreement on the division of construction sections and the scheduled winner of the successful bid, were also expected to participate in the bidding. Accordingly, the scheduled winner of the instant construction project was requested to make a formal bid (hereinafter referred to as “tender”) in each construction section so that they may proceed as agreed upon.

(2) Furthermore, seven large construction companies secured appropriate revenues from each construction section, but set a bid price to eliminate potential bid bid bid bid bid questions in advance when leaving the bid price to the successful bidder. Seven large construction companies set a bid price as of September 1, 2009 and notified other successful bidders of the bid price by setting the bid price as 76% compared to the design price.

2) Whether the Plaintiff committed the instant act

A) “Unfair collaborative act” prohibited under Article 19(1) of the Fair Trade Act is an agreement on an act that unfairly limits competition. “Agreement” includes not only explicit agreements but also implied agreements, and “unfair collaborative act” is maintained until the act of implementation is continued (see Supreme Court Decision 2012Du1773, Nov. 28, 2013).

B) In light of the above legal principles, the following circumstances that can be acknowledged by comprehensively taking into account the above facts and the evidence presented earlier as follows, Gap evidence Nos. 3, Eul evidence Nos. 5 through 7, 9, 11, 13, Eul evidence Nos. 8-1, 2, and Eul evidence Nos. 12-1, 12-4, and the overall purport of oral argument, it can be acknowledged that the plaintiff committed the instant act. Accordingly, the plaintiff's assertion is without merit.

(1) During the Defendant’s investigation process related to the instant construction project, the Plaintiff stated to the effect that the Plaintiff was scheduled to win the bid on the four sections of the said agreed bid, which were actually awarded a successful bid in the actual bid. The Plaintiff’s employees (i.e., the D, Scinging Construction, (ii) the E, F, and Samd Co., Ltd.’s (c) prior to the bid, determined and notified the bid price of the relevant construction section in full, and (ii) confirmed and reflected whether all of them follow the bid in the actual bid. The Plaintiff appears to have been credibility. Accordingly, the Plaintiff appears to have committed the instant act after an agreement with the said prospective contractor.

(2) The Plaintiff’s bid rate in the said 4 sections is 83.232% from the 2-1 section, 84.329% from the 2-2 section, 84.329% from the 5-1 section, 84.303% from the 5-2 section, and 83.851% from the 5-2 section, which cannot be deemed as a competitive bid price as the bid price as the bid rate much more than 71 to 72% from the average bid price rate at the time of the instant bid, and the Plaintiff’s H was aware of the fact that it is difficult to receive a successful bid in the event of the bid as above.

(3) In addition, the evaluation of propriety of the ordinary bid price is conducted in the order of the lowest bidder, and the subordinate enterpriser has a structure of examination that is excluded from the successful tender, and it is the core strategy for the successful tender to reduce the bid price to the greatest extent and to receive the second stage examination order within the scope that does not decline from the bid. In light of this, the bid price in this case is to be invested at the lowest price within the scope that does not generate more than 5.5 ordinary improper type of public tender as seen earlier. However, the bid in this case is to be invested at the lowest price within the scope that the tender in this case does not generate more than 5.5 unfair type of public tender. However, if 2 companies other than the plaintiff among the 13 construction sections did not cause improper type of public tender, not only the 12 construction sections but also all participants of the remaining 12 construction sections did not cause improper type of public tender, and thus, it is difficult for the plaintiff to understand the bid price in this case without the plaintiff's bid bid price.

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.

Judges Yoon Sung-won

Judges Yu Hun-tae

Judges Kim Yong- For

1) In light of the order of construction, relevance between types of construction, construction cost, etc., the number of types of construction work is different depending on the characteristics of construction (e.g., ground destruction, soil treatment, steel processing assembly, etc.), but most of the lowest prices of construction work is usually divided into 30 types of construction work for a single construction project.

2) However, the successful bidder may be determined only through the second stage examination without undergoing the first stage examination in the case of a construction project requiring the reduction of new technology or new construction project exceeding the estimated price of less than 20 persons or exceeding the estimated price of 150 billion won.

3) The standard cost of work shall be calculated by aggregating 70 per cent of the cost of work type design and 30 per cent of the average cost of work type.

4) The amount of construction work design means the amount of construction work by type of work prepared or directly investigated and calculated by referring to the transaction actual cost, cost calculation, appraisal price, etc. according to the contents of the design by the ordering agency.

5) If the ranking of the standard amount for work units is below 10 per cent of 60 per cent to 80 per cent, the inappropriate number of work units shall be calculated as 1.5 per cent, except for those units, and if the ranking of the standard amount for work units is below 10 per cent, if the ranking of the standard amount for work units is below 50 per cent, the number of units of work shall be calculated as 3 and 1.5 per cent except for those units of work.

6) The Defendant exempted the Plaintiff from the penalty surcharge on the grounds that the Plaintiff’s corporate rehabilitation procedures are in progress.

A person shall be appointed.

A person shall be appointed.