2012Nu2793 Revocation of revocation of restriction on participation qualification of unjust enterprisers

Lee Jae-chul Co., Ltd.

Korea Railroad Corporation

Daejeon District Court Decision 2012Guhap2124 Decided November 7, 2012

May 9, 2013

June 13, 2013

1. Revocation of a judgment of the first instance;

2. The Defendant’s disposition imposing sanctions against the Plaintiff on restricting the qualification to participate in the tendering procedure for six months (from May 21, 2012 to November 20, 2012) shall be revoked.

3. All costs of the lawsuit shall be borne by the defendant.

The same shall apply to the order.

1. Details of the disposition;

(a) Conclusion of long-term continuing construction contracts;

The plaintiff is an enterprise established for the purpose of electrical construction business, etc., and was selected as a successful bidder by participating in a competitive bid on the "A" and "electric facilities improvement work due to the installation of one station PSSD" (hereinafter referred to as the "construction work of this case"), which was announced by the defendant around December 21, 201.

On December 28, 2011, the Plaintiff entered into the instant first construction contract with the Defendant (hereinafter referred to as “the instant first construction contract”) with the amount of KRW 59,697,546 (the total contract amount of KRW 423,409,770), the date of commencement on December 29, 2011; the date of completion on February 6, 201, and the date of completion on February 6, 2012.

On May 10, 2012, the Plaintiff entered into the second construction contract with the Defendant (hereinafter referred to as “the second construction contract”) with the amount of KRW 376,056,131 (the total contract amount of KRW 423,409,770), May 11, 2012, the date of completion, and September 27, 2012 (hereinafter referred to as “the second construction contract”).

B. Articles 2 and 3 of the condition of integrity special terms and conditions included in the contract provisions related to the obligation to comply with the integrity agreement of this case are as follows:

Article 2 (Duty to Comply with Integrity Agreement) A person who submits a written pledge of integrity performance in a tender for construction works, services, etc. and enters into a contract or the other party to enter into a contract shall not directly or indirectly provide the relevant person with unjust profits, such as money, valuables, entertainment, etc., in relation to the conclusion and performance of the contract.

Article 3 (Restrictions on Qualifications of Unjust Enterprisers to Participate in Tender)

3. A person who provides money, valuables, entertainment, etc. to the relevant personnel for a period of not less than six months but not more than two years from the date on which the Korea Railroad Corporation imposed restrictions on qualification for participation in bidding, as prescribed in any of the following subparagraphs. A person who provided money, valuables, or entertainment to the relevant personnel in connection with bidding, conclusion of a contract, and performance of a contract is prohibited from participating in bidding for six months from the date on which the restriction on qualification for participation in bidding was imposed. A person who was subject to the restriction on qualification for participation in bidding for the Plaintiff was subject to the restriction on participation in bidding. A person who was subject to the restriction on participation in bidding for the Plaintiff was examined on March 30, 2012 as a result of the audit of part of the first construction of the instant case and the second construction of the instant second construction, which was executed by the Plaintiff on March 30, 2012, which was unfairly subject to the restriction on participation in bidding for the Plaintiff on construction work (hereinafter referred to as “the Enforcement Decree of the Act”), Article 76 subparag. 136(1). 2. 30. 1.

- With respect to the pre-construction part of the instant secondary construction (hereinafter “pre-construction part”) (hereinafter “pre-construction part”) (hereinafter “pre-construction part”), unlike the initial design specification (SETL), the construction supervisor provided the amount of KRW 13,423,000 for a total of 10 times during the construction supervision period (hereinafter “grounds for Disposition 2”). The construction supervisor provided the amount of KRW 538,000 for a total of 10 times during the construction supervision period (hereinafter “Grounds for Disposition 3”), [based on recognition] without dispute, the fact that there is no evidence Nos. 1 through 4, and evidence Nos. 1 through 31,00 for a construction supervisor (including each number) and the purport of the entire pleadings as a whole.

2. Whether the disposition is lawful;

A. Summary of the plaintiff's assertion

(1) With respect to the ground for Disposition No. 1 of this case, the Plaintiff could not construct high-tension cables because it was not procured from the Defendant as a water supply source, which is a water supply source. However, the Defendant’s construction supervisor had the Plaintiff arbitrarily completed this part and then demanded the Plaintiff to claim construction cost, and accordingly, the Plaintiff was paid the construction cost, and the Plaintiff did not receive the completion payment by submitting a false completion system.

As to the grounds for Disposition No. 2 of this case, the establishment of the subdivision team is not included in the details of the instant primary construction project, but included in the instant secondary construction project. The Plaintiff was temporarily executed at the Defendant’s request without concluding the instant construction contract. Furthermore, upon the Defendant’s request, the Plaintiff is required to do so.

In a situation where construction works should be urgently performed, it is nothing more than construction works conducted with the approval of the Defendant Construction Supervisor as it does not facilitate the procurement of materials. Therefore, construction works installed in the subdivision have been carried out differently from the design drawings of the instant secondary construction works, and cannot be deemed as defective construction works.

C. As to the ground for Disposition No. 3 of this case, the Plaintiff’s on-site director and a person’s wife cannot be said to have violated the duty of observance of an integrity contract by offering entertainment with a simple meal with the Defendant’s on-site supervisor.

(2) A deviation from or abuse of discretionary power

Even if all of the grounds for the instant disposition are recognized, in light of the circumstances, the instant disposition is considerably unfair and illegal as it constitutes deviation and abuse of discretionary power.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

(1) Determination as to the existence of the reasons for the disposition

(A) As to the ground for Disposition No. 1 of this case

1) Facts of recognition

A) Although the Plaintiff completed the instant primary construction on February 19, 2012, the Plaintiff failed to perform a high-tension cable construction (a work amounting to KRW 11,477,00) included in the instant primary construction because it was not supplied with a changeer and a low-tension power distribution team, which is a government-funded material.

B) While Defendant Construction Supervisor L and Defendant Seoul HeadquartersM N, who was the completion inspection of the instant primary construction, knew that the instant primary construction was not carried out, the instant primary construction was made false documents on February 21, 2012 and completed the instant primary construction.

C) The Plaintiff received the payment of the construction cost of KRW 58,471,00 for the instant primary construction work in accordance with the completion inspection report prepared falsely as above.

[Ground of recognition] The statements in Gap evidence 6, 7, 13, Eul evidence 3, Eul witness B, witness of the court of first instance, witness of the court of first instance, witness of the court of first instance, and the purport of the whole pleadings

2) The following circumstances revealed as to whether there was an unjust act in the performance of a contract, and based on the facts acknowledged and the purport of the entire pleadings;

① In other words, it is true that the Defendant’s supply of government-funded materials was delayed and it was impossible for the Plaintiff to complete the instant primary construction work within the contract period. However, in such a case, the Plaintiff should have demanded the Defendant to extend the construction period or temporarily suspend construction. ② However, in light of the fact that the Plaintiff received the entire construction cost, including the portion of the construction work that was not constructed after the completion inspection, and the entire construction cost, including the portion of the construction work that was completed, was paid by the Defendant’s construction supervisor L, the inspection inspector L, etc., ③ The above act is illegal, and the Plaintiff’s cooperation can be deemed to have been intentionally involved in the illegal act. In addition, it is reasonable to deem that the Plaintiff’s payment of the entire construction cost, including the portion of the construction work that was not constructed in cooperation with the false construction completion disposal, constitutes “the case where the Plaintiff committed an unfair act in performing this contract” as stipulated in Article 76(1)1 of the Enforcement Decree

1) Facts of recognition

A) The Plaintiff, while performing the instant primary construction at the request of the Defendant Construction Supervisor, planned installation of temporary power equipment, etc. for the instant primary construction (the construction cost of KRW 43,520,00,00) for the purpose of smooth progress of construction works, such as installation of air conditioning equipment, etc. corresponding to the instant secondary construction (the construction cost of KRW 43,520,00). Meanwhile, the Plaintiff, while performing the said construction, constructed the instant primary construction with reinforced products (FTRP), not ethyl products as specified in the design documentation, and the power source of the powder also connected the electric cables to a point close to the powder, not the electric room specified in the design documentation, and constructed the electric cables at a lower level than the design plan. On the other hand, the Plaintiff modified the specifications of low voltage power cables, electric cables, electric wires for spon-top light, electric wires for earthing, contact cables, etc.

C) However, with the approval of L of the construction supervisor, the Plaintiff constructed the powder powder with a reinforced plastic (FRP) unlike the design documents, and connected all of the powder powder to a location near the powder. On the other hand, the Plaintiff did not obtain the approval of L of the construction supervisor with respect to the alteration of the specifications of the low voltage power cable, etc.

[Reasons for Recognition] The entry of Eul evidence 3, witness B of the first instance trial, witness B of the first instance trial, witness L of each trial, the purport of the whole pleadings

2) The following circumstances are revealed as to whether the contract was not fulfilled in bad faith, based on the facts acknowledged and the purport of the entire pleadings;

① Although the Plaintiff did not conclude the instant secondary construction contract with the Defendant, the Plaintiff was in a state of concluding a long-term continuing construction contract including the instant secondary construction work, and the Defendant requested that the instant construction work be executed prior to the construction of the instant secondary construction work. In such a case, the Plaintiff is obligated to execute the construction work in the design drawing unless there is specific agreement with the Defendant on the design modification. ② Meanwhile, the Plaintiff, after consultation with L as the construction supervisor, constructed the instant secondary construction work as a reinforced plastic product, not ethyl products as specified in the design drawing. Of the eight pages of the instant secondary construction work, the Plaintiff’s construction supervisor completed the construction of the instant secondary construction work, not the electric room specified in the design drawing. However, the Plaintiff’s construction supervisor changed the construction specifications of the instant primary construction work without obtaining approval from the construction supervisor, and the Plaintiff’s construction supervisor changed the construction work specifications of the instant secondary construction work to the extent that it appears to have been lower than the instant temporary construction drawings.

(C) As to the ground for the instant disposition No. 3

1) Whether the contract violates the special terms of integrity agreement

Comprehensively taking account of the facts stated in Gap evidence 5, Eul evidence 3, witness B, and witness L of the court of first instance, the plaintiff's on-site director and the construction supervisor of the defendant's construction supervisor may recognize the fact that the defendant's construction supervisor provided meals ten times from January 13, 2012 to February 29, 2012 as follows, for the following reasons, for the following reasons, after inspecting the construction site and the construction site of the Gap in the instant case on February 21, 2012, and moving to D station:

A person shall be appointed.

In light of the following circumstances revealed by the above facts, namely, the Plaintiff’s provision of meals to the Defendant’s construction supervisor in itself is likely to undermine the proper performance of the contract. Even if the first construction period of this case was not long, the Plaintiff provided meals repeatedly during that period. In particular, on February 21, 2012, when the first construction work of this case was completed and processed, the Plaintiff provided meals in a considerable amount of money at a construction site and at a high-spole with a considerable distance, it is reasonable to deem that the Plaintiff provided unjust profits, such as entertainment, in violation of the special terms and conditions of the integrity contract of this case.

2) Article 39(2) of the Act on the Management of Public Institutions as to whether a violation of special conditions of the integrity agreement of this case becomes a legitimate ground for disposition, provides that “a public corporation or quasi-governmental institution may restrict participation in bidding for a certain period not exceeding two years against a person, corporation, or organization that is obviously likely to undermine fair competition or appropriate implementation of a contract.” In addition, when restricting participation in bidding pursuant to the aforementioned provision, participation in bidding is limited not only to the construction ordered by the defendant under Article 76(8) of the State Contracts Act but also to the construction ordered by the head of each central government agency. Accordingly, the restriction on participation in bidding pursuant to Article 39(2) of the Act on the Management of Public Institutions is a disciplinary administrative disposition, and the reason for the disposition is limited to the reasons prescribed by statutes (Article 76(1) of the Enforcement

On the contrary, the instant contract is a contract under private law concluded by the Defendant on an equal footing with the other party as the subject of the private economy, and its essential content does not differ from the contract between the private parties (see Supreme Court Order 2006Ma117, Jun. 19, 2006). Even if the qualification for participation is restricted on the basis of "special conditions for integrity contract", it is merely merely an act of notifying the purport that the Defendant would not participate in the tender conducted by the Defendant, not an administrative disposition subject to administrative litigation, but a tender conducted by another government agency or public institution, and it does not affect the tender conducted by another government agency or public institution.

On the other hand, the defendant's violation of special conditions of integrity contract of this case is one of the grounds for the restriction of participation of improper enterprisers in bidding. Thus, apart from the fact that the defendant's participation in bidding conducted by the defendant against the plaintiff on the ground of the violation of special conditions of integrity contract of the plaintiff, this does not constitute a ground for the restriction of participation in bidding under Article 39 (2) of the Act on the Management of Public Institutions and each subparagraph of Article 76 (1) of the Enforcement Decree of the State Contracts Act, and thus, the ground for the restriction of participation in bidding under

(2) The relevant legal principles are applied to determine whether or not to deviate from or abuse discretionary power

Whether a punitive administrative disposition deviates from or abused the discretionary power under the social norms ought to be determined by objectively examining the content of the offense, the purpose of the public interest to achieve the disposition, and all the relevant circumstances, which served as the grounds for the disposition, and the degree of infringement on the public interest and the degree of disadvantage suffered by an individual (see, e.g., Supreme Court Decision 20043854, Apr. 14, 2006). In addition, even if the criteria for the punitive administrative disposition are prescribed in the form of Ministerial Ordinance, it is nothing more than that prescribed in the internal administrative rules of the administrative agency, and there is no effect to externally bind citizens or the court. Whether the pertinent

Since it should be determined in accordance with the contents and purport of the law, it cannot be said that the above disposition disposition is legitimate as it satisfies the above disposition criteria.

In addition, in a case where the above disposition criteria do not conform with the Constitution or laws or where there are reasonable grounds to believe that the sanctions imposed pursuant to the above disposition criteria are considerably unfair in light of the content of the relevant violation and the content and purport of the relevant statutes, which served as the grounds for the relevant disposition, the said disposition is unlawful by abusing discretion or abusing discretion (see, e.g., Supreme Court Decision 2007Du6946, Sept. 20, 2007). Whether the pertinent disposition in question

Further, the purport of the State Contracts Act that limits the qualification of unjust enterprisers to participate in the construction of this case is to ensure the faithful performance of the contract to which the State is a party by avoiding participation in the construction for a certain period of time, and to prevent disadvantage to the State. ② Meanwhile, the Plaintiff only cooperates with the Defendant’s construction supervisor’s budgetary convenience, and does not actively demand construction work to be completed or actively participate in such work. Thus, the Plaintiff’s main responsibility may be deemed due to inappropriate work performance of the Defendant’s employees. ③ In addition, the Plaintiff’s failure to supply the government-funded materials, which appears to be due to the Defendant’s failure to perform construction work, and the Plaintiff’s failure to perform the construction work of this case to secure the difference between the construction cost of the first construction contract and the construction cost of the second construction contract and the construction cost of the second construction contract and the construction cost of the second construction contract. However, the Plaintiff appears to have been in a considerable amount of less than 430,500,000 won for each of the construction work sites and construction cost of this case.

(3) Sub-determination

Therefore, the instant disposition should be revoked because it is illegal that the grounds for partial disposition are not recognized, and furthermore, it is inappropriate to deviate from and abuse discretion.

3. Conclusion

Therefore, the plaintiff's claim of this case is accepted on the grounds of its reasoning, and the judgment of the court of first instance is unfair on the grounds of its conclusion, and it is so revoked, and it is so decided as per Disposition.

The presiding judge shall receive the award of merit;

Judges Excursion Ship Owners

Judges Kim Gin-han

1) The payment of the construction cost is to be paid only after the completion of the second construction project in this case after the conclusion of the second construction project.

I seem to be.