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National Assembly Legislation

  • Act on Contracts to Which the State is a Party
    • Competent Ministry : Ministry of Economy and Finance
    • Advance Publication of Legislation : 2019-03-18
    • Opinion Submission Deadline : 2019-04-01
Reasons for Proposal

The increase in social demand for social justice via fair trade is responsible for the gradual improvement of related Acts and institutions. For example, an Amendment calling for the nullification of any unfair contract imposing a sacrifice by a franchise business from the franchise headquarters using its superior status is underway. Regarding the same Act in question, it has been suggested that an Amendment rooting out any unfair special terms and/or conditions in a public procurement contract is a pressing matter.
Accordingly, the Integrity Agreement provision of the Act stipulates that to improve transparency and fairness in contracts to which the State is a party, the head or contracting officer and the tenderer or contractor shall not offer or receive money, goods, entertainment, or any other benefit directly or indirectly in the course of making or accepting a tender or signing or performing a contract (and even after the completion of the relevant project or the delivery of goods). The violation of this provision may lead to termination of contract, but the contract is still allowed to be continued, which is in conflict with the underlying spirit of the Act.
Accordingly, the Amendment specifies that with regard to the public procurement contract, the State shall not attach any special term or condition and any violation thereof may result in the invalidation of effect with the only contract clause in question being void.
Also, for the purpose of legislation, any tenderer or contractor violating the Integrity Agreement is restricted from participating in future government contracts.
Finally, the Amendment includes the subject of objection to any party in violation of the Integrity Agreement and has deleted the condition limiting the subject of objection to contracts equivalent to or greater than the amount specified, allowing the provision to act as a tool for self-correction necessary for ensuring the fairness in public procurement (Article 5; Article 27; Article 28).

Major Provisions

Principles of Contracting (Article 5); Restriction, Etc. on Qualification for Participation of Inappropriate Business Entities in Tendering Procedures (Article 27)


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