RESTRICTEDWORLD TRADE
ORGANIZATIONWT/WGTGP/W/7
30 October 1997
(97-4762)
Working Group on Transparency
in Government ProcurementOriginal:  English
INFORMATION ON THE REPUBLIC OF KOREA'S PROCEDURES
AND PRACTICES ON TRANSPARENCY IN GOVERNMENT
PROCUREMENT
Communication from the Republic of Korea
Table of Contents
Page
I. INTRODUC TION ............................................................................................................... ..   2
II. PROCUREMENT METHOD................................................................................................   2
III. INFORMATION ON NATIONAL LEGIS LATION AND PROC EDURES........................   3
IV. INFORMATION ON PROCUREMENT OPPORTUNITIES, TENDERING
AND QUALIFICATI ONS.....................................................................................................   3
V. TRANSPARENCY OF DECISIONS  ON QUALIFICAT IONS...........................................   4
VI. TRANSPARENCY OF DECISIONS ON CONTRACT AWARDS ....................................   5
VII. REVIEW..................................................................................................................... ...........   6
VIII. OTHER MATTERS RELATED TO TRANSPARE NCY ....................................................   6
IX. INFORMATION TO BE PROVIDED  TO OTHER GOVER NMENTS ..............................   7WT/WGTGP/W/7
Page 2
I. INTRODUCTION
1. In 1995, Korea enacted the Act Relating to Contracts to which the State is a Party (ARCSP),
in line with the GPA, as the basic regulation for government procurement.  Unless otherwise provided
for in other laws, government procurement is conducted under this Act.
2. In addition to the ARCSP, the Enforcement Decree of the Act Relating to Contracts to which
the State is a Party (EDARCSP) was enacted to address matters related to enforcing the ARCSP.  TheARCSP prescribes that government procurement ex ceeding threshold values provided for in the GPA
should be proceeded by international tendering.  Pursuant to the ARCSP, Korea enacted the Special
Regulations of the Enforcement Decree of the ARCSP for a Specific Government Procurement
(hereafter the Special Enforcement Decree) and the Special Enforcement Regulations for the ARCSP
for Specific Procurement (hereafter the Special Enforcement Regulation) in order to regulate the
procedures and criteria for international tendering in detail.
3. Contracts shall be concluded through the agreement of contracting parties on equal standing
and shall be implemented on a bona fide basis.  All international tendering shall be conducted under
the principles of reciprocity.  The contract officials shall not impose any special terms or conditions
upon the citizens of a member country of the Government Procurement Agreement or upon the
products or services produced from those countries.
II. PROCUREMENT METHOD4. The procurement method in Korea can be classified as follows based on the way each contract
is concluded:
(a) Open tendering
5. This is the typical tendering system in which suppliers holding the minimum capability to
undertake the contract, such as a licence, facilities, etc. can participate in the tender concerned andcompete with each other.
6. The ARCSP prescribes that the contract official shall conduct a public procurement according
to the competition principle.  However, if necessary, taking into consideration the purpose, nature,
scale, etc. of the contract, he may nominate participants or restrict the qualification of the participants.
(b) Selective tendering
7. In cases where the goal of the contract is difficult to achieve unless the supplier has special
facilities, technology, and materials, the procuring entity can nominate participants for tendering and
determine the winning supplier.
(c) Single tendering
8. Following are the cases in which a single tendering can be applied:
- in the case of a situation where an Act of God or national security is concerned;
- in the case of goods that are set aside for small business;WT/WGTGP/W/7
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- in the case of goods that are related to provisions of the Social Welfare Business Act;
- in the case of no bidder, even after a tendering renotification, etc.
III. INFORMATION ON NATIONAL LEGISLATION AND PROCEDURES
9. Korea submitted to the WTO information on national implementing legislation, which was
circulated to the Parties to the GPA on 11 February 1997 (GPA/12).
10. As described in the Introduction, the main characteristic of the GP system in Korea is to enact
the ARCSP, as the fundamental law which lays out the principles and procedures of government
procurement.  ARCSP is in line with the WTO/GPA and was promulgated on 5 January 1995.
11. Based on the ARCSP, the main regulations prescribing the procedures and criteria related to
GP are as follows:
- Enforcement Decree of the ARCSP (EDARCSP)
- Special Regulation of the Enforcement Decree of the ARCSP for Specific
Procurement (Special Enforcement Decree)
- Special Enforcement Regulations for the ARCSP for Specific Procurement (Special
Enforcement Regulation)
- Local Financing Act
- Government-Invested Enterprise Management Law (GIEML)
- Act on Government Procurement Business (AGPB)
12. All of these laws and regulations, being related to government procurement are published in
the official gazette before they enter into force.  Korea is establishing an Internet Home Page to
introduce its GP system and regulations in English.
13. In particular, information on the go vernment procurement by SAROK (Supply
Administration, Republic of Korea), the central procuring entity, and major government agencies areavailable from the GINS (Goldstar Information Network Services).
IV. INFORMATION ON PROCUREMENT OPPORTUNITIES, TENDERING AND
QUALIFICATIONS
(a) Public notice
14. The Special Enforcement Decree prescribes that the notice of international tendering should
be published in the official gazette, the Kwanbo.  The procuring entity may make use of a computer
network for the notice along with the official gazette.
15. Details of the public notice:
- matters assigned for the tendering;
- place, date and time for the tendering and its openingWT/WGTGP/W/7
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- qualification of a bidder;
- decision method for the successful tenderer, etc.
(b) Tender documents
16. Tender documents are the following documents, which the procuring entity prepares and
maintains for the tender participants to review, if necessary, from the date of the public notice of the
tender to the deadline for submitting the tender:
- public notice of tender or notification of participating in tender;
- documents of notes for tender (describing matters to be kept in mind by participants);
- application form to tender, forms of tenders and contract;
- general and specific conditions of the contract;
- on construction work,
- design documents (drawings, specification and construction site explanation)
- a statement of quantity and a detailed explanation of the calculation of the
unit price for the quantity
- the guidance of tender.
(c) Clarification
17. Entities are required to provide tender documentation and to reply promptly to any request
from suppliers for explanations relating to tender documentation.
V. TRANSPARENCY OF DECISIONS ON QUALIFICATIONS
(a) Transparency of criteria
18. Qualifications for a bidder, such as contract performance record, technical performance
ability, financial capability, etc., can be provided to confirm a supplier's ability to fulfil a contract.
19. To simplify the qualification procedures, entities can avail themselves of a permanent
supplier's list.
(b) Notification and listing
20. The procuring entity shall notify each supplier submitting an application to prequalify of
whether or not it has been included on the list of qualified suppliers.  The procuring entity shall notify
each supplier included on the list of the termination of the list or any supplier's removal from the list.WT/WGTGP/W/7
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VI. TRANSPARENCY OF DECISIONS ON CONTRACT AWARDS
(a) Transparency of criteria
21. In principle, the decision to award a contract in international tender is based on both the
tender price and capability of conducting the contract concerned.
22. In a competitive tendering, the successful tenderer shall be:
- a person who is deemed fully capable of fulfilling the terms of the contract and offers
the lowest bids;
- a person who offers the most favourable bid for the state in conformity with the
evaluation criteria specified in the public notice or the tender documentation;
- a person whose bid conforms closest to the criteria if the evaluation criteria are
determined by the Presidential Decree considering the nature and scale of contracts.
(b) Receipt and opening of tenders
23. Qualified suppliers may submit sealed tenders in person or by mail until the closing time of
submission at the place which was specified in the tender notice.  The tenders shall remain sealed and
shall be deposited until they are opened publicly.
24. The place and time of opening tenders shall be specified in the tender notice.  The procuring
entity shall open tenders in the presence of the tenderers.
(c) Ex-post information on contract awards
25. When the procuring entity awards the contract, it is required to publish a notice of contract
award in the official gazette within 72 days from the date of the decision.  Such a notice must contain
the following information:
- the scope, quantity and value of the procurement;
- the name and address of the winning tenderer;- the address of the entity awarding the contract;
- the procedures used in the decision of the contract award;
- the procedure of public notice for open tender;
- the reasons why a limited tender was executed, if applicable;
- other matters concerning the decision on the contract award.
26. The procuring entity is also required to provide an unsuccessful tenderer with information on
the reasons why its tender was not selected, characteristics and advantages of the tender selected, and
the name of the winning tenderer, if requested.WT/WGTGP/W/7
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VII. REVIEW
27. Those who claim to have been disadvantaged in the implementation of the provisions on the
scope of the government procurement contract, eligibility for participation, public notice or the
decision on the successful tenderer may make an objection to the central agency concerned.
28. Anyone dissatisfied with the ensuing measures by the agency may request a review from the
International Contract Dispute Mediation Committee established in the Ministry of Finance andEconomy.
29. The Committee shall undertake an investigation and provide mediation.  If no objection is
raised within 15 days regarding the result of the mediation, it shall have the same effect as a judicial
conciliation.
VIII. OTHER MATTERS RELATED TO TRANSPARENCY
(a) Maintenance of record of proceedings
30. When the procuring entity decides on a contract award by the open tender, it shall maintain
documentation regarding the following items for five years as well as all documentation related to the
tender and contract:
- the names of participants in the tender and the opening of the tender;
- the name of the winning tenderer, the value of the winning award, and the reasons for
the decision on the contract award;
- in the event of invalidity of tender, details of the tender and the reason for the
invalidity;
- country of origin of goods.
31. When the contract is awarded by a single tendering, the procuring entity shall maintain, for
five years, documents recording the following items:
- the purpose of the contract;
- the name of the item to be procured, specifications, quantity, unit price and value;
- specific provisions of laws and regulations applied and the reasons they were applied
to the contract;
- the name and address of the other party to the contract;- the value of the contract and the reasons for awarding the contract;
- country of origin of goods.
(b) Language and other matters
32. The procuring entity may make use of a computer network for the tender notice in addition to
the official gazette (for international tendering, publishing the tender notice in the official gazette isrequired).WT/WGTGP/W/7
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33. For the notice of international tendering, the procuring entity shall describe the following
items in one of the official WTO languages (English, French or Spanish) at the tail end of the public
notice:
- the subject-matter of the contract;
- the time-limits set for the submission of tenders or application to participate in the
tender;
- the name and address of the procuring entity.
IX. INFORMATION TO BE PROVIDED TO OTHER GOVERNMENTS
34. Korea has already notified the WTO/Committee on Government Procurement of its national
implementing legislation (GPA/12).  In international tendering, the principle of non-discrimination in
providing information related to government procurement is applied.
35. Member countries of the WTO/GPA are required to provide information on procurement and
contract awards in response to a request by any other GPA Party.  The Minister of Finance andEconomy may request central government agencies to submit relevant materials accordingly.