How should you prepare for legal risks in the national project negotiation process?
Article posted in 2025-01-24 13:59:59 | VEAT
Law firm Veat addressed the issues of the effect of negotiation failure and whether to restrict participation in bidding based on the possibility of duplicated manpower proposals after selecting the preferred negotiator, in response to a request from Company A, which engages in computer system integration consulting and building services.
This post introduces a case where Law firm Veat reviewed and provided consulting on the major legal risks arising in the contract conclusion process by negotiation based on the "Law on Contracts with the State as a Party" and provides consulting.
Legal Effect of Negotiation Failure and the Law on Contracts
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Law on Contracts 9. A person falling under any of the following items as determined by Enforcement Decree a. A person who forges or alters documents related to bidding or contract, or obstructs bidding or contract, thereby causing a risk of impairing the fair execution of competition. Enforcement Decree of the Law on Contracts
1. A person who causes a risk of impairing the fair execution of competition, who falls under any of the following items a. A person who forges, alters or improperly exercises documents [including certificates according to Article 2, paragraph 2, subparagraph 6 of the "Electronic Signature Law" when submitting bids through the electronic procurement system according to Article 19, paragraph 1], or submits false documents |
The Law on Contracts stipulates that negotiation shall be conducted with the preferred negotiator and the contents of the proposal, and if the negotiation fails, negotiation shall be conducted with the next eligible negotiator, but does not restrict participation in bidding simply on the ground of negotiation failure.
However, it provides that if the reason for negotiation failure is the submission of false documents, etc., which is a violation of the Law on Contracts, participation in bidding may be restricted within a period of 2 years (see Article 27, paragraph 1, item 9(a) of the Law on Contracts, and Article 19, paragraph 1 of the Enforcement Decree).
Therefore, if a company's proposal of duplicated manpower to multiple projects of a procuring entity is deemed to be a submission of false documents, it may be subject to a restriction on participation in bidding within a period of 2 years as an improper contractor under the Law on Contracts.
Systematic Legal Consulting of Law firm Veat
Contracts awarded by government agencies are governed by different legal regulations than those for private contracts, and various legal issues may arise during the contract conclusion process, requiring careful review by legal experts.
Based on Law firm Veat's extensive experience and cases in the public contract field, the company provided clients with specific guidelines to reduce legal risks. In particular, it accurately analyzed similar cases and the court's position on those cases, and carefully reviewed whether proposing manpower in duplicate would be a reason for restricting participation in bidding under the Law on Contracts, considering the client's specific circumstances.
Law firm Veat, Possessing Expertise in Public Contract Field
The negotiation procedure under the Law on Contracts is strictly regulated, and even small mistakes can have a significant impact on the entire project. Through this case, Law firm Veat provided accurate and practical advice on sensitive issues such as negotiation failure and duplicated manpower proposals, effectively protecting the client’s interests.
If a legal problem arises in relation to contracts with the government or public contracts, please do not hesitate to contact Law firm Veat. Our experts at Law firm Veat will provide customized legal advice tailored to your specific situation.
The case work is also available on Law firm Veat’s blog below.
- How to Prepare for Legal Risks in the National Project Negotiation Process?
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