(1) Reasons for Proposal

This Amendment aims to prescribe delegated matters in accordance with the partial amendmnet to the Act on the Improvement of Urban Areas and Residential Environments (to be enforced on October 13, 2018), such as the standards for imposing penalty surcharges and the period for restricting bid participation on construction business entities; and to improve upon other operational weaknesses.

(2) Major Provisions

Establish the criteria for imposing penalty surcharges and the period for restricting bid participation on construction business entities by Mayors/Do Governors (Article 98-2 and Attached Table 5-2)

Improve upon other operational weaknesses (Attached Table 6)

(3) Amendment Details
Partial Amendment to the Enforcement Decree of the Act on the Improvement of Urban Areas and Residential Environments

The Enforcement Decree of the Act on the Improvement of Urban Areas and Residential Environments shall be partially amended as follows.
Article 98-2 shall be newly inserted as follows.

Article 98-2 (Cancellation of selection of contractor, imposition of penalty surcharges, criteria for restriction of bid participation, etc.)

(1) The criteria for imposing penalty surcharges or restricting bid participation in accordance with the type and degree of violation of a construction business entity under the provisions of Article 113-2 or 113-3 of the Act shall be as the Attached Table 5-2.
(2) If a Mayor/Do Governor issues an order of cancelling the selection of a contractor, imposing penalty surcharges, or restricting bid participation in accordance with Article 113-2 or 113-3 of the Act, he/she shall make a written notice specifying the type of violation and measures, the amount of the penalty surcharges, and the period of restricting bid participation.
(3) Any person who has been notified of the imposition of penalty surcharges pursuant to paragraph (2) shall pay the penalty surcharge to the collection agency designated by the Mayor/Do Governor within 20 days from the date of notification or within a period of more than 20 days as specified by the Mayor/Do Governor: provided, however, that when the penalty surcharge cannot be paid due to natural disasters or other unavoidable reasons within such period, it shall be paid within 7 days from the date such reason becomes extinguished.
(4) The collection agency who has received the penalty surcharge in accordance with paragraph (3) shall give the receipt to the person who paid the penalty surcharge and shall inform the Mayor/Do Governor of such fact without delay.
(5) If the Mayor/Do Governor intends to restrict a construction business entity from bid participation in the rearrangement project pursuant to paragraph (1) of Article 113-2, he/she shall notify the local government of the subject, period, reason for the restriction and other details thereof without delay and shall post the relevant detials on the website during the restriction period of bid participation for the public’s perusal.
Attached Table 5-2 shall be newly inserted as follows.

[Attached Table 5-2]
Criteria for imposing penalty surcharge and restricting bid participation (in relation with Article 98-2)
1. General criteria
(a) If a construction business entity falls upon any of the subparagraphs of Article 113-2 (1) of the Act, the Mayor/Do Governor may order the project implementer to cancel the selection of the contractor for a rearrangement project, and he/she may impose penalty surcharges in accordance with the individual criterion of subparagraph 2 in lieu of ordering the project implementer to cancel the selection of the contractor, in consideration of the degree of violation of the contractor.
(b) The Mayor/Do Governor may restrict the bid participation in rearrangement projects implemented in Si/Do pursuant to the individual criterion of subparagraph 2, in addition to ordering the project implementer to cancel the selection of the contractor and imposing penalty surcharges agains the construction business entity pursuant to Item (a).

2. Individual criterion