Reasons for Proposal
The current Act sets forth basic matters concerning contracts for which the State is a party, but does not specify any matters in relation to the subcontractor for reasons such as infringement of freedom of contract and the private domain where the party to the contract enters into a subcontract in connection with the applicable project.
However, if the party to the contract with the State becomes the original contractor of the subcontracting transaction, it may be deemed to correspond to an indirect party to the contract, although it may not be a direct contracting party with the State. Accordingly, the State needs to make efforts in realizing the “principle of fairness of contract” and preventing various unfair conducts arising from unfairness in the contract so as to ensure fairness and create a healthy transaction culture.
Therefore, the Amendment aims to prevent social conflicts caused by pertinent unfair transactions, improve public confidence, and promote the smooth execution of relevant projects by stipulating the management responsibility and obligation of the State for the fair conclusion and fulfillment of the subcontract.
Details
A. Require the State to supervise the entire process of signing and fulfilling contracts in a responsible manner, and endeavor to prevent and resolve various unfair conducts that may arise among participating stakeholders (Article 3-2 newly inserted).
B. When signing the contract, require the head of each central government agency or the contract personnel to prepare a contract specifying the subcontracting transaction plan in relation to the pertinent project and the guarantee for payment for the subcontracting transaction (Article 11 paragraph 1 subparagraphs 7 and 8 newly inserted).
C. Require the head of each central government agency or the contract personnel to supervise the affairs of the contracting party if the contracting party adjusts the subcontracting price for the subcontractor as the original contractor for the subcontracting transaction (Article 13 (2) newly inserted).
D. Once the contracting party completely fulfills the contract, require the head of each central government agency or the contract personnel to inspect it according to associated documents such as the contract prepared by the contracting party and the subcontractor (Article 14 (1)).
E. Allow the head of each central government agency or the contract personnel to directly make payment to the subcontractor so as to protect the subcontractor to the subcontract and to prevent unfair conduct such as non-payment (Article 15 (4) newly inserted).
F. Where the contracting party as the original contractor unreasonably infringes or restricts the interests of the subcontractor in a subcontracting transaction, allow the subcontractor to file an objection with the head of the relevant central government agency (Article 28 (2) newly inserted).
G. Where there is an objection, allow the head of the central government agency to request the contracting party to submit data if deemed necessary (Article 28-3 newly inserted).
H. Allow the head of each central government agency to issue a corrective order to the contracting party if there is an unreasonable cause arising from a subcontracting transaction (Article 28-4 newly inserted).
