Article 26(Cases applicable to negotiated contract) #
(1) The cases for which a negotiated contract may be made in accordance with the proviso of Article 7(1) of the Act shall be as follows: <Amended on Jul. 21, 2010; Oct. 28, 2011; Nov. 23, 2011; May 14, 2012; Dec. 30, 2013; May 22, 2014; Dec. 31, 2015; Dec. 4, 2018; Sep. 17, 2019; May 1, 2020; Sep. 29, 2020; Dec. 8, 2020; Feb. 2, 2021; Jul. 6, 2021; Jan. 3, 2023; Apr. 11, 2023; Nov. 16, 2023; May 7, 2024; Dec. 24, 2024; Dec. 30, 2025>
1. The following cases where there is no time to put a contract into a competition or it is found impractical to accomplish the purpose of the contract through competition:
a. Where a natural disaster occurs, the occurrence or spread of infectious diseases is required to be prevented, military forces are to be mobilized for a military operation, a ceremony is urgently required, urgent relief from a flood or other emergency situation is required, raw material prices rapidly rise, emergency safety diagnosis or facility improvement is required for preventing any accident, etc., or any other similar event occurs;
b. Where it is necessary for security, such as the national security, a national defense plan, intelligence service, management of military installations, diplomatic relationship, or any other similar case is concerned, or it is necessary to keep a state agency’s activities confidential;
c. Where the Administrator of the Defense Acquisition Program places an order with a business entity engaging that researched and developed standardized products for military use or a business entity subject to priority management under the Emergency Resources Management Act to manufacture and purchase standardized goods for military use (limited to items designated by the Administrator of the Defense Acquisition Program in cases of a business entity subject to priority management);
d. Where it sells materials owned by the State for recovery from disasters to persons that have sustained damage caused by an emergency disaster;
2. The following cases where a fair competition is impractical, such as a particular person’s technique is required, or there is only one person who can produce the goods concerned:
a. Where it is impracticable to identify who is liable for a defect that is likely to be discovered in the future from facilities in a construction project and it executes a contract with the immediately preceding or current contractor;
b. Where a contract is made with the current contractor because confusion is likely to arise in work process otherwise or it is impracticable for two or more contractors to work together in an identical job-site;
c. Where a contract for finish works is made with the immediately preceding or current contractor;
d. Where it is impracticable in fact to conduct competition because the project concerned is to be implemented in an area contiguous to the enemy or any other extraordinary area;
e. Where it is actually impracticable to conduct a competition because the construction project requires a patented construction method, new technology designated and publicly notified pursuant to Article 14 of the Construction Technology Promotion Act, a new technology certified or a technology tested pursuant to Article 7 of the Environmental Technology and Industry Support Act, a new electric technology designated and publicly notified under Article 6-2 of the former Electric Technology Management Act (referring to the Act before it was amended to Act No. 13741), or a new technology for disaster safety (limited to a new technology within the protection period or effective period designated under each relevant Act) designated under Article 14 of the Act on Promotion of Disaster Safety Industry;
f. Where a person who manufactured and supplied the goods concerned installs, assembles, or repairs such goods;
g. Where it is required to procure goods in order to exchange parts of goods already procured or to extend facilities, and such goods are likely to be incompatible if they are manufactured and supplied by any person, other than the person that manufactured and supplied the goods concerned;
h. Where it is intended to place an order to manufacture, purchase, or lease goods patented or goods registered as a utility model or design and no appropriate substitute therefor is available;
i. Where the producer or possessor of the goods concerned is only one person and it is impracticable to accomplish the purpose of the project by placing an order to manufacture, purchase, or lease other goods;
j. Where a contract is for survey, designing, supervision, special land survey, or training, which requires a particular person’s technique, quality, experience, or qualification; for services for scientific research with a particular person; or for designing services to be entered with a person who won a prize in an open design competition conducted pursuant to a relevant statute;
k. Where it purchases real estate, such as a parcel of land or a building, from a particular person, or leases an asset to or from a particular person;
l. Where a service for the excavation of buried heritage under Article 11 of the Act on Protection and Inspection of Buried Heritage is converted to an in-depth excavation survey after a trenching survey under Article 7(1)4 of the Enforcement Decree of that Act;
3. Where any of the following products produced by a small and medium entrepreneur defined under subparagraph 1 of Article 2 of the Small and Medium Enterprises Promotion Act is to be manufactured by or purchased or leased from the relevant small and medium entrepreneur:
a. Products, which have been certified for its performance pursuant to Article 15 of the Act on Facilitation of Purchase of Small and Medium Enterprise-Manufactured Products and Support for Development of their Markets;
b. Products, which have been certified for its quality pursuant to Article 20 of the Software Promotion Act;
c. Products completely developed with support under Article 9(1)3 of the Act on the Promotion of Technology Innovation of Small and Medium Enterprises, the purchase of which is agreed upon with a person relating to its initial demand;
d. Products certified as new products under Article 16 of the Industrial Technology Innovation Promotion Act;
e. Products manufactured using a new technology certified or designated pursuant to the following statutes or a new technology designated by the competent Minister, the performance of which has been verified by the competent Minister at the stage of commercialization:
1) Article 14 of the Construction Technology Promotion Act;
2) Article 102 of the National Transport System Efficiency Act;
3) Article 12-2 of the Act on the Promotion of Science and Technology for Food, Agriculture, and Forestry;
4) Article 7 of the Agricultural Mechanization Promotion Act;
5) Article 18 of the Act on the Sustainable Use of Timbers;
6) Article 57 of the Framework Act on Logistics Policies;
7) Article 8 of the Health and Medical Service Technology Promotion Act;
8) Article 15-2 of the Industrial Technology Innovation Promotion Act;
9) Article 14 of the Disaster Safety Industry Promotion Act;
10) Article 17 of the Marine Science and Technology Promotion Act;
11) Article 7 of the Environmental Technology and Industry Support Act;
f. Products designated and publicly notified as excellent goods for procurement under Article 30 of the Enforcement Decree of the Government Procurement Act;
g. Goods with a joint trademark designated and publicly notified as excellent procurement in accordance with Article 31 of the Enforcement Decree of the Government Procurement Act (limited to cases where the contract is to manufacture or purchase goods whose price is lower than the amount publicly notified by the Minister of Finance and Economy);
h. Deleted; <Sep. 29, 2020>
i. Products acknowledged by the Minister of Science and ICT that conform to the standards for performance and reliability of information protection systems under Article 58 of the Framework Act on Intelligent Informatization and that comply with the requirement for introduction of information protection systems by type determined by the Director of the National Intelligence Service pursuant to Article 69 of the Presidential Decree of the Electronic Government Act;
j. Disaster safety products certified for compliance under Article 16(1) of the Disaster Safety Industry Promotion Act;
4. Where it executes a contract with any of the following organizations and entities that are established for the purpose of providing persons of distinguished service to the State or disabled persons with jobs or services for veterans or welfare services, for the manufacture, purchase, or lease of goods or for services (limited to goods directly produced by such organizations and entities and services directly provided by such organizations and entities), or sells or leases goods directly to any of such organizations and entities:
a. A welfare factory in a collective village designated by the Minister of Patriots and Veterans Affairs for self-support of persons of distinguished service to the State;
b. An association comprised of wounded persons, which is established pursuant to the Act on the Establishment of Associations by Persons of Distinguished Services to the State;
c. A production facility designated as a facility of producing products by persons with severe disabilities under Article 9(1) of the Special Act on the Preferential Purchase of Products Manufactured by Persons with Severe Disabilities;
d. A social welfare corporation established pursuant to Article 16 of the Social Welfare Services Act;
e. A standardized workplace for persons with disabilities certified under Article 22-4(1) of the Act on the Employment Promotion and Vocational Rehabilitation of Persons with Disabilities;
5. The following cases where it is found inefficient to enter into a contract through a competition in the light of the purpose or nature of the contract, except the cases specified in subparagraphs 1 through 4:
a. Any of the following contracts:
1) Where a contract is for a construction project under the Framework Act on the Construction Industry (excluding specialized construction projects), the estimated price of which is not more than 400 million won, for a specialized construction project under that Act, the estimated price of which is not more than 200 million won, and for a construction project under any other statutes related to construction projects, the estimated price of which is not more than 160 million won;
2) Where a contract is for the manufacture, purchase, or lease of goods or for services, the estimated price of which is not more than 20 million won;
3) Where a contract is for the manufacture, purchase, or lease of goods or for services and is executed with the small enterprises prescribed in Article 2(2) of the Framework Act on Small and Medium Enterprises or the micro enterprises prescribed in Article 2 of the Framework Act on Micro Enterprises, the estimated price of which is not less than 20 million won and not more than 100 million won; provided, the contracts include those for the manufacture, purchase, or lease of goods or for services executed with those other than the small enterprises or micro enterprises in the case of falling under Article 30(1)3 and the proviso of paragraph (2) of that Article;
4) Where a contract is for the manufacture, purchase, or lease of goods or for services and is relevant to academic research, cost accounting, construction technology, etc., which requires special knowledge, technology or qualification, among the contracts the estimated price of which is not less than 20 million won and not more than 100 million won;
5) Where the estimated price of a contract is not less than 20 million won and not more than 100 million and the contract is entered into for the manufacture, purchase, or lease of goods or for services with any of the following persons:
6) Where a contract is not for a construction project nor for the manufacture, purchase, or lease of goods or for services, including lease contracts the estimated price of which is not more than 50 million won;
7) A contract for the manufacture, purchase, or lease of goods or for services concluded with a young person owned start-up defined in subparagraph 11 of Article 2 of the Support for Small and Medium Enterprise Establishment Act, the estimated price of which does not exceed 50 million won;
b. Where goods to be used in an overseas diplomatic mission abroad are manufactured, purchased, or leased locally;
c. Where it is found disadvantageous for the processing, loading and unloading, transportation, or storage of goods through a competition;
d. Where it manufactures or purchases defense supplies under the Defense Acquisition Program Act from a defense contractor;
e. Where it makes a contract for a national project with a person to whom such national project can be entrusted or delegated under any other statute;
f. Where it makes a contract with another state agency or a local government;
g. Where innovative products are to be manufactured, purchased, or leased pursuant to Article 27(1) of the Government Procurement Act;
h. Where a contract is made regarding digital services selected pursuant to Article 20(3) of the Act on the Development of Cloud Computing and Protection of Its Users;
i. Where research facilities and equipment necessary for promoting national research and development projects belonging to a group of innovative, risk-taking research and development projects under Article 24-2(2) of the Enforcement Decree of the Framework Act on Science and Technology are to be manufactured, purchased, or leased;
(2) Where the head or a contracting officer of a central government agency intends to manufacture, purchase, or lease a product specified in the items of paragraph (1)3, he or she may execute a negotiated contract within the period in which the competent Minister's certification, designation, etc. of the goods is effective (including the extended period, where the effective period is extended; hereafter in this paragraph, the same shall apply); provided, a negotiated contract may be executed only for up to 6 years, where the effective period of certification, designation, etc. of the relevant goods exceeds 6 years. <Added on Jul. 21, 2010; Sep. 29, 2020; Dec. 24, 2024>
(3) Where the head or a contracting officer of a central government agency makes a negotiated contract pursuant to paragraph (1) 4, he or she shall check the following matters: <Added on May 25, 2006; Jul. 21, 2010; Sep. 17, 2019>
1. Whether the person with whom it is intended to make the negotiated contract meets the requirements for qualification;
2. Whether the person directly produces the goods to be procured through the negotiated contract.
(4) The head or a contracting officer of a central government agency may request the head of the competent government agency responsible for supervision over a person with whom he or she intends to make a negotiated contract to cooperate with him or her, as necessary for checking the matters specified in paragraph (3). <Amended on May 25, 2006; Jul. 21, 2010; Dec. 31, 2015>
(5) When a contracting officer makes a negotiated contract pursuant to paragraph (1)1c or d, paragraph (1)2, paragraph (1)4b or c, or paragraph (1)5c or e, he or she shall report the details thereof to the head of the central government agency to which he or she belongs, and the head of each central government agency shall notify the Board of Audit and Inspection of contracts made pursuant to paragraph (1)2, out of the details so reported. <Amended on Dec. 31, 1996; Feb. 2, 1998; May 25, 2006; Jul. 21, 2010; Sep. 17, 2019>
(6) Deleted. <Jul. 6, 2021>