If a business entity violates the Subcontracting Act, penalty points are imposed in accordance with Article 26 Paragraph 2 of the Subcontracting Act, besides a corrective order or imposition of a penalty surcharge. If these penalty points accumulated exceed a certain threshold, the Fair Trade Commission(FTC) must request measures such as restrictions on qualifications for a bidding to the head of the relevant administrative agencies. The FTC’s request for measures such as restrictions on participation in bidding is followed in accordance with the State Contracts Act and the Local Government Contracts Act. The State Contracts Act stipulates that a person who has been requested by the FTC to restrict qualifications for participation in bidding is an unfair business person, and the head of each central government agency must restrict the participation qualification of the relevant unfair business person.
As such, in a series of procedures from the imposition of penalty points under the Subcontracting Act to the disposition of restrictions on participation in bidding under the State Contract Act, there was a problem in which it was not clear at what stage the administrative agencies’ decision-making could be contested through a lawsuit. However recently there were several Supreme Court decisions, some of which denied the disposability of the FTC’s imposition of penalty points under the Subcontracting Act(2020Do50683, 2020Do50690, 2020Do54890) while one of which acknowledged the disposability of the FTC’s decision to restrict on participation in bidding(2020Do48260).
Conventionally, there has been some discussions from the aspect of dispute law on ‘intermediate disposition made as a precedent procedure for the final administrative disposition’, but the decisions to impose penalty points and limit the eligibility for bidding under the Subcontracting Act is a case in which one interim disposition leads to subsequent dispositions from multiple administrative agencies. That is it has s unique structure. So far it has not been dealt much in the field of the fair trade law as well as the subcontracting law in the aspect of the dispute law, whether or not it is subject to an appeal litigation where a business can fight against the unfavorable disposition of the administrative agencies. However, considering that remedies for rights through the elimination of disadvantages of business entities are just as important as the significance of the bidding qualification restriction system in order to secure fairness and transparency in bidding, dispute law discussions related to the Subcontracting Act should not be ignored only because they are unfamiliar. In particular, in some cases, since the disposition of restriction on participation in bidding is a strong enough sanctioning measure which could decide the survival of a business, business entities are willing to remove any disadvantages before the restriction on participation in bidding is issued or penalty points is imposed, and that is the reason we need to pay more attention to this matter.
In this article, I will give an overview of the system of restriction on qualification for participation in bidding and imposition of penalty points, treat the general theory of disposability under the Dispute law in order to review the disposability of the decision to impose penalty points and request for restriction on participation in bidding under the Subcontracting Act. After that, I will analyze the Supreme Court’s decisions, and show how it would affect the remedy of rights surrounding the bidding qualification restriction system in the future.