Korea's public procurement market, valued at approximately KRW 209 trillion annually, is in principle open to foreign companies on the same basis as domestic companies, in accordance with international trade norms such as the Government Procurement Agreement (“GPA”) and Free Trade Agreement (“FTA”).

Korea's public procurement market is structured so that the Korean government will be the contractual counterparty to the contractor regardless of the actual bid issuer (e.g. a particular government agency, provincial local government, or a public institution). That said, depending on which party is actually involved, the underlying applicable laws and regulations may differ (E.g. Act on Contracts to Which the State is a Party, Act on Contracts to Which a Local Government is a Party, and Act on the Management of Public Institutions). Therefore, to enter Korea's public procurement market, it is necessary to thoroughly understand the procedures and obligations set forth in these relevant laws and regulations in advance.

Let us briefly examine the general principles of contract in Korea's public procurement market.
 
In order to ensure fairness and transparency in public contracts, the competitive bidding method is the default rule for executing contracts in the public procurement market. The bid issuing authority must open the bid to multiple bidders, and through the bid announcement they disclose key contract terms and conditions – such as subject matter, budget, and performance period of the contract – as well as eligibility requirements for bidders and other aspects of bidding procedures.

Those who wish to participate in bidding will need to fully understand the requirements under the applicable laws/regulations and the details specified in bidding documents beforehand, and bear responsibility for any failure to do so. However, before the bid submission deadline, a prospective bidder may avoid such liability by actively requesting the bid issuing authority to clarify any errors, omissions, or matters requiring further explanation in the bidding documents, which are discovered when reviewing the documents.
 
Because bidders are responsible for understanding the bid announcement, and since the major contract terms and conditions – such as the subject matter, budget, and performance period – specified in the bid announcement become part of the actual contract once the successful bidder is determined, it is crucial to thoroughly understand the content of the bid announcements.

In this regard, foreign companies seeking to enter Korea’s public procurement market need to carefully review the various legal requirements in advance to avoid unexpected risks.

[Korean Version]