Government Procurement Act, 1720

Bill as submitted to the Hopper of the Federal Assembly, 1720

A

BILL

TO

To Prescribe Matters Necessary for the Scope, Administration and Management of Public Procurement Services to Ensure the Fair and Efficient Performance Thereof; Among Other Purposes.

GOVERNMENT PROCUREMENT ACT, 1720

Ordered, by the Federal Assembly of Nouvelle Alexandrie,
to be Printed, 1720 AN.

_______________________________

BE IT ENACTED by the King's Most Excellent Majesty, by and with the advice and consent of the Federal Assembly, in this present session assembled, and by the authority of the same, as follows:-

PART I
GENERAL PROVISIONS.

Article 1: Short Title.

1. This act shall be known as the "Government Procurement Act, 1720."
   

Article 2: Definitions.
The definitions of terms used in this Act are as follows:

1. The term "procurement commodities" means demand commodities and stockpile commodities.
2. The term "demand commodities" means the commodities prescribed by Royal Decree, which are required by an end-user institution.
3. The term "stockpile commodities" means any raw materials, facility materials, and daily necessities the Government stores up or supplies either solely or in cooperation with the private sector, for the smooth supply and demand of commodities, price stabilization, and preparedness for emergencies, such as disasters and national crises, both on a short-term and long-term basis, which are commodities prescribed by Royal Decree;
4. The term "safety management commodities" means the procurement commodities related to the safety of citizens living, protection of life, and public health and sanitation, which are designated and publicly notified by the Administrator of the Public Procurement Service;
5. The term "end-user institution" means any of the following agencies requiring procurement commodities, conclusion of contracts for construction works, or management of facilities:
   1. Independent government bodies and federal government agencies (hereinafter referred to as "federal agencies");
   2. Regional and local governments as established by law (hereinafter referred to as "regional and local governments");
   3. Other agencies prescribed by Royal Decree.
      
      

PART II
PUBLIC PROCUREMENT SERVICE.

Article 3: Public Procurement Service.

1. A body to be known as the Public Procurement Service shall be established for the purpose of centralizing all federal government procurement activities and enhancing efficiency in public procurement.
2. The Public Procurement Service shall be shall be responsible for:
   1. Developing and implementing procurement policies and strategies;
   2. Conducting procurement for government departments, agencies, and public institutions;
   3. Providing advice and assistance to government departments, agencies, and public institutions on procurement matters;
   4. Promoting and ensuring transparency, fairness, and competitiveness in public procurement;
   5. Providing procurement-related training and education to public officials and suppliers;
   6. Any other roles and responsibilities as may be prescribed by law or regulation.
3. The Public Procurement Service shall have an Administrator and a Vice Administrator.
4. The Administrator shall be a public official in political service, appointed by the President of the Government, on the advice of the Council of State, for a fixed term of five AN years, renewable once.
5. The Vice Administrator shall be appointed from among public officials in general service belonging to the Senior Executive Service, for a term of five AN years, renewable.
6. The Public Procurement Service may have such other officers and staff as may be necessary for the efficient performance of its functions, as provided by the law.
7. The Administrator shall represent the Public Procurement Service and oversee the overall operations of the Public Procurement Service.
8. The Vice Administrator shall assist the Administrator and shall perform the functions of the Administrator in the absence of the Administrator or when the Administrator is unable to perform their functions due to illness or any other cause.
9. The Administrator shall submit an annual report on the operations of the Service to the relevant minister, which shall be laid before the parliament.
10. The Service shall be subject to audit by the relevant government agencies or by the Department of Treasury.
11. The Council of State or the Secretary of Treasury may make regulations for the effective implementation of this Act.
12. The scope of public procurement services conducted by the Administrator of the Public Procurement Service is as follows:
    1. Purchase, distribution management, and supply of procurement commodities, and other services ancillary thereto;
    2. Awarding construction contracts for end-user institutions, and other services ancillary thereto;
    3. Administration and operation of facilities for end-user institutions, and other services ancillary thereto;
    4. Quality management of procurement commodities and safety management commodities;
    5. Cooperation in international procurement and support for overseas procurement market expansion;
    6. Other services that the Administrator of the Public Procurement Service may or is required to perform under other statutes and regulations.
13. Article 3 of the Office of Procurement and Joint Production Accelerator Cell Act, 1719 is stricken from the Act, with the duties, officers, and resources of the Office of Procurement herein established becoming part of the Public Procurement Service, to be integrated and reorganized as determined by the Administrator of the Public Procurement Service.
14. The Office of Procurement and Joint Production Accelerator Cell Act, 1719 shall be amended as follows:
    1. Article 2, paragraph (1): The Public Procurement Service refers to the federal government agency established by the Government Procurement Act, 1720.
    2. Article 4, paragraph (1): The Joint Production Accelerator Cell is hereby established under the Public Procurement Service.
    3. Article 4, paragraph (4): The Joint Production Accelerator Cell shall be led by a Cell Director, appointed by the Administrator of the Public Procurement Service, who shall serve for a term of two years, renewable once.
    4. Replace the words "Office of Procurement" with the "Public Procurement Service" in Articles 5 and 6.
15. The National Ordnance and Procurement Board is hereby placed under the jurisdiction of the Public Procurement Service.
16. Public procurement services shall be governed by this Act, except as otherwise specifically provided in any other statute.
    
    

PART III
FOUNDATIONS IN PUBLIC PROCUREMENT POLICY.

Article 4: Procurement Policy Deliberation Committee.

1. A Procurement Policy Deliberation Committee (hereinafter referred to as the "Committee") shall be established under the jurisdiction of the Council of State of Nouvelle Alexandrie to deliberate on the following matters regarding procurement policies:
   1. Establishment of mid- to long-term policies and systems for public procurement;
   2. Matters concerning the creation of public demand and selection of purchases for improvement of public services and technological innovation;
   3. Matters concerning performance management and evaluation related to public procurement;
   4. Other matters referred to the Committee by the chairperson for deliberation so as to facilitate procurement policy.
2. The Committee shall be comprised of not more than 20 members including the chairperson.
3. The office of chairperson of the Committee shall be assumed by the Secretary of the Treasury, and the members shall be appointed or commissioned by the Secretary of the Treasury from among both the public officials of the relevant federal administrative agencies and those who have plenty of academic knowledge and experience in the fields of public procurement, economy, science, and technological innovation.
4. The Secretary of Defense shall be part of the Procurement Policy Deliberation Committee.
5. Subcommittees, such as the committee for creation of public demand, may be established by area under the Committee to ensure efficient operation of the Committee. In such cases, deliberation in the subcommittees shall be deemed deliberation in the Committee.
6. The Committee and subcommittees may have working committees to assist in their work.
7. Matters necessary for the organization and operation of the Committee, subcommittees and working committees shall be prescribed by Royal Decree.
   

Article 5: Encouragement of Patriotic Social Responsibilities.

1. To encourage patriotic social responsibilities of enterprises, the Administrator of the Public Procurement Service may reflect the values of the Federation, such as loyalty to the crown, environmental conservationism, humanism, patriotism, national preference in fair trade, and consumer protection, in the procurement procedures.
   

Article 6: Procurement Education.

1. The Administrator of the Public Procurement Service may provide procurement education to improve the expertise and capabilities of personnel of the Public Procurement Service, end-user institutions, and private enterprises, engaging in procurement services or delivery services.
   

Article 7: Procurement Statistics.

1. In order to understand the status of public procurement and formulate and implement effective procurement policies, the Administrator of the Public Procurement Service shall prepare statistics on contracts signed by the heads of Federal agencies, regional and local governments, and other institutions prescribed by Royal Decree (hereafter referred to as "Federal agencies, etc." in this Article).
2. The Administrator of the Public Procurement Service may request a Federal agency, etc. (referring to the end-user institution in the case of a contract signed by the Administrator of the Public Procurement Service; hereinafter the same shall apply) to provide data necessary to prepare statistics on contracts.
3. Upon receipt of a request to provide data pursuant to paragraph (2), a Federal agency, etc. shall comply therewith, without good cause.
4. Matters necessary for the subject matters of statistics to be prepared under paragraph (1) and for the methods and procedures for preparing such statistics shall be prescribed by Royal Decree.
   

Article 8: Requests for Providing Data.

1. Where deemed necessary for efficiently performing purchases of commodities to be procured from foreign countries and formulating stockpiling plans, as part of public procurement services referred to in Article 3, and effectively managing programs for assisting the entry into overseas procurement markets, the Administrator of the Public Procurement Service may request the head of a relevant administrative agency to provide data on import and export, including records of customs clearance of commodities, etc., as prescribed by Royal Decree. In such cases, the head of the relevant administrative agency shall comply therewith, unless there is a compelling reason not to do so.
2. The Administrator of the Public Procurement Service shall protect the data provided under paragraph (1) in compliance with the laws when they handle such data.
   
   

PART III
REQUESTS FOR ENTERING INTO CONTRACTS AND SPECIAL CASES FOR CONTRACTING METHODS.

Article 9: Requests for Entering into Contracts.

1. Where the value of money requested for a contract, the nature of a contract, and any other matters comply with the standards prescribed by Royal Decree, in entering into a contract pertaining to demand commodities or construction works, the head of an end-user institution shall request the Administrator of the Public Procurement Service to enter into a contract provided that the foregoing shall not apply to cases prescribed by Royal Decree for which it is impracticable to request the conclusion of a contract due to a natural disaster or other force majeure event or for which it is inappropriate to request the conclusion of a contract for national defense or the protection of national secrets or due to a disaster, emergency relief, or special features of technology.
2. The head of an end-user institution may request the Administrator of the Public Procurement Service to enter into a contract for the purchase of demand commodities or construction works even in cases not falling under the main clause of paragraph (1).
3. Where the Administrator of the Public Procurement Service is requested to enter into a contract under the main clause of paragraph (1) and paragraph (2), they shall determine a contracting method and others in consultation with the end-user institution, according to statutes and regulations that the end-user institution shall apply with respect to the conclusion of a contact provided that consultation may be omitted if deemed unnecessary for the purpose or nature of contract.
4. If the consultation under the main clause of paragraph (3) ends in vain, the Administrator of the Public Procurement Service may have the end-user institution directly enter a contract.
   

Article 10: Unit Price Contracts for Third Parties.

1. With respect to a contract for manufacture, purchase, processing, etc. of demand commodities, which are required by an end-user institution, the Administrator of the Public Procurement Service may enter a contract under which they only determine a unit price in advance (hereinafter referred to as "unit price contract for a third party").
2. Where the other party to a contract requests the termination of the contract during the duration thereof due to the cessation of business caused by the deterioration of business, the difficulty in finding the raw materials or other reasons prescribed by Royal Decree, the Administrator of the Public Procurement Service may accept such request except in the cases falling under any of the following subparagraphs:
   1. Where delivery is currently in progress.
   2. Where the other party commits an act falling under any of the subparagraphs of Article 20 (1);
   3. Other cases prescribed by Royal Decree, such as a breach of contract.
3. Matters necessary for the conclusion and termination of unit price contracts for third parties shall be prescribed by Royal Decree.
   

Article 11: Contract with Multiple Suppliers.

1. When purchasing demand commodities required by an end-user institution, the Administrator of the Public Procurement Service may enter a contract pursuant to Article 10 with at least two persons as parties to the contract (hereinafter referred to as "contract with multiple suppliers") so that the end-user institution can select demand commodities equal or like one another in quality, performance, efficiency, etc.
2. With respect to the conclusion of a contract with multiple suppliers, the other party to the contract shall keep the contract price equal to or lower than the market transaction price (referring to the price for which the other party to the contract enters into a contract directly with an end-user institution or the price at which the other party to the contract supplies the relevant product to the market) of the contracted product (including the products of the other party to the contract whose performance and specifications are equal to or higher than those of the contracted product).
3. If the other party to a contract violates paragraph (2) without good cause, the Administrator of the Public Procurement Service may reduce the amount of delivery by the difference between the two prices or request the other party to the contract to do so.
4. The conclusion of contracts with multiple suppliers, the reduction of the amount of delivery by the difference and requests for such reduction, and other necessary matters, shall be prescribed by Royal Decree.
   

Article 12: Special Cases concerning Contracting Methods.

1. The Administrator of the Public Procurement Service may enter a contract according to the contracting methods prescribed by Royal Decree, if they deem it necessary to purchase and supply procurement commodities required by each end-user institution.
2. Where the Administrator of the Public Procurement Service purchases standardized products in a scale not smaller than the scale prescribed by Royal Decree, among competing products manufactured by small and medium enterprises, to increase opportunities for small enterprises and small and micro enterprises to receive orders, they may execute a procurement contract through competitive bidding among joint suppliers composed of small and medium enterprises.
3. If it is found that bidders negotiated and agreed on bidding prices in advance during the competitive bidding pursuant to paragraph (2) or joint suppliers colluded in bidding for successful bidding of a particular person, the Administrator of the Public Procurement Service shall take necessary measures, such as the revocation of a decision on a successful bidder or the cancellation, termination, etc. of a contract, against such bidders provided that the foregoing shall not apply where an exceptional situation prescribed by Royal Decree exists, such as where no suitable contractor or manufacturer exists, except those against whom necessary measures, such as the revocation of a decision on a successful bidder or the cancellation, termination, etc. of a contract, shall be taken.
4. The Administrator of the Public Procurement Service shall place restrictions on the qualification of members of a joint supplier referred to in the main clause of paragraph (3) for participating in bidding pursuant to the laws.
5. The scope of standardized products, the organization of joint suppliers, etc. pursuant to paragraph (2) shall be prescribed by Royal Decree.
   
   

PART III
PRICE PAYMENT.

Article 13: Price Payment.

1. Where the Royal Decree determines that it is more efficient for the Administrator of the Public Procurement Service to pay the price for the performance of a contract on behalf of the head of an end-user institution (hereinafter referred to as "substitute payment") in view of the scale of the contractor, contracting method, its own financial conditions, etc., on condition that the contract concluded as such has been performed in normal ways, the Administrator shall pay such price in substitution.
2. Where substitute payment has not been made by the Administrator of the Public Procurement Service as it does not fall under paragraph (1), the head of an end-user institution shall directly pay the relevant price to the other party to the contract and notify the Administrator of the Public Procurement Service of the fact as soon as such payment is made.
3. Where the head of an end-user institution intends to pay the price in advance, they may make an advance payment to the Administrator of the Public Procurement Service.
4. Necessary matters concerning collection procedures, payment deadline, etc. for the amount paid in substitution under paragraph (1) shall be prescribed by Royal Decree.
   

Article 14: Fees.

1. The Administrator of the Public Procurement Service may collect fees from end-user institutions in relation to public procurement services.
2. Fees referred to in paragraph (1) shall be deemed the revenue of the special account for procurement (hereinafter referred to as "special account for procurement").
3. The Administrator of the Public Procurement Service may grant the reduction or exemption (hereinafter referred to as "reduction or exemption") of fees under paragraph (1) if any of the following subparagraphs applies:
   1. Where they have been paid the price from the head of an end-user institution in advance under Article 13 (3);
   2. Where the conclusion of a contract for demand commodities or construction works is delayed due to any reason not attributable to an end-user institution;
   3. Other cases prescribed by Royal Decree where it is necessary to grant the reduction or exemption of fees, such as the facilitation of purchase of small and medium enterprise-manufactured products.
4. Necessary matters concerning the determination and procedures for collection of fees referred to in paragraph (1) and the reduction or exemption of fees referred to in paragraph (3) shall be prescribed by Royal Decree.
   

Article 15: Arrears.

1. The Administrator of the Public Procurement Service may impose an arrear, as prescribed by Royal Decree, on the head of any end-user institution who fails to pay the amount paid in substitution under Article 13 (1) or fees under Article 14 (1) by the deadline for payment.
   
   

PART IV
QUALITY MANAGEMENT OF PROCUREMENT COMMODITIES AND SAFETY MANAGEMENT COMMODITIES.

Article 16: Quality Management of Procurement Commodities.

1. In order to improve the quality of procurement commodities, the Administrator of the Public Procurement Service may execute the following affairs for quality management:
   1. Inspection of production facilities and manpower to ascertain whether a manufacturer produces commodities directly;
   2. Quality inspection and inspection upon delivery to ascertain the production and delivery of products in conformity with agreed specifications;
   3. Follow-up management of delivered commodities;
   4. Development and examination of standard specifications for procurement commodities;
   5. Other affairs necessary for the quality management of procurement commodities.
2. The Administrator of the Public Procurement Service may require businesses subject to test or inspection to bear expenses incurred in testing or inspection for quality management under paragraph (1) 2, as prescribed by Royal Decree provided that expenses incurred in testing and inspecting commodities upon delivery shall be borne by each business so inspected.
3. Matters regarding the standards, procedures, etc. necessary to execute quality management under paragraph (1) shall be determined and publicly notified by the Administrator of the Public Procurement Service.
   

Article 17: Quality Management of Safety Management Commodities.

1. For the safety of the people, the Administrator of the Public Procurement Service shall execute the affairs referred to in the subparagraphs of Article 16 (1) for the quality management of safety management commodities.
2. Matters necessary for the selection of items of safety management commodities, and the revocation and change thereof, shall be prepared, and publicly notified by the Administrator of the Public Procurement Service, in consultation with related agencies.
   

Article 18: Special Cases concerning Quality Management.

1. Upon receipt of a request from the head of a relevant agency or institution to conduct an inspection on delivery pursuant to Article 16 (1) 2 regarding commodities or services falling under any of the following subparagraphs, the Administrator of the Public Procurement Service may conduct the inspection on delivery on behalf of the head of the agency or institution:
   1. Commodities or services directly procured by the head of a Federal agency (including the head of a public institution);
   2. Commodities or services directly procured by the head of a regional or local government;
   3. Commodities or services directly procured by the Department of Defense.
      
      

PART V
FAIRNESS IN PUBLIC PROCUREMENT SERVICES.

Article 19: Investigation into Unfair Procurement Practices.

1. Upon receipt of a report on any of the following practices that harm fairness in the procurement process for demand commodities (hereinafter referred to as "unfair procurement practices"), the Administrator of the Public Procurement Service may require public officials under his or her jurisdiction to demand the submission of relevant materials from the other party to the contract, the bidder, or the person who has submitted a quotation through the integrated national electronic procurement system (hereafter referred to as "other party to the contract, etc." in this Article), or may require them to visit any office, place of business, factory, etc. to inspect facilities, documents, etc., if necessary for investigating the report:
   1. Counterfeiting or falsifying any document regarding the bid, contract, inspection upon delivery, etc., or submitting any false document;
   2. Delivering goods in violation of direct production standards;
   3. Delivering goods with any false label of the place of origin;
   4. Delivering goods inconsistent with the contract standards without prior consent of the end-user institution, etc.;
   5. Violating Article 11 (2);
   6. Obtaining designation of exemplary procurement commodities, etc. under Article 24 (1) by fraud or improper means.
2. A public official conducting the inspection under paragraph (1) shall present an identification indicating his or her authority to interested parties.
3. A public official conducting the inspection under paragraph (1) shall do so within the minimum extent necessary for enforcing this Act and shall not abuse their authority for other purposes.
4. Where any unfair procurement practice is found, the Administrator of the Public Procurement Service may require the other party to the contract, etc. to rectify such practice, and shall take dispositions or other actions pursuant to relevant statutes and regulations or the terms and conditions of the contract.
5. Where required to rectify under paragraph (4), the other party to the contract, etc. may raise an objection to the Administrator of the Public Procurement Service, as prescribed by Royal Decree.
6. Where the other party to a contract, etc. gains any profit from any unfair procurement practice under paragraph (1) 1 through 6, the Administrator of the Public Procurement Service may redeem it.
7. Where deemed necessary, the head of an end-user institution may request an investigation into unfair procurement practices from the Administrator of the Public Procurement Service, and if the Administrator of the Public Procurement Service requests him or her to submit materials necessary for investigation, they shall comply therewith, unless there is a compelling reason not to do so.
   

Article 20: Suspension of Transactions.

1. If the other party to a contract concluded pursuant to Articles 10 and 11 falls under any of the following subparagraphs at the time of implementing the contract, the Administrator of the Public Procurement Service may have the other party to the contract or the detailed commodities or items suspended from transaction for up to two years, as prescribed by Royal Decree:
   1. Where the other party violates Article 10 (2);
   2. Where the place of origin of commodities is falsely registered in the Electronic Procurement System established by the Administrator of the Public Procurement Service;
   3. Where the other party joins with another party to the contract in forging a related document, such as an electronic tax invoice, or in committing a fraudulent act, such as counterfeiting or falsification, in the process of bidding or concluding or implementing the contract;
   4. Where the other party commits an act specified by Royal Decree in the process of bidding or concluding or implementing the contract.
2. Details of and standards for suspension of transactions pursuant to paragraph (1), and other necessary matters, shall be prescribed by Royal Decree.
   

Article 21: Payment of Monetary Rewards.

1. The Administrator of the Public Procurement Service may pay a monetary reward within budgetary limits to a person who has reported or informed on the act of giving or receiving a bribe in relation to the duties of a public official performing public procurement services or on an unfair procurement practice and submitted evidential materials backing it up (hereinafter referred to as "reporter, etc.").
2. A person who has received a report or information under paragraph (1) shall keep confidentiality on identity, etc. of the reporter, etc.
3. Matters concerning the scope of persons eligible to receive monetary rewards under paragraph (1) and the criteria and procedures for payment of monetary rewards shall be prescribed by Royal Decree.
   
   

PART V
ASSISTANCE TO END-USER INSTITUTIONS AND SUPPLIERS.

Article 22: Assistance in and Vicarious Execution of Procurement Services of End-User Institutions.

1. If requested by the head of an end-user institution, the Administrator of the Public Procurement Service may aid in or vicariously perform any of the following affairs prescribed by Royal Decree:
   1. Procurement of demand commodities related to the software business and affairs related to projects pertaining thereto;
   2. Contracts for construction works and affairs related to projects pertaining thereto.
      

Article 23: Assistance to Suppliers.

1. The Administrator of the Public Procurement Service may help with suppliers to enter into the procurement market, such as operating assistance centers and online commodity markets, as prescribed by Royal Decree.

Article 24: Designation of Exemplary Procurement Commodities.

1. The Administrator of the Public Procurement Service may designate and publicly notify any of the following commodities or trademarks as exemplary procurement commodities or exemplary procurement joint trademarks (hereafter referred to as "exemplary procurement commodities, etc." in this Article) to improve the quality of procurement commodities:
   1. Exemplary procurement commodities: Commodities produced by any of the following enterprises, the performance, technology, or quality of which meets the standards prescribed by Royal Decree:
      1. Any of small and medium enterprises;
      2. Any of the enterprises which meets the criteria prescribed by Royal Decree;
   2. Exemplary procurement joint trademarks: Joint trademarks developed and retained by small and medium entrepreneurs not less than the number prescribed by Royal Decree to enhance sales activities, the technology, quality certification, etc. of which meet the standards prescribed by Royal Decree.
2. The Administrator of the Public Procurement Service may take necessary measures to increase the purchase of and to expand a market for exemplary procurement commodities, etc., as prescribed by Royal Decree.
3. The Administrator of the Public Procurement Service may suspend the effect of or revoke the designation of exemplary procurement commodities, etc. designated under paragraph (1), in cases prescribed by Royal Decree, including failure to meet initial designation standards.
4. Details on designation procedures and period of exemplary procurement commodities, etc., the suspension of effect of designation, and the revocation of designation, shall be prescribed by Royal Decree.
   

Article 25: Support for Public Purchase of Innovative Products.

1. To improve public services and promote technological innovation, the Administrator of the Public Procurement Service may support the public purchase of innovative products that serve the public interest (hereinafter referred to as "innovative products"), designated as such after deliberation by the Committee pursuant to Article 4 (1) 2, according to each of the following:
   1. Trial purchase and supply of innovative products;
   2. Building and operation of public purchase support system for innovative products.
2. The Administrator of the Public Procurement Service shall consult in advance with the Secretary of the Treasury about the methods of supporting public purchase pursuant to paragraph (1), and matters necessary therefor shall be prescribed by Royal Decree.
3. If a product designated under paragraph (1) fails to meet the initial designation standards or otherwise falls under any of the cases prescribed by Royal Decree, the Administrator of the Public Procurement Service may revoke the designation.
4. Where a person in charge of purchase at an end-user institution has purchased an innovative product, they shall not be liable for any loss incurred from the purchase of such product unless his or her intent or gross negligence is proved.
   

Article 26: Cooperation in International Procurement and Assistance in Entry into Overseas Procurement Markets.

1. In order to create an environment for fair competition in the procurement market, the Administrator of the Public Procurement Service may expand exchanges and cooperation with related domestic institutions and procurement authorities in foreign countries and may assist domestic enterprises in entering overseas procurement markets.
2. Procedures and methods for assisting domestic enterprises entry into overseas procurement markets under paragraph (1), and other necessary matters, shall be prescribed by Royal Decree.
   
   

PART VI
STOCKPILING PROJECTS.

Article 27: Purchase and Supply of Stockpile Commodities.

1. The Administrator of the Public Procurement Service may determine the timing and quantity of purchase of stockpile commodities by item in consideration of the domestic supply and demand status of stockpile commodities.
2. A person who intends to use stockpile commodities supplied by the Administrator of the Public Procurement Service (hereinafter referred to as "user") shall register himself or herself in the National Procurement Systems, as determined by the Administrator of the Public Procurement Service.
3. No user may resell any stockpile commodities supplied by the Administrator of the Public Procurement Service to others without further manufacturing and processing.
4. The Administrator of the Public Procurement Service shall cancel the user registration of any legal entity that violates paragraph (3) and the representative thereof and may restrict the user registration thereof for up to two years, as prescribed by Royal Decree.
5. The Administrator of the Public Procurement Service may recover the difference between the original amount of payment and the amount of resale by the user that violated paragraph (3), as prescribed by Royal Decree.
   

Article 28: Determination of Sales Price of Stockpile Commodities.

1. The sales price of stockpile commodities shall be determined by the Administrator of the Public Procurement Service by considering the purchase cost (including expenses directly incurred for management, including the price of goods and distribution management costs; hereinafter the same shall apply), demand and supply of commodities in question, the trend of price and any other aspects.
2. Where the sales price of stockpile commodities exceeds the purchase cost, the amount of excess shall be deemed the revenue of the special account for procurement.
3. The Administrator of the Public Procurement Service shall require an end-user institution or a private company to pay the sales price before delivering stockpile commodities if they may permit the end-user institution or private company to pay the sales price after delivering stockpile commodities, at its request, if deemed necessary for efficient execution of a stockpile project.
4. A person who intends to purchase any stockpile commodities (excluding the Administrator of the Public Procurement Service and private business operators under Article 30 (2) ) may pay the purchase price of the stockpile commodities by credit card, debit card, etc. (hereafter referred to as "credit card, etc." in this Article) through an institution designated by the Administrator of the Public Procurement Service, as prescribed by Royal Decree, to make vicarious payment of purchase prices of stockpile commodities (hereafter referred to as "institution for vicarious payment of price of stockpile commodities" in this Article).
5. Where the purchase price of any stockpile commodities is paid by credit card, etc. under paragraph (4), the date of approval granted by the institution for vicarious payment of price of stockpile commodities shall be deemed the date of payment of the purchase price.
6. An institution for vicarious payment of price of stockpile commodities may receive fees from persons who intend to purchase stockpile commodities, in return for the vicarious payment of the purchase prices.
7. Matters necessary for the designation and operation of institutions for vicarious payment of price of stockpile commodities, fees for vicarious payment, etc., shall be prescribed by Royal Decree.
   

Article 29: Derivatives Trading.

1. The Administrator of the Public Procurement Service may deal in derivatives if required to avoid risks due to the price fluctuation and the unstable supply and demand of stockpile commodities.
2. Details and scope of derivatives trading under paragraph (1) and other necessary matters shall be provided for by Royal Decree.
   

Article 30: Private-Public Joint Stockpiling Projects.

1. The Administrator of the Public Procurement Service may perform a private-public joint stockpiling project in cooperation with private sectors, if required to revitalize stockpiling projects.
2. The Administrator of the Public Procurement Service may provide support necessary for commodities stockpiled by a private business operator participating in a private-public joint stockpiling project under paragraph (1) and reduce or exempt fees for using stockpiling facilities if the properties and quantity of stockpile commodities, a stockpiling period and any other matters meet the standards prescribed by Royal Decree.
3. The Administrator of the Public Procurement Service may request a private business operator who has received support or whose usage fees have been reduced or exempted under paragraph (2) to preferentially sell the commodities stockpiled by the said business operator to the Public Procurement Service, and take disciplinary measures prescribed by Royal Decree, including collecting back the usage fees reduced or exempted under paragraph (2), if the said business operator fails to comply therewith, without good cause.
4. Subjects eligible to participate in private-public joint stockpiling projects under paragraph (1), the method of participation and other necessary matters shall be prescribed by Royal Decree.
   
   

PART VII
SUPPLEMENTARY PROVISIONS.

Article 31: Entrustment of Facility Management.

1. If deemed necessary to perform public procurement services, the Administrator of the Public Procurement Service may entrust some of the affairs to another administrative agency or a legal entity, organization, or individual with the management and operation of the warehouses, container yards, and other facilities belonging to the special account for procurement, services specified in the subparagraphs of Article 3, affairs specified in the subparagraphs of Article 16 (1) and in Articles 17 (1) and 18, as prescribed by Royal Decree provided that when they entrusts any affairs specified in Article 16 (1) 2, 17 (1), or 18, they shall entrust such affairs to a laboratory accredited under the laws.
2. The Administrator of the Public Procurement Service or any administrative agency, legal entity, organization, or individual that has been entrusted with affairs under paragraph (1) (hereinafter referred to as "entrusted institution") may keep and manage commodities, other than procurement commodities, in the facilities as a trustee.
3. The Administrator of the Public Procurement Service may wholly or partially subsidize expenses incurred in performing the entrusted affairs under paragraph (1) within budgetary limits of the special account for procurement.
4. An entrusted institution shall keep and preserve records on the execution of the relevant affairs.
5. If necessary, the Administrator of the Public Procurement Service may require an entrusted institution to submit materials relevant to its business or may authorize public officials under his or her jurisdiction to enter a relevant office or place of business and inspect the performance of quality management.
6. If an entrusted institution falls under any of the following subparagraphs, the Administrator of the Public Procurement Service may revoke the entrustment or order its inspection service suspended for a fixed period of one month to one year provided that in cases falling under subparagraph 1, the entrustment shall be revoked:
   1. Where it is entrusted with the affairs by fraud or improper means;
   2. Where the head of the institution that is entrusted with the affairs requests the revocation of the entrustment;
   3. Where its accreditation as an authorized institution in the field of inspection is wholly revoked by the relevant agency;
   4. Where the inspection is conducted by fraud or improper means;
   5. Cases where it is unlikely to ensure the reliability or fairness of its service, as determined and publicly notified by the Administrator of the Public Procurement Service.
7. Matters necessary for the entrustment of affairs under paragraph (1), the designation, administration and supervision of entrusted institutions, the suspension of inspection services of entrusted institutions and the revocation of entrustment shall be determined and publicly notified by the Administrator of the Public Procurement Service.
   

Article 32: Legal Fiction as Public Officials in Application of Penalty Provisions.

1. A person who falls under any of the following subparagraphs shall be deemed a public official for the purposes of criminal prosecution under the laws:
   1. A member, other than a public official, of the Committee or a subcommittee or working committee under Article 4;
   2. An executive officer or employee of an entrusted institution who is engaged in affairs entrusted under Article 31.
      

Article 33: Administrative Fines.

1. Any of the following persons shall be subject to an administrative fine not exceeding three million ecu:
   1. A person who fails to keep and preserve relevant records, in violation of Article 31 (4), or who keeps and preserves false records;
   2. A person who fails to submit materials specified in Article 31 (5) or who submits false materials;
   3. A person who refuses, interferes with, or evades an inspection under Article 31 (5), without good cause.
2. Administrative fines under paragraph (1) shall be imposed and collected by the Administrator of the Public Procurement Service, as prescribed by Royal Decree.
   
   

PART VIII
CLOSING PROVISIONS.

Article 34: Commencement and Application.

1. This Bill shall apply to all of the Federation of Nouvelle Alexandrie.
2. This Bill shall not become law unless it has been given Royal Assent.
3. In the event any provision or part of this Bill is found to be invalid or unenforceable, only that particular provision or part so found, and not the entire Bill, will be inoperative.