The Seoul Metropolitan Government (“SMG”) announced that it would use the competitive bidding process for its OO management system improvement project and the SMG would, therefore, invite bids, form a bid evaluation committee to evaluate the bids and select the preferred bidders in accordance with Article 43 of the ‘Enforcement Decree of the Act on Contracts to which a Local Government is a Party’ and Chapter 5 of the ‘Criteria for Selecting Preferred Bidders in Local Government Bidding’ (Criteria for Executing Contracts by Negotiation), and select the awardee after negotiations.

In the qualitative evaluation process, the SMG eliminated the highest and lowest scores for each evaluation item and not for each evaluation committee member. A bidder who was not selected as the first preferred bidder thereafter filed an application for provisional disposition to preserve the status of preferred bidder, arguing that the SMG’s process of adding qualitative scores violated the applicable laws and regulations and was therefore not effective.

The highest and lowest scores are eliminated in the qualitative evaluation of bids in national and local government bidding. Chapter 5 of the ‘Criteria for Selecting Preferred Bidders in Local Government Bidding’ (Criteria for Executing Contracts by Negotiation) provides as follows: “Qualitative evaluation shall be the arithmetic average of the scores given by the evaluation committee members other than those who gave the highest score and the lowest score. However, the contractor may, if necessary, specify that the highest and lowest scores will be eliminated for each evaluation item (or sub-item) in the tender notice or specify the detailed evaluation criteria in the request for proposal, etc. If there are two or more highest scores or lowest scores, only one shall be eliminated.” Thus, in principle, the highest and lowest scores should be removed for each evaluation committee member, but eliminating the highest and lowest scores for each evaluation item may be possible if the tender notice, etc. specifies so.

In this case, the SMG’s tender notice and request for proposal did not state that the highest and lowest scores would be eliminated for each evaluation item, but the SMG removed the highest and lowest scores for each evaluation item. DR & AJU successfully assisted in obtaining a decision that the SMG’s processing of qualitative scores violated the Criteria for Executing Contracts by Negotiation and was not effective, because it impaired the fairness and public nature of bidding by allowing preferred bidders to be chosen arbitrarily depending on the scoring methodology. Disputes relating to qualitative evaluation are common in public bidding, and this case set a clear standard for eliminating the highest and lowest scores.