Hello. I am lawyer Oh Seung-hyun from Cheongchul Law Firm.
As AI technology emerges as the core of the national future industry, large-scale national projects commissioned by the government and public institutions are becoming an invaluable opportunity for AI startups. Budgeting in the billions and extended project durations serve as a stepping stone for companies' stable growth and technological advancement. Therefore, being selected as the 'preferred bidder' in national project tenders can be a decisive issue that determines the fate of a single company at times.
However, in such a crucial bidding process, it is not uncommon to face ambiguous evaluation criteria or results that are procedurally hard to understand. When a decision made by an evaluator with a low understanding of AI technology, unfair actions by competitors, or doubts that the evaluation was conducted with different standards than those announced arise, how should our companies respond? Many companies consider formal objections or reports to the Anti-Corruption and Civil Rights Commission, but unfortunately, it is a reality that these alone are unlikely to bring about a fundamental solution.
In this newsletter, we wish to delve deeply into the most certain and powerful legal remedy against unfair bidding results, 'provisional injunction'.
Limitations of Objections and Administrative Procedures
When an issue with the bidding results is suspected, the first method that comes to mind is to officially raise an objection to the issuing agency. However, this can be akin to 'trusting a cat with the fish.' Practitioners at national or public institutions are extremely reluctant to let it be known externally that there were issues in the bidding process. This is because, if the issues are confirmed as facts, those involved may become subjects of audits and disciplinary actions.
This fear acts as a motive for practitioners to downplay and conceal problems rather than solve them. They tend to respond with a formulaic answer such as "there were no procedural defects according to internal reviews," and are highly likely to withhold critical information on grounds like 'protection of trade secrets' or 'internal information' regarding information disclosure requests. Ultimately, in a situation where sufficient information and objective re-examination do not occur, it is nearly impossible for an objection to be accepted.
The Most Powerful Weapon, ‘Provisional Injunction to Preserve Preferred Bidder Status’
The most effective way to break through such frustrating situations is to seek a judgment from the court with a 'provisional injunction.' Specifically, this legal procedure, referred to as 'provisional injunction to preserve preferred bidder status' or 'provisional injunction to suspend subsequent procedures,' requests the court to temporarily halt all subsequent procedures, including contract signing with the competitor unfairly designated as the preferred bidder.
A provisional injunction is a 'temporary' measure predicated on the main lawsuit, but in the context of national project bidding, it is essentially equivalent to the 'main game.' National projects must be rapidly advanced according to a predetermined schedule. If the court grants the provisional injunction and suspends subsequent procedures, the issuing agency cannot wait for years until the main lawsuit is concluded. This is because the project itself may be at risk of sinking.
Therefore, when the court grants the provisional injunction, the issuing agency usually reverts its previous decision and selects the provisional applicant (i.e., the unfairly eliminated company) as the new preferred bidder to proceed with the project. In other words, winning the provisional injunction not only serves as a simple temporary measure but also has a decisive effect of effectively regaining the status of the preferred bidder.
Key Strategies for Winning Provisional Injunctions
So, how can one succeed in a provisional injunction? The key lies in two aspects: 'rapid evidence acquisition' and 'logical persuasion.'
First, securing objective and sufficient evidence is of utmost importance. All official documents as well as any materials that can prove the irrationality of the evaluation process must be rapidly collected. For instance, if a company was eliminated despite receiving a perfect score in quantitative evaluation items, it would be necessary to gather evidence logically supporting situations that indicate an unfair evaluation favoring specific competitors or issues with the composition of evaluators.
Second, the assistance of an expert who can persuade the court within a short time frame is essential. Provisional injunction hearings typically occur rapidly within 1 to 2 months. During this short period, one must delve into the flaws in the issuing agency’s claims of 'procedural legitimacy' and clearly explain to the court why that decision is unfair and illegal. Establishing a response strategy in collaboration with legal representatives or practical experts well-versed in AI technology and public procurement laws is key to winning. Fortunately, judges overseeing provisional injunction hearings make objective judgments solely based on the evidence submitted and legal principles, rather than the internal logic of the agency. Persuading the judge with cold evidence and logic is a much clearer and more reliable way to secure a win in the bid compared to appealing to emotions or begging the agency.
Conclusion
No one should face frustration from unfair evaluations in national projects prepared with innovative AI technology and passion. If you have strong doubts about the fairness of the bidding process, do not hesitate any longer. Do not get trapped in the limited framework of objections; instead, regain your rightful opportunity through the powerful legal right of a ‘provisional injunction.’ If you secure rapid evidence and have meticulous legal responses via experts working together, it will be possible to correct unfair procedures and create outcomes where our company's technological capabilities and efforts are justly evaluated.
