Call Center Falsely Received Service Fees by Manipulating Vacancy Rates... Court Rules "Bid Participation Ban Justified"

A court ruling has upheld the Public Procurement Service's decision to restrict the bidding eligibility of a call center company that falsified the ratio of vacant counselors to receive service fees.

[Image source=Beomryul Newspaper]

The Seoul Administrative Court Administrative Division 11 (then presiding judge Kang Woo-chan) ruled on February 6 against company A, a call center operator, in its lawsuit seeking to cancel the restriction on bidding eligibility imposed by the head of the Public Procurement Service (case number 2022GuHap88637).

Company A, a call center business operator, entered into a contract in 2017 announced by the Public Procurement Service for the "cash receipt and electronic tax invoice counseling consignment operation contract." The contract stipulated that △ the monthly vacancy rate must be maintained at 5% or less, and △ if it exceeds 5%, the service fee payment would be reduced accordingly.

However, an investigation by the Public Procurement Service revealed that company A submitted false payment claim documents when requesting service fees, resulting in excessive receipt of service fees. Consequently, the Public Procurement Service imposed a one-year restriction on company A's bidding eligibility starting from December 2022.

In response, company A filed an appeal lawsuit arguing that "trainees before official employment are recognized as having a subordinate relationship, and employees on parental leave are also considered regular workers under the Labor Standards Act; therefore, including them in the number of deployed counselors is a legitimate calculation method."

The court stated, "Company A did not pay salaries to employees on parental leave, and those employees received parental leave benefits from the Employment Center of the Ministry of Employment and Labor. Nevertheless, company A's managers processed the parental leave employees as if they had logged into the counseling system and worked. This suggests that company A was aware that, in principle, parental leave employees should not be included in the counseling workforce and thus counted as vacancies."

Furthermore, the court ruled, "Considering that the Public Procurement Service allowed full payment of normal service fees within a 5% vacancy rate, taking into account possible work gaps caused by parental leave, retirees, and new hires during counselor operations, it is reasonable not to include trainees, parental leave employees, and absences of regular employees due to leave in the number of deployed counselors. Therefore, company A's claim is without merit."

The court added, "Since company A does not strongly dispute that the excessive service fees it received included trainees, parental leave employees, and retirees, it is clear that the state suffered damages of less than 1 billion KRW. The disposition against company A is necessary to ensure faithful compliance with the State Contract Act and to prevent disadvantages to the state. Therefore, the Public Procurement Service's decision cannot be considered an abuse or deviation of discretionary authority under social norms."

Han Su-hyun, Legal Times Reporter

※This article is based on content supplied by Law Times.