Regulations for the Cooperation between National Defense Technology Institutions and Private Entities for Research, Development, Production, Manufacture and Maintenance Article 19

Paragraph (1)Where the research and development work related to the national defense industry on which a National Defense Technology Institutions commissions Private Entities to do is pertaining to an original model, or an object which is manufactured or supplied for the first time, it shall be handled in the manner for research and development , experiment or development and, where the budget for such work exceeds the published amount as prescribed by the Government Procurement Law, It may be handled by adopting the restricted invitation for bids measuring under the Government Procurement Law. The same rule shall apply where the volume production after the research and development work involves exclusive rights, the Private Entities have rights for exclusively manufacture or supply, or in the cases where there are no other appropriate substitutes.Paragraph (2)When the commission as referred to in the preceding paragraph pertains to a confidential or highly confidential procurement as prescribed by the Government Procurement Law, the National Defense Technology Institutions may combine the first-time research and manufacture or development and volume production [of the new products] into one case and attend to the procurement of the same. However, the procurement shall comply with the provisions of the "Applicable Scope for Special Military Procurement and Treatment Rules".Paragraph (3)Where the commissioned first-time research and manufacture or development of new products as referred to in the second paragraph is done at the entire expense of the Private Entity itself, the volume production quantity shall be estimated and the cap on the unit price [of the products] on volume production shall be agreed upon in advance.