23 construction companies increase subcontract payments by KRW 18.4 billion... Fair Trade Commission, inspects win-win agreement

The Fair Trade Commission announced on the 12th that it held a 'construction industry win-win agreement public-private consultative body meeting' with officials from 29 mid-sized general construction companies and the Korea Professional Construction Association at the Specialty Construction Center in Dongjak-gu, Seoul.

At this event, the Fair Trade Commission shared the implementation status of the 'Construction Industry Win-Win Cooperation and Fair Trade Agreement' signed in July of this year, including adjustment of subcontracting payments, improvement of reserve setting practices, and sharing of responsibility for defect litigation.

According to the Fair Trade Commission, 23 general construction companies increased the subcontract payments paid to 152 suppliers by approximately 18.4 billion won after signing the agreement, reflecting changes in supply costs such as increases in raw material prices and oil prices.

In particular, in the case of HJ Heavy Industries, after signing the agreement, the subcontract amount paid to the three suppliers was increased by a total of KRW 3.3 billion through the signing of an interconnection agreement and discussions on adjusting the subcontract amount.

It was confirmed that 11 general construction companies did not set reserves, and two of these companies blocked the setting of reserves through the computer system. Retention money is the amount of money that is postponed until after completion of construction, in the name of guaranteeing the contractor's performance of defect repair obligations, etc. to be paid to the subcontractor.

14 general construction companies improved their contract conditions to prevent the practice of passing on industrial safety costs and waste disposal costs to suppliers.

In addition, 16 general construction companies operated an in-house subcontract dispute resolution organization to discuss current issues related to subcontract transactions with suppliers.

The Fair Trade Commission said, “We will continue to support the autonomous implementation of the agreement and spread best practices to ensure that a fair trade order is established in the construction industry.”