Calls have emerged to convert a special rule on prime contractor joint contracting, set to expire at the end of this year, into a permanent system.
The Democratic Party of Korea's Eulji-ro Committee, Reps. Min Byoung-dug, Kim Nam-keun, Lee Kang-il, Yeom Tae-young, Ahn Tae-joon and Song Jae-bong, the Korea Specialty Contractors Association and the Korea Mechanical Construction Contractors Association jointly held a forum on improving the prime contractor joint contracting system at the National Assembly Members' Office Building on the 6th.
Under the prime contractor joint contracting system, general contractors and specialty contractors form a joint venture to take part in a project. The arrangement can reduce unpaid wages and low-priced subcontracting at construction sites because the project owner pays construction costs directly. But public institutions have issued fewer such contracts since the joint contract operating guidelines were revised in 2020, and the current operating standards for the special rule on joint contracting under the prime contractor management method are due to expire at the end of this year, prompting calls to make the system permanent.
Jin Sang-ki, a senior research fellow at the Korea Mechanical Construction Industry Research Institute, said in a presentation on ways to promote joint contracting for cooperative growth in the construction industry: "This is not about creating a new system, but about normalizing a system that already exists in the law, in the place where the law should be." He said deaths at construction sites, unpaid wages and leakage of construction funds are tied to the multi-tiered contracting structure, and argued that specialty firms should contract directly with project owners to resolve the cost problems that arise through multiple layers of subcontracting. To that end, he proposed extending the temporary special rule due to expire at the end of this year or converting it into a permanent system, and applying it to both national and local government contracts.
Park Kwang-bae, a senior research fellow at the Korea Institute of Construction Policy, said in a presentation on the problems of multi-tiered subcontracting in the construction industry and the expected effects of prime contractor joint contracting: "Reducing the number of contracting tiers would make it easier for specialty firms to secure construction funds." Heo Yong-ju, chairman of the Korea Mechanical Construction Contractors Association, stressed in opening remarks the need to extend the special rule beyond its expiration, saying: "Promoting the prime contractor joint contracting system is an important institutional foundation for fairness and shared growth in the construction industry."
