1. Reasons for Enactment (Amendment)

This Amendment strengthens safety control by tightening restrictions on qualifications for participation in tendering by substandard design/supervision service providers and clarifying requirements concerning warranty periods, and reduces the burden of performance on businesses by clarifying the definition of the term “estimated amount.”

2. Major Provisions

A. Clarify the definition of the term “estimated amount” (subparagraph 2 of Article 2 amended)

  1) Government-furnished materials that are installed not by the contractor but by the project owner are regarded as a separate goods contract for which a separate order is placed and excluded from the estimated amount, but a number of local governments have included them in their tender announcements.

  2) Clarify that the definition of “estimated amount” includes government-furnished materials that are actually installed by the contractor.

  3) Reduce the burden of performance on bidders and prevent confusion at the working level.

B. Clarify requirements concerning warranty periods (Article 70 (2) amended)

  1) Current provisions stipulate that the establishment of a warranty period when entering into a contract for construction works is optional for “construction work where the contract amount does not exceed 30 million won.”

  2) Clearly prescribe that even for a contract for construction works where the contract amount does not exceed 30 million won, a separate examination shall be conducted to determine whether repairs of defects may be necessary due to the nature of the construction works before the establishment of a warranty period can be considered optional.

  3) Enhance the quality of subject matter of construction contracts by strengthening the repair process for defects.

C. Tighten restrictions on qualifications for participation in tendering for substandard design/supervision service providers (attached Table 2 amended)

 1) Current provisions restrict qualifications for participation in tendering by service providers who have deviated from the design documents in an improper manner and service providers who have failed to faithfully supervise improper work.

 2) Newly insert restrictions on qualifications for participation in tendering with respect to substandard design, and tighten restrictions on qualifications for participation in tendering with respect to substandard supervision.

 3) Aim to reduce substandard work by strengthening safety and quality control at construction sites.