Preventing Hidden Construction Cost Increases... Seoul City Revises Contractor Selection Criteria for Maintenance Projects

Mandatory Verification of Construction Costs and Limitation of Alternative Design Scope

Excessive construction cost increases or design changes by contractors in maintenance projects within Seoul are expected to become impossible in the future.

On the 28th, the Seoul Metropolitan Government announced that it has revised the "Public Support Maintenance Project Contractor Selection Criteria" to support the prompt and fair selection of contractors. After an administrative notice period, the city completed administrative procedures for the revision, including review by the Regulatory Reform Committee, and finalized and announced it on the same day.

This follows the amendment of the "Seoul Metropolitan City Urban and Residential Environment Maintenance Ordinance" in March this year, which advanced the timing of contractor selection from "after project implementation plan approval" to "after association establishment approval."

With this revision, bidders for maintenance projects must mandatorily request construction cost verification from a verification agency at the time of the initial project implementation plan approval. This measure aims to prevent disputes between associations and contractors caused by excessive construction cost increases after contractor selection.

The bidding methods will also diversify. Previously, only "itemized bidding" was allowed, but now "lump-sum bidding" can be chosen according to the conditions of the maintenance district association. Lump-sum bidding is a method where bidders submit only the total construction cost.

Indiscriminate alternative designs will be restricted. The city decided to limit the scope of alternative designs by bidders to "within the maintenance plan scope." Minor changes such as altering the building coverage ratio, floor area ratio, maximum height, expanding the maintenance district area, or changing maintenance infrastructure will not be permitted.

Additionally, to prevent excessive promotion during contractor selection, individual promotion by bidders outside of joint promotional briefings and shared promotional spaces is prohibited. Associations must hold at least two joint promotional briefings for bidders and may provide and designate one shared promotional space after the first joint briefing. If a bidder proposes designs outside the maintenance plan scope or violates promotional regulations or standards, their participation in the bid will be considered invalid.

To prevent recent controversies such as missing rebar during construction, inter-floor noise after move-in, and leaks, and to improve the quality of apartment complexes, submission of the "Apartment Performance Requirements" will also be mandatory.

The Seoul maintenance project public support contractor selection criteria containing these provisions will take effect immediately upon announcement.

Han Byung-yong, Director of the Seoul Housing Policy Office, stated, "It is important to ensure a fair selection process to prevent conflicts or disputes between contractors and associations," adding, "With the completion of all administrative procedures following the revision of the contractor selection criteria, we will establish a fair and transparent contractor selection culture."