Conflict over 'Submission of Responsibility Completion Guarantee' in Bid Guidelines
Concerns Raised That It Raises Hurdles for Construction Companies' Bids
Association Members Wanting Competitive Bidding Cast Opposing Votes
The selection process for the construction company of Hannam 4 District in Yongsan-gu, Seoul, where fierce bidding is expected in the second half of this year, will be delayed by about a month. This is due to opposition from the union members against the selection criteria for the construction company outlined in the bidding guidelines. Originally, the union planned to announce the bid by the end of this month and select the construction company in November.
According to the maintenance industry on the 26th, the Hannam 4 District redevelopment union held a delegates' meeting yesterday afternoon and proposed a construction company selection plan that included construction costs and bidding criteria, but it was rejected. Among the 99 attendees either on-site or in writing, 63 voted against the original proposal. There were 33 votes in favor, and 3 abstentions or invalid votes.
The union members who voted against the proposal took issue with the 'submission of a responsibility completion guarantee letter' clause in the bidding guidelines. When rumors spread that this clause was causing certain construction companies to hesitate in participating, they feared that competitive bidding might not occur and thus rejected the agenda. In fact, in the union members' group chat, comments such as "Isn't the goal to create good apartments through competition?" and "I have always taken pride in major construction companies competing fairly, but now I am worried" were shared. There were also concerns that, like the adjacent Hannam 5 District, the bid might fail due to a single construction company bidding alone.
The union plans to revise the contents of the construction company selection plan and proceed with the approval process again. Even if the phrase 'submission of a responsibility completion guarantee letter' is removed, it is highly likely that equivalent content will be included in the bidding guidelines. The responsibility completion guarantee letter means that even if internal or external issues such as changes in construction costs arise, the construction will not be halted, and if the construction is not completed within the deadline, the developer or the union assumes the debt. In maintenance projects such as redevelopment and reconstruction, the project funds and relocation costs borrowed by the union from banks can become liabilities.
However, with the rejection of the agenda, the schedule for selecting the construction company will be delayed beyond the original plan. The bid announcement was initially scheduled for the end of this month to begin the full selection process, but it is expected to be delayed by about a month. The construction cost was set at 9.4 million KRW per pyeong.
As the construction company selection approaches, conflicts are also emerging among union members, with differing preferences. One union member said, "Some say this issue excludes certain companies, while others say it favors certain companies," adding, "I am worried that conflicts will arise over every matter once the construction company selection officially begins."
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