Contract Cost Review Profitable... Yeongju City Saves 780 Million Won Budget

Systematic Reviews Prevent Budget Waste and Improve Financial Management Efficiency

Yeongju City in Gyeongbuk announced on the 24th that it saved 780 million won in its budget last year through contract cost reviews.

Contract cost review is a system that prevents budget waste and enhances financial management efficiency by pre-examining the appropriateness of cost estimation, construction method selection, and design changes for projects commissioned by local governments.

Yeongju City conducts reviews for projects with comprehensive and specialized construction work costing 200 million won or more, other construction work (electricity, telecommunications, firefighting, etc.) costing 50 million won or more, services costing 50 million won or more, and goods costing 20 million won or more.

The city carried out contract cost reviews for a total of 90 cases amounting to 94.3 billion won, saving project budgets by ▲improving unreasonable work types and construction methods ▲adjusting overestimated quantities and rates ▲correcting errors in labor and unit price application. In addition, the city maximized review efficiency by concurrently conducting 500 design reviews independently along with the contract cost reviews.

Through contract cost reviews, Yeongju City thoroughly examined the details of construction, services, and goods calculated by the ordering departments, reflecting appropriate costs by reviewing transaction price examples, conducting site inspections, and assessing the introduction of new construction methods. This prevented unnecessary budget waste while also contributing to improving the quality of contracted deliverables.

Han Yong-ho, Director of the River Division, said, “We will thoroughly review the appropriateness of cost estimation and design documents to improve inefficient work types and construction methods, and actively strive to save budgets while preventing poor construction and enhancing safety.”