• Korean Journal of Construction Engineering and Management
• /
• v.6 no.1 s.23
• /
• pp.162-168
• /
• 2005

Index adjusted ratio method has been widely utilized in public construction sector for contract sum adjustment by price fluctuation. In this method, the Production Price Index are used for the base ratio, but the PPI can't reflect the character of construction project in respect of the selected items and weight. In this research we prove the problem of using the index adjusted ration method in contact sum adjustment by price fluctuation, and improve it by using the construction cost index, which has the property of construction project. And we figure out the efficiency of the proposed method by case study.

• Korean Journal of Construction Engineering and Management
• /
• v.12 no.2
• /
• pp.3-11
• /
• 2011

There are several causes to recalculate the contract amount in public construction projects. Among them, the escalation clause was introduced in 1969 and now the condition to recalculate the cost is effective after 90 days from the date of contract and the rate of fluctuation should be more than 3% from the date of bidding. The two calculation methods for the rate of fluctuation are item-adjustment and index-adjustment. According to the results of investigation into 4 public institutions and 163 projects, all of them have used the method of index-adjustment and the rate of projects that spend over 6 months obtaining the approval of contract amount adjustment is more than 90%. The reason for spending lots of time is caused by problems of the calculation method on the price fluctuation rate. Therefore, it is necessary that the calculation method should be diversified to cope with the problems and a option of the builder should be expanded as well. Furthermore, if the way to apply correction factors to construction price index and average index based on the producer and consumer price index made by the bank of Korea is added, then the duration will be reduced without additional expenses. This study proposed the diversification of the calculation method using price fluctuation rate and builders' expanded options as improvement on the managerial method of Price Fluctuation System for the prompt and efficient contract amount adjustment.

• KSCE Journal of Civil and Environmental Engineering Research
• /
• v.35 no.1
• /
• pp.217-227
• /
• 2015

This study conducted case studies in order to suggest the improvement of GDP (Gross Domestic Product) deflator method which is adopted on calculating fluctuation rate on BTL (Build-Transfer-Lease) sewer rehabilitation projects in Jeju. As a result, because GDP deflator method calculates fluctuation rate by each quarterly, the fluctuation rate of GDP deflator method is higher than it of index adjustment rate method. And GDP deflator method cannot reflect real price because of applying fixed index in whole construction cost for calculating fluctuation rate. Especially, the notification day - the base point influences fluctuation rate and fluctuation amount strongly in GDP deflator method.

• KSCE Journal of Civil and Environmental Engineering Research
• /
• v.34 no.2
• /
• pp.667-676
• /
• 2014

This study has conducted case studies in order to suggest alternatives to the historical data-based estimate system. Price fluctuation calculation methods based on historial cost indexes, standard estimate and construction cost indexes were applied to 9 road construction sites in Jeju for an analysis. As a result, in 5 construction sites (about 56% of 9 sites), the index control rate calculated based upon historical data-based estimate system was higher than that calculated based upon standard estimate and construction cost indexes. Thus the establishment of the requirements for the adjustment of contract price due to price fluctuation delays, which leads to a significant difference in price fluctuation amount. And, in an analysis of construction cost indexes, the indexes for road construction were used for calculating index control rate which ranges from 2.0 to 9.4 percent, indicating the time of construction amount and price fluctuation application has a significant influence on index control rate.

• Korean Journal of Construction Engineering and Management
• /
• v.13 no.1
• /
• pp.67-76
• /
• 2012

There are index adjustment method and item adjustment method in estimation methods for price fluctuation rate of public constructions. A relevant regulation has put item adjustment method as a principle, but in most construction, contract sum adjustment has been made by index adjustment method. Hence, this study, by figuring out width and causes of the gap between index adjustment method and item adjustment method through direct comparative analysis, solved inequality caused by difference between them and suggested a rational way against irrationality of each method. For building operations of public housing construction, a detailed fluctuation rate by index adjustment method and item adjustment method of construction cost elements of the same construction, that is, direct material cost, direct labor cost and historical construction cost was estimated to analyze difference between two adjustments and establish its cause. Across the analysis, it was found that fluctuation rate by item adjustment method was estimated lower than that by index adjustment method and difference between methods for estimating fluctuation rate of quotation unit price and application of index unrelated to construction type and construction nature are main causes of the difference. This study has a significance in that, for smooth contract sum adjustment between contracting parties, it practically proved the real difference between adjustment methods by conducting comparative analysis of the difference in direct correspondence way.

• Journal of the Korea Academia-Industrial cooperation Society
• /
• v.22 no.4
• /
• pp.183-194
• /
• 2021

In this study, the conversion factor for 2020 is estimated based on an outpatient and inpatient conversion factor separation model developed from SGR and AR by using actual medical expense data. In addition, a policy plan is proposed to calculate the values of single and multiple conversion factors for each type of medical expense, and to effectively use the conversion factor separation model as one of the means to establish a medical delivery system. The major results are as follows. First, at r=0.1, the rate of adjustment in the hospital single conversion index in 2020 was 2.0%, and the outpatient and hospitalization conversion rates for hospitals were 2.2% and 2.3%, respectively. In addition, a combination of outpatient and inpatient conversion factors can be used for the adjustment. Second, as a measure to establish a medical delivery system, instead of adjusting the addition rate, a method of interlocking the addition rate and the conversion factor is proposed. Third, it is necessary to develop a model that enables target management of volumes, in addition to the outpatient conversion factor, the inpatient conversion factor, and the adjustment coefficient.

• Communications for Statistical Applications and Methods
• /
• v.16 no.1
• /
• pp.41-50
• /
• 2009

Chain-linking is a method for aggregating volume measures which would improve the quality of estimates of economic growth over the present fixed base in Korea. There is a risk that choice of chain-linking techniques such annual overlap, one-quarter overlap or over-the-year overlap may create an artificial seasonality to the volume series. The empirical results on Korean GDP suggest that the use of the annual overlap is recommended. And conducting seasonal adjustment after chain-linking to produce the chain-linked seasonally adjusted GDP is more appropriated in Korea.

• Proceedings of the Korean Institute of Building Construction Conference
• /
• 2005.11a
• /
• pp.117-120
• /
• 2005

The business market of architecture has got a system that controls a deposit according to the price function. This system is written on a law of contract about countries. So the main body of construction has to make a reasonable contract. This study is written about a rate of numerical index on controling a deposit. We tried to fine problems and solutions of labor expenses, instrument costs and material costs which is so big and changable on the construction market Labor expenses are expressed according to the rate of construction scale between direct and indirect cost that applies ability of works. Instrument costs are expressed according to an output method of a unit price annually and a weight allowance of local instrument conditions and use frequence. The last material costs expressed according to a local weight allowance make a decision of the material cost index. They applies locally relative index more than absolute one on what uses the price rate of producers and importations. This solutions are not enough to apply to the real market, so it needs to exam and to be on the market after a feasibility study.

• Korean Journal of Construction Engineering and Management
• /
• v.15 no.5
• /
• pp.49-60
• /
• 2014

Electrical construction cost index has been applied fixed-weighted method. But fixed-weighted method can't faithfully reflect industrial structure changes. Because the weighted value and price index of fixed-weighted method is fixed on the basic period. Electrical construction cost index is composed of the cost of labor and material. So it fluctuates sharply whenever the construction association of korea announces the laborer's wage of electrical construction. And it depends on only the producer price index changes that is related to electrical construction since then. So a study is focused on developing electrical construction cost index applied chain-weighted method. Because chain-weighted method can reflect the realities of the electrical construction and alleviate the sudden changes of labor cost with link index. We verify that chain-weighted method relieves the step states of electrical construction cost index applied fixed-weighted method.

• Korean Journal of Construction Engineering and Management
• /
• v.21 no.4
• /
• pp.82-89
• /
• 2020

Article 64 of the Enforcement Decree of the National Contract Act The requirement of the pre-amendment statute related to the adjustment of the contract price was 5% or more of the price fluctuation rate from the date of the contract. However, the meeting requirement was changed from 5% or more to 3% or more from the date of signing of the Presidential Decree No. 19035 to 2005. 9. 8. The method of adjusting the contract amount was also changed to determine the contractor's desired adjustment method at the time of contract. Alleviating these requirements and revising the empowerment of contract partners is intended to prevent difficulties in achieving smooth objectives by applying to public construction contractors without unfairly benefiting or unfavorable to contract partners. Even if the standards are relaxed and the rights are secured as described above, if the existing provisions for the adjustment of price fluctuation are applied, unlike the original purpose of the government system, the Korea Bank's price economic statistics classification method and the contract construction classification criteria applied in public construction work Due to the inconsistency, it can be seen that the amount of adjustment for price fluctuation by construction type is excessive and underestimated. Therefore, the purpose of this study is to analyze problems through cases and to make appropriate construction cost adjustment through improvement measures.