• Korean Journal of Construction Engineering and Management
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• v.24 no.2
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• pp.79-87
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• 2023

Given that most government contracts are based on a fiscal year, long-term continuing construction contracts require appropriate provisions as significant amounts of budget is supposed to be invested for several years. This study drew problems and improvements of the long-term continuing construction contracts by analyzing the contents of FGI and list of construction order. We found that a number of problems, such as the mismatch between laws and enforcement decrees, difference in calculating overheads due to the extension of construction period, many construction orders that are hard to see as budget efficiency and over investment in the final annual contract, were tangled up in the process. To solve the problems mentioned, we suggested several improvements as follows: (1) effect of total construction period and total amount should be guaranteed by a law, (2) it is suggested that the scope of long-term continuing construction contract is determined by a law, and (3) it should be clear about the calculation of overheads concerned with the extension of construction period as well as the estimation of construction period to prevent over investment in the final contract.

• Korean Journal of Construction Engineering and Management
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• v.18 no.2
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• pp.30-37
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• 2017

In Korea, additional indirect costs generated from the time period extension of public construction projects have been studied. Practical claims against such costs are increasing. There are no clear criteria for calculating the delay cost caused by the extension, and thus calculation methods differ across entities. Logical valid calculation methods have also not been researched. Further, there are no Korean studies on the additional indirect cost caused by a suspension in a public construction project on a long-term continuing contract. The purpose of this research is to propose a method of calculating the indirect cost incurred by construction time extension that reflects the characteristics of Korean public construction projects. The cost patterns generated during construction periods were analyzed, and then the current criteria of calculating the indirect costs caused by the extension were examined. Following this, actual conditions and practices in the field were surveyed and the current calculation method was applied to a model case to compare the actual cost and that determined from the current calculation method. Issues with the current method were identified by this comparison. Based on this, this research proposes a method of calculating the total actual cost caused by a suspension in a public construction project that is appropriate for calculating the additional indirect cost generated by a suspension in a public construction project on a long-term continuing contract.

• Korean Journal of Construction Engineering and Management
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• v.20 no.6
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• pp.3-10
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• 2019

The entire duration of the long-term continuous construction contract project cannot be expected when calculating the initial budget as the construction of the contract is carried out annually according to the budget composition. In addition, the statutes related to the defect liability and execution of contracts have not been established systematically in relation to the contract. Therefore, there are many problems at the actual construction site with regard to the defect liability or the performance of the contract in relation to the contract. In this study, the following improvement directions were presented for the efficient operation of the contracts: First, the defect liability is legal and should be specified in an Act rather than an enforcement decree. Second, if the parties to the contract vary in the following order in the contract, the special agreement should be specified in the enforcement decree. Third, in the event of an indirect cost due to the extension of the period of the long-term continuous work, the contingency items of the total project cost management policy should be utilized. Fourth, in the case of general construction contract conditions, clauses related to the purchase of the premium of the CAR, inspection, taking over, defect repair, and defect inspection shall be supplemented.