File photo of Booyoung housing apartment. Regardless of the content of the article | Kyunghyang Shinmun
Booyoung Housing, which paid a subcontract price lower than the bid amount for over two years, was sanctioned by the Fair Trade Commission.
The Fair Trade Commission (FTC) announced on the 14th that it has decided to impose a fine of 131 million won on Booyoung housing that has decided to pay for a subcontract at a price lower than the lowest bid price.
From March 9, 2016 to June 11, 2018, Booyoung Housing conducted a competitive bidding for 11 new apartment projects to determine the subcontractor. In the process, Booyoung Housing obtained the difference by determining the subcontract price at a lower price than the lowest bid price through re-bidding or additional negotiations. The bid amount for the landscape planting project, for which the contract was signed in February 2017, was 874 million won, but the final decision amount was reduced to 860 million won through additional negotiations. In the process of negotiating the construction project, the final decision was made at 2.74 billion won, which was reduced by 35.3 million won. The difference between Booyoung Housing’s final decision on a price lower than the bid amount was 158.42 million won.
Article 4 Paragraph 1 of the Subcontracting Act regulates the determination of a price lower than the lowest bid amount without objective reasons that cannot be attributed to the principal contractor.
The Fair Trade Commission said, “This measure sanctioned the act of determining the subcontract price at a price lower than the lowest price through re-bidding and additional negotiations in the process of competitive bidding, which is frequently used to select subcontractors,” the FTC said. It is expected that unfair subcontracting practices will be improved, including subcontracting at an unreasonably lowered amount.”