| Title |
An Analysis of the 2014 Pricing Guide for Technical Service Cotnracts through Comparison with Foreign Countries’ Cases |
| DOI |
http://dx.doi.org/10.6106/KJCEM.2015.16.3.152 |
| Keywords |
Construction Technical Service ; Pricing Guide ; Percentage of Construction Cost Method ; Cost Plus a Fee ; Method ; Adjustment |
| Abstract |
Enhancing clarity and transparency of the pricing guide for technical services for public construction works enables the prediction and reimbursement of the service cost for project owners and bidders, while it would alsoyield benefits for engineers who carry out the construction tasks. In order to improve the global competitiveness of construction service industry, the government revised its pricing guide for techical services for construction works recently, moving away from its previous percentage-of-construction-cost method towards the Cost Plus a Fee Method. However, since the Cost Plus a Fee Method results in the rise of the service price by 153%~197%, there is the need for a review on the method and basis of the adjustment in order to avoid controversies regarding the application of the revised method. In this context, this paper analysed the 2014 revision of the pricing guide for technical services for public construction works through comparison with foreign cases including those of the US and the UK. The analysis yielded the conclusion that, while the shift towards Cost Plus a Fee Method which is widely used in advanced economies is a very meaningful change in large measure, certain aspects still remain problematic. Unlike in advanced economies, the detailed break-down shows the direct labor cost includes certain indirect expenses. Also, indirec expenses are admitted so comprehensively as to include overhead costs and technology royalties. These problems results in redundant estimation of certain expenses, and obstructs transparency in spending details. This paper proposes various improvement measures to address these issues. |