Mandatory Submission of Payment Guarantee for Subcontractors During Firefighting Construction

Amendment to the Enforcement Rules of the Firefighting Facilities Installation Business Act to be Promulgated on the 15th

[Asia Economy Reporter Osangdo] On the 15th, the amendment to the "Firefighting Facilities Construction Business Act Enforcement Rules," which mandates the submission of subcontract payment guarantees for firefighting construction companies to protect small business operators, will be promulgated.

According to the Fire Agency on the 14th, this amendment focuses on blocking unfair trade and protecting small business operators. When a construction company receives a lump-sum contract for construction work and subcontracts firefighting facility-related work to a specialized firefighting facility company, the primary contractor construction company is required to submit a copy of the subcontract payment guarantee to the fire station when reporting the start of construction.

Under the existing Firefighting Facilities Construction Business Act, the primary contractor is supposed to obtain a subcontract payment guarantee from a guarantee insurance company and provide it to the subcontractor. However, since this is a contractual matter between parties and not mandatory, its effectiveness has been limited.

The amendment also includes provisions to input and manage the start/change reports of firefighting facility construction and the deployment status of firefighting technicians and supervisors at construction sites into the "Firefighting Facilities Business Integrated Information System."

According to last year's firefighting facilities construction business capability evaluation, the total firefighting construction cost in 2018 was 6.4454 trillion won, of which 45%, or 2.9111 trillion won, was subcontracted construction payments.

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