Gwangju City Saves 21.7 Billion Won Budget Through Pre-Contract Review

[Asia Economy Honam Reporting Headquarters Reporter Park Seon-gang] The Audit Committee of Gwangju Metropolitan City announced on the 6th that it saved 21.7 billion KRW in budget through pre-contract reviews for public projects commissioned by the city last year.

The contract review system is designed to ultimately reduce budget waste by verifying construction design costs, market analysis based on implementation methods, and quantity calculation scales. To prevent unfair reductions in project costs focused solely on budget-saving targets or exclusion of reviews that deviate from standards, the committee operates a cost analysis advisory group composed of experts and strengthens on-site inspections.

Last year, a total of 654 projects worth 506.2 billion KRW were requested for review by various city departments, business offices, autonomous districts, and public corporations. As a result of reviews applying cost estimation standards and standard unit prices, savings of 17.6 billion KRW from 309 construction projects, 3.1 billion KRW from 103 service projects, and 1 billion KRW from 242 goods projects were achieved.

The saved budget was reinvested into various new projects such as convenience facilities for citizens and job creation, significantly contributing to financial management.

Since July 2019, the city’s Audit Committee has been focusing on 13 innovation tasks across four areas, including revising contract review processing rules (expanding reviews for private subsidy projects, shortening review periods, etc.), expanding the cost analysis advisory group, updating contract review standards, and disclosing contract review results.

To assist project department staff in practical skills, the committee published and distributed the 2020 Contract Review Casebook to related organizations, containing contract review cases by field, improvements to inappropriate unit prices, and best practices identified during contract reviews.

This year, to strengthen the continuity and expertise of contract review officials, two specialized contract review officers qualified in architecture and civil engineering fields were recruited to work continuously in their respective fields for three years. Additionally, the required professional training hours for reviewers in each field will be expanded to 20 hours to enhance practical capabilities.

Chairman Lee Gap-jae of the Audit Committee stated, “This year, we will continue to strengthen fair and transparent cost reviews to secure local fiscal soundness and improve the practical skills of staff to contribute to the development of a clean Gwangju.”

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