"Despite Soaring Raw Material Prices, Half Ignore Requests for Delivery Price Adjustments"

[Asia Economy Sejong=Reporter Dongwoo Lee] Despite the rise in raw material prices, it was found that only 4 out of 10 subcontractors have applied for delivery price adjustments under the Subcontracting Act. Additionally, half of the original contractors either did not initiate negotiations or refused to negotiate even after receiving a delivery price adjustment request.

According to the Fair Trade Commission on the 15th, an urgent inspection of the delivery price adjustment status between original contractors and subcontractors was conducted targeting member companies of small and medium enterprise cooperatives. The results showed that only 39.7% of subcontractors had ever applied for delivery price adjustments.

Under the Subcontracting Act, the delivery price adjustment negotiation system allows subcontractors or the small and medium enterprise cooperatives they belong to to request an adjustment of subcontract payments from the original contractor when changes in supply costs, such as raw material prices, make subcontract payment adjustments unavoidable. In such cases, the original contractor must initiate negotiations within 10 days.

However, even if such provisions are not included in the contract, it was found that 54.6% and 76.6% of respondents, respectively, answered that they were unaware that subcontractors could directly request price adjustments or negotiate through cooperatives under the Subcontracting Act.

Among those who applied for adjustments, only 8.2% requested negotiations through cooperatives, while 91.8% requested adjustments directly. After applying for delivery price adjustments, 51.2% responded that the original contractor initiated negotiations, whereas 48.8% said negotiations were either not initiated or were refused.

Notably, when negotiations were requested through cooperatives, the rate of original contractors initiating negotiations was higher at 69.3%. Regarding price adjustments, 57.6% of respondents said that at least part of the raw material price increase was reflected in the delivery price, while 42.4% said it was not reflected at all.

The Fair Trade Commission stated, “From today, we will establish and operate a dedicated response team to quickly grasp market conditions and the status of delivery price adjustments and actively implement countermeasures.”

This content was produced with the assistance of AI translation services.