Ulsan City, 2024 Contract Review... 13.5 Billion KRW Budget Savings

A total of 625 contract reviews, including 157 construction and 212 service contracts, worth 380 billion KRW
Increase of 80 million KRW in safety and quality management costs, strengthening responsibility for safety

Ulsan City saved 13.5 billion KRW in budget through contract reviews conducted throughout 2024.

They also shortened the average contract review processing time from 10 days to 3.3 days, actively supporting the prompt advancement of projects.

During 2024, Ulsan City conducted reviews on a total of 625 contracts worth 380 billion KRW. Among these, △157 construction contracts worth 234 billion KRW were reviewed, resulting in savings of 9.3 billion KRW on 146 contracts △468 service and goods contracts worth 146 billion KRW were reviewed, achieving savings of 4.2 billion KRW on 173 contracts. In total, 319 contracts yielded savings of approximately 3.5% of the requested review amount, equating to 13.5 billion KRW.

Analysis of contract reviews showed that the total number of reviews was similar to the previous year. The goods sector accounted for the largest share with 250 contracts (40.0%), followed by services with 212 contracts (33.9%), construction with 157 contracts (25.1%), and design changes with 6 contracts (1.0%).

Additionally, savings from contract reviews were highest in the construction sector at 9.3 billion KRW, an increase of 2.4 billion KRW compared to the previous year, with overall increases also seen in services and goods sectors.

▲ Major Savings Cases

In the construction of the Uljugun Startup Infrastructure (Platform), efforts to reduce construction costs included adjusting the number of overestimated temporary container installations, changing rebar processing from on-site to factory processing, and switching materials such as natural stone and HVAC equipment from self-supply to procurement purchase, resulting in budget savings of 312.66 million KRW.

For the installation of a rain shelter at Ya-eum Tennis Court, deleting the site cleanup item and replacing unnecessary patented construction methods with standard construction unit prices saved 140 million KRW, achieving a savings rate of 22.5%, thereby enhancing fiscal soundness.

In the Gangdong Coastal Park project, which involves installing a coastal promenade and landscape facilities, adjusting quantities for simple process construction detail drawings, deleting unnecessary quality test costs, and changing rebar processing and assembly types saved 590 million KRW, improving budget execution efficiency.

Considering the participation rate of local companies and working conditions, adjustments to vehicle operation costs and local staff deployment plans in construction management services such as the supervision authority delegation for the maintenance of aging sewer pipelines in Nam-gu saved 220 million KRW.

Adjusting fuel costs and transportation distances saved 300 million KRW in construction waste disposal services for the three districts of the local river disaster recovery project in Duseo-myeon, Uljugun.

Through cost reviews, Ulsan City eliminated budget waste factors and reflected missing safety management and quality control costs totaling 38 million KRW in three projects including the Jongha Innovation Center finishing works. They also increased safety-related budgets by 36 million KRW in nine projects including the construction of the Maritime Logistics Integrated Performance Verification Center by adding industrial safety and health management costs, thereby strengthening safety responsibilities.

Furthermore, for 34 projects including the 2040 Ulsan Urban Master Plan establishment service, the city reviewed the appropriateness of bidders’ similar performance, technical capabilities, and management status to ensure transparency and fairness by correcting technical scoring and calculation errors.

Auditor Kim Young-sung stated, “We significantly reduced budget waste by guiding appropriate construction methods and material selection reflecting site conditions and special characteristics through rational cost reviews.” He added, “We plan to continue conducting on-site verifications of contract review implementation and closely consult with ordering departments to actively support safety management and quality control costs that are often omitted in construction.”

Ulsan City plans to publish a contract review casebook and hold workshops this year to enhance understanding and expertise of contract review tasks among ordering department staff. Additionally, a cost analysis advisory committee composed of 16 experts in civil engineering and architecture will be operated as needed to ensure the professionalism of contract reviews and review the validity of applying new technologies.

Ulsan City Hall.

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