Busan City Rolls Up Sleeves to Expand Construction Subcontracting Orders

Busan City recently established and is actively implementing a plan to expand subcontracting orders to overcome the crisis faced by the construction industry in the Busan area, which is experiencing a downturn in the construction market and difficulties in financing.

The city aims to create momentum for overcoming the crisis in construction companies through ▲ building a webpage to provide customized one-stop services ▲ forming a win-win cooperation council between the public and private sectors to strengthen collaboration ▲ operating the nation’s first on-site mentoring program.

First, by establishing a construction subcontracting webpage, the city will provide information on the annual ordering plan and specialized partner companies, as well as real-time information on recruitment of large company partner firms, supporting local construction companies to conduct their order acquisition activities efficiently.

Additionally, the city plans to proactively address difficulties at construction sites by creating a communication platform between the public and private sectors through the construction industry win-win cooperation council.

As the nation’s first initiative, on-site mentoring sessions will be held where site managers can meet directly, enhancing communication and information exchange, and providing opportunities for large construction companies to register partner firms and secure work orders.

Furthermore, the city will strengthen the regional company capacity-building (Scale-up) project, which has been underway since 2016, to support the expansion of large construction companies’ partner firm registrations and increase subcontracting rates.

In response to the trend of stricter registration requirements for partner firms by large construction companies, the city will proactively offer customized capacity enhancement plans, provide consulting to help establish efficient bidding strategies by understanding procurement market trends and demands, and conduct basic education on technological innovation research and development (R&D) to promote sustainable growth of companies.

Promotional sales activities to secure subcontracting work for Busan’s highly capable small and medium specialized construction companies will also be further strengthened.

The city will hold the 'Cooperation and Win-win Day between Large Companies and Local Firms,' where employees of each company communicate face-to-face, earlier in September (previously October) to align with the registration schedules of large companies’ partner firms. Additionally, a new related event called 'Night of Win-win' will be held to maximize partner firm registrations through deepened networking with large companies.

Moreover, the city will enhance the activities of the visiting 'Subcontracting Promotion Sales Team' by including district and county offices alongside the city and specialized construction associations, aiming to increase sales effectiveness through measures such as delivering market letters.

The city plans to do its utmost not only to provide additional administrative support for expanding subcontracting but also to establish a fair subcontracting order.

This includes ▲ holding a 'Joint Workshop for Construction Business Stakeholders,' a communication time between construction project managers and local firms ▲ inspecting and promoting local firm participation in subcontracting ▲ strengthening incentives to raise subcontracting rates ▲ conducting joint inspections of illegal subcontracting with the Ministry of Land, Infrastructure and Transport and city and district (county) offices, all to establish a fair subcontracting transaction order and strive to expand work opportunities for local firms.

Im Kyung-mo, Director of the Urban Balanced Development Office of Busan City, emphasized, “Amid the recent downturn in the construction market due to continuous price increases in labor and raw materials, we will make every effort to provide administrative support so that excellent local specialized construction companies can find a path to recovery.”

Busan City Hall.

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