Browse > Article
http://dx.doi.org/10.6106/KJCEM.2015.16.3.152

An Analysis of the 2014 Pricing Guide for Technical Service Contracts through Comparison with Foreign Countries' Cases  

Lee, Taewon (Department of Architectural Engineering, Yonsei University)
Lee, Ghang (Department of Architectural Engineering, Yonsei University)
Publication Information
Korean Journal of Construction Engineering and Management / v.16, no.3, 2015 , pp. 152-164 More about this Journal
Abstract
Enhancing clarity and transparency of the pricing guide for technical services for public construction works enables the prediction and reimbursement of the service cost for project owners and bidders, while it would also yield benefits for engineers who carry out the construction tasks. In order to improve the global competitiveness of construction service industry, the government revised its pricing guide for techical services for construction works recently, moving away from its previous percentage-of-construction-cost method towards the Cost Plus a Fee Method. However, since the Cost Plus a Fee Method results in the rise of the service price by 153%~197%, there is the need for a review on the method and basis of the adjustment in order to avoid controversies regarding the application of the revised method. In this context, this paper analysed the 2014 revision of the pricing guide for technical services for public construction works through comparison with foreign cases including those of the US and the UK. The analysis yielded the conclusion that, while the shift towards Cost Plus a Fee Method which is widely used in advanced economies is a very meaningful change in large measure, certain aspects still remain problematic. Unlike in advanced economies, the detailed break-down shows the direct labor cost includes certain indirect expenses. Also, indirec expenses are admitted so comprehensively as to include overhead costs and technology royalties. These problems results in redundant estimation of certain expenses, and obstructs transparency in spending details. This paper proposes various improvement measures to address these issues.
Keywords
Construction Technical Service; Pricing Guide; Percentage of Construction Cost Method; Cost Plus a Fee Method; Adjustment;
Citations & Related Records
Times Cited By KSCI : 2  (Citation Analysis)
연도 인용수 순위
1 City of South San Francisco, CA., Department of Public Works (2014). Regulations and Guidelines of Cost Estimating for Professional Services in Local government, Site-Survey and Questionares & Answers Session.
2 Lee, Taewon and Lee, Ghang (2014). "A Study on Practical Ways to Improve Pricing Criteria For Technical Service Contracts" Korean journal of Construction Engineering and Management, KICEM, 15(2), pp.33-43.   DOI   ScienceOn
3 Lee, U., Yoo, W., Kim, T., Cha, M., and Cho, H. (2012). 'Improvement of Estimating Method for Construction Management Service Fee by Case Study', Korean journal of Construction Engineering and Management, KICEM, 13(4), pp. 17-20.
4 Ministry of Strategy and Finance (2014). Article 15 through 22 of Criteria for Preparation of Projected Price.
5 Ministry of Strategy and Finance (2013). Article 2 Sub-Paragraph 2 of the Enforcement Decree of the Act on Contracts to Which the State is a Party.
6 Ministry of Industry, Trade and Energy (2012). Article 7 through 10 of criteria for Project Price for Engineering Project.
7 Ministry of Land, Infrastructure and Transport (2014). Article 4 of Price Criteria for Construction Project Management.
8 Ministry of Land, Infrastructure and Transport (2013). Article 4 and 7 of Price Criteria for Construction Supervision.
9 Office of Management and Budget(OMB) of the USA, Cost Principles of Circular A-122.
10 Public Procurement Service (2014). Criteria for Application of Expenses Ratio in Cost Calculation for Construction, Industrial, Environmental and Facilities Works.
11 Statistics Korea (2014). Article 15 Sub-Paragraph 1 of the Statistics Act.
12 The Institute of Professional Engineers of Japan (2011). Guideline for Remuneration for Engineers.
13 The Institute of Professional Engineers of New Zealand (2014). Fee Guidelines for Consulting Engineering Services.
14 US Department of Defense (2011). Unified Facilities Criteria(UFC) Handbook: Construction Cost Estimating.
15 US General Services Administration (2014). Cost Principles and Procedures, Part 31 of Federal Aquisition Regulations(FAR) of the USA.
16 Ministry of Land, Infrastructure and Transport (2012). Article 8 of Work Scope and Price Criteria for Architect for Public Works.
17 US Environmental Protection Agency, Cost Advisory and Financial Analysis Division of Office of Aquisition Management (1994). EPA-2002-B-94-003 Guide for Preparing Independent Government Cost Estimates.