The Fair Trade Commission said on the 23rd that it ordered corrective measures and imposed a 40 million won penalty surcharge on Dongwon Construction Industry on suspicion of omitting actual construction details from a subcontracting contract.
According to the Fair Trade Commission, from 2019 to 2021, Dongwon Construction Industry subcontracted part of the construction of the National Route 5 Chuncheon–Hwacheon road and intentionally excluded the scope of work and about 3.565 billion won in payments from the contract. It later reported to the ordering agency as if it had carried out the omitted work itself.
An investigation by the Fair Trade Commission found that Dongwon Construction Industry did in fact pay the subcontractor, but drafted a false contract to obtain a favorable evaluation under the comprehensive review bidding system of the Public Procurement Service. Under the system, a higher score is given only if the subcontracting ratio is at a certain level (82% of the bid amount).
Dongwon Construction Industry also added special terms requiring the subcontractor to bear all expense related to "additional work," "handling civil complaints," "industrial accident response," and "natural disasters." Some contracts even included a clause allowing the prime contractor to unilaterally terminate the agreement.
The Fair Trade Commission said these acts infringed the subcontractor's equal right to contract and constituted an unfair practice that shifted even industrial accident handling expense onto the subcontractor. A Fair Trade Commission official said, "We put the brakes on the practice of issuing documents showing a smaller subcontracting scale than actually performed to win public works bids," adding, "By sanctioning special terms that passed on even industrial accident expense, this measure sounded a warning against attempts by prime contractors to evade responsibility."