On the 29th, Hyundai E&C announced that it will introduce a 'performance-sharing VE (Value Engineering) compensation system' that shares results based on proposals from partner companies regarding design, purchasing, and construction optimization.
This system is designed to execute cost-saving activities based on VE ideas suggested by partner companies, leading to quality innovation and work process improvements for the project, compensating 50% of the results generated by the partners. Hyundai E&C is the first construction company in Korea to officially implement this type of performance compensation system.
The performance-sharing VE compensation system operates according to a standard procedure consisting of a total of seven steps. Partner proposals undergo a first feasibility review and a second effectiveness evaluation, leading to the submission of VE proposals, contract changes, construction execution, and performance settlement. The methods for performance payment and settlement criteria have also been clearly established to enhance the system's enforceability.
A comprehensive evaluation system prioritizing quality and safety has been established. Hyundai E&C conducts a multidimensional review of VE proposals, including compliance with client quality standards, potential for construction delays, and risks to safety. Proposals are adopted when their effectiveness and feasibility are confirmed, designed to ensure that partner suggestions can substantially contribute to the project's reliability and completeness.
The system will be implemented primarily at sites for domestic and overseas material and subcontracting contracts within the Civil Engineering, New Energy, and Plant Business Division. Future plans will consider expanding its application to the Dwellings and housing business division.
A representative from Hyundai E&C noted, 'This system is meaningful in that it has established a structure to institutionally accept the technological proposals from partner companies and return them as tangible results,' adding, 'We plan to further enhance our technology-based cooperation system to strengthen long-term business competitiveness.'