KFTC to Survey Subcontracting Practices at 100,000 Manufacturing, Service and Construction Firms

2024.06.29. The Fair Economy — The Fair Trade Commissio recently announced that, starting on the 28th, it will conduct a survey on subcontracting practices covering a total of 100,000 companies in the manufacturing, service and construction sectors.

According to the Fair Trade Commission, the survey covers 10,000 prime contractors and 90,000 subcontractors.

For prime contractors, the top-ranked companies by sales (manufacturing and services) and by construction capacity evaluation amount (construction) were extracted, selecting 7,000 manufacturing companies, 2,500 service companies and 500 construction companies. For subcontractors, 90,000 companies were selected from among the trading partners submitted by the prime contractors for the survey.

The survey period runs from the 28th to July 31 for prime contractors and from August 26 to October 6 for subcontractors, with extensions possible if needed. The scope covers subcontracting transactions carried out in each sector last year.

In particular, a new survey item on the subcontract price linkage system was added this year. The system was newly introduced into the Subcontracting Act in October last year as part of a government policy task to "create an environment where suppliers receive fair payment for their deliveries." Through this survey, KFTC plans to examine the current state of adoption of the subcontract price linkage system and, based on the findings, actively support the system's early establishment in the market.

Meanwhile, the survey also includes a questionnaire to verify the overall subcontracting transaction status by sector, covering items such as contract issuance and use of standard subcontracting contracts, subcontracting payment status, demand and misuse of technical data, and improvements in transaction practices.

The survey will be conducted online: companies will be notified by mail of whether they are subject to the survey, and will then enter their information on a website (https://hado.ftc.go.kr). KFTC also plans to set up an integrated consultation center (1522-1391) and a one-on-one SNS consultation center related to the subcontracting survey, to respond promptly to inquiries and difficulties from surveyed companies.

Meanwhile, KFTC plans to publish the results of the subcontracting survey at the end of the year, based on companies' responses and an analysis of the related data. The survey results will be used as basic data for monitoring future violations of the law and for improving the system, and in particular, suspected major violations involving subcontract payment, negotiations on adjusting supply prices, and misappropriation of technical data will be reflected when drawing up plans for ex officio investigations.

KFTC said that the subcontracting survey, which has been conducted since 2021 with approval as an official national statistic, uses verified statistical methods to accurately capture the state of subcontracting transactions, and is expected to be widely used as basic data not only for law enforcement and system improvement but also for academic research.