betterServices by Stage

Construction Phase Service

01

Cost Management for the General Contractor

Reducing costs through management of contracts, change orders, progress payment, settlement of the contract (review of overbudgeting, constructedquantity, unit price of new item)
02

Prevention of disputes and claims

Preventing potential disputes and claims between stakeholders during the construction process
03

Potential for partial opening

Considering the possibilities of partial opening to maximize customer profits

01 Cost Management for the General Contractor

Reducing costs through management of contracts, change orders, progress payment, settlement of the contract (review of overbudgeting, constructedquantity, unit price of new item)

step1Construction contract stage
1. 1. Contractreview
  - Reviewing and filteringexcessive design
  - Estimating the optimal cost
  - •Drafting the standard contract
2. 2. Supervision of the bidding process
  - Competitive bidding
  - Evaluating bidding price and negotiating on preferred bidder’s proposal
Contracting on the optimal construction cost
step2Application for progress payment
1. 3. Appraisal of over charging
  - Elimination of overcharged quantity without construction
    (field survey and item review)
  - Checking contract conditions
2. 4. Mediation of disputes over construction
  - Suggestion of a clear scope
  - Prevention of unreasonable increases in the construction cost
Prevention of excessive cost claims
step3Change orders and balancing of accounts
1. 5. Identifying the actual amount of construction
  - Recording precise changes to the drawings
  - Finalization of the construction amount after extensive field survey
2. 6. Reviewing new item’s unit price
  - Estimation of optimal unit price for new item using actual cost DB
Confirmation of change orders and settlement of final accounting

Maximization of the owner’s profit through a comprehensive cost management for each stage

02 Prevention of disputes and claims

Preventing potential disputes and claims between stakeholders during the construction process

Claim Analysis

Claim Analysis(Data from the Korean Commercial Arbitration Board, sum of the 2016–2018 data)

33% of all conflict mediations during the last 3 years in Korea was construction claim
More frequency of construction claims than those of other indusrries and large amount of money related
Schedule delays and financial damages caused by construction claims

Preventing claims during Design, Contract, and Construction

Causes and Response

Construction CompanyThe general contractor, NSC

Common claims

Increasedconstruction costs

Schedule delays

Causes of Claims

The design errors or excessive change change order

Ambiguous work scope with construction company
LesseeDepartment stores, supermarkets, hotels, logistics centers

Common claims

Construction by the owner

Compensation for business loss

Causes of Claims

Ambiguous work scope with lessees

Delays in schedule, compensation for defects
ResidentsApartments and officetels

Common claims

Defects in the construction or noise

Breach in lot sales conditions

Causes of Claims

Defects due to design or construction errors

Discrepancy between sale conditions and the actual status when moving in

Preparatory Measures of LOTTE CM

01Design
- Ensuring accurate drawing and specification
- Establishing specific and clear contractual
02Contract
- Establishing a clear work scope
- Enlisting conditions of business damage and compensation
- Analyzing the surrounding circumstances at the time of moving in
03Construction
- Checking out design thoroughly and managing the construction quality
- Avoidingexcessive change orders

03 Potential for partial opening

Considering the possibilities of partial opening to maximize customer profits

Examples of partial opening

Jamsil LOTTE World Tower
- Low rise building area opened two years and six months before completion of High rise building
- High rise builging completed in 2017
Busan LOTTE Town
- Low rise building opened in 2014
- High rise building under construction
LOTTE Shenyang, China
- Low rise building opened in 2015
- High-rise building and other amenities under construction