Shared Growth

POSCO E&C is a trustworthy win-win partner that forms stable industrial ecosystem.

Strategy for Shared Growth

Five Major Brand Programs

POSCO E&C operates various win-win growth programs to foster substantial mutual cooperation with its small and medium-sized Enterprises business partners, categorizing its major initiatives into five key brands.

  • 01 Process

    Establishment of "fair trade culture" by protecting the rights and interests of subcontractors and operating a fair trade compliance program

    Use of Standard Subcontracting Agreements / Operation of the Subcontracting Win-Win Cooperation Committee / Compliance Program / Compliance with the 4 Major Action Items for Large and Small-to-Medium Enterprises
  • 02 Win-Win

    Operation of "win-win-based bidding system" and "financial support system" to ensure fair profits and improve liquidity

    · Win-Win Growth Procurement & Financial Support Programs : Win-Win Procurement Systems / Appropriate Price Bidding System / Market Price Competitive Bidding System / Proposal-based Bidding System / Procurement Preference for Social & Disability-owned Enterprises

    · Financial Support Programs : Win-Win Growth & ESG Fund(Woori Bank) / "Together Win-Win" Loan(Shinhan Bank, Hana Bank)
  • 03 Empathy

    "Creating a Happy Workplace" by operating a welfare system for partners and facilitating communication with field workers

    Welfare system: Support for funeral supplies, rewarding excellent employees of partners, Establishment of standards for the installation of on-site sanitation and rest facilities
    Communication activities: operation of a field workers' opinion channel, management of workers’ wage arrears
  • 04 Share

    Expanding the "Performance Sharing System" such as profit sharing by resolving construction field issues with partners

  • 05 Coexistence

    Operation of “Shared Growth Support Team” to support technology, consulting, education positions required by small and medium-sized partners

Process

Establishment of "fair trade culture" by protecting the rights and interests of subcontractors and operating a fair trade compliance program

Use of standard subcontract agreement recommended by the Fair Trade Commission

Immediate reflection of amendments to the Fair Transactions in Subcontracting Act and standard subcontract agreement

Time of first introduction

Construction: December 27, 2017
Equipments/materials/services: April 5, 2019

Subcontract Win-Win Cooperation CommitteeNewly established 2020.04

Able to quickly and amicably resolve disputes between the field and partners through company-wide decision-making
- Establishment of win-win cooperation procedure regarding dispute settlement
- Partners are able to directly apply for dispute settlement in case of a conflict

Compliance Program (CP)Implementation Date: 2003.07

A comprehensive internal compliance system established and operated by the company to ensure adherence to fair trade regulations, encompassing training, oversight, and monitoring.

POSCO E&C CP Framework

POSCO E&C has established a systematic Compliance Program (CP) for the effective prevention, detection, and response to legal risks. We adhere to the 8 core elements recommended by the Korea Fair Trade Commission (KFTC) and operate a dedicated Compliance Council.

8 Core Requirements of the CP

① Establishment and implementation of CP standards and procedures
② Commitment and support from top management
③ Appointment of a Compliance Officer to oversee CP operations
④ Development and utilization of a Compliance Manual
⑤ Provision of continuous and systematic compliance training
⑥ Establishment of an internal monitoring system
⑦ Disciplinary actions against employees violating fair trade laws
⑧ Effectiveness evaluation and continuous improvement measures

Compliance with the Four Major Action Items between Large and Small-Medium EnterprisesImplementation Date: 2009.09

The Four Major Action Items

① Guidelines for Contract Execution
② Guidelines for the Selection and Operation of Partner Companies
③ Guidelines for the Establishment and Operation of an Internal Subcontract Review Committee
④ Guidelines for the Issuance and Retention of Documents

Incorporation into Contract Procedures: Reflected directly in the company's contract administration workflows and procedures.

Win-Win

Operation of "win-win-based bidding system" to ensure fair profits for partners

Operation of the Appropriate Price Bidding SystemIntroduction of 2020.04

A system introduced to address issues such as quality deterioration and safety accidents caused by bleeding competition.
It aims to foster win-win cooperation with subcontractors facing difficulties due to the downturn in the construction economy and rising raw material prices, by abolishing the lowest bid system.

Operation overview

Sets a baseline "appropriate price amount" and excludes bidders who submit bids below this threshold. The bidder with the bid closest to and just above this baseline is selected as the successful contractor.

Case of "XX site" Window construction (budget : KRW X billion; the set lowest price: KRW 1.1 billion)
Company A would have won the contract; however, through the application of the appropriate price system, Company C was selected as the successful bidder by filtering out abnormally low bids.

Cateogry Company A Company B Company C Company D Company E
Bidding amount (KRW 100 million) 9 10 12 13 15

Bid System of Market Price CompetitionIntroduction of 2017.09

Exclusion of Lowest-Price Bidding & Application of Market Price Competitive Bidding: To ensure win-win cooperation with subcontractors, the lowest-price bidding system is excluded for interior architecture, landscaping, and wallpapering work types in steel mill projects and architectural projects, and the Market Price Competitive Bidding System is applied instead. Exclusive Bidding for Local Enterprises: In particular, among steel mill projects, certain work types are restricted exclusively to local enterprises (in Pohang, Gwangyang, and Suncheon) to foster mutual cooperation with regional partner companies.

Operation overview

Among the bidders within the budget, the bidder closest to the market price* is selected as the successful bidder.
* [(average of bidders within budget + order budget) ÷ 2] x (93%–97%)

Case of "XX site" mechanical construction (budget: KRW X billion; market price: KRW 2.68 billion)
Company A would win the bid when the lowest price is applied; however, Company C became the successful bidder with the application of the market price.

Category Company A Company B Company C Company D Company E
Bidding amount (KRW 100 million) 24 25 27 28 29

Proposal-based Bidding System Operation Newly Established in 2026.07

· An innovative bidding system that moves away from price-centric evaluations by accepting diverse proposals from partner companies and comprehensively evaluating both their capabilities and pricing.
· Selects the optimal contractor by reflecting site-specific needs across areas such as safety, quality, schedule (construction period), and design innovation.
· Applied to High-Risk, High-Complexity Work Types: Targets work types with high impact on safety, quality, schedule, and design (initiated by the site).

Operation Overview

The successful bidder is selected based on the highest combined score: Proposal Evaluation (50%) + Price Evaluation (50%)

Proposal Evaluation Average score given by evaluation committee members through a blind review process
(excluding the highest and lowest scores).
Price Evaluation Scores are converted in proportion to the bidding rate relative to the 1st-ranked amount that meets the appropriate price baseline amount.

Note: Evaluation weightings and items may be adjusted depending on site conditions and work characteristics.

Evaluation Committee

Composed of a total of 6 to 8 members, including Site representatives (within 50%), Related departments (technology, estimation, etc.), and the Procurement department

Purchase Preferential System for Social Enterprises & Companies of Persons With DisabilitiesIntroduction of 2020.07

Expansion of trade with society-friendly companies to participate in solving social problems and go beyond creating economic profit in the purchasing process

Society-Friendly Companies

A concept independently defined by POSCO Group by compiling companies related to social problem-solving

사회적 친화기업
  • Social Enterprise
    Social Enterprise Promotion Act

    Companies that provide social services or jobs to vulnerable groups such as the elderly, persons with disabilities, women with career interruptions, and North Korean defectors,
    or contribute to the local community

  • Intrepreneurial Activities of Persons With Disabilities
    Act on the Facilitation of Entrepreneurial Activities of Persons With Disabilities

    Companies owned or run by persons with disabilities and persons with disabilities amounting to more than 30% of its personnel

    Small enterprises owned or run by persons with disabilities (annual sales of less than KRW 12 billion in manufacturing, less than KRW 8 billion won in construction)

Benefits

Preferential registration and bidding, fee reduction

Category Details
Preferential evaluation for new registration Additional 10 points are given when evaluating new registrations
Preferential bid price evaluation 5% preferential treatment when evaluating the bid amount (orders with a budget of less than KRW 1 billion)
Reduction of contract deposit 5% reduction of contract deposit (10% → 5%, preferential level for excellent companies)
Shortening the payment period Shortening the payment period (tax invoice issuance +50 → 15 days)

Operation of "financial support system" to enhance the financial liquidity of partners

Shared Growth/ESG FundIntroduction of 2011.06

Low-interest loan assistance for subcontractors by establishing a Shared Growth Fund of KRW 52 billion with Woori Bank starting in June 2011

1% to 2% preferential rate compared to market interest rate

Target and period

- Target : Regularly registered partners of POSCO E&C
- Limit and Term : KRW 500 million per year (extendable in 1-year increments if registration is maintained)
- Application and Repayment : Available any time / Early or lump-sum repayment at maturity
* Note: A fee applies for early repayment

Win-Win LoansIntroduction of 2018.06

- Concluded an MOU with Korea Commission for Corporate Partnership and financial institutions for financial support for the first time in the construction industry
* June 2018 (Shinhan Bank), August 2020 (Hana Bank)

- Signing a contract with POSCO E&C makes it available for a partner to borrow money and reduce interest costs

더불어 상생대출

Target and period

- Target : Officially registered partners of POSCO E&C (contracts in KRW, with a contract period of at least 6 months and before 50% of the contract period has elapsed)
- Limit and Term : Within the contract period, up to 100% of the contract amount (considering deductions for paid advances, interim payment limits, and credit rating)
- Repayment Method : Installment repayment (deduction from interim payments) or full repayment at maturity

Empathy

"Creating a happy workplace” by operating a welfare system to build a sense of unity with subcontractors

Support for Funeral Supplies for Employees of PartnersIntroduction of 2019.01

Target: Employees of PHPs and employees of partners working at a POSCO site and their lineal ascendants and descendants and spouse.
Item: Funeral supplies engraved with POSCO logo (12 items, including bowls, paper cups and plates, for 500 people)

협력사 직원 장례용품 지원

Selection process

  • Occurrence of bereavement

  • Field manager of the partner

  • Person in charge of construction in POSCO

  • Person in charge of win-win cooperation in funeral goods companies

Documents to be submitted

Funeral supplies application form, employment certificate, national pension or health insurance subscription certificate

Rewarding Excellent Employees of PartnersIntroduction of 2017.12

Selection process

  • Selection of top partners in performance evaluation

  • Recommendation of outstanding employees from partner companies by the business division

  • Confirmation of excellent employees

Reward and prize

Certificate of commendation and gift certificate worth KRW 1 million
The selected partner is given 1 additional point in the comprehensive performance evaluation.

Establishment of standards for the installation of on-site sanitation and rest facilities

1) Contract conclusion
2) Selection/management of partners
3) Establishment/operation of internal deliberation committee on subcontract
4) Issuance and preservation of written forms
* Reflecting four major practices in contract work procedure

대중소기업간 4대 실천사항 준수

"Creating a Happy Workplace" that communicates and empathizes with partners and workers

Operation of Field Workers' Opinion ChannelIntroduction of 2019.05

Establishment of a mobile communication channel to report workers’ inconvenience, matters to be improved, and unfair treatment
* Scan the QR code, log in to the "Field Workers Opinion Channel" in the "POSCO E&C Report & Consultation Center" and register opinion

현장근로자 소리함 1
현장근로자 소리함 1 현장근로자 소리함 2 현장근로자 소리함 3

Transfer Fee Support for "Nomubi.com“Introduction of 2021.06

Introduction of a proactive payment arrear prevention system to prevent wage delays and fund misappropriation by workers of subcontractors (Nomubi.com, since 2016).

Provision of support by waiving Nomubi.com transfer fees for. partners

- Target : Small and medium-sized partners doing business with POSCO E&C (excluding middle-standing enterprises)
- Method of Support : Automatic fee waiver within the Nomubi.com system

※ Nomubi.com Payment Process (Primary Contractor → Workers' Accounts)

근로자 임금 체불관리시스템 근로자 임금 체불관리시스템

1. Preparation of Billing Statement
2. Review of Billing Statement
3. Disbursement of Progress Payment
4-1. Transfer (Labor Costs, Equipment Costs, Material Costs
4-2. Transfer (Other Costs)
5. Review of Payment Details

Share

Expansion of the "Performance Sharing System" to share technology and performance by resolving issues at construction fields

Performance Sharing SystemIntroduction of 2008

How to make a proposal of technology

1) Good ideas from partners can be proposed at any time through the "Win-Win Cooperation Technology Suggestion Center" (http://winwin.poscoenc.com)

How to make a proposal of technology How to make a proposal of technology

2) Excellent ideas from partners that are creative and can be applied to the field are selected by holding the "Technology Cooperation Contest"

Contest Period*

Annually 1-2 times
Announcements made in advance on the POSCO E&C website and partner portal

Contest topic

Submission of ideas following the announcement of required topics by POSCO E&C
- Topics related to new businesses such as nuclear energy, secondary batteries, offshore wind power, hydrogen, etc.
- Topics related to new technologies and methods such as cost reduction,
construction period shortening, and safety/environmental improvements

Contest benefits

For partners selected for excellent ideas, upon proving performance through joint technology development,
incentives such as unit price contracts, Private contracts, and joint patent applications will be provided.

성과공유제

Coexistence

Operation of the "Shared Growth Support Team" for coexistence with partners by providing support in the necessary areas

Shared Growth Support TeamIntroduction of 2019.08

Overview

The Shared Growth Support Team helps SME partners to improve their safety, skills and job competency through a two-track system, one being a support team using POSCO E&C’s capabilities and infrastructure and the other being a support team tailored to partner needs.

Support target

PHPs and SME partners who wish to participate in the program or have been recommended internally.

Program

- Training : Offering capacity-building training in areas such as new business, safety, and quality (including mandatory Safety Academy courses and training for areas needing improvement).
- Consulting : Providing complimentary consulting and system establishment support using external organizations (for example, safety diagnostics and ready-mix concrete vehicle management systems).

Operation method

[Track 1] POSCO E&C organizes a support team and matches partners to the program by selecting them or receiving their applications.
[Track 2] POSCO E&C listens to the needs of partners and matches them to our own program or outside entities.

Operation method Operation method

100% Cash Payment of Subcontract Amount

To secure cash liquidity and foster win-win growth for partner companies, POSCO E&C became the first in the construction industry to implement 100% cash payments for subcontracting fees in October 2010.

하도급대금

Early Payment of Holiday Funds

Early payment of subcontract amounts for smooth financial activities of partners who have a high demand for funds during the Lunar New Year and Chuseok holidays every year

Donation to fund for mutually beneficial cooperation of large enterprises & small-medium enterprises

Donating funds for the integrated management and effective usage of activity costs for various shared growth programs run by POSCO E&C

  • What is a mutually beneficial cooperation fund?

    Private finances provided by a domestic corporation to the Korea Foundation for Cooperation of Large & Small Business, Rural Affairs for mutual cooperation with SMEs

    Donated toKorea Foundation for Cooperation of Large & Small Business, Rural Affairs

    Contribution amountKRW 2-3 billion

    Purpose of contributionOperating shared growth programs of POSCO E&C
  • Key programs for the mutually beneficial cooperation fund

    ㆍSupply of funeral supplies for suppliers’ on-site employees
    ㆍSupport for hygiene facilities at construction sites
    ㆍSupport for ESG assessment and safety consulting
    ㆍEducational assistance for enhancing the suppliers’ competencies

Operation of the PHP (POSCO Honored Partner) program

Discovering more PHPs and establishing long-term partnerships by increasing transactions with them

Target

ㆍRegistered company in Construction, Equipment, Material and Logistics

Selection criteria

ㆍExcellent scoring partner in comprehensive performance evaluation and safety management

[Example]
Category On-site
evaluation
Contract
performance
Bidding
rate
Merit/demerit
Performance score 70 points 20 points 10 points -9~+10
points

Benefits

[Construction]
- Priority rights for bid participation
- [Best PHP Awardee] Priority for Private Contracts (Applying Guaranteed Annual Work Volume) Incentives for Site Managers of Zero-Accident Partner Companies (KRW 1 million / quarter)

[All Sectors]
- Reduction of performance bond rate (10% → 5%)
- Provision of Cash Incentives (KRW 2 million per company, excluding Best PHP awardees) and Offering of Funeral Wreaths, etc.

ESG assessment and safety consulting

Improving ESG capabilities and preventing safety accidents for sustainable management.

Target: Officially registered partners in construction areas.
Benefits: Support for ESG assessment and safety consulting fees.

Electronic import stamp tax support

Exemption of Electronic Revenue Stamp for Contract Signing to Foster Win-Win Growth with SME Partners (POSCO E&C bears 100% of the cost)

Electronic revenue stamp issuance process

전자수입인지 인지세 지원 전자수입인지 인지세 지원 전자수입인지 인지세 지원

Technical Data Escrow Program

POSCO E&C provides SMEs with the option to securely deposit their critical technical information with a trusted third-party organization, the Korea Foundation for Cooperation of Large & Small Business, Rural Affairs (KOFCA).

* This program enables companies to verify their ownership of the technology in the event of a technology leak.

  • Eligible Participants

    - Officially registered partners of POSCO E&C

  • Depositable Items

    - Production and manufacturing processes, design drawings and manuals, formula ratios, etc.

  • Support Details

    - Full coverage of technical data escrow service fees

※ Procedure:
① Submit application → ② Pay service fee → ③ Submit deposit materials → ④ Apply electronic signature → ⑤ Execute escrow agreement

Free Transfer of Patent Rights

Free transfer of POSCO E&C's unused patents to small and medium-sized partners to enhance their technological competitive edge and spread win-win cooperating culture

특허권 무상이전 특허권 무상이전

Contribution to the Agricultural and Fishing Villages Collaborative Cooperation Fund

Supporting Revitalization and Sustainable Development and Growth of Local Economies in Rural Areas

Agricultural and fishing villages collaborative cooperation fund

A fund established to support agriculture, fisheries, and rural communities that have suffered or are likely to suffer damage from the implementation of Free Trade Agreements (FTAs), and to promote win-win cooperation between private enterprises and agricultural and fishery workers (Paragraph 1, Article 18-2 of the Act on Support for Agriculture and Fisheries, etc. in Connection with the Implementation of Free Trade Agreements)

Operator of the Fund : Korea Foundation for Cooperation of Large & Small Business, Rural Affairs (KOFCA)
Contribution Amount : KRW 1 billion (subject to change based on annual support activities)
Purpose of Contribution : Linked to community volunteer and sharing activities

Bidding Recommendation System for Local Companies

Expansion of participation of local companies in construction under a certain amount

Construction type Existing Improved
Machine installation (PLANT) Less than KRW 1 billion Less than KRW 2 billion
Electrical Work (PLANT) Less than KRW 700 million Less than KRW 1 billion
Reinforced Concrete Work (PLANT) Less than KRW 500 million Less than KRW 1 billion
* Companies headquartered in Pohang or Gwangyang (Suncheon), or members registered with the Korea Contractors Association (Pohang and Gwangyang branches)

Introduction of the Mutual Growth Mall

An online shopping platform designed to expand sales channels for SMEs and enhance employee welfare for partner companies by providing quality products from excellent SMEs at reasonable prices.

Eligible Users: Officially registered partners of POSCO E&C
Product Range : Includes food, electronics, daily necessities, furniture, and fashion & beauty items, featuring well-known SME brands such as Cuckoo, Shinil, and Dimchae.
How to Use : Visit the URL below, register as a member, and purchase freely
- Online: (http://www.dongbanmall.com/poscoenc
- Mobile: (http://m.dongbanmall.com/poscoenc)

※ Membership Registration Notes : 1. Select client company (click POSCO E&C) 2. Employee number (leave blank)

Mobile Operation of the Partner Portal for Procurement Tasks

Enhancing work efficiency for partner company employees through mobile access to core procurement portal tasks such as bidding, contracting, and progress payment
* Installation QR

구매업무 파트너포탈 모바일 운영

Participation in Innovative Technology Procurement Consulting Sessions

Participation in purchasing consultation sessions co-hosted by the Shared Growth Committee, local governments, and related organizations, aimed at promoting product purchases and pioneering sales channels for small and medium-sized enterprises.

* 1:1 consultations with small and medium-sized enterprises wishing to do business with POSCO E&C

[Participation in purchasing consultation sessions]
Participation in regional and specialized purchasing consultation sessions, such as the Daegu, Chungnam, and Ulsan Innovation Growth Tours, large-small business win-win growth events, and materials/parts/equipment (So-Bu-Jang) business consultation sessions.

Activation of the Right to Stop Work and Provision of Performance-based Incentives

Substantially guarantee workers' rights to safety activities—the core agents of disaster prevention—and link them to disaster prevention effectiveness to reward best practices based on their level of contribution.

Operation of a Grievance Handling Center on the Partner Portal

Receipt and handling of various grievances of partners, such as inquiries on partner registration process, bidding contract system, and how to use the system
* Grievance Handling Center : https://ild.poscoenc.com/pgm/board/QnA.asp

온라인 현장(사양)설명회

Online on-site (specification) briefing session

Enhance operational efficiency and bidding participation rates by omitting on-site visits from partners through non-face-to-face operations.
* Target orders: Small orders, orders involving long-distance travel, simple condition orders, etc.

Online on-site briefing process

온라인 현장(사양)설명회 온라인 현장(사양)설명회

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