What is a Construction Service Business, Types and Work Contracts

Rancakmedia.com – For those of you who don't know what a construction service business is, you can read the article below to get complete information about a construction service business.

In today's contemporary times, the construction services sector is like a mushroom that grows in the rainy season. The construction service industry is important for building office buildings and public facilities that will serve the needs, interests and safety of the people who will use and benefit from these buildings in the future.

The construction service business sector in Indonesia is regulated by the legal basis of Law Number 18 of 1999 concerning Construction Services, which classifies construction service companies according to the type, form and field of construction service business.

In practice, the service business construction must still pay attention to the principles of construction and environmental sustainability.

To avoid confusion, both construction service providers and the business they work for must know what their responsibilities are, understand the legal documents they use, and understand the contracts they sign.

What is a Construction Services Business

A construction service business is an activity that offers services for planning, monitoring and implementing project management. Not only that, the company also carries out work and construction of structures. Include all necessary building services, equipment and documents.

Understanding What is a Construction Services Business

When it comes to construction, there are many different technologies at work, including the construction of highways, flyovers, office buildings, bridges, and residences. High-rise buildings and civil engineering projects such as airports, power plants and dams all fall into this category.

Differences between Construction Services and Construction Services Business

The Law on Construction Services (UUJK) states that the definition of Construction Services is construction work planning consulting services, construction work implementation services and construction work supervision consulting services.

What is meant by a construction service business in UUJK is a business that provides "services" or services in the field of construction planning, implementation and supervision, these individuals are collectively referred to as "Service Providers" in the community. Those who provide jobs are referred to as “service users”, and they may be people, businesses, or government agencies.

Thus it can be stated that what is meant by "construction service business" is one of the companies in the economic sector related to the planning, implementation and or supervision of a construction/infrastructure activity to produce a building or other physical form. .

Type of Construction Service Business

Individual companies and business entities, both legal entities and non-legal entities, both on a national and global scale, are all forms of business in the field of construction services.

Individuals acting as construction executors may only work on projects with low business requirements, basic technology, and simple construction requirements.

Construction projects with a high level of risk and projects, as well as significant business value, are often carried out by limited liability companies or equivalent foreign business organizations.

Type of Construction Service Business

Construction planners, meaning providers who offer planning services in construction, which involve a number of tasks ranging from development studies to making construction work contract agreements, as for the scope of the types of construction businesses according to Law no. 18 of 1999, namely:

  1. Construction planner, namely a provider that provides planning services in construction which includes a series
    activities starting from development studies to the preparation of construction work contract documents.
  2. Construction contractors are called construction contractors, who are project managers/heads of projects.
  3. The contractor's job is to turn blueprints into tangible objects, such as buildings.
    construction supervisor, namely the act of providing supervisory services over the course of construction work, either part or all of the work, from site preparation to project completion.
  4. Engineer in Supervision refers to a person who provides this kind of service. The phrases “consultant” and “contractor” are now separated into “three categories” based on the information provided above about the type of construction services business.

A construction project usually consists of integrated construction work such as architectural, civil, electrical and environmental activities. Here's a more in-depth description.

Architectural Field

This construction services business category includes building architecture with simple, medium, and high technology, interior architecture, and landscape architecture, including maintenance.

Civil Field

Civil sector projects include the construction of roads, bridges, railroads, runways, tunnels, underground roads, flood control canals, irrigation networks, water resources infrastructure, building structures, construction of mines and factories, and demolishing buildings.

Mechanical field

This construction service project includes air conditioning (AC) installation, oil/gas/geothermal installation, industrial installation, elevator and escalator construction, and piping.

Electrical Field

Projects in the electricity industry include power generation installations, electrical installations, railway signaling and telecommunications, telecommunications for air and sea navigation aids, telecommunications centers, lightning rods, and radio transmitter buildings.

Environmental Management Sector

Environmental impact analysis (Amdal), environmental engineering, development of processing areas and buildings, as well as clean water and sewage pipes, are all part of this construction services project.

Legality of Construction Services Business

Like other business categories, this service requires a license. This is because this industry includes construction implementation services, construction planning services, and construction supervision services. Therefore, every business that wants to do architecture requires SIUJK or a Construction Services Business Permit.

Legality of Construction Services Business

The Investment Coordinating Board issues Construction Service Business Permits (IUJK) to Construction Service Provider Companies (BKPM). This institution is a representative of the government that has the authority to organize various construction services in Indonesia.

Construction Services Business Work Contract

The name of the contract is inseparable from the acquisition of goods and services. Construction services, sometimes referred to as “Construction Work Contracts”, are no different.

Construction work contracts are contract documents that contain agreements regulated by laws and regulations between service users and service providers in the implementation of construction services where each party must comply with the contract that has been stipulated.

According to the agreement, the construction work contract contains at least provisions regarding:

  1. The parties explicitly indicate their identity.
    figuring out what the work is, how much it is worth, how much it costs per unit, how much the work is, and how long it will take to complete it
    coverage period, which includes service provider deployment and maintenance
  2. Equality of rights and obligations, including the right of the service user to obtain the results of construction services and his obligation to fulfill the conditions agreed upon, as well as the right of the service provider to obtain information and fees for services, and his obligation to provide construction services
  3. Use of construction workers, which consists of the task of hiring qualified construction workers;
  4. Methods of payment include requirements relating to the obligations of service users in making payments for the results of construction services, including payment guarantees
    If one party does not do what they are supposed to do, the default clause says who will be responsible.
  5. Dispute resolution provides rules about the process of solving problems due to conflict
    There is a clause in a construction work contract that says what will happen if one of the parties does not do what they agreed to.
  6. Consequences are borne by the parties with events that occur beyond their choice and ability, resulting in injury to one of the parties.
  7. Building Failure, with rules regarding the responsibility of service providers and/or service users for building failures and the length of time they have to repair them
  8. In the law that protects workers, there are rules regarding worker safety and health, as well as social security benefits.
  9. Protection for third parties other than the parties and employees includes the responsibilities of the parties in the event of an incident that causes loss or causes an accident and/or death;
  10. The environmental element includes the responsibility of the parties to comply with environmental regulations;
  11. Compensation in case of unexpected harm and legal liability to third parties during construction or if the building is damaged
  12. Alternative construction dispute resolution
    The knowledge above shows how important it is for service consumers and construction service businesses. Each party must fully understand and understand everything written in the contract.

Construction Services Business Work Contract

If there is disagreement in the contract, then the settlement is carried out by using the core concept of the debate to reach a consensus. However, if in terms of contemplation, the parties cannot reach an agreement, then each party has the right to take steps to resolve the dispute as stated in the Construction Work Contract.


Below we have summarized some frequently asked questions about construction services, as follows:

What Taxes Are On Construction?

In the construction tax there are services that are subject to income tax (PPh) article 4 paragraph 2 which is regulated based on government regulations.


To avoid confusion, both construction service providers and the business they work for must know what their responsibilities are, understand the legal documents they use, and understand the contracts they sign.

Constitution Service Construction (UUJK) defines Construction Services as consulting services for planning, implementing, and supervising construction work. Construction companies are all forms of business in the field of construction services.

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