Measures of Hubei Province on Administration of the Construction Project Cost

Article 1 With a view to enhancing the administration of the construction project cost, regulating the pricing of construction project, reasonably defining and effectively monitoring the construction project cost, and safeguarding the lawful rights and interests of the parties concerned in the construction project, these Measures are formulated in accordance with Construction Law of the People’s Republic of China, Law of the People's Republic of China on Tenders and Bids , Contract Law of the People’s Republic of China , the relevant laws, rules and regulations of the State and in light of the actual situation of the Province.

Article 2 These Measures shall be applicable to activities related to the construction project cost within the administrative area of the Province; regarding the activities in which the construction project cost is determined by means of bidding according to law, the supervision and administration shall be conducted in accordance with these Measures.

The construction project cost in these Measures refers to all the expenses needed from the project confirmation to the final acceptance and the delivery of the project for operation. It shall cover construction cost, other related project construction expenses, project reserve funds, tax payment, interest of the loans from bank during the construction, and other expenses which shall be categorized into the construction project cost according to the stipulations of the State, and so forth.

Article 3 The competent administrative department of construction above county level shall be responsible for supervision and administration of the construction project cost within its own administration area. And its administration organ of the construction project cost shall be responsible for the performance of the specific works.

The provincial competent administrative departments of communications, water conservancy and so on shall be responsible for the administration of the project cost within their own trade field. Each special administration organ of the project cost shall ensure the specific administration work in accordance with the related provisions on the special project cost and the relevant ration and standard.

Article 4 The provincial administration organ of the project cost shall, according to the relevant stipulations of the State and the project construction norms and standard, formulate the system on administration of the project cost and the pricing rules, compile the consumption indexes of the construction project, and provide the basis for pricing the construction project cost.

The administration organ of the project cost at all levels shall timely collect and publish the cost information, covering the market prices of the man power, materials and specific construction machine, average index of project cost, price alteration tendency and so on, thus providing the  references for pricing the cost of the various construction projects.

Article 5 Regarding the project which shall be conducted by means of bidding according to law, the current standard of State and the Province in pricing the construction project cost shall be adopted. It is forbidden for the parties concerned in the construction project to make collusions to overestimate the project cost for the purpose of illegal profits.

The pricing criterion for the construction project cost shall cover index of the project investment estimate, rating of construction period, rating of the budgetary estimate, budget norm (the unified base price table and the bill of estimate), expense standard, machine-team fees quota of the construction machinery, supplementary quota, and other pricing standard stipulated by the State and the Province.  

Article 6 The investment estimate of the construction project shall be compiled in accordance with the price cost and with reference to the variation of the price, interest rate and exchange rate during the construction period.

Article 7 The design estimate of the construction project shall be subjected to the control of the investment estimate and be compiled in accordance with the budgetary estimate principles and the project pricing criterion. The approved design estimate is the major basis for control of the investment and cost. It is forbidden to make any breach of the basis without being authorized by the project approval department.

Article 8 The drawing budget of the construction project shall, within the scope of the approved design estimate, be compiled by the certified cost engineer or the cost appraiser with the corresponding qualifications in accordance with the already checked and approved shop drawing, organization and design plan, pricing criterion and the relevant stipulations.

Article 9 The pricing according to bill of quantities or the quota pricing may be adopted as the pricing method of the construction project, which shall be manifestly stated in the bidding documents according to the relevant laws, rules and regulations. It is forbidden to mingle both pricing methods in the same project.

Article 10 The party issuing contract and the contractor shall conclude the Project Construction Contract in a written form according to law. Regarding the construction project which shall be conducted by means of bidding according to law, the contract price and the bidding price shall be exactly the same. It is forbidden for any party to make private alteration when the contract price is agreed in the contract. It is also forbidden to make any other additional pacts in disagreement with essential contents of the already concluded contract.

Article 11 The following cost items of the project shall be agreed and manifestly stated in the Project Construction Contract in accordance with the relevant stipulations of the State and the Province:

1.  The project contract price;

2. The amount, time limit and method in delivering the advance payment and in appropriating the construction progress payment;

3. The identification of the design alteration and the mistake, omission and calculation error of the bill of quantities, the adjustment, counterclaim, and time limit of the project price and the delivering method of the corresponding payments;

4. The amount, withholding method and refunding time limit of the guarantee money for project quality (maintenance);

5. The time limit of the project and the rewards and punishment for ahead of or behind schedule;

6. The risk-taking scope and extent for the price variation of the equipments and materials; the adjustment method of the contract price when the variation exceeds the agreed scope and extent;

7. Closing accounts at the completion of the construction; the method in paying the contract price after the settlement and the liabilities for breach of contract;

8. The safety measures, the civilized construction, and the insurance premium for accidents and injuries;

9. The method in solving the disputes over fulfilling the contract, the guarantee items related to the payment of the contract price and the pricing of the project;

10. Other cost items that both parties deem to make an agreement;

Article 12 Regarding the construction project which shall be conducted by means of bidding according to law, the party issuing contract and the contractor shall conclude the Project Construction Contract, and the contractor shall submit the contract copy, within seven days as of the date of concluding the contract, to the local administration organ of the project contrast above county level for registration. When handling the procedures for registration, the bidding document, the notification of award, the electronic data of the commercial bid and the bidding price of the successful bidder shall be submitted at the same time.

The supplementary contract or supplementary agreement concluded by the party issuing contract and the contractor in the course of construction involving the adjustment of the project cost shall be timely reported to the administration organ of the project cost for record and registration.

Article 13 Where there is the situation agreed in the contract for the adjustment of the contract price, the contractor shall inform the party issuing contract of the reason and amount of the adjustment in a written form within fourteen days, and the contractor shall confirm the amount of adjustment and take it as the additional part of the contract price which shall be handled in accordance with the agreement in the contract. Where the party issuing the contract does not confirm nor put forward any comments within fourteen days as of the date of receiving the notice from the contractor, it shall be deemed as his approval of the adjustment; if the contractor does not submit the adjustment report or inform the party issuing contract within the stipulated time limit, the party issuing contract may decide the action of the adjustment and the amount of adjustment in accordance with the relevant data and shall inform the contractor in a written form.

Where the contents of adjustment agreed in the construction contract involve the attestation of the project cost, there shall be the written documents with the signature of both representatives of the contractor and the party issuing contract and the supervising engineer or the certified cost engineer.

Article 14 The settlement of the accounts at the completion of the project shall be based on the Project Construction Contract concluded by the party issuing contract and the contractor. And the compilation shall be conducted with reference to the contents of price adjustment agreed in the contract.

Regarding the construction project which shall be conducted by means of bidding according to law, the settlement of the accounts at the completion of the project shall be based on the Project Construction Contract registered in the administration organ of the project cost and with reference to the contents of price adjustment agreed in the contract.

Article 15 Where the project is completed, except the situation agreed in the contract by the party issuing contract and the contractor, the contractor shall submit the complete set of the documents involving the settlement of the accounts to the party issuing contract within twenty-eight days as of the date of check and acceptance of the project.

Article 16 The party issuing contract, after receiving the documents involving the settlement of the accounts submitted by the contractor, and if condition permits, may directly conduct the scrutiny, or entrust the enterprise for project cost consultation with the corresponding qualifications to conduct the scrutiny. And a written scrutiny opinion shall be put forward within the stipulated time limit. Where there is no submission of the scrutiny opinion, it shall be deemed as the approval.

The enterprise for project cost consultation shall objectively and disinterestedly conduct the scrutiny of the account settlements and accomplish it within the time limit agreed in the contract.

Article 17 The primary scrutiny opinion from the enterprise for project cost consultation shall be sent to both the party issuing contract and the contract in a written form. The party issuing contract and the contractor shall feedback the approval or the dissent within fifteen days as of the date of receiving the primary scrutiny opinion. Where there is no feedback within the time limit, it shall be deemed as the approval. 

Article 18 Where the scrutiny of the account settlements is completed, the party issuing contract shall pay the rest part of the project price within the stipulated time limit. It is forbidden to make any delay of the payment.

Where the contractor obtains the construction progress payment and the payment for account settlement after the project completion, the contractor shall preferentially pay the salaries of the laborers.

Article 19 Where the dispute takes place in the course of settling the accounts after the project completion, the party issuing contract and the contractor shall negotiate to solve the dispute in accordance with the pricing criterion and the relevant stipulations. If the dispute could not be solved by means of negotiation, it may be applied to the local administration organ of the project cost for intermediation or it may be brought to the board of arbitration in accordance with the agreement in the contract or brought to the people’s court according to law.

Article 20 Regarding the project which shall be conducted by means of bidding according to law, the contractor shall submit the documents of account settlement to the local administration organ of the project cost for examination and registration within ten days after the confirmation by both the contractor and the party issuing contract. The following materials shall also be submitted for the examination and registration:

1. builder’s license;

2. documents of account settlement;

3. certificate of the cost engineer and the cost appraiser;

4. payment attestation of the project price;

5. other data due for submission.

Article 21 The administration organ of the project cost shall conduct the registration scrutiny of the documents of account settlement in accordance with these Measures and the already registered Project Construction Contract within five days as of the date of receiving them. The registration scrutiny shall cover the following main contents:

1. The information concerning the fulfillment of the articles related to the project cost in the Project Construction Contract;

2. Whether the account settlement is compiled and scrutinized in accordance with the agreement in the contract;

3. Whether the competence and qualifications of the unit and personnel for the compilation and scrutiny are in agreement with the stipulations;

4. Recheck the information of paying the various fees stipulated by the State.

Where the registration scrutiny meets the requirements of the relevant stipulations, the documents of account settlement shall be registered and recorded; where the registration scrutiny does not satisfy the requirements, the party concerned shall correct the document of account settlement within the stipulated time limit.

Article 22 Where the documents of account settlement are not checked and registered by the administration organ of the project cost, it is forbidden to handle the procedures for the check, acceptance and registration. 

Article 23 The documents of account settlement, after being confirmed and signed by both the party issuing contract and the contractor, shall be deemed as the basis for payment of the project settlement price and the completion settlement.

Regarding the project which shall be conducted by means of bidding according to the law, the documents of account settlement, after being confirmed and signed by both the party issuing contract and the contractor, shall be deemed as the basis for payment of the project settlement price and the completion settlement.

Article 24 The enterprise for project cost consultation and the professional cost appraising personnel who engage in pricing the construction project costs shall observe the corresponding practice rules and norms and conduct the pricing of the project cost within the stipulated scope.

Article 25 The enterprise for project cost consultation shall legally conduct the consultation service, and timely and accurately provide the consigner with the information data and the relevant report. It is forbidden to collect any fees in violation of the relevant stipulations.

Article 26 The unit which compiles the documents concerning cost of the construction project and the certified cost engineer or the cost appraiser shall take legal responsibilities for the documents they compiled.

Article 27 The documents concerning the construction project cost in the Province shall employ the computer software in the compilation, which shall satisfy the Pricing Criterion for the Bill of Quantities in Construction Projects and the pricing basis stipulated in these Measures. If the software does not meet the afore-mentioned requirement, it is forbidden for its utilization in pricing the cost of the construct projects of the Province; and the administration organ of the project cost shall order the party concerned to stop its use or to make corrections. 

Article 28 Where the construction project which shall be conducted by means of bidding according to law violates these Measures and does not perform bidding activity in accordance with the current pricing criterion of the State and the Province, it shall be ordered by the relevant competent administration department of the project to make correction; if the party concerned refuses to make correction, a fine of over ten thousand yuan but less than thirty thousand yuan shall be imposed. Where the parties concerned make collusions to overestimate the project cost for the purpose of illegal profits, the direct responsible person shall be imposed upon with a fine of over five thousand yuan but less than twenty thousand yuan; if the action constitutes a crime, the criminal responsibility shall be investigated according to law. 

Article 29 Anyone that violates these Measures and does not pay the project price in accordance with stipulations or does not conduct the account settlement within the stipulated time limit shall be ordered by the relevant competent administrative department of the project to make correction and simultaneously be imposed upon with a fine of voer ten thousand yuan but less than thirty thousand yuan. And the direct responsible person shall be imposed upon with an administrative penalty.

Article 30 Where any unit that compiles the documents of the project cost or any personnel that conducts the compilation and scrutiny violates these Measures and causes the errors in the documents in a deliberate way or because of gross negligence, which results in the damages of the party issuing contract or of the contractor, the party concerned shall take the responsibilities for compensation according to law; and the competent administration department of construction shall register and publicize his discredits. If the circumstance is flagrant, his qualifications or the practice license shall be repealed according to law. 

Article 31 Any unit that does not obtain the Qualification Certificate of the Enterprise in Project Cost Consultation and therefore whose documents of the project cost are deemed invalid shall be imposed upon with a fine of over ten thousand yuan but less than thirty thousand yuan by the competent administration department of construction.

Where the project cost consultation is conducted in the name of a cost engineer or a cost appraiser who is not registered, the already concluded or compiled documents of the project cost shall be deemed invalid, and a fine of over five thousand yuan but less than twenty thousand yuan shall be imposed by the competent administrative department of construction.

Article 32 The competent administrative department and its administration organ of the project cost shall conduct the supervision and administration on the construction project costs strictly in accordance with the laws, rules and regulations and the relevant stipulations. Anyone of its working members that neglects his duty, abuses his power or practices illegalities for private gains shall be imposed upon with an administrative penalty according to law; if the action constitutes a crime, the criminal responsibility shall be investigated according to law.

Article 33 These Measures shall come into force as of January 1, 2008.