The total price of the EPC project does not change, can the engineering fee be adjusted?

Recently, the Changsha Municipal Housing and Urban-Rural Development Bureau issued a notice clarifying matters related to project change management under the EPC general contracting model of municipal public projects and housing construction invested by our municipal government. The notice clarified: Within the scope of Changsha City, the government invests in various new, expanded, and renovated housing construction and municipal public engineering projects contracted using the design-procurement-construction general contracting model (hereinafter referred to as the EPC model) (hereinafter referred to as the government investment) This notice shall apply to all engineering changes of the project). The engineering changes mentioned in the notice refer to the changes and adjustments that occur after the EPC model general contracting contract is signed and the construction drawing design review and filing is completed, which are divided into changes within the risk and changes outside the risk.

Changes within the risk: Project changes caused by the EPC model general contractor or that the general contractor shall bear in the general contract contract are within the risk or are not among the following outside-risk changes.

Changes outside of risks: Project changes caused by risks borne by the construction unit as stipulated in the EPC model general contracting contract, mainly include: 1. Risks of price changes in the general contracting contract due to changes in national laws, regulations and policies; 2 , the risk of cost increase and construction delay caused by the construction unit; the cost increase and construction period caused by the progress of preliminary work such as project demolition, immigration, pipeline relocation (involving military, railway, high-voltage electricity, high-voltage oil and gas pipelines), etc. Risks of delays; other risks of increased costs and delays in construction due to written requests from local governments, functional departments, and maintenance management departments that exceed the portion agreed by both parties to be borne by the general contractor; 3. Risks of increases in costs and delays in construction caused by other force majeure. The EPC model general contracting contract should adopt a lump sum contract, and the contract should stipulate the specific risk sharing content, change categories and handling procedures, measurement rules, pricing methods, etc. of engineering changes. In principle, the total contract price will not be adjusted for changes within the risk, the construction unit shall not pay the corresponding change fees, and the construction period shall not be postponed. Non-risk changes will be handled in accordance with the contract between the two parties, and the cost and construction period can be adjusted after approval.

The notice on matters related to engineering change management will be implemented from March 1, 2022, and will be valid for five years.