What are the risks in the construction industry?

From the practical research, there are serious credit risk management problems in the bidding activities of the construction market at present, which have affected the orderly bidding activities of engineering construction and the healthy development of the construction market.

On the one hand, the contractor's credit risk not only affects the standardization and order of bidding activities, but also lays hidden dangers for the quality and safety production of subsequent projects. If some contractors provide false engineering achievements, enterprise qualifications and financial statements, or adopt methods such as bidding by bidding, collusion, etc., resulting in rejection of the bid and failure of bidding, which will affect the bidding process and bidding cost; Even if the bid is finally won, without the corresponding professional skills, talents, management strength and financial strength, there are many risks such as finance, technology and management in the contractor's performance of the construction contract, which directly affect the construction period, quality and construction safety.

On the other hand, the imperfection of credit risk management service restricts the reasonable competition in the construction market and is not conducive to effectively mobilizing the resource allocation in the construction market. Under the principle of winning the bid at a low price, a large number of contractors with weak comprehensive strength enter the business market through unreasonable price competition and irregular market competition (collusive bidding and collusive bidding), and use "bad money" to drive out "good money". On the contrary, the honest contractor with strong comprehensive strength lost to the price war of inferior contractors, which made the allocation of resources in the construction market unbalanced and violated the principle of fairness and justice in the construction market competition.

Therefore, how to establish a perfect and effective credit risk management service in engineering construction bidding activities should become one of the important research topics in the development of China's construction industry.

1, credit risk characteristics, credit risk management services.

In the bidding activities of engineering construction, there are many factors that cause the contractor's credit risk, including political risk, information risk, commercial risk, management risk and financial risk. The comprehensive effect of these risk factors forms the overall credit risk of the contractor.

Generally speaking, the contractor's credit risk usually has the following characteristics:

1

The risk probability is small and the accident loss is large. At present, the domestic construction market is in an obvious buyer's market, and the employer has long occupied a favorable market position. In the fierce market competition, contractors usually don't default. However, considering the particularity of engineering construction, the construction period is long, the capital investment is large, and there are many risk links. Once the contractor defaults, it will bring serious economic losses to the owner.

2

Information asymmetry makes it difficult to identify risks. There is a serious information asymmetry between the main activities in the construction market, and the employer lacks an effective information channel to understand the comprehensive strength of the contractor's enterprise, so it is difficult to accurately evaluate the contractor's credit risk. In bidding activities, the contractor may eventually win the bid by falsely reporting the project performance, providing false enterprise qualifications and financial statements.

This objectively requires the establishment of a perfect credit risk management service mechanism in bidding activities, and credit evaluation and rating as an important reference in bid evaluation activities. However, from the perspective of practical development, the current domestic bid evaluation management mainly includes two parts: technical bid and commercial bid:

1

Technical tender includes all construction organization contents such as construction deployment, construction scheme, construction technical measures and construction organization, that is, construction progress plan, which is used to evaluate the technical strength and experience of bidders.

2

The contents of the business target include: enterprise qualification, business license, project performance, safety production license, financial status and other documents, which are used to evaluate whether the bidder meets the requirements of the bidding documents.

Judging from the contents of technical tender and commercial tender, the content of bid evaluation involving contractor's credit risk assessment in commercial tender is mainly financial status.

On the one hand, perfect credit risk assessment is a comprehensive risk assessment activity, which not only considers the influence of various development factors such as cost, price, technological improvement and government supervision on contractor enterprises from the macro level; It is also necessary to comprehensively evaluate its strength and performance risks from the enterprise management level, such as financial status, business strategy, enterprise structure, management personnel, technical personnel, legal disputes, past performance, etc. Financial status is only one of comprehensive risk assessment, and it is not objective to take it as the whole basis of contractor's credit risk assessment.

On the other hand, in order to ensure the objectivity and fairness of bid evaluation activities and minimize external interference, most of the project bid evaluation work is completed in the same day, which means that the working time of bid evaluation experts is very limited. In a short period of time, experts need to evaluate both technical and commercial bids at the same time, so it is difficult to accurately evaluate the credit risk of bidders through a financial statement. At the same time, for a long time, domestic bid evaluation activities have formed the inertia of bid evaluation thinking, mainly considering the bidder's enterprise qualification, project performance and construction organization, and paying insufficient attention to the bidder's credit risk management.

Therefore, at present, there is no perfect and effective credit risk management service mechanism for engineering construction bidding activities, and it is urgent for the state to play a macro-control role and promote the establishment and improvement of market-oriented credit risk management services for bidding.

2, credit risk management services, government-led VS market-oriented development.

Judging from the overall development of the construction market credit system, the construction of China's construction market credit system is currently in the development mode of joint participation of the government and the central bank. The establishment of credit laws and regulations, the collection of credit information, the evaluation of credit risk and the application of credit management mechanism are mainly led by government agencies.

In this mode, on the one hand, government agencies bear heavy credit construction costs and credit management energy, and both the development and construction of information system management platform and the collection and processing of credit data are independently completed by government agencies; On the other hand, there are some limitations in information data collection, credit risk assessment and credit management services. Therefore, it is difficult to use credit risk data in a deeper level to establish and play the role of credit risk management mechanism. Specific to the field of bidding credit risk management:

1

In terms of credit data collection, enterprise qualification standards, engineering performance, financial statements and whether there are records of various bad market behaviors are only part of enterprise credit risk factors, and the authenticity of data may be false, so credit information collection has limitations;

2

In terms of credit risk assessment, it is difficult for credit risk assessment to further explore the possibility of enterprise credit risk due to factors such as time, expert qualification and credit basis.

three

In terms of credit management services, there is a lack of effective market competition, and the development of bidding credit risk management services is slow.

The advantage of market-oriented credit management mechanism is that enterprise credit risk rating and rating will appear as commodities in the form of paid services. In order to make a profit, the corresponding institutions will invest a lot of cost and energy to improve "commodity value and service", including more comprehensive credit risk data collection, deeper credit risk assessment and better credit risk service, thus providing reliable and effective reference for bid evaluation activities. Especially under the market competition mechanism, this commercial credit risk management service will fully mobilize market resources and effectively play an important role in the bidding activities.

Of course, from the perspective of market development, the development speed of market-oriented credit risk management mechanism is still relatively slow, but from the perspective of political incitement, after the 18th National Congress, the State Council clearly listed the bidding field as the key area of credit construction. Two important documents, Opinions on the Use of Credit Records and Credit Reports in Administrative Matters and Outline of Social Credit System Construction (20 14-2020), both propose that the credit records or credit reports issued by third-party credit service agencies will serve as an important basis for bidders' qualification examination, bid evaluation, bid selection and contract signing. These policy documents constitute an important foundation for the development of market-oriented credit risk management services, and also point out the development direction for the credit risk management services of bidding activities.

Engineering construction activity is an industry activity with high credit risk, and there are many market participants. Establishing and perfecting the market-oriented contractor credit risk management service in bidding activities can provide effective decision-making reference for bidding activities, help standardize the bidding market order, rationally mobilize the allocation of market resources, and ensure the quality and safety of construction projects and the orderly and healthy development of the construction industry.