How to stipulate risk allocation in engineering contracts

After surviving the "two fourteen days", many places ushered in a wave of intensive resumption of work at construction sites. What follows is an unavoidable adjustment in project prices: on the one hand, the epidemic, as the background for the resumption of work on the construction site, will inevitably bring about an increase in epidemic prevention costs; on the other hand, measures such as delaying the start of construction and restricting traffic that were previously taken to control the epidemic have It may also cause fluctuations in labor costs, construction material costs, and construction machinery and equipment usage fees in the coming period. The price risk caused by market price fluctuations will inevitably lead to adjustments to the project price.

Generally speaking, project price adjustments are first implemented in accordance with the provisions of the contract. If there is no stipulation in the contract, and the price fluctuation factors and ranges exceeding the stipulations in the contract shall be adjusted and regulated by local cost management methods, detailed rules and documents; if any If both parties still have disputes, they can force the contract price to be adjusted through claims, or even sign a supplementary agreement to renegotiate based on the principle of change of circumstances, and redistribute the contract benefits through judicial intervention.

Currently, Sichuan, Hunan, Zhejiang, Jiangsu, Shandong and other provinces, as well as Wuxi, Sanming, Zhengzhou, Qingdao, Xiamen, Leshan and other cities have issued documents to guide the resumption of local construction projects. Among them, the epidemic prevention cost and price risk sharing principles stipulated in local policies are related to whether the project price adjustment is reasonable or not, and will also affect the sustainable development of the local construction industry.

1. How to reasonably share the cost of epidemic prevention?

As for the additional cost of epidemic protection materials and personnel required to resume work while the epidemic prevention and control is not lifted, the attitude of all regions is relatively unified: the cost of epidemic prevention should be included in the project cost and paid by the construction unit. For example, Zhengzhou City has made it clear that from February 13, the epidemic prevention costs incurred by construction units in corresponding construction projects during the epidemic prevention period will be included in the project cost and be fully added (the validity period is tentatively three months); and Qingdao City emphasized that due to epidemic prevention and control measures The actual costs incurred for implementation can be included in the project cost.

Zhejiang Province has also detailed regulations: For projects that continue to be constructed during the epidemic prevention and control period, special funds for epidemic prevention and control can be listed separately in the project cost, and calculated at the standard of 40 yuan per person per day. Shandong Province also pointed out regarding the project cost adjustment: During the epidemic prevention and control period, the epidemic prevention and control fee will be increased (based on the number of construction workers and management personnel on the construction site, calculated at a standard of 40 yuan per person per day). From the perspective of construction safety, Xiamen City proposed that during the epidemic prevention and control period, the safe and civilized construction rates for bidding, construction, and construction projects under construction can be increased by 20%.

This is in line with the principle that "the risk that the contract price will be affected by changes in national laws, regulations, rules and policies shall be borne by the developer and the contractor in the contract" and better protects the contractor's rights. reasonable interests.

2. How to reasonably share the labor price?

As for the wage changes caused by the shortage of construction workers, the positions of various places vary. Many places support labor prices in accordance with Article 9.8.1 of the "Construction Engineering Bill of Quantities Valuation Specifications" (GB 50500-2013), which states that "during the contract performance period, when the contract price is affected by labor price fluctuations, the contract price shall be adjusted according to the contract stipulations." The risk shall be borne by the construction unit. For example, Wuxi City has clarified that the labor unit price is a policy adjustment, and the risk should be borne by the contractor; and Hunan Province has stipulated that the labor cost can be confirmed by both contracting parties and the project price can be adjusted according to the actual amount of the project completed during the epidemic prevention and control period.

Due to differences in labor comprehensive unit price adjustment policies, Zhejiang Province regards changes in labor prices as market risks and stipulates that if there is no major change in labor prices in the contract, both parties can rely on the "Zhejiang Province Construction Project Pricing Basis" (2018 Edition)" "The risk of labor and individual material prices within 5% shall be borne by the contractor, and the excess shall be borne by the contractor" to reasonably share risks.

3. How to reasonably share the material price?

According to Articles 9.8.2 and 9.8.4 of the "Construction Engineering Bill of Quantities Valuation Specifications" (GB 50500-2013), when the contractor supplies materials and engineering equipment, the contractor shall Based on actual changes, price adjustments will be included in the project cost of the contract project.

When the contractor purchases materials and engineering equipment, both parties should agree in the contract on the scope or magnitude of the price change of the main materials and engineering equipment; if there is no agreement in the contract and the unit price of the materials and engineering equipment changes by more than 5%, the excess part The price shall be adjusted according to the cost information adjustment method or the price index adjustment method, that is, the excess shall be borne by the contracting party.

In view of the abnormal changes in the price of equipment and materials caused by the epidemic, Zhejiang Province also stipulates that if there is no major change in the price of a single material in the contract, both parties can rely on the principle of "the contractor shall bear the amount within 5 years, and the excess shall be borne by the contracting party." Reasonable sharing based on the principle of "bearing responsibility". Xiamen City has fully considered the foresight. For projects with new bidding and newly signed construction contracts, only sand, stone, masonry bricks and blocks will be included in the material price difference adjustment range, and only those parts with a price change exceeding 10 will be given. Adjustment.

In addition, there are also regions that support both parties to issue visas and make settlement adjustments on time based on the actual situation, or believe that material price changes may exceed the range and risks that both parties can foresee and avoid based on past experience, and encourage Both the developer and the contractor shall sign a supplementary agreement and make adjustments according to the actual situation.

Of course, this model requires project cost management agencies to strengthen monitoring, pre-research, and early warning of price trends, and timely shorten the information release cycle of main material prices and various cost indexes, so as to ensure a reasonable project cost. Provide support for determination and effective control; the housing and urban-rural construction authorities at all levels and their project cost management agencies should establish and improve the mediation mechanism for project and building material price disputes. For example, Beijing requires the establishment of a coordination mechanism for project cost adjustment, with a focus on monitoring price fluctuations of building materials; Sichuan Province also plans to strengthen material price monitoring.

In addition to guiding both parties to reasonably share price risks, various localities are also taking active actions to reduce the financial burden of construction industry enterprises and create preferential policy space for the resumption of work and production. For example, Zhejiang Province has made it clear that new contracting in areas with severe epidemics will Construction companies with business operations will not collect wage deposits from migrant workers for the time being; Leshan City, Sichuan Province will implement a commitment system to postpone the payment of wage deposits from migrant workers for new construction permit applications during the epidemic. This action has inspired various places: reducing, exempting, and deferring cash deposits are also direct measures to help construction companies enhance their financial strength and actively respond to the epidemic.