November 19, 2023

How to handle a weak current project? Step by step to understand it!

ForewordHello everyone, I'm Mr. Lin, how to handle the intellectual weak current project? Today I will share some knowledge about project calculations and I hope it will be useful for everyone. Text

How to handle a weak current project? Step by step to understand it!

The basis of engineering calculations

1. Bidding Documents: Refers to legally binding bidding documents issued by owner or a unit entrusted to him, including questions and answers, additional explanations, correspondence, minutes of meetings, etc. of bidding documents.

2. Bid Documents: Refers to Bid Documents submitted by us in response to Bid Documents that have already won a Bid.

3. Contract: refers to a project contract signed by both parties, content of which corresponds to content of contract specified in project contract.

4. Design change: refers to a design change notice or other document issued by design institute with full signatures and effective.

5. Order Form: refers to a valid document issued by owner or other units to instruct our unit to perform work that is outside scope of this section of tender.

6. Contact form: refers to project contact form issued by owner, design institute, general contractor, other building units and unit in terms of construction coordination.

7. Construction Plan and Measures: refers to methods and procedures prepared by us and approved by owner (contractor) and manager to guide construction of project.

8. Price confirmation sheet: Refers to document that owner must confirm price and quantity when Party B purchases equipment or materials in accordance with terms of contract or entrusted by owner.

9. Work Quantity Visa: According to actual contract and drawings, work visa must be confirmed by owner and supervisor on site.

10. Engineering Claim: Refers to act of claiming compensation from another party when one party incurs losses due to other party's failure to meet its contractual obligations or occurrence of risks that other party must bear. party in performance of contract.

The overall project calculation consists of four main components:

1. Engineering contract

2. Design changes

3. Claim

4. Project cost calculation

The construction project has been developed, and next step will be transition to stage of concrete implementation. The price serves as basis for payment upon execution of contract. Contract pricing methods generally fall into three categories: fixed-value contracts, unit-price contracts, and cost-plus-fee contracts.

Design Contract

1. One-time payment contract

1. Fixed Total Price Contract: Both parties to contract perform contract according to agreed total price based on drawings and technical specifications. During execution of contract, ifAs long as tenderer does not request a change in original content of contract, or if difference between actual project quantity and estimated project quantity does not exceed a certain agreed percentage, contract price can only be adjusted, otherwise contractor should not request a change in total price.

2. Adjust total price of contract: when offering and signing contract, calculate total price of contract based on requirements of tender documents and current prices. However, terms of contract stipulate that if cost of materials increases or decreases due to fluctuations in market prices during execution process, how should total price of contract be adjusted accordingly.

3. Fixed Total Project Cost Contract: The bidder requires bidder to quote a unit price for sub-projects in accordance with scope specified in bill of quantities at time of bidding. (This is a reference engineering value, usually not corrected)

Second, unit price contract

(1) Estimated contract quantity with unit price

(2) Net Unit Price Contract

(3) Mixed unit price and lump sum contract

If scope and design of project to be contracted is not very precise, or may be in or out of school, it is currently no longer appropriate to use a lump sum contract and a unit price contract. should be used instead. Unit price contracts have following forms:

1. A contract with an estimated unit cost of project. When preparing bidding documents for such contracts, bidder instructs consulting department to list project number table and estimated project number according to subprojects. The contractor bids on project. Quantity table Enter unit price of each item and calculate total contract price for quotation. However, in monthly calculation, it is calculated based on actually completed engineering volume. When project is fully completed, total cost of project will be finalized using an as-built drawing.

2. A net unit price contract that is used when project team has not yet submitted detailed construction drawings or when construction drawings are available but project quantity cannot be accurately calculated for some reason. The bidding documents only provide bidders with a list of work items in each project, scope of project and necessary descriptions, but not quantity of work. The contractor is required to quote a unit price for each item in work list. items. In future construction, it will be calculated according to actual engineering quantity.

3. The unit price and lump sum contract are based on price contractper unit, but lump sum method has been adopted for some subprojects where it is not easy to calculate engineering quantity.

Third, cost plus fee contract

1. Price plus a fixed percentage of remuneration under contract

2. Contract with fee plus fixed fee

3. Contract with promotion and payment

4. Contract with maximum value and variable commission

Fourth, current tender documents

1. The total cost is indicated at a time (the number and price of project will not be adjusted)

2. Unit price lump sum (only project quantity is adjusted, unit price remains unchanged)

3. Settlement of estimates of construction drawings (reduction rate)

4. Temporary Price

Change engineering contract

1. The concept of contract modification

The Meaning of Contract Modification: Contract Modification can be divided into a broad sense and a narrow sense. Contractual relations are civil legal relations, and also distinguish three elements of civil legal relations. Under modification of a contract in a broad sense, we mean a change in one or more elements of contract, including subject, object and content, that is, modification of contract includes assignment of contract. Contract changes in narrow sense do not include substantive changes in substantive changes, that is, contract assignments are not included. A contract change here refers to a narrow contract change.

2. Conditions for changing contract:

(1) A contractual relationship already exists between parties.

(2) A contract modification must have an agreement between parties to modify it.

(3) The content of original contract has changed.

(4) The modification of contract must be made in accordance with method established by law.

3. Consequences of contract modification:

(1) For an amended portion of a contract, original contract becomes null and void and parties must act in accordance with amended contract.

(2) An amendment to contract is only effective for part of contract that has not been performed and is not valid for part of contract that has been performed, except as agreed by parties. That is, changes to contract do not have retroactive effect.

(3) Amending contract does not affect right of parties to claim damages.

4. Classification of changes to contract:

Engineering changes include changes in amount of engineering work, engineering design changes, schedule changes, changes in construction conditions, and so on. Generally, engineering changes fall into two categories: design changes and other changes.

(1) Design changes. If there are changes in project during construction process, this will have a big impact on progress of construction. Therefore, design changes should be reduced to minimum, and if it is necessary to change design, then this should be carried out in strict accordance with national standards and procedures agreed in contract.

(2) Other changes. If, during execution of contract, employer requires a change in quality standard of project or other significant changes occur, this should be resolved through negotiations between two parties.

5. Requirements for processing contract changes:

(1) If there is a situation that needs to be changed, it should be changed as soon as possible. If change is unavoidable, whether construction is halted pending a change order or construction continues, it will undoubtedly increase losses.

(2) After a design change, change should be implemented as soon as possible. Once an engineering change order is issued, order must be promptly implemented and all relevant documents must be comprehensively reviewed. The contractor must also pay close attention to execution. If contractor cannot complete change order, additional losses must be borne by contractor.

(3) The impact of engineering changes should be further analyzed. The impact of engineering changes is often multifaceted and impact lasts for a long time, which should be comprehensively analyzed.

6. Technical Change Procedures

【1】Redesign procedures:

(1) The client makes changes to original design.

(2) Changes to original design due to contractor reasons.

(3) Design changes. Elements that may constitute a design change include:

①Change mark of corresponding partHeight, baseline, position and size:

②Increase or decrease scope of work agreed in contract:

③Change construction time and sequence of related projects:

④Other additional work required for technical changes.

[2] Procedures for other changes:

From point of view of contract, in addition to design changes, other changes are other changes that may lead to a change in content of contract. For example, changes in requirements of both parties for quality of project (in accordance with national mandatory standards), changes in requirements of both parties for construction time, changes in construction conditions and environment lead to changes in construction equipment and materials, etc. The procedure for making these changes should be originally proposed by one party and can only be changed by signing an additional agreement with other party through consultations.

【3】Change rating:

Principles for changing grades:

(1) The change work has a unit price or a price of same scope of work in bill of quantities, and cost of change project must be calculated based on unit price. The price per unit of object is not subject to adjustment, euwhether implementation of modification did not cause significant changes in organization of construction and construction methods of facility.

(2) Although price per unit or price of same type of work is shown in bill of quantities, but it is no longer applicable to specific changed work, a reasonable new price per unit or new price must be established on basis of original price per unit or prices.

(3) There is no unit price or price for similar work in bill of quantities for content of modified work, and new unit price or price must be determined in accordance with principle of conformity with contract unit. price level. Neither party may use absence of such a price in bill of quantities as an excuse to charge too high or too low a price per unit of modified work.

Project claims management

1. Concept of engineering claims

An engineering claim is an act of claiming compensation from another party when one party suffers losses due to other party's failure to fulfill obligations stipulated in contract, or occurrence of risks that must be borne by other party during execution of an engineering contract. In real work, claims are bilateral, including contractor's claim against developer and developer's claim against contractor. However, in practice, number of claims against developer is relatively small, and they are easy to deal with. Claims against contractor can be implemented by offsetting invoices, writing off project funds, writing off guarantee fees. contractor makes a claim against builder. A claim is usually understood to mean a claim that a contractor (building unit) seeks for advance compensation for losses caused by project delays and cost increases not caused by itself during performance of contract.

2. Nature of technical requirements

There is not necessarily a legal causal relationship between outcome of damages in A's claim and behavior of plaintiff.

Category B claims are not punishment, but compensation.

Grievance handling C is a management process that often occurs between contracting parties and contracting parties, and is a collaboration between two parties, not a confrontation.

3. Claim characteristics

The claim works both ways.

B can only claim compensation from other party if economic loss or damage to rights actually occurred.

Claim C is a unilateral act without confirmation from other party.

4. Reason for claim

Party A is in breach of contract.

Force majeure.

C contract defect.

Changes to Contract D.

The engineer's order.

F other third party reasons.

5. Classification of claims

A is classified according to contractual basis of claim: claim expressed in contract, etc.the claim implied in contract and moral claim.

B is classified by purpose of claim: claim by construction time, claim by cost.

C is classified according to nature of claim event: project delay claim, project change claim, project acceleration claim, forced contract suspension claim, risk of accident and unforeseen factors claim and another claim.

6. Handling technical requirements

Principle. Claims must be based on contract. Prompt and reasonable processing of claims. Strengthen active control and reduce technical claims.

7. Reason for claim

(1) Tender documents, construction contract text and annexes, other contracts (e.g., memorandums, amendments, etc.), approved project implementation plans, various engineering drawings, technical specifications, etc. Basis for these claims can be found directly in claims report.

(2) Correspondence between two parties and various minutes of meetings. During execution of contract, resolutions or decisions made by customer, manager and contractor during regular or irregular negotiations are additions to contract and should be considered an integral part of contract, but minutes of negotiations can only be obtained after signing by all parties as a basis for a claim.

(3) Progress plan and specific progress and related documents at project site. The schedule and specific schedule are site-specific documents and an important basis for requesting changes.

(4) Meteorological data, engineering inspection and acceptance reports, and various technical evaluation reports, records and records of power outages, water outages, road openings and closures during project.

(5) Relevant national laws, decrees, policy documents, official price index, wage index, accounting data of various meetings and vouchers for purchase of materials, ordering, transportation, entry and use.

Project cost settlement

1. The Importance of Project Costing

Project price settlement refers to an economic activity in which contractor collects price from construction unit (owner) in accordance with established procedures in accordance with provisions of contract on terms of payment and quantity of completed project during implementation of project. process.

Settlement of cost of project is a very important task in implementation of project, which is mainly manifested in:

Project price adjustment is main indicator that reflects progress of project. During construction process, one of basis of project price is calculation according to completed project quantity. That is, hThe more contractor completes project, greater project price to be settled must be. Therefore, depending on share of accumulated and settled project price in total contract price, it can approximate progress of project, which is useful for understanding progress of project.

Calculating cost of project B is an important link in accelerating turnover of capital. The contractor can settle payment for project as soon as possible, which facilitates repayment of debts and recovery of funds, and can also reduce costs.

Project C price settlement is an important indicator for evaluating economic benefits. For contractor, only full settlement of project payment can mean that business risks have been eliminated, and contractor can make an appropriate profit and achieve good results. advantages.

2. Project Cost Calculation Method

2.1 Project Financing Plan (Construction Payment Collection Plan) and Application Form

According to provisions of contract or requirements of owner (contractor), if project financing plan (project collection plan) must be submitted before start of project (at beginning of each year), business planning department of company will guide and assist management personnel project according to project. A planning schedule and proposal (or approved budget for construction drawings) is drawn up and communicated in form of a project (or yearly) payment plan.

According to terms of contract or requirements of customer (contractor), after each payment period, project must prepare an application form (or statistical report, budget book) and submit it to customer (contractor) for confirmation.

2.2 Collection of project prices

Project prepayment:

Invoicing, processing of tax payments, collection of prepaid project funds in accordance with provisions of contract and maintenance of collection account. The project in this city is handled by financial department of company. Projects in other provinces and cities should be handled by project management personnel (financial personnel) and reported to business planning department and financial department of company in a timely manner.

General provisions: Advance payment for labor and material projects is carried out in accordance with contract. In principle, share of advance payment is not less than 10% of contract price and not more than 30% of contract. large engineering projects, advance payment is collected from year to year in accordance with annual project plan.

Provided that construction conditions are met, developer must make an advance payment for project within one month after contract is signed by two parties, or no later than 7 days before agreed start date. Within 10 days after expiration of deadline, developer sends a notice to developer demanding prepayment. If developer still does not make prepayment in accordance with requirements afterupon receipt of notice, contractor may stop construction 14 days after notice is given, and developer must pay contractor from agreed payment date. Interest payable (interest rate based on bank loan interest rate for same period), and liable for breach of contract.

2.3 Construction drawing budget

The Marketing Department is responsible for providing all bidding documents and bidding documents (including quotations, commitments, list of materials provided by A, or list of materials provided by A and B, etc.).

Estimate of construction drawings (final estimate) is headed by General Economic Department, business planning department coordinates preparation of project, and technical and engineering staff of project cooperates.

The project is responsible for providing final and effective construction drawings, as well as original drawings that have been republished after changes to project but have already been built.

The project is responsible for providing equipment drawings and related instructions and manufacturer's documents.

The project is responsible for providing a specific construction plan or operating instructions, meeting minutes, project contact list, etc. reviewed and approved by owner (contractor).

The project is responsible for providing records and logs of receipt of materials A, as well as visa form and register of confirmation of materials B.

The project is responsible for providing appropriate test reports, records, visas, acceptance sheets, etc.

In cooperation with business planning department of company, project is responsible for drawing up estimate of construction drawing (calculation) and summarizing it according to atlas as a whole, and using this as a unit to calculate pre-calculated (estimated) engineering quantity and establish accounting book.

3. Completion of calculations

After completion of project, both parties must settle settlement on completion of project in accordance with agreed contract price, content of contract price adjustment and claims.

Way to complete calculations

1. Calculation at end of project

2. Single payment upon completion of project

3. Final calculation of construction project

4. Completion Statement

The content of act of completion is same as in construction drawing budget, but its cost components are still direct costs, indirect costs, profits and taxes. There is no single format and form of act on completion of settlements, as a rule, instead of it, you can use budget form, which can also be developed in accordance with needs.

Specific content of settlement completion report

Difference in project quantity: difference in project quantityIt refers to difference between project quantity in construction drawing estimate (or contract price) and actual project quantity, which is main reason for difference between settlement on completion of construction and construction drawing. The main reasons for low production volume are:

1 design change

2 design changes in place

3 material price differences

4 Commission adjustments.