Decree No. 16 of the Ministry of Housing and Urban-Rural Development: Administrative Measures for Contract Issuing and Contract Pricing of

Article 13 When determining the contract price, the developer and contractor shall take into account the impact of market environment and changes in the price of production factors on the contract price.

Article 1 of the Administrative Measures for Contract Issuing and Contract Pricing of Construction Projects (Order No.

The relevant matters of the contract price shall be agreed by the Employer and the Contractor, generally including the agreed method of the contract price, the payment and settlement method of the advance payment, the project progress payment, the project completion price, and the adjustment of the contract price.

For emergency rescue, disaster relief and construction projects with particularly complex construction technology, both parties can determine the contract price by means of cost plus remuneration.

The bid evaluation committee may review the objection whether it is lower than the project cost quotation by referring to the relevant regulations issued by the competent housing and urban construction department of the State Council and the competent housing and urban construction department of the people’s governments of provinces, autonomous regions and municipalities directly under the Central Government.

Article 16 The contractor shall submit the completed project quantity report to the contract letting party in accordance with the contract.

The competent housing and urban and rural construction departments of the local people’s governments at or above the county level shall be responsible for the management of the project contracting and pricing within their respective administrative areas.

The bill of quantities shall be an integral part of the bidding documents.

Article 7 The bill of quantities shall be prepared in accordance with the valuation specifications for the bill of quantities and the calculation specifications for the bill of quantities formulated by the State.

Article 10 The bid price shall not be lower than the project cost or higher than the maximum bid price.

For construction projects invested by state-owned funds, there shall be a maximum bid price limit; For construction projects invested by non-state funds, there may be a maximum bid price limit or a minimum bid price.

If a tenderer has a maximum bid price limit, it shall publish the total price of the maximum bid price limit, as well as the costs of divisional and sub-divisional works, measures, other items, fees and taxes of each unit project at the time of bidding.

Article 15 The developer and contractor shall, in accordance with the provisions of the competent department of housing and urban and rural construction under the State Council and the competent department of housing and urban and rural construction under the people’s governments of provinces, autonomous regions and municipalities directly under the Central Government, and in combination with the project payment, construction period and other conditions, agree on the specific matters of advance payment in the contract.

Article 6 Construction projects invested wholly or mainly with state-owned funds (hereinafter referred to as construction projects invested with state-owned funds) shall be priced with the bill of quantities; Construction projects invested by non-state funds are encouraged to be priced with bill of quantities.

The advance payment shall be determined and paid according to a certain proportion of the contract price or the annual project plan amount, and shall be deducted from the project progress payment.

The specific work can be entrusted to the project cost management organization.

Article 8 The maximum bid price limit shall be prepared in accordance with the bill of quantities, relevant provisions on project pricing and market price information.

The bid price shall be prepared in accordance with the bill of quantities, relevant regulations on project pricing, enterprise quota and market price information.

For construction projects with small scale, low technical difficulty and short construction period, both parties can determine the contract price in the form of total price.

Article 11 If the bid price is lower than the project cost or higher than the total price of the maximum bid limit, the bid evaluation committee shall reject the bidder’s bid.

16 of the Ministry of Housing and Urban-Rural Development of the People’s Republic of China issued on December 11, 2013 and implemented from February 1, 2014) is formulated in accordance with relevant laws and regulations in order to regulate the contract awarding and contract pricing of construction projects, safeguard the legitimate rights and interests of both parties of the contract and the contractor of construction projects, and promote the healthy development of the construction market.

Article 9 The base bid price for bidding shall be prepared in accordance with the relevant provisions on project pricing and market price information.

Article 2 These Measures are applicable to the management of contract awarding and contract pricing of construction projects in the People’s Republic of China (hereinafter referred to as project contract pricing).

The pricing of project development and contracting shall follow the principles of fairness, legality and good faith.

For construction projects priced by bill of quantities, both parties are encouraged to determine the contract price by unit price.

Article 3 The contract awarding and contracting prices of construction projects are formed by market competition under the macro-control of the government.

The project contracting pricing referred to in these Measures includes the preparation of the bill of quantities, the maximum bidding price limit, the bidding base price, the bidding quotation, the project settlement, and the signing and adjustment of the contract price.

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Article 14 The Employer and the Contractor shall agree in the contract on the adjustment method of the contract price in the following circumstances: (1) Changes in laws, regulations, rules or relevant national policies affect the contract price; (2) The project cost management organization releases the price adjustment information; (3) The design is changed with approval; (4) The Employer changes the approved construction organization design, resulting in increased costs; (5) Other factors agreed by both parties.

Article 5 The State shall promote the project cost consultation system and implement the whole-process cost management for construction projects.

Article 4 The competent department of housing and urban and rural construction under the State Council shall be responsible for the management of the national project contracting pricing.

Article 17 The Employer and the Contractor shall settle and pay the project funds on a regular basis or in sections according to the project progress as agreed in the contract.
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The construction projects mentioned in these Measures refer to housing construction and municipal infrastructure projects.

The maximum bid price limit and its outcome documents shall be submitted by the tenderee to the competent housing and urban and rural construction department of the local people’s government at or above the county level where the project is located for the record.

After receiving the project quantity report, the Employer shall timely check and confirm it in accordance with the contract.

Article 12 The tenderer and the winning bidder shall conclude a contract according to the winning bid price.

For projects not subject to bidding, the contract shall be concluded by both parties through negotiation.