The Ministry of Housing and Urban Rural Development has organized the preparation of a new version of the engineering quantity list pricing standard and recently released it. The relevant person in charge of the Department of Standards and Quotas recently interpreted the relevant content.

Q: What is the background and considerations for preparing the new version of the bill of quantities pricing standard?

Answer: The Third Plenary Session of the 20th Central Committee of the Communist Party of China proposed to build a high-level socialist market economy system, fully leverage the decisive role of the market in resource allocation, improve the mechanism of determining factor prices mainly based on market supply and demand, and prevent improper government intervention in price formation. As a component of the socialist market economy, the engineering cost management system urgently needs corresponding reforms.

During the planned economy period, China implemented a government pricing system with quotas as the core for engineering construction. The estimated, budgeted, and settled prices of projects were strictly calculated using government quotas. At the beginning of this century, after China's accession to the World Trade Organization, a preliminary system of engineering quantity list valuation was established. The contracting parties determined the contract price through bidding and tendering, and used it as the main basis for completion settlement. In the 20 years since the implementation of the bill of quantities pricing system, there has been relatively sufficient market price competition in some private investment and construction projects. However, in the field of state-owned investment, there are still some problems with the engineering cost management mechanism: firstly, the engineering cost still largely relies on the budget quota issued by the government, and the decisive role of the market is not fully played. The second issue is that many project construction parties have weak contract awareness and weak process control, which can easily lead to investment loss control, settlement disputes, and other phenomena.

The main purpose of the new version of the valuation standard of bill of quantities is to improve the market-oriented cost management rules in the project construction development and contracting and implementation stages, reduce the government's improper intervention in the price, give full play to the enterprise's own vitality, and let the price be mainly determined by the market from the technical rules and management mechanism.

Question: Please introduce the main changes in the pricing standards of the new version of the bill of quantities.

Answer: The new version of the engineering quantity list pricing standard focuses on leveraging the decisive role of the market, giving equal importance to reasonable cost determination and scientific cost control, and has been improved in some key points:

One is to clarify the relationship between transaction pricing and enterprise costs. The new version of the bill of quantities pricing standard requires the employer to fully and accurately describe the various characteristics and performance requirements of the proposed project, so that the contractor can form a complete and reasonable bidding quotation; At the same time, contractors are allowed to independently choose construction measures and organizational plans, fully stimulating their competitive vitality. The second is to clarify the market-oriented pricing method and pricing basis. In the process of preparing the maximum bidding price and bidding quotation, government quotas and information prices are no longer the main pricing basis, and market price information, engineering cost databases, as well as bidders' equipment level, management level, cost consumption and other contents are added as comprehensive considerations for determining the engineering cost. The third is to strengthen the rational allocation and effective control of risks. Comprehensively sort out the risks that may occur during the measurement and pricing process between the contracting parties, and allocate the risks reasonably according to the principles of "who is responsible, who bears the responsibility" and "who has controllable risks, who bears the responsibility". The fourth is to emphasize the requirements for the full process control of engineering cost. Requesting cost management activities throughout the entire process of construction project bidding, performance control, and settlement management can help reduce settlement disputes and achieve effective and dynamic control over project investment.

Q: What impact does the new version of the bill of quantities pricing standard have on the management of state-owned investment projects and various participating units?

Answer: The new version of the engineering quantity list pricing standard is not only a technical standard for calculating engineering costs, but also a management standard for controlling engineering costs. It regulates a series of cost activities such as bidding and tendering, construction process cost control, change claims, and price settlement for engineering projects, which is conducive to guiding the upgrading of the management mode of state-owned investment projects.

The new version of the standard guides construction units to gradually break away from their dependence on government pricing. They should not only grasp real market data, scientifically and reasonably prepare various cost documents, but also enhance market awareness. They should reasonably determine risk, change, price adjustment and other clauses in bidding documents and construction contracts, so that project costs can be calculated accurately and controlled, and they can truly assume the main responsibility of cost control. The new version of the standard guides construction units to quickly change their business philosophy, enhance their market competitiveness and cost control capabilities, focus on improving their technical capabilities, equipment level, and on-site management capabilities, optimize construction measures and plans, and achieve cost reduction and efficiency improvement. The new version of the standard guides cost consulting enterprises to implement full process cost control, which places greater responsibility on enterprises compared to traditional cost consulting models and promotes the improvement of the engineering cost consulting industry's capabilities.

Taken from China Construction News on December 31, 2024