CHINA Law and Practice Contributed by: Nancy Zhang, Xiaoying Tian, Qian Gu and Liangqian Ying, JunHe
Fixed Unit Price This means that the unit price is a fixed amount, which is not adjustable in response to any change in conditions or quantities, and the total construction price is the product of the weighted summation of the fixed unit price multiplied by the quantity required. Cost Plus Fee Cost plus fee means that the contractor is paid a fee in the amount agreed between the parties, in addition to reimbursement of the actual con - struction cost. Adjustable Price With an adjustable price, the contract price is adjustable subject to agreed conditions, such as an increase in labour or material costs due to inflation or market change, a change in the order, a change of quantities or other geotechni - cal conditions. 7.2 Assigning Responsibility for the Design and Construction of a Project An owner may either enter into an EPC Contract with a general contractor, or separately enter into a design contract and a construction contract with a local design institute and construction contractor, respectively. EPC Contracts include the following according to market practices: • an Engineering-Procurement-Construction (EPC) arrangement, under which the con - tractor is responsible for the engineering, procurement and construction of the project, and is fully accountable for aspects such as quality, safety, schedule and price; • a Design-Build (DB) arrangement, under which the contractor is responsible for the engineering and construction of the project,
• bill of quantities pricing ( 工程量清单计价 ); • fixed lump-sum price ( 固定总价 ); • fixed unit price ( 固定单价 ); • cost plus fee ( 成本加酬金 ); and • adjustable price ( 可调价 ).
These are not mutually exclusive and sometimes, multiple pricing structures might be included in
the same contract. Fixed Quota Pricing
Fixed quota pricing means that the construc - tion price, in accordance with the bidding docu - ments, is a total of: • the direct construction cost calculated based on the unit labour price, material price, equip - ment price and other information formulated by the relevant administrative authorities and the market price for the same during the same period; • the indirect construction cost (including man - agement salaries, office expenses, employ - ees’ insurance); • profit; and • taxes. Bill of Quantities Pricing Bill of quantities pricing means that the aggre - gate of the price for each component of the con - struction work, which is calculated based on the integrated unit price and quantity of such com - ponent, is determined based on the construc - tion drawing and construction management and engineering skills. Fixed Lump-Sum Price With a fixed lump-sum price, the total construc - tion price is a fixed amount which is not adjust - able within the agreed work scope and condi - tions.
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