Evaluation of Construction Environmental Capital Law (No. 13) | Analysis of "Project Price Review"
Published:
2021-03-09
Basic Interpretation of 1.
Project price review refers to the contractor and the contractor in accordance with the contract agreed pricing method and pricing standards and project price settlement information, on their own or jointly commissioned qualified engineering cost consulting institutions to carry out the project cost settlement audit work. The project price is an important means to determine the cost of the project accurately and reasonably, and it is an essential link of the project cost control. The project price review is a civil legal act, so the contractor and the contractor may entrust a third party qualified cost consulting agency to review the price, or the two parties may negotiate to determine the settlement price of the project.
The project price is closely related to the judicial appraisal of the project cost, but there are also great differences:
(1) the role and nature of different. The judicial appraisal opinion of engineering cost is the professional judicial appraisal opinion of engineering cost issued by the cost appraisal institution entrusted by the court or arbitration institution in the litigation or arbitration case of engineering construction contract dispute, which is not only the conclusion of technical achievements, but also one of the eight forms of evidence stipulated in the Civil Procedure Law. However, the project price review is often not implemented in the project construction contract dispute litigation or arbitration cases, but a civil act of the contractor and the contractor reviewing the project settlement according to the contract agreement and the project price-related settlement data. After the project price review conclusion is approved by both parties of the contractor, it is the project settlement review conclusion, which is legally binding on both parties. If the project price review conclusion cannot be approved by both parties of the contractor, in litigation or arbitration cases, it can only be used as evidence of a party's unilateral claim.
(2) The treatment of data is different. In the process of project price review, for vague relevant cost information, the price review personnel can make subjective judgments based on work experience. In the process of judicial appraisal of project cost, relevant information must be cross-examined and approved by both parties. For vague relevant cost information, judicial appraisal institutions are often listed as controversial matters between the two parties, and the court will make a choice according to the provisions of Article 20 of the (I) on Judicial Interpretation of Construction Projects (Fa Shi [2020] No. 25). In practice, for engineering changes that are not complete in form or even have not formed a visa at all, whether it is the project price or the judicial appraisal of the project cost, as long as there is other evidence to prove that "the contractor agrees to implement and has indeed completed the implementation", the corresponding project price should still be calculated.
(3) The requirements and treatment methods for the results are different. The project price review is based on the contract agreement and process data of both parties, and the audit results are given in accordance with the audit regular. Both parties have no clear requirements. The judicial appraisal of project cost is generally caused by the dispute of project cost, and both sides have different opinions in the process of judicial appraisal. Therefore, the relevant information in dispute must be cross-checked by both parties or submitted to the court for confirmation of validity before being used as the basis for identification. The conclusion of the trial price is often clear and unique, but the judicial appraisal opinion often contains two parts: "undisputed matters" and "disputed matters". After cross-examination by both parties, the court or arbitration institution finally makes a judgment on the "disputed matters. For the difference between project price review and project audit, please refer to [Analysis of Final Accounts Audit of Construction Projects (No.12)].
Validity of 2. Project Price Review Conclusion
(I) the validity of the conclusion of the price review of the cost consulting agency jointly commissioned by the contracting parties.
For the contracting parties jointly entrusted to the cost consulting body of the price conclusion, if the contracting parties sign and seal the approval, the price conclusion will have legal effect on both parties. If the parties are unable to agree on a price conclusion, there are different views in judicial practice as to whether the price conclusion is binding on the parties. There is a view that since the advisory opinion is issued by the relevant institutions and personnel jointly entrusted by the parties, the corresponding price conclusion is the result of the work completed by the trustee, and the parties as the principal should accept the result. Another view is that the advisory opinion itself is not an expert opinion, but is essentially a documentary evidence, similar to the testimony of an expert witness when the trustee is an individual. Its probative power as evidence in procedural law is weak, and regardless of whether the advisory opinion is due to a joint commission by both parties, either party may apply unilaterally for appraisal on the basis of reasonable doubt, and the people's court generally grants permission. There is also a view that it is necessary to distinguish between two situations: first, if the two parties have an agreement on the validity of the trial price, and the agreement does not violate the prohibitive provisions of the law, the validity of the trial price shall be determined in accordance with the agreement. Second, if there is no agreement in the contract and the two parties cannot reach a supplementary agreement, the price review report cannot have legal effect on both parties, and the project cost needs to be determined through judicial appraisal. Article 30 of the (I) on Judicial Interpretation of Construction Projects (Fa Shi [2020] No. 25) stipulates: "The parties jointly entrust relevant agencies and personnel to issue advisory opinions on the cost of construction projects before litigation. If one of the parties in the litigation does not approve the advisory opinions to apply for appraisal, the people's court shall grant permission, except where both parties clearly indicate that they are bound by the advisory opinions."
(II) the validity of the price review conclusion of the cost consulting agency unilaterally entrusted by the contractor (or contractor).
The contractor (or contractor) unilaterally entrusts the cost consulting agency to make the price conclusion, unless the other party signs and seals the price conclusion, otherwise the price conclusion is not binding on the other party, can only be used as unilateral evidence in the litigation.
If the contractor unilaterally entrusts the cost consulting agency to make the trial price report, if the contractor approves the trial price report but the contractor in the litigation objects to the trial price report and applies to the court for a new judicial appraisal, the court will not support it unless the contractor has sufficient evidence and reasons.
(III) the validity of the price review conclusion made by the institution without engineering cost consulting qualification or beyond the qualification level of engineering cost consulting.
Although the Measures for the Administration of Engineering Cost Consulting Enterprises stipulate that the price review must be conducted by units with corresponding engineering cost consulting qualifications, even if the price review conclusion is made by institutions without engineering cost consulting qualifications or beyond the qualification level of engineering cost consulting, the price review conclusion is valid as long as the employer and the contractor sign and approve it. The reasons are as follows: First, the law does not provide for the need to entrust a third party to review the price, the price is the scope of the autonomy of the parties, whether to entrust a third party to review the price and whether to approve the results of the review price is entirely up to the parties to choose. Second, the Measures for the Administration of Engineering Cost Consulting Enterprises are only departmental regulations, with reference to the Supreme People's Court on the Application<中华人民共和国合同法>The (I) of Interpretation of Certain Issues stipulates that after the implementation of the contract law, the court shall not use administrative regulations as the basis for confirming the invalidity of the contract.
The Supreme People's Court (2015) Min Yi Zhong Zi No. 94 held that the validity of the audit report issued by the cost audit institution beyond the scope of qualification. The entrustment audit of the project cost should be divided into the entrustment carried out by the public power organ according to the authority and the entrustment carried out by the civil subject independently. The former must entrust a cost agency with corresponding qualifications. For the latter, following the principle of "nothing is prohibited by law", the parties have the right to entrust any subject that they think has professional knowledge of cost. Furthermore, if the parties believe that they have considerable professional ability, they can determine the price by themselves after mutual consultation. Since the purpose of project settlement price review is to determine the project settlement price, and the price level is only the interest adjustment between different parties, and does not involve public interests such as quality and safety of construction projects, therefore, although the project cost review agency exceeds the business scope of Class B qualification contract project cost defined by relevant administrative regulations, the Audit Report issued by it originates from the contractor's self-entrustment and is jointly signed and confirmed by the contractor, it shall be deemed that the settlement price of the project payment has been agreed upon by both parties, and the amount approved in the report shall also be used as the basis for the settlement of the project payment. After the dispute between the two parties, the contractor requested to deny the validity of the Audit Report on the grounds that the project cost audit institution exceeded its qualification, which violated the principle of good faith and did not support it.
(IV) the validity of the conclusion of the employer's own price review.
The Employer may review the project settlement statement and settlement data submitted by the Contractor on its own, and the conclusion of the Employer's review of the price shall be legally binding on both parties if the Contractor approves the conclusion in writing. If the Contractor does not approve it, it can only be used as unilateral evidence of the Employer in litigation, and the people's court shall generally conduct judicial appraisal of the project cost, unless it is in accordance with the provisions of Article 21 of the (I) for Judicial Interpretation of Construction Projects (Fa Shi [2020] No. 25), which implicitly approves the settlement documents of the contractor.
(Note: The original text is contained in the Law of Construction Contracts in China, Law Press, October 2019. The present text has been partially revised)
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