Abstract:The owner invited bids for the manufacture of two 50-ton tower cranes. The tender documents include 98 pages of technical specifications detailing the design requirements. The person in charge of the bidder reads 2-3 pages and understands the main requirements, and then thinks that the required tower crane belongs to the bidder's company's light tower crane, which only needs to be rebuilt by the bidder's company's corresponding tower crane. In fact, the last 90 pages or so contained more specifics about the cranes, and the requested cranes were not light cranes at all, but heavy cranes. The bidder's offer was less than $4 million and the next lowest bid was more than $7 million. Because of the large difference, the owner asked the bidder to confirm its bid. The bidder confirmed the bid in writing. The owner was not comfortable with the confirmation and held a meeting prior to award to further confirm that the bidder understood the requirements of the specifications and could fulfill them. The owner requested cost analysis information from the bidder, which the bidder did not provide. However, it claimed that there were no errors other than one de minimis error and that the error had no impact on the total offer. Considering the bidder's repeated assurances that it would perform the contract in accordance with the specifications, the owner awarded the contract to the bidder.
While working on the preliminary design, the owner realized there was a problem with performance and decided to meet to discuss it. It was only then that the bidder realized the huge difference in price.
The bidder asked for a contract modification to extend the time and increase the cost. The bidder argued that the owner had no right to require the bidder to perform the contract if the contract price's significant deviation from actual costs was due to a mistake by both parties; if the owner insisted on performance, then the contract price and duration would have to be fairly adjusted to make the contract price reflect costs. [1]
Keywords: bidding stage, contract administration, bidding documents.
Audit the bidding documents, first of all, we must audit the bidding documents whether it is in line with the signing of the construction contract of the principles of the construction, whether it is in line with the relevant state laws and regulations and provisions. Only in this way can we ensure that the bidding unit in a fair, just, competitive and orderly premise of bidding. Secondly, we should review its content to ensure that the enterprise's own conditions can meet the needs of the bidding documents, and ensure that the bidding documents respond to the bidding requirements. For ambiguous places to be clarified, the bidding unit's clarification documents, minutes of meetings, other supplementary documents and later the notice of award will become an integral part of the contract, but the most important thing is to carry out the bidding documents in the contract conditions of the review and analysis. [2]
With the gradual improvement of bidding management, the owner sets out the contract terms in the bidding documents at the bidding stage. This is a good thing for the bidding unit, there are also disadvantages. The good side is in the bidding, on the understanding of the contract, to facilitate the preparation of the bid price and the formulation of bidding strategy; unfavorable is now the construction market is basically a buyer's market, some owners rely on their own position and advantage, in the contract set up obviously aggravate the contractor's responsibility, exempt from their own responsibility, exclude the contractor's main right of the obvious unfair terms and conditions. Therefore, for the bidding unit, the validation, analysis of contract terms is a must seriously complete the work, in order to do a good idea, targeted to determine the bidding strategy. A construction contract generally consists of eleven major parts, i.e.: definition of terms and contract documents, general rights and obligations of both parties, construction organization design and duration, quality and inspection, safe construction, contract price and payment, supply of materials and equipment, changes in the project, acceptance and settlement of the completion of the project, breach of contract claims and disputes, and other clauses. As the saying goes, no contract is too small. If you fail to review one aspect of the contract, it may bring hidden dangers to the construction in the future. Therefore, you should review the clauses one by one.
1. Definition of terms and contract documents. Should focus on the order of interpretation of the contract documents, the applicable language and law, the use of standard specifications, supervision units and drawings. The order of interpretation of the contract documents, the construction process has a great impact, generally should be: this contract agreement, notice of award, tender and its annexes, contract special provisions, contract general provisions, bidding documents, standard specifications and related technical documents, drawings, bill of quantities, engineering quotations or budget. The order of interpretation must be adhered to, otherwise it will make the construction due to similar problems arise and be passive.
2. General rights and obligations of both parties. The main audit of the contracting party has no advantage by virtue of their own drafting of tender documents and status, set up in the contract obviously aggravate the responsibility of the contractor, exempt their own responsibility, exclude the main rights of the contractor's obviously unfair terms. If there is, it can be raised at the stage of clarification of the tender, and if the contractor's attitude is strong, the contractor has to consider the corresponding increase in costs due to these unfair factors and how to avoid the risk.
3. Construction organization design and duration. In general, the contractor should be considered ahead of schedule, because this can be evaluated in the owner of the bidding opportunity to get extra points, but first of all, we must analyze the bidding documents in the duration is reasonable, there is no owner because they want to catch up with the progress of the vicious compression of the duration of the phenomenon, if there is such a phenomenon should be considered to catch up with the work, increase the personnel and equipment transfer, food and accommodation, and so on a series of problems. In addition, the contracting authority in the bidding documents will provide a preliminary progress plan, the contractor in addition to its refinement in the bidding, but also pay attention to indicate the owner of the supply of drawings, materials, equipment, the arrival of the plan requirements for the future duration and cost of claims to create conditions.
4. Quality and inspection. The contractor needs to pay attention to two points, one is the intermediate acceptance of hidden works and re-inspection of the provisions; on the other hand, pay attention to the bidding documents, whether the content of the project test, the bill of quantities contains the project test, because in general the single-unit no-loading test by the contractor is responsible for the no-loading linkage test by the contractor is responsible for the contractors, the contractor does not bear any costs.
5. Safety construction. Mainly look at its safety aspects of what standards, whether the requirements are strict. Because of different standards, different requirements, the offer will be very different.
6. Contract price and payment. Should pay attention to the main way to determine the contract price. At present, the contract price of the way more than a fixed unit price, especially fixed comprehensive unit price, offer to determine the level of comprehensive unit price is particularly important. For the fixed lump sum contract, the contractor's risk is relatively large, to agree in the contract the contract price includes the scope of risk and risk cost calculation method. Risk range outside the contract price adjustment should also be agreed in the contract.
7. Material and equipment supply. In this regard, the main agreement should be the content of the material and equipment supplied by the contractor, the general contractor should provide its supply of materials and equipment list, including varieties, specifications, arrival location, supply quantities, supply time, etc., and sometimes Party A requires Party B to put forward in the bidding documents for the materials, equipment, so that Party B should also specify the arrival time and other detailed requirements. In the contract should be agreed in the process of contract implementation A supply materials, equipment, unit price, specification varieties, location, time, quantity and schedule does not match the solution, at the same time, there should be A supply materials, equipment, settlement methods.
8. Engineering changes. Mainly depends on the provisions of the tender documents and contract conditions, if there is a design change, there is a price range limit change, or as long as the change occurs, Party A will pay the price of the change. If so, the tender price can be appropriately reduced; on the contrary, if the Party stipulates that all changes in this contract are not taken into account, the tender price should be relatively high, in order to avoid risk.
9. Completion and acceptance and settlement. The contractor should be agreed in the contract conditions, the contractor is required to provide detailed requirements for specific completion information, such as the number of copies of as-built drawings and other information in line with normal requirements, in order to avoid the owner of the delayed acceptance of the event without compensation to the contractor. At the same time, it should be specifically agreed that the completion of the settlement of the time frame and the two sides of the settlement of the settlement of the delay, so as to avoid the owner deliberately delayed settlement of the contractor's financial expenses and other costs increased.
10. breach of contract, claims and disputes. Mainly look for both sides should be liable for breach of contract provisions are fair and just, if the contractor for its breach of contract without any compensation, then the bid price should be appropriate to consider the impact of this factor. There is also whether the contract gives formal claims procedures, the contractor in the review of tender documents and contract terms and conditions should be consciously looking for potential claims, because with the improvement of the management level, the claims have become the contractor to create a major source of profit.
11. Other. Mainly depends on the contractor on the project subcontracting and engineering insurance requirements. If the contractor allows subcontracting, and the contractor has to subcontract the work, the bidding documents should be listed in detail in the subcontracting unit information, so that the contractor audit. For project insurance, accidental injury insurance for employees engaged in hazardous work is currently compulsory, but construction and installation all risks and third party liability insurance are not. If the contracting authority specifies in the contract that the contractor is responsible for it, the contractor shall credit the premium to the quotation. [3]
According to the court in this case, the bidder only read part of the technical specifications, and the bidding based on part of the technical specifications belongs to an error of judgment, not a misreading of the technical specifications, and therefore rejected the bidder's litigation request to modify the contract or rescind the contract.
Lawyer comment: the bidder and the successful bidder has signed a construction contract, at this time the bidder asked to modify the contract. The behavior of its two sides by the contract law adjustment. According to the provisions of article 54 of the contract law, due to a material misunderstanding of the contract, one party has the right to request the people's court or arbitration institution to change or revoke. The people's court or arbitration institution shall not revoke it if the party requests such a change. Why is the contract concluded due to a material misunderstanding, a party has the right to change or revoke? Because from the theory of civil law, one of the validity of the establishment of civil behavior is the meaning of the true. The party due to a major misunderstanding and the intention of the expression is obviously not the true will of the heart, so the so-called civil behavior lack of validity of the premise. But the right to change or revoke must be exercised through the court. What is "material misunderstanding"? It refers to a party's own negligence leads to misunderstanding of the content of the contract and the conclusion of the contract behavior. Constituent elements of material misunderstanding: (1) the misunderstanding of the party who made a misunderstanding of the meaning of the expression. (2) The misunderstanding party has a material misunderstanding of the nature of the contract, the identity of the parties, the situation of the subject matter, the price or remuneration. (3) The misunderstanding was caused by the negligence of the party who misunderstood, and not by the deception or undue influence of another party. Accordingly, although the bidder caused a misunderstanding of the bidding documents through its own fault, the act still falls within the scope of material misunderstanding in contract law. However, the bidder requested a change in the contract, and it was up to the court's discretion whether or not to change it. According to the principle of fairness, the fault lies with the bidder, and the bidder is not at fault. If the court changes the contract, it is obviously unfair to the bidder's construction unit. If the bidder requested to cancel the contract, this lawyer believes that the court ruled to cancel the contract is more reflective of the spirit of civil law. The consequences of revocation of the contract to comply with the provisions of article 58 of the contract law, "after the contract is invalid or revoked, because of the contract to obtain the property, shall be returned; can not return or no need to return, shall be discounted compensation. The party at fault shall compensate the other party for the losses suffered as a result, both parties are at fault, each shall bear the corresponding responsibility", therefore, as the fault of the bidder, should be compensated for all the losses caused by the bidder.
So the bidding stage of contract management should do the work, is the review of the contract conditions. As many units in the country did not take the common contract text, the contracting authority to draft the contract terms are not the same. Therefore, the focus of each contractor may be different, which requires the bidding staff and contract signing staff to carefully review each bidding documents and their contract terms, and constantly accumulate experience, strengthen the contract laws and regulations, learning, training, clarify the rights and obligations of both parties to improve the awareness of the contract, so that the contract really become their own interests, "amulet! "to reduce the occurrence of contract disputes, and effectively guide the future offer, contract signing and contract implementation. In this way, will receive twice the result with half the effort.
[1] Engineering construction bidding and tendering case analysis folder in the case of ten " contractor did not read all the bidding documents for the tender"
[2] Jiang Chuanhui, "construction project cost management", Jiangxi University Press, 2005 edition
[3] Chen Huiling, Ma Taijian, "Guide to construction project bidding and tendering. Guide to Bidding and Tendering for Construction Projects, Jiangxi Science and Technology Press, 2000.3