As we all know, the core of project cost management in China for many years is quota, which exists in the form similar to government pricing and directly determines the formation of project cost pricing. So many people think that the current project cost management in China is quota management. In fact, the role of quota is the focus of establishing market economic system reform, but after nearly ten years of debate and practice, the nature and role of quota have changed. According to the nature of quota itself, it is a kind of information and reference, but for various reasons, quota is still implemented as a pricing document. In China, the quota has its particularity of "integration of quantity and price". In the long-term planned economy, prices were artificially fixed for a long time. In order to simplify the valuation work, the quota management department matched the quota with the price, and formed a unit valuation table with "quantity and price in one". The unified charging standard stipulated in China's budget quota limits the competition of contractors' personal conditions. And the cost quota is fixed with the budget.
Although several "competition fees" are put forward for the cost quota, the valuation basis of the quota limits the scope and scope, which does not reflect the characteristics of strong single building products and personalized contractors. However, with China's entry into WTO, under the requirements of international economic integration, China's project cost management should gradually be in line with international standards. According to international practice, the original meaning of quota is the standard of consumption, and there is no fixed price in quota. In this sense, China's current project cost management can not be regarded as real quota management.
According to international practice, quota management issues are distributed by adopting uniform consumption standards. At present, there are three international management modes: Commonwealth management mode, American management mode and Japanese management mode. These three models only stipulate the unified rules of engineering quantity valuation, calculate the engineering quantity according to the unified project division according to the design drawings, and then calculate the project cost according to the market price, instead of putting the price into the quota. Of course, the pricing and pricing modes in the world are not unique, that is, the WTO cannot force us to accept any of the three major engineering pricing modes in the world today, so in theory, the international practice in the field of engineering cost is soft constraint and has no coercive power. However, the valuation basis of engineering cost in China is directly formulated and managed by the government construction department, which only pays attention to the consumption of quota and ignores the unification of engineering quantity calculation rules, resulting in great differences in the quota compiled by various departments in different regions and poor universality. This hinders the further opening of the construction market, especially after China's entry into WTO, the project cost management must be in line with international practices, and the disadvantages of the existing management methods will become more prominent. At present, although China has formulated various measures to gradually liberalize prices and carried out a lot of reforms in various places, the establishment and adjustment of quotas are relatively lagging behind, which cannot keep up with market changes. This model has the shadow of government pricing in essence. Therefore, the current project price mechanism in China can only be regarded as semi-regulated price management, not real price management.
Therefore, China's project cost management reform should keep the consumption standard part in the "quota" management with China characteristics, abandon the price part, avoid forming the quota unit price, make consumption become the national standard, make the price become the market information, implement the principle of quantity control regardless of price, and realize the unification of engineering quantity calculation rules, standardization of engineering quantity calculation methods and marketization of engineering cost determination.
2. The project cost determined according to the current quota: planned price or market price?
The overall goal of the project cost reform in China is to realize the price system based on the market formation price. At present, under the pressure of market price, the project cost management department gradually liberalized the price, and some places, especially coastal areas, began to compile the comprehensive unit price of the project.
But still can't get rid of the shackles of "quantity and price integration", so some people call it the pricing basis of the transition period. Although this price mechanism has no legal basis for government guidance, it has been given the coat of "government-guided price" through a series of normative documents of project cost management by the government. At present, the project quota approved by the project cost management organization is compiled according to the principle of social average cost, so the cost price stipulated in the quota is different from that of the enterprise. The project cost in China is mainly calculated according to the pricing table, which is a concrete manifestation of "quantity and price are integrated", and this pricing model obviously has a strong planned price color. In fact, the truly market-oriented price mechanism plays a role through the law of value, thus spontaneously regulating the supply and demand relationship in the construction market through the "invisible hand" of the market. Because the price mechanism is the soul of organizing economic activities in the market mechanism. The market mechanism can reflect the necessary information related to it to the price through the interaction between supply and demand. Therefore, the market price should contain all necessary information, and market participants can make corresponding adjustments according to price changes.
It is impossible for the pricing model under the planned economy system to achieve the purpose that the law of value spontaneously regulates the supply and demand of the construction market, because its price cannot reflect all the internal information of the project. This compulsory pricing model of "quantity and price in one, fixed fee" is not conducive to competition among enterprises, nor to the excavation of internal potential and enthusiasm of construction enterprises. As a matter of fact, all the competition is centered on the price, and the project cost, as the result of the competition in the construction industry, can't truly reflect the relationship between supply and demand in the market, which leads to a distorted guiding role in the flow of social resources and ultimately leads to a waste of resources. Therefore, only by excluding the price factor from the existing quota, formulating unified rules for calculating quantities nationwide, and calculating the consumption standards of various projects under unified project division, and then each enterprise forms its own project price according to the requirements of competitive strategy and finally according to the market price, can we get the market price in line with international practice, and the law of value can play a price adjustment role in the field of engineering construction.
The reform of engineering cost management in China is ultimately to form a pricing model of market economy, which requires all engineering cost management institutions to "control the quantity, let go of the price, give macro guidance by the government, and make independent quotations by enterprises, and finally form the price by market competition", quickly formulate the standard format of bill of quantities, unify the items, rules and dimensions, and speed up the construction of a unified national price information network. Through the project price information network, we can know the price of needed materials conveniently and timely, and better reflect the market price of the project.
3. Expenses and profits in the project cost: Are they determined by the market or stipulated by the government?
The project cost in China consists of direct cost, indirect cost, profit and tax. According to international practice, overhead, profits and taxes should be shared in the unit price of sectional works. In China, indirect fees, profits and taxes are calculated according to the charging standard, profit rate and tax rate stipulated by the management department, while direct fees are calculated according to the unit pricing table. Obviously, the project cost obtained in this way has a strong planning color. In fact, market opening should provide a broader competition space and higher requirements for micro-subjects, but according to the current project pricing model, enterprises, as the main competitors in the market, are not pricing subjects, and the real pricing subjects are still subordinate to the government's project cost management department.
At present, the principle of differential rate is adopted in the collection of engineering overhead fees in China. Although the old method of pricing indirect fees according to affiliation has been abolished, there are still charging standards based on the combination of enterprise qualification grade and engineering category. This model may cause controversy after China's entry into WTO, and foreign contractors may invoke the principle of non-discrimination and national treatment to sue the WTO. However, our practice of charging labor insurance fees for state-owned enterprises, township collective enterprises and private enterprises separately violates the non-discrimination principle of the WTO and will increase the WTO's countervailing sanctions against state-owned enterprises in China.
After China's entry into WTO, another impact on the project cost is profit. Although the construction profit has also implemented the differential profit rate, it is still uniformly stipulated by the government and adopts the planned profit model. Through international investigation and comparison, it seems that the planned profit of 7% calculated by China construction enterprises is not small, and the overall level of project cost is not high, but the actual situation is that most state-owned enterprises have suffered long-term losses and are difficult to survive. The main reason is that the profits of China's construction enterprises can not be fully used as profits, such as low depreciation rate and insufficient compensation. At the same time, welfare bonuses, housing subsidies, employee medical care, etc. It must be paid out of profits. In fact, these expenses are included in the production cost internationally. As the main body of the market, the enterprise's business goal is to maximize profits. No boss will do business at a loss. Even if the quotation of individual projects is lower than the cost, it will be for different bidding strategies, perhaps to occupy the market, perhaps to consider the connection of projects, in short, for greater profits in the future. However, the current pricing model seems to have a new protective component. Not to mention the dissatisfaction of foreign enterprises with this protection measure after China's entry into WTO, even at home, it will lead to the profit of construction industry output value far below the industrial average. At the same time, the cost of general projects is surprisingly high because of the behind-the-scenes transactions of project transactions. In addition, after China's entry into WTO, the project cost level of China will fluctuate with the market fluctuation. China's original advantage of low labor cost will be lost, and at the same time, it will face the integration of the cost composition of project cost and accounting cost accounting.
Therefore, it is necessary to reform the cost attribute of project cost, straighten out its cost composition, adjust the original mandatory cost to a guiding rate that floats within a certain range, and implement dynamic regulation to promote competition among enterprises in order to reduce the project cost. According to international practice, all expenses that belong to production and operation costs, welfare nature and salary nature are included in the project cost and are no longer paid from after-tax profits. The government should not only open all kinds of engineering prices, but also open the profit rate and rate of enterprises. The profit and fee are also determined by the market, forming the real market price of engineering products. In addition, the social security system should be improved as soon as possible to solve the burden of labor insurance fees left by most state-owned construction enterprises, so that they can go into battle lightly and participate in fair competition in the market with a positive attitude.
How do government agencies determine their functions in project cost management?
With the continuous improvement of the socialist market economic system and the deepening of China's government's reform and opening up, China's project cost management system reform should take the opportunity of joining WTO to change the government's functions in project cost management. But at present, the government is still using quotas to control the price level of labor, materials, machinery and various expenses, which is obviously out of date. The government should gradually reduce its intervention in microeconomic activities, or even not intervene in microeconomic activities. Laws and regulations are the threshold of a country's market access and an important means for the government to manage the industry. The main work of government departments should be to standardize the construction market and realize effective indirect macro-control of project cost management. As a quota management department under the government department, its main job should be to regularly publish the cost information of various building products, as well as the unit price information and cost index of labor, materials and machinery, so as to guide the market behavior of contractors, and at the same time provide reference for investors to control the project cost, formulate the rules and valuation methods of engineering quantity that meet the market demand, and carry out macro-control on the project cost.
Our government should take practical measures like foreign countries, divide engineering projects into government investment projects and non-government investment projects, and adopt different management methods to manage prices respectively. In foreign countries, the government mainly controls government investment projects by indirect means. Government investment projects mainly adopt centralized management, adopt various standards and indicators for scheme design and construction within the approved investment scope, and strictly implement target control. For private investment projects, the government mainly takes measures such as price, tax, interest rate policy adjustment and urban planning to guide and guide the direction and region of private investment. China's current investment management system, after several reforms, still has the color of "planning", and the management of state-owned investment projects is not standardized and strict enough. There are often "three excesses" such as over-budget, over-budget, over-final accounts, investment expansion, inefficiency and out-of-control investment, while the management of foreign capital, Sino-foreign joint ventures and private investment projects is too detailed and there are many administrative interventions.
The government can implement macro-control through economic levers such as credit and tax, but it cannot participate in specific project pricing management. The government should strengthen the formulation of relevant standards and laws, so that project management institutions can carry out cost management according to law. As we all know, the number and amount of people involved in engineering corruption in China are the largest among corruption cases. The main reason is that in the process of project management, the government participates too much, which makes the project cost rent-seeking space large and the enterprises can not compete normally. Therefore, the government should establish and improve the legal system of project cost management while the project cost is gradually regularized. It must organize forces to understand the legal systems of member countries as soon as possible, analyze and compare the gap between domestic laws and regulations in the construction field and developed countries, establish and improve the legal system of construction undertakings that conforms to China's reality and links with WTO rules, and gradually integrate with the international community. After China's entry into WTO, the main clauses that have an impact on the project cost in WTO are General Agreement on Trade in Services (GATS) and Agreement on Government Procurement (GPA). GATS has established six principles: most-favored-nation treatment, transparency, greater participation of developing countries, market access, national treatment and gradual liberalization. The Agreement on Government Procurement stipulates the principles of non-discrimination, transparency and differential treatment of developing countries. After China's entry into WTO, the project cost will be forced to integrate into the international economic integration system. Then, the government must strive to narrow the gap with international project cost management, speed up the pace of reform, and make China's project cost management gradually adapt to international project cost management.
5 project cost management must introduce information technology
With the rapid popularization of information technology, the informatization of project cost management in China must also keep pace. Nowadays, computer network technology is becoming more and more popular, and all aspects of information flow are pouring in. Project cost management is a comprehensive discipline, including political economics, construction economics, labor economics, design and construction technology, engineering materials science, value engineering, operational research, finance, statistics and economic law. Faced with such a huge information flow, the traditional management mode and method obviously can't meet the requirements of science and informatization, let alone China's entry into WTO. Therefore, it is necessary to speed up the establishment of the national construction project cost information network, which should include the information systems of relevant policies, talents and project cost institutions; Engineering cost index and quota information system; Actively promote the use of computers to establish data and information databases, develop general management software programs, implement network management and resource sharing according to regional departments, publish relevant information at home and abroad through the network, provide information services for all parties who invest or participate in construction projects by the government and society, and create conditions for the gradual formation of prices for construction projects in China by the market.
At present, all kinds of engineering price information collected, sorted out and published by engineering cost management institutions at all levels in China lags behind the market seriously. It is urgent to establish a national construction project cost information network and improve the multi-channel information release system. In the market economy society, it is the key for owners and contractors to gain competitive advantages and profits whether they can capture market price information timely and accurately. In foreign countries, the government regularly publishes project cost information as a reference for government project estimation. At the same time, social consulting companies also publish cost information such as price index and cost index to guide the evaluation of engineering projects. However, the cost information in China is released by the government construction department, which makes there are too few competitive factors and inhibits the enthusiasm and creativity of investors and contractors.
With the deepening of China's engineering cost management reform and China's entry into WTO, it is necessary to develop a new generation of engineering cost management software, which can better meet the requirements of separation of quantity and price, unit price quotation and bill of quantities reform, and can be in line with international practices, provide users with an ideal engineering cost management platform, easily deal with various problems encountered in modern engineering cost management, reduce labor intensity, improve work efficiency, and promote scientific, standardized and international engineering cost management.
6 concluding remarks
Engineering cost is an important part of engineering construction, and the reform of engineering cost management is the bottleneck and breakthrough of construction market reform. The Ministry of Construction is rectifying and standardizing the bidding behavior, further deepening the reform of engineering cost valuation basis and valuation method, and constantly popularizing the internationally accepted calculation method of bill of quantities. With the development of China's socialist market economy, capital construction investment is increasing, and the requirements for project cost management are getting higher and higher. Joining WTO is both an opportunity and a challenge for project cost management. We should seize the opportunity, deepen the reform and strengthen the training of talents, so that the mode and method of construction project cost management in China can be based on promoting the development of China's socialist market economy and adapting to the process of global economic integration.
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