11 subjective reasons for project losses, 100 types of waste on construction sites, and 157 key time points!
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This post was last edited by Hasty Passerby on 2018-9-13 at 14:18. The 11 main subjective reasons for project losses, 100 types of waste on construction sites, and 157 important time points! In actual work, it is common to encounter situations where, when it comes to final settlement, many unresolved disputes arise. Some disputes arise mainly due to flaws in the contract terms, others from unclear opinions regarding changes and negotiations, and still others from errors present in the initial bid documents... The responsibilities of both parties at each stage of the project construction not only affect the cost of the project but also its overall quality. Therefore, it is very important to manage project costs effectively, with special attention should be paid to the following points: First, during the design and drawing review phase, responsibilities must be clarified in advance. 1. The quality of the design drawings has a direct impact on the pace of project progress and the cost of construction. On one hand, cost reduction can be achieved through limited-design approaches; on the other hand, after the drawings are completed, cost experts should participate in the drawing reviews to assess the quality of the designs from a cost perspective, which can help reduce disputes and claims arising from drawing-related issues during the settlement process. 2. To ensure design quality and minimize or eliminate various problems in the drawings, when signing a design contract with the design entity, the following clause may be included in the contract: Should errors in the design or imperfections in the drawings go undiscovered and uncorrected during the design briefing process, resulting in rework and delays during construction, the designer shall bear a certain percentage of the resulting losses and expenses. 3. In order to identify issues in the drawings as early as possible and minimize the costs resulting from errors in those drawings, provisions regarding drawing reviews can be included in the construction agreement or building contract. These provisions require the construction party and the supervision party to promptly identify and point out any errors or deficiencies in the drawings during the drawing review phase as well as throughout the construction process, thereby avoiding rework and delays in the construction schedule. II. Bidding process: Whenever possible, assign the construction work to the same contractor. 1. When defining the scope and contents of each bid package in the bidding documents, it is necessary to do so based on the principles of facilitating construction, ensuring smooth coordination, and minimizing costs. 2. During the construction process, if multiple construction firms are working on the site at the same time, the tasks related to the same project should preferably be assigned to the same construction firm, in order to avoid splitting up the work. This helps prevent rework or delays caused by issues related to the sequence of construction activities and coordination between different parties. 3. It is necessary to clarify the adjustment methods for certain provisional items specified in the tender documents during the final settlement, the on-site guarding and installation costs of materials and equipment supplied by the employer along with their calculation methods, the names and quantities of materials or equipment listed at provisional prices in the project, as well as the final settlement procedures, etc. 4. In the case of bidding based on a bill of quantities, the following aspects should be carefully checked: whether the quantities listed in the bill are accurate and whether there are any items missing ; Do the characteristics described in the project description match those in the drawings or the actual situation? ; Are there any regulations regarding the adjustments to be made for items with incorrect清单 calculations? ; Special materials, specific technical requirements, and any particular environmental conditions at the site should all be clearly specified in the tender documents. 5. During the bid evaluation process, the review of bid prices should focus on checking for any instances of collusive bidding aimed at deliberately inflating prices ; Moreover, emphasis should be placed on proper bid evaluation: determining whether all the contents included in the bid documents meet the requirements specified in the tender documents ; Does the scope of work listed in the quotation fully correspond to the drawings and design requirements? Are there any items missing, or any items with incorrect pricing? ; Are the items covered by the total bid price complete? ; Are the material prices reasonable? ; Whether the composition of the quote is reasonable, etc. If any of the aforementioned issues are found in the bid submission during the bid evaluation process, it is necessary to verify and clarify them with the bidding party on the spot, and require the bidding party to provide a clear written explanation for those issues as one of the important bases for subsequent settlement procedures. III. Contract signing process: Negotiate the project cost in advance. For any project, whether the contract is properly drafted and whether the contract price is determined objectively and reasonably have a significant impact on the ability to keep project costs under control. 1. From the perspective of the contract’s content, it is crucial that the provisions within the contract be thorough and that the wording used is precise. If the contract content is incomplete, it can lead to numerous changes and negotiations later on. Especially in the case of fixed-price contracts, the core content of the contract text is the scope of work included in that fixed price; therefore, the specification of the scope of work is the key aspect of the contract. In construction projects where the client designates subcontractors, the contents of the general contracting service fee should be clearly specified in the construction contract or agreement, taking into account the actual circumstances of the project. 2. In terms of the form of the contract, whether to use a contract with adjustable prices or a fixed-price contract should be determined based on the actual circumstances. Once the construction drawings are available, the relevant personnel from the project owner should conduct a comprehensive review of them, and any issues or errors found in the drawings should be corrected promptly. Before the contract price is finalized, a complete bidding budget must be prepared; the estimated cost should reflect the actual cost of the project in an objective and reasonable manner. Moreover, based on the construction drawings and the actual conditions of the project, it can be anticipated that there will be few changes during construction. For projects with simple requirements, clear construction drawings, and a construction period of less than one year, a fixed-price contract can be used, resulting in lower risks for both parties. If the engineering project is relatively complex, the construction drawings may not be very complete. Numerous changes may occur during the construction process; in such cases, a contract with adjustable prices can be used, either by adjusting the costs for these changes or by preparing the final settlement based on the actual as-built drawings. IV. Changing material prices: A designated person shall handle the preliminary filing procedures. 1. Specifications and models of the approved materials ; Does the final price include the packaging and shipping costs of the materials? ; A normal loss rate during transportation should be agreed upon with the supplier for fragile materials. 2. If the approved materials are finished or semi-finished products requiring processing, it should be indicated whether the transportation costs to the construction site are included ; It should be clearly specified what is included in the agreed price, such as the costs for processing, manufacturing, and installation ; The specific construction techniques and methods should be clearly defined to prevent unnecessary disputes in the settlement process due to unclear review comments. 3. Whether the collection and organization of change orders and material approval forms are done in a proper manner is also one of the criteria for assessing the quality of our work. All audit documents generated during the construction of each project should be organized by a designated person. Archive documents in a timely manner, classify and number them according to the sequence of dates on which negotiated changes occurred for each individual project and its engineering items, and establish a ledger to serve as an important basis for settlement. For project budget managers, during the construction process, they should pay attention to organizing and perfecting various settlement documents related to the project, such as negotiations, change orders, meeting minutes, and material price approval forms. Whether it involves negotiations for cost increases or decreases, all relevant details must be fully documented to ensure that the negotiated terms align with the actual conditions of the project, thereby laying a solid foundation for the final settlement review. When signing a construction contract, what should Party B pay attention to? The purpose of a construction contract is for the contractor to complete a building that meets the required standards within a specified time by allocating appropriate personnel, materials, and equipment, while the employer pays the project cost as agreed. To achieve this goal, it is necessary to prevent risks that arise during the performance of the contract, providing a contractual basis for both parties to resolve disputes. Factors Affecting the Validity of a Contract The validity of a contract is the premise and foundation for contract review. Construction project contracts are highly technical, involve numerous aspects, and have complex legal relationships; many factors can affect the validity of such contracts. Therefore, it is necessary to conduct a thorough examination of the factors that influence contract validity: 1. Whether the project falls under those that require bidding in accordance with the law, and whether bidding was indeed carried out 2. Are there any circumstances in which a winning bid is invalid? 3. Does the contractor possess the appropriate qualifications, and are these qualifications of a satisfactory standard? 4. Are there any cases of subcontracting or affiliation? Having clarified the above issues, we can focus our attention when examining the validity of a contract, thereby having a clear understanding of its validity. II. Contract price: The contract price clause is the most central and important clause in a construction contract. In fact, 80% of disputes arising from construction contracts pertain to issues related to the contract price. Therefore, we must pay sufficient attention to the stipulations regarding the contract price. The following points should be noted: 1. For projects subject to bidding, the contract price is the same as the bid price and the winning bid price ; For projects awarded through direct contracting, the contract price is the cost of the project as agreed upon by both parties at the time of signing the contract. 2. The cost for safe and civilized construction consists of environmental protection fees, fees for civilized construction, fees for safe construction, and costs related to temporary facilities; it shall not be lower than the minimum rate specified in the \"Rate Table for Safety Protection and Civilized Construction Measures Fees\". 3. According to item 2.0.7 of the 2013 pricing specifications, provisional sums refer to the unit prices for materials and construction equipment that are necessary but whose costs cannot be determined at this time, as well as the amounts for specialized works, which are provided by the tenderer in the bill of quantities for payment purposes. 4. Provisional sums are intended for the procurement of materials, equipment, and services that have not been determined or are unforeseeable at the time the construction contract is signed; for adjustments to the project cost in case of changes during construction or due to factors specified in the contract; as well as for covering costs related to claims and on-site verification. 5. Different contract price structures result in varying risk allocations between the employer and the contractor, primarily in terms of the distribution of risks related to the scope of work, the volume of work, and unit prices between these two parties. 3. Scope of work for project contracting: The scope of work for project contracting refers to the range and content of the contractor’s tasks, which should be specified as precisely as possible, generally down to individual sections or sub-sections of the project. If conditions permit, it is also possible to specify which specialized tasks outside the scope of this contract shall be assigned by the employer to other parties or subcontracted by the employer, and at the same time define the services to be provided by the contractor to such subcontractors and the associated costs. When defining the scope of the contract, it is important to clearly specify the construction boundaries, including the vertical and horizontal construction limits as well as the boundaries between different contractors. If the project goes through a bidding process, the scope of work should be specified in accordance with the bidding documents to avoid disputes. 4. Project duration: The project timeline is generally closely linked to the overall plans of the client; changes in one aspect can have an impact on the whole project. Therefore, in order to ensure that the contractor completes the construction within the agreed time frame, strict penalties for failure to meet deadlines are usually established. It is thus particularly important to clarify the start date, actual start date, planned completion date, actual completion date, delays in the project timeline, extensions to the timeline, claims related to the timeline, and the total duration of the project. Points to note: 1. In the event that the start date specified in the contract, the start date indicated in the start-up report, and the start date stated on the construction permit are not all the same, the start date shall be the one specified in the start-up report as confirmed by the supervision unit. 2. Note that if the total number of calendar days for the project duration differs from the number of days calculated based on the planned start and completion dates, the total number of calendar days shall prevail. These days refer to calendar days including statutory holidays; in practice, the actual construction time does not include holidays such as the Spring Festival. Therefore, the contractor must pay attention to the length of these holidays to avoid a too short project duration. 3. When the project owner requires that the construction period be shorter than the scheduled period, the additional costs must be specified in the tender documents; the reduced duration shall not exceed 30% of the scheduled period. If it exceeds 30%, it is considered as arbitrary compression of the reasonable construction period, and shall be handled in accordance with the Regulations on the Quality Management of Construction Projects. 4. The two parties shall clearly specify the circumstances under which the project timeline is delayed or extended, and detail the procedures for filing claims regarding the project timeline. The rights and obligations of both parties regarding the schedule are specified in the liability for breach of contract, so that in case of issues related to the schedule, they can have a basis on which to defend their legitimate interests. Project quality: \"Every steel bar is governed by the law.\" Meeting quality standards is a prerequisite for receiving the contract payment, and quality issues in a project are legal issues. The provisions of the \"Interpretation of the Supreme People’s Court on Issues Concerning the Application of Law in the Trial of Disputes over Construction Contracts\" state that as long as the quality of the work constructed by the contractor is satisfactory, even if a invalid construction contract has been signed, the contractor can still receive payment for the work in accordance with the terms of that contract ; If the quality of the construction work carried out by the contractor is unsatisfactory, the employer has the right to refuse to pay for the work. Points to note: 1. The project quality must meet the qualified standards specified in the **regulations; the two parties may also agree on other requirements, such as winning awards like the “Lu Ban Cup” or “Qianjiang Cup”. 2. This agreement is binding on both parties; therefore, when signing the contract, it is necessary to take full account of the actual conditions of the project as well as the genuine intentions of both the contractor and the client when filling in the relevant details. It is generally advisable to indicate “Qualified, striving to win the XX Award”. If it is agreed to obtain the XX Award, the contractor shall bear the corresponding liability for breach of contract in the event that they fail to do so. Matters requiring attention regarding the composition of the six types of contract documents: 1. The contract documents for construction projects refer to the contract agreement (including written agreements and documents related to consultations and changes during the contract execution process), the notice of award, the bid document and its attachments, the special clauses of the construction contract, standards, specifications and relevant technical documents, drawings, the bill of quantities, and the project quotation (budget). The logical relationship between them is as follows: the contract agreement serves as the outline of the contract documents; the notice of award represents the employer’s commitment, while the bid document constitutes the contractor’s offer. The offer and acceptance are part of the contract formation process. The special terms and general terms of the contract specify the rights and obligations of the contracting parties, that is, they address what needs to be done. The specifications and drawings define the standards to be followed by the employer, contractor, and supervisor, that is, they address how things should be done and how management should take place. The bill of quantities and the cost estimate determine how payment will be settled upon completion of the project. 2. If both parties agree to include the tender documents and bid documents as part of the contract, it is recommended to list the tender documents first. According to Article 19 of the Law on Bidding, the tender documents shall contain all substantive requirements and conditions, such as the technical specifications for the bidding project, the requirements regarding bid prices, and the criteria for evaluating bids. Article 27 stipulates that the bid documents must meet the substantive requirements and conditions set out in the tender documents. Therefore, the substantive content should be interpreted in accordance with the substantive provisions of the tender documents as a priority. It should also be noted that regarding the provisions for the same content, it is best for the parties to specify them in the same document; otherwise, the same content will be scattered across different documents, which may lead to inconsistencies in the provisions or interpretations. Issues to note regarding the payment of progress payments for Project 7: The management of progress payment disbursements plays an important role in project contract management, and both parties to the contract need to pay close attention to this. To that end, the two parties can further detail the process for making these payments. In practice, the employer often does not pay the full amount due as progress payments, but rather pays a certain percentage based on the value of the work completed; in some cases, it is agreed that payments will cease once 70% of the total contract price has been paid. The two parties can make specific arrangements regarding this. Matters to note regarding completion acceptance: 1. Whether the completion acceptance is successful is directly related to whether the contractor can receive payment for the work. Completion acceptance is an important step in thoroughly checking whether the construction meets the design requirements and quality standards. According to Article 61 of the Construction Law, construction projects submitted for completion acceptance must comply with the prescribed quality standards for construction projects, have complete technical and economic documentation as well as a signed warranty letter, and meet all other specified conditions for completion. The construction project can be put into use only after it has passed the completion inspection ; Those that have not been inspected or have failed the inspection shall not be put into use. 2. The conditions and procedures for completion acceptance are the specific methods for carrying out such acceptance; it is important to clearly specify these procedures in the special terms or supplementary agreements, so as to avoid disputes should either party fail to submit an acceptance report or refuse to carry out the acceptance process. 3. The completion date, as well as the handover and acceptance of the project, are directly related to the project timeline; this ultimately determines whether there will be claims regarding delays in completion. It is important to note the legal criteria used to determine the completion date in case of disputes between the parties. Firstly, if a construction project passes the completion inspection, then the date of passing such inspection shall be considered the completion date ; Secondly, if the contractor has submitted the completion acceptance report and the employer delays the acceptance process, the date on which the contractor submits the completion acceptance report shall be deemed the completion date ; Finally, where a construction project is put to use by the employer without having undergone completion acceptance, the date on which possession of the construction project is transferred shall be regarded as the completion date. The settlement of project payments is one of the most important clauses in project contract management. In practice, disputes often arise over project settlement. The following points should be noted: 1. Clarify the settlement procedure. Throughout the provision of legal services, we have developed a practical approach for this purpose. First, the contractor submits a settlement statement, which is then reviewed by the project owner. The results of this review are communicated to the contractor, who can raise objections to those results and engage in negotiations. Finally, an agreement is reached, and the settlement is finalized and approved. 2. During the settlement process, any objections must be submitted in writing, with a detailed explanation of the basis for them ; Agree on a specific amount, and try to minimize the scope of disputes and the scope of the project ; If an agreement cannot be reached, initiate litigation or arbitration in a timely manner. 3. The final settlement referred to in the 2013 version of the construction contract includes a comprehensive settlement of all matters related to the execution of the contract, such as the project cost, penalty fees, and compensation amounts; it should fall under the category of \"final settlement\". Ten dispute resolution methods and points to note: 1. Article 28 of the Interpretation of the Civil Procedure Law explicitly stipulates that disputes over construction project contracts shall be under the exclusive jurisdiction of the courts handling real estate matters; in other words, such disputes are governed by the people’s courts located at the site of the construction project, thereby ruling out the possibility of agreeing on alternative jurisdiction. 2. However, the arbitration jurisdiction agreement remains valid. 11. Liability for breach of contract: \"An obligation without liability is equivalent to no obligation at all.\" Liability for breach of contract is the most important clause in the process of contract performance, as it serves to urge both parties to fulfill their obligations as stipulated in the contract. By detailing the consequences of breaching the contract, both parties will be more mindful of their responsibilities, and contract performance will rely not only on the spirit of agreement and good faith between the parties but also on the liability provisions set out in the contract. At the same time, when a dispute arises between the two parties, the party in breach can be held accountable for such breach in accordance with the liability provisions stipulated in the contract; therefore, the parties should specify in detail the following liability aspects in the contract: 1. Clearly define the nature of the performance bond (or guarantee), including the circumstances under which it can be deducted, the timing of its activation and expiration, as well as the rules regarding the repayment of the bond and any associated interest. 2. Penalties for project delay: deduction of the security deposit, liquidated damages, and application of such amounts to offset the project cost or the total contract price. 3. Penalties for late payment of project funds: If the employer fails to pay the project funds on time, they shall bear interest on the overdue amount at the loan interest rate set by the People’s Bank of China starting from the date of delay. Liquidated damages: May be agreed upon in proportion to the delay. 4. Provisions regarding preferential claims. 5. Provisions regarding the delivery of the project and related documents: Any disputes arising from the settlement of the project costs between the employer and the contractor shall be resolved through arbitration or litigation. However, whether such disputes occur or not, and regardless of who is at fault, they cannot serve as a pretext for the contractor to delay the handover of the project, the completion of its inspection, cooperation in the necessary documentation procedures, or the delivery of the project-related documents. If the aforementioned dispute is determined to be due to the employer’s fault, the employer shall bear the corresponding responsibility (liens). 6. Provisions regarding quality disputes: Establishment and designation of an intermediary agency for determining quality issues. Burden and procedure of proof. A third party can be agreed upon: the quality department in the location of the district. 7. Provisions regarding the quality guarantee deposit: the duration of the warranty period, the method of returning the deposit, and interest payment. 8. Provisions regarding responsibility assignment and penalty methods during safe and civilized construction. 9. Provisions regarding illegal subcontracting, subletting, and affiliation in projects: mainly the penalty rules. The project does not permit subcontracting or illegal subcontracting; if the employer discovers that the contractor is engaging in such activities in violation of these provisions, it has the right to terminate the contract immediately. In addition to bearing all responsibilities in accordance with the relevant penalty provisions regarding quality and timeline set out in this agreement, the contractor shall also pay a penalty equal to 10% of the total project cost. If the employer incurs losses, the contractor shall also bear the direct and indirect economic and reputational compensation liabilities arising from the damage to the employer’s reputation in house sales as a result of the contract being terminated and forcing the employer to issue a new tender. However, this agreement does not apply to subcontracts assigned by the employer. 10. Determination of engineering warranty responsibilities: Handling and cost allocation in the event that the contractor does not provide warranty. What aspects should Party B pay attention to during construction? How should it be arranged? I. Points to Note 1. Before the materials arrive at the site: It is necessary to be aware of the materials that will be used on the construction site (whether they are specified by the client, by the designer, or can be chosen by the contractor itself); one must also know the quality and quantity of these materials, as well as their market prices. 2. Key aspect to note: the seamless communication between the material handler and the material supplier. For example, if a material supplier quotes 100 yuan for a certain material, which is already a very high price, it would be possible to negotiate a lower price (for instance, 80 yuan could work), but the person in charge of purchasing the materials insists on paying 120 yuan. In this way, that person makes a profit of 20 yuan, and the material supplier also profits; it’s a win-win situation for them, while it is the project contractor who suffers losses. This requires that the material handler be an honest and reliable person, one who is responsible to the company. Otherwise, for a large-scale project, the mere process of ordering materials alone can result in significant financial losses. You can assign someone who is loyal to the company to purchase the materials; this person needs to have a good understanding of both the prices and quality requirements of such materials, in order to help the company save as much money as possible. 3. During material delivery: When materials arrive, the material supervisor must strictly inspect their quality and quantity. 4. During the use of materials: Before extracting and using the materials, the person in charge of the construction must be familiar with the construction drawings and know exactly how much of each material is required. Materials should be extracted on time and in the required quantities, and efforts should be made to control the amount of materials used. Construction must be carried out strictly in accordance with the drawings; any differences in the amount of materials used, whether more or less, must be documented in writing through formal discussions. In other words, the person in charge must strictly oversee the extraction of materials, prohibiting excessive or incorrect extraction, and there must be records of such material extraction. Secondly: on-site, there must be someone specifically responsible for monitoring the quality of the work, ensuring construction is carried out in accordance with the plans, and strictly preventing waste or loss of materials. Workers’ lack of understanding of construction techniques can lead to material waste, and it is also necessary to prevent them from stealing construction materials and tools. II. Construction Arrangements1. Construction must be carried out strictly in accordance with the schedule. Idle time and unjustified work stoppages are strictly prohibited. There must be records of workers’ working hours, and their wages must be calculated based on these recorded hours. It is strictly prohibited to record workers’ working hours multiple times. Severe penalties must be imposed for economic losses caused by work stoppages! 2. For workers who fail to meet the technical standards, they must work overtime to complete their assigned workload. (For example: If a worker is supposed to lay 10 square meters of flooring but only manages to lay 8 square meters, he must then work overtime to finish the remaining 2 square meters. No extra working hours should be recorded; otherwise, those hours cannot be counted as full-time working hours!) ) In summary, the economic losses are mainly reflected in the purchase of materials and in the management of material storage ; Material usage: medium ; The working hours of workers during construction, and the skills of those workers ; Negotiations regarding the increase or decrease in the amount of work on site. III. Suggestions or methods
1. For the selection of materials, there should be a reliable person in charge. This person should have a thorough understanding of the materials market and the properties of various materials, so as to be able to purchase inexpensive and cost-effective materials, or products that offer similar performance at a lower price. He is fully responsible for the selection of materials and for the costs associated with their delivery. 2. When materials arrive on site and are used in construction, a dedicated person must keep records of their quantity, purpose, model, specifications, etc. The materials proposed must be supported by data on the quantity required for construction; the technical supervisor is responsible for the amounts of materials suggested, striving to ensure that the requests are accurate and well-founded. It’s not possible to provide as much material as one wants; the amount should be determined based on the construction requirements. 3. Materials must be stored under appropriate conditions, ensuring that the storage location does not cause waste, damage, or loss to the materials themselves. A dedicated person should be responsible for the material library 24 hours a day. 4. On-site construction discussions must be accurate and reliable; no details should be omitted, and the quantities of work and man-days should be fully specified. On-site, a dedicated person should be responsible for overseeing the construction quality, the amount of materials used, the construction tools (which are provided by the company and must be registered upon pickup to ensure that their quantity and quality are maintained upon return), as well as the workers’ attendance. Cutting corners is strictly prohibited. 5. In some cases, more quantity of work can be reported to the client for settlement, while the actual amount of work performed is used when settling accounts with the contractor. Handle it flexibly. 6. Prevent a collusion between the project manager and the contractor; the project manager will keep more accurate records of the workload and man-days. The project manager is the overall supervisor of a project, and his loyalty directly determines the quality of the project as well as its scale. 7. Quotations should vary depending on the different clients; it is necessary to assess the situation and be flexible. Sometimes, when the client is not very familiar with the quotes for new materials or new construction methods, they tend to offer higher prices to the other party. In other cases, if the client is not very responsible, does not have a good understanding of the project, or is not concerned about costs, it is necessary to observe carefully before determining the price. 8. Conduct settlements in a timely manner to prevent files from being lost, damaged, or incomplete over time, as these issues can all lead to inaccurate settlements. 9. All documents must be complete in terms of information, accurate and correct in content, properly signed, with clear handwriting; negotiations cannot be effective without the signature of the person in charge. This is the case with all documents; if they aren’t signed properly, they won’t be valid, and it will cause problems during subsequent settlements. The data clerk is responsible for these tasks. 10. There should be a flexible reward and punishment system: increase the income of dedicated personnel ; Fire the pests in the company; punish those who seek petty gains. Diversified income: salary + bonuses + commissions + various benefits + year-end dividends + quarterly dividends, etc. The general principle is: when quoting to the contractor, reduce the volume of work; when quoting to the client, increase the volume of work ; Construct strictly in accordance with the drawings to ensure project quality, and detailed records of both large and small quantities must be kept in the correspondence; the documentation should be complete and thorough ; Materials are the most crucial aspect; strict management is required throughout their entire lifecycle, from ordering to delivery and use ; Settlement should be carried out promptly ; Employees are responsible to the company.