The tricks behind on-site construction visas (from the contractor) – a must-read

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This post was last edited by “Hasty Passerby” on September 14, 2018, at 21:25. Common practices regarding construction site visas (from the contractor’s perspective). Recommendation: Those involved in construction project management know that construction visas are extremely important; they also constitute a significant addition to the total project cost. In fact, some project teams believe that there’s no profit to be made from the contract terms themselves—the profits come from these visas. Take a look at this summary of common practices; perhaps it will provide you with some useful insights. Whether you’re a client or a contractor, even supervisors can benefit from reading this. Personally, I think some of these tactics are very useful, and all parties should pay attention to them to avoid falling into traps set by others at work. I. General Principles 1. The filling out of visas related to fees should facilitate pricing and make settlement easier. When filling in the information under different pricing models, it is important to note that if there is a visa settlement agreement, the details entered must be consistent with the pricing criteria specified in that agreement ； In the absence of a visa agreement, the pricing shall be determined in accordance with the original contract’s pricing terms or by referring to the pricing method specified in the original agreement. Furthermore, the visa process should be handled as much as possible in accordance with the calculation rules of the pricing basis (such as fixed quotas). 2. Contents of visas for various contract types. A price-adjustable contract requires a minimum order volume ； A fixed-price contract requires at least the quantity and unit price to be specified ； A fixed-price contract also requires the specification of quantity, price, and fees ； A cost-plus contract must specify at least labor, materials (with specified material specifications), machinery (the coordination between machine hours and labor), and expenses. Please include diagrams if possible. Additionally, the visa must specify whether it refers to the cost before taxes or after taxes. II. Priority order for filling in visa details (this order is quite complex): 1. If it’s possible to apply for a visa based on the total amount, it’s better not to use the unit price ； 2. It is better not to base the pricing on the volume of work, if it is possible to determine the price directly ； 3. It is best not to sign the facts if it is possible to directly sign the results (including directly signing the quantity of work) ； 4. If it is possible to use a written format, it is better not to include illustrations ； Other items that need to be filled in. The main ones are: when, where, why ； Job responsibilities ； Organizational design (human, mechanical) ； Quantity of work (with quantities and calculation formulas, and drawings if necessary) ； Are there any materials provided by the employer? ； The description of visas must be objective and accurate; visas for concealed work should be based on drawings, indicating the concealed areas, items, construction methods, and quality standards. If the volume of work in the concealed areas is not specified in the drawings, their geometric dimensions should be indicated along with simple diagrams. For on-site visas that are not related to construction, it is necessary to specify the time, location, reason, and geometric dimensions or original data; it is not acceptable to merely state the volume of work and cost involved. Once the visa is obtained, it should be processed promptly in accordance with the contract provisions, and the review process must strictly adhere to the established quotas and relevant regulations. III. How to deal with the client’s refusal to sign (there are pitfalls that all parties need to be aware of). Before preparing the visa application, it is first necessary to become familiar with the relevant provisions of the contract, and to develop reasons for the visa application focusing on the key issues. At the same time, one should present reasons and outline the details of the visa from the other party’s perspective; this not only makes it easier to obtain the visa but also makes the applicant feel that no risks are involved. Only in this way will the other party be more likely to accept it and grant the visa; otherwise, they will be reluctant to agree and deny it. If the other party deliberately refuses to grant approval unreasonably, in practice it is possible to deliver the documents to Party A in the form of sending and receiving letters (by having ordinary staff handle it). There is no need to force Party A to sign the visa form; they only need to sign the receipt document. This way, it can be proven that they have received our documents. Even if Party A does not sign the visa form, the visa will still take effect automatically after the statutory deadline has passed. IV. Precautions 1. The visa application form must be detailed yet concise; it should not be vague, so that the person reading it can understand what the contents of the visa are ； 2. The visa form is a document through which Party B claims payment from Party A for any additional work not specified in the contract or for any changes made to it; in other words, it is a proof of the work done by Party B for Party A. Therefore, it must be filled out based on the actual conditions on site, without any omissions or overstatements. 3. Party B must indicate the price on the visa form as well as the quantity, so that it will be clear at the time of audit! The visa application must include the basis for it (design changes, meeting minutes, etc.), calculation formulas and explanations, unit price analysis, as well as photographs and other supporting materials. 4. It is necessary to first clarify, in accordance with the provisions of the construction contract, what falls within the scope of visas, so as to avoid issuing visas in a careless manner and giving the client or supervisor a bad impression, suggesting that one is irresponsible toward themselves and others. In many cases, design changes and project correspondence documents can serve as the basis for settlement; therefore, there is no need to issue additional visas, to prevent displeasure on the part of others. However, when such documents cannot reflect the details of the settlement, visas must be issued ； 5. Regarding the issue of how to determine the volume of work for visa processing, in many cases, on-site measurements carried out by the client, the contractor, and/or other parties are used as the basis for determining this volume. It is crucial to handle the relationships among these parties in advance, so that the on-site measurements yield results favorable to the contracting party. This is important because visa processes usually involve multiple parties, and there is little room for adjustment afterward, unless one has very good relations with all the involved parties ； 6. Regarding the time required to obtain a visa, it is generally necessary to apply in a timely manner, but this is not necessarily advantageous in many cases. If the information involved is sensitive, applying hastily during the construction process is only feasible if the details are accurate; if there is any exaggeration in the information, then no one will be willing to issue the visa. Therefore, it is important to manage the timing carefully – it should neither be too early nor too late ； 7. Visas that allow one to earn money are usually related to the hidden aspects of a project; therefore, it is necessary to consider ways to obtain more such visas in these hidden areas. This includes taking into account issues related to the construction organization plans or proposals you submit. Additionally, regarding matters such as foundation treatment, the contractor should put forward suggestions for solutions that are favorable to them ； 8. In the end, it comes down to quantity when it comes to visas; therefore, a visa that doesn’t represent an actual quantity cannot be considered a real visa. Everyone should put in serious effort in this regard.