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The distortion in the final settlement of construction projects stems from this reason. The outcome of such settlements has a direct impact on the interests of both the project owners and the construction firms. Based on practical engineering experiences, this article analyzes the 8 main reasons for distortions in the final settlement of construction projects, in the hope of helping everyone to develop targeted strategies and measures to ensure proper settlement processing. I. Blind signing of contact forms, with vague and imprecise visa descriptions as well as a lack of timeliness. This is because our country currently adopts an engineering supervision model that separates measurement (supervision) from evaluation (final accounting). Engineers responsible for final account verification generally do not go to the construction site during the building process; the basis for calculating the volume of work during such verification is mainly the construction drawings and supervisor’s approvals. This creates the possibility of cutting corners during the construction phase (especially for concealed works). On-site supervisors do not have a sufficient understanding of cost management and relevant regulations, and they issue visas blindly for projects that should not be approved. In some cases, the construction units fill out the visas without conducting proper verification before signing and stamping them; they invent various pretexts on these visas to engage in fraud, underreporting amounts in order to deceive others. They fail to process visas in a timely manner when problems arise, and instead rush things at the time of final settlement, shifting responsibilities among themselves. Some construction units submit extremely low bids in order to win contracts, and in order to protect their profits, they cut corners on projects that are covered under a fixed-price agreement, while creating numerous construction visas for projects that are not covered by such agreements. The arbitrary issuance of visas at the construction site disrupts the normal order of the construction market. II. Calculation of quantities The calculation of quantities is carried out based on the as-built drawings, design change orders, and **uniformly established calculation rules; it forms the basis for preparing the settlement statement. Errors in quantity calculation mainly include re-calculation within the sub-items of the quota, misalignment of decimal places due to inconsistent units of measurement, and calculation mistakes. III. Application of fixed quotas: There are discrepancies in the understanding of how to use sub-items or make conversions for items that are not included in the fixed quotas; the comprehensive explanations provided for these quotas are ignored, conversion factors are not applied, and higher fixed quota values are used. IV. Material Prices The models and materials of the main components are not specified in the design; aside from the predetermined material prices, most of them are priced according to market rates, which also affects the final cost calculation. V. Cost Calculation The cost quotas specified in the contract are not applied. According to the classification of project types, Category 3 projects apply the standards of Category 2 projects at a higher level. The project did not reach the agreed standard of civilized construction, yet the additional fee for civilized construction was calculated as per the agreement. The engineering taxes in county towns are applied using rates from urban areas, etc. VI. A very small number of settlement preparers lack the necessary professional competence, resulting in distorted calculations. VII. The construction entity’s imprecise use of language in the contract for work assignment and on-site visas leads to discrepancies between the settlement amount and the actual cost. VIII. The construction unit is concerned that the settlement terms are too strict. The submission for settlement is carried out by the construction entity entrusting an intermediary agency to conduct the review; the construction entity’s objective is to reduce or increase the amount in question in order to cover the related fees, which naturally creates the possibility that the construction contractor may overstate the amounts involved. Common ones include: 1. Inventing various pretexts to set excessively high quotas. ①List separately those elements that have already been taken into account in the quota and included within the comprehensive unit price. For example: Earthwork has been priced in accordance with the quota based on the volume of work, but some construction firms calculate the cost of excavator shifts separately; ② The elements included in the rate are calculated as separate items, for instance, the additional costs associated with construction during winter or rainy seasons are already included in the comprehensive rate, yet some firms calculate the cost of pumping water out during rainy seasons separately; ③ The unit price of a project is inflated by using conversion factors for the quota prices. 2. fictitious expenses. In some projects, large-scale and specialized machinery was not used during construction, yet additional costs for night work and expedited construction measures were included in the final settlement. 3. Raise the billing standards and expand the scope of fees charged.
Budget specialists in construction companies are usually highly sought after; as the saying goes, those who can do the work are not as valuable as those who can calculate costs.
The work results of budget officers are directly related to the performance and achievements of project managers; nothing can be accomplished without money. Therefore, these officers are highly valued by project managers and are given relatively high salaries. Privately, the project manager will also express their views.
The process of cooperation is actually a form of negotiation as well; behind the guise of mutual benefit, there are still competitions at play, which is why some people pay attention to the details