Construction and installation costs have dropped significantly over the past two years, especially for large-scale projects. What are your thoughts on this?

The same goes for me; low-bid bidding is deadly. At its core, it’s due to chaotic competition in the market, extremely high labor costs for state-owned construction companies, too many employees, and moreover, there’s a growing trend of industry and regional protectionism

Reducing construction costs is an important way to lower the bid price, in order to win the contract. Nowadays, companies consider a contractor’s track record, so it’s necessary to secure as many projects as possible; whether profit is made is a matter for later. But having projects to work on is definitely better than having none at all

The limited number of construction projects leads to bidders among construction firms competing by lowering prices. Also, the overall cost of materials has decreased.

Especially in the current situation, the homeowners don’t have any extra “resources” either: lol

For leaders of state-owned enterprises, political achievements are more important than profitability; once they have achieved certain political successes, they can advance in their careers, and whether money is made or not, as well as the level of employees’ salaries, are not important. Although the idea behind separating government and enterprises is the same, there’s nothing that can be done about it.

It can be said that the industry has improved – people now know what the standard costs are, so there are fewer tricks and less misappropriation of funds. Management has also become more rational. I believe that other aspects will change as well in the future

It’s hard to say, but I hope the quality of installation won’t decline. Project quality = equipment quality + installation quality?

Due to the unfavorable external economic conditions, CNPC has suffered huge losses in the past two years; it has repeatedly emphasized the need to control investments, with a clear target of reducing investments by 15%! In this case, the project that the construction contractor receives already has a reduced value.

Since the prices of raw materials have dropped significantly, the installation cost should also decrease. It’s just like when processing something – if the price of the materials is low, then the processing cost will be low as well! ! !

There are already few projects available, and more teams have the capacity to take on projects, so naturally the profits decrease. And with a set quota in place, although it’s not followed strictly, at least there is a benchmark, which reduces the chances of fraud. The key factor is still competitiveness. I know that some teams have relatively fixed core members, and their installation quality is indeed good. Once the installation of the indoor equipment is completed, the area is cleaned immediately; after entering that enclosed space, everyone must wear shoe covers. Although their costs are higher than those of other teams, the quality is better, there’s less need for worry, so the overall efficiency remains high. Therefore, it is still recommended to steadily improve one’s own skills and the technical level of installation work, in order to increase the added value as much as possible.

This issue seems quite complex; there are several possible reasons for it: 1. Intensifying competition, with more and more teams participating. When bidding, there are few reasons that can convince the tendering party, so teams are forced to lower their prices drastically； 2. The reduction in projects due to the current economic crisis has exacerbated the decline in installation costs ； 3. The general contractor or the client has increasingly strict requirements regarding installation quality, which forces what used to be considered a source of profit to become an expense (I’ve experienced this several times) ； It is recommended that construction teams improve their capabilities and increase the technical level of their work, while also reducing unfair competition. Ah, it’s very difficult.

I think the first reason is the result of malicious competition among construction firms; the second is that owners take advantage of this competition to keep prices down, creating a vicious cycle. Eventually, with more change orders, the quality suffers, and it is ultimately the owners who end up suffering.

Bidding is merely a means to select the option with the best cost-performance ratio. However, in current bidding processes, there is no effective way to evaluate which option offers the best cost-performance ratio, so price becomes the decisive factor; in order to win the bid, parties strive hard to lower their prices

Project costs are traditionally composed of direct expenses such as labor, machinery, and materials, plus additional fees. Objectively speaking, labor costs have been rising over the past couple of years, while the prices of machinery and materials have fluctuated significantly; in contrast, the additional fees remain relatively stable. Therefore, it is normal for bidding prices to change. I believe bidding is a form of market competition, with each party having its own strategies. The owner uses the bidding process primarily to ensure compliance with procedures and to select the contractor who offers the best value for money. The key lies in setting the conditions for the bid documents and in subsequent management; if not too many opportunities are given to contractors during this subsequent management phase, I believe the bid prices will still reflect the actual situation. After all, no one wants to engage in a loss-making deal.

This year, two bidding processes have been canceled; the quality of pipe fittings used is extremely poor, and the situation is in a complete mess.

It’s fierce competition; owners push for extremely low prices. Bids have to be as transparent as possible and as detailed as possible. For projects worth hundreds of thousands or even millions, they insist that the brand and price of every single screw be specified in the bid, and they check you after completion before finding reasons to deduct money...

The results achieved through competition cannot be considered negative outcomes! In terms of construction projects, unit management and cost control are what truly reflect the level of competence; if these aspects are not up to standard, the quality of installation will be poor, forcing one to compete in the lower-end market. Many large projects in the country are managed by foreign project management companies, with domestic construction teams working according to foreign management methods. At first, it seemed there were too many rules and regulations, which slowed down progress; however, as the project progressed, things went more smoothly, the pace accelerated, and both quality and safety were ensured. There is a Chinese proverb that goes, \"Sharpening the axe doesn’t delay the job of cutting wood,\" and another says, \"To do a good job, one must first sharpen their tools.\" They convey the same idea in fact. The more management is regarded as a means and tool, the more its advantages become apparent when it is implemented strictly!

Excessive price competition has led to a sharp decline in work quality, creating a vicious cycle that severely hinders the healthy development of the bidding system.

For some projects, foreign-funded companies bid on them; their technical costs and project expenses are relatively high. In order to remain competitive, they strive to cut construction and installation costs as much as possible, making it difficult to make a profit from working with them.