【Sea River Civil Engineering Discussion】What are the main risks borne by the project owner? What to do when material prices rise?
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What are the main risks borne by the construction entity? The portion by which the prices of major construction materials, equipment, and labor fluctuate beyond the range stipulated in the contract, as compared to the prices at the base period at the time of bidding ； Changes in contract price due to **changes in laws, regulations, and policies** ； Changes in project costs and timelines caused by unforeseen geological conditions ； Changes in project costs and schedule due to reasons on the part of the construction party ； Changes in project costs and timelines caused by force majeure. The specific terms of risk sharing shall be agreed upon by both parties in the contract. The project owner shall not set unreasonable deadlines, nor shall they arbitrarily shorten reasonable deadlines. The above are the risks that the construction party will have to bear!
The construction entity, which is the owner and the party in control of resources, should bear responsibility for unforeseen risks
As a fair, just, and reasonable contract, the allowable fluctuation range for construction materials and equipment is generally set at 5%; the contractor is responsible for covering any fluctuations within this range, while the owner takes care of any fluctuations beyond it. The cost of labor is to be borne by the contractor.
Indeed, in line with the principles of fairness and justice, it can be stipulated in the contract