Study Of Public Regulation Of The Engineering Contract Cost Issues

To realize the targert for construction costs is the fundamentality of cost management. However, the contractor's target for construction costs has been seriously influnced by those problems such as default of payment for construction, construction without advance payment, and yin-yang contracts with two faces etc. Resulting from the lack of valid communication between the engineers and the lawyers, it has been a neglected defect in the research system that there is no systematic study on legal factors related to the construction cost management in China. Whereas, a proposal is put forward that the legal factor should be brought into the research system, and the legel property of construction cost should be throughly and systematicly analyzed. As a result, construction contract cost, a fully innovative concept, is introduced in this paper. And based on the new concept, a different-angle research on the cost management is carried out.The construction contract cost is composed of contract price and transaction costs. The contract price is the purpose, and the transaction costs are the means on how to realize the purpose. The lack of credit in Chinese contruction market has resulted in over high transaction costs. When the construction market fails to reduce the transaction costs automatically by its own price mechanism, it is necessary to depend on the external restriction system including laws and others. Whereas, the concept of public regulation is introduced in this paper so as to discreb all sorts of external restrictions accurately. And on the basis of theories about public regulation, the function mechanism of the valid regulation is demonstrated, and both the excess of regulation and the deficiency of regualation are analyzed by the mathematics models.Beginning with the research on the public regulation of the legel validity foundition for the construciton contract cost, the measurement principles under the conditions of valid or invalid contracts are analized, and so are the contradictions in the judicature regulation of contracts with two faces, which are the result of theexcess of government regulation. By researching the deficiency of both the judicature regulation and government regulation, ideas on how to treat the legal validity of constuction contract without advance payment in a proper way are demonstrated.The tendering procedure is the stage in which the construction contract cost begins to form, and the government regulation has direct effects on contrcact price and transaction costs. There are excess of regulation in tangible construction market and the construction contracts recording system, which are the main government regulation forms in the tendering procedure. With the anylasis of the legel property, status and the according legislation suggestion of the tangible construction market, its market funcition mechanisim and the effect on the transaction costs are studied. The excess of regulation of the construcition contract recording system is researched, and the legislation proposal on how to standardize the system is put forward.With the inspection for acceptance as its proceeding procedure, the balance of account on completion is one key to determine the contract price. Both the deficient regulations of inspection for acceptance and of the balance of accout on completion are discussed, and so is the excessive regulation by the administrative audition. Jidicial appraisal is another key to determine the construction contract price. Both the excesssive and deficient regulations of the judicial appraisal are discussed.The priority of payment for construction is the most important legal barrier for the realization of the target for the construction contract cost. The lawmaking background and the importance of the priority are introduced. The comparison among the legal postion of rights related to the priority, and problems on the judicature regulation of the priority are discussed.