Research On The Bidding Under Cost Quotation Of Construction Projects In China

Construction projects are the material basis for the existence and development of various departments and industries of national economy.The development is related to the growth of national economy and employment status,as well as the safety of the public life and property,the quality of production and life.Construction projects are indispensable both for the necessary infrastructure for social development and the sites and equipment for the operation of various social material production departments.It can be said that the development of construction projects is inseparable from the small garden or porch that can be seen everywhere in daily life to the national projects such as the high-speed rail,the Hong Kong-Zhuhai-Macao Bridge,FAST and so on.At the same time,the development of construction projects and the development of many related industries also have very close connection.Construction projects can absorb a large amount of material production materials,which directly drives the development of metal products processing industry,equipment manufacturing industry,building materials industry,and indirectly drives the development of real estate industry,financial industry and other service industries.In the process of construction,it can absorb a large number of urban and rural labor and plays a great role in the employment of rural migrant population and the construction of new urbanization.Bidding mechanism is a widely used trading mechanism in the field of construction projects in China.Compared with other trading methods,project bidding has obvious advantages.First,project bidding reflects fair and open market trading rules,which can curb the dark box operation and corruption in the process of construction project contracting to a certain extent.Second,the project bidding enables the tenderee to choose a better contractor at a lower price.In project bidding activity,bidders through the competition of construction ability and construction qualification,makes the bidder with low price,strong technical ability,good reputation,reliable quality guarantee system become the final winners.The process makes the project price more close to the value,which forcing contractors to control the project cost in actual construction process.Third,carrying out project bidding can reduce the transaction costs in the process of construction project contracting.In the process of project bidding,all bidders bid at the same time in the same place,through the group decision of expert review,tenderee determines the optimal bidder as the winning bidder.It can reduce the trading links and transaction costs,increase the tenderee's income.However,in practice,the bidding mechanism,which should be beneficial to the realization of the interests of all parties involved in the bidding,has caused many problems and even been criticized by some bidding enterprises.The most serious problem is the bidder's under-cost quotation.The harm is mainly reflected in the following aspects:first,the tenderer only pay attention to price in the bidding process,which will lead to the project quality is difficult to ensure,damage the rights and interests of the tenderee,threaten the safety of construction personnel and the public life and property;Second,compared to the enterprises quote at the real cost,the enterprises quote at lower cost are more likely to put off tax or default the wages of migrant workers,affecting the order of tax collection and social stability;Third,the enterprises quote below cost will easily delay the construction period,increase the owner's expenses of labor,machinery,management and finance,and then increase the total expenditure of the tenderee;Fourthly,the enterprises quote below the cost often subcontract illegally,divide the project into several parts and sublet them to other organizations,which will lead to contract relations more complex and contract disputes more frequent.As can be seen from the above several situations,the issue of quotation below cost will damage not only the effective operation of the bidding system,but also the interests of the tenderer,other bidders,the construction industry and even the public.In the long run,this not only interferes the construction project bidding work,but also will have a greater impact on the development of advantageous enterprises in the industry.Because of the serious social harm of the problem,the theoretical analysis of the problem and the discussion of regulation measures are particularly important.The paper is based on the standard bidding model,by relaxing the standard assumptions constructs the extended model.It analyzes which condition under-cost quotation will be the bidder's equilibrium bidding strategy when the bidder can obtain additional benefits in the construction stage and the trading object has additional value.It illustrates quoting below cost when the bidder in the above two cases has its theoretical origin.The contents include three parts.First,according to the causes,the problem of under-cost quotation is divided into two kinds of situations:the bidder can obtain additional benefits in the construction stage and the trading object has additional value.Based on the characteristics of the two cases,the paper expands the standard bidding model,and calculates the equilibrium bidding strategy.Secondly,based on the two types of under-cost quotation models,the paper designs the prevention mechanism,and extend the static analysis to the dynamic analysis to discuss the prevention mechanism of under-cost quotation in multi-stage bidding.Third,based on the balanced quotation strategy and corresponding mechanism design of two types of under-cost quotation models,this paper puts forward the governance countermeasures for the under-cost quotation of construction projects in China from the perspectives of law system and management.The paper on the basis of predecessors' research,there may be two main innovations:first,divides the situations of under-cost quotation into two types according to the causes of the problem,and constructs the under-cost quotation bidding model in the two cases.Second,makes prevention mechanism design in the two cases.This paper aims to find out the theoretical root,prevention mechanism and governance measures of under-cost quotation in construction projects,so as to provide reference for the improvement of project management and related mechanisms.