Procedures of Shanghai Municipality on the Administration of Construction Project Contracting

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Procedures of Shanghai Municipality on the Administration of Construction Project Contracting

Procedures of Shanghai Municipality on the Administration of Construction Project Contracting

(Promulgated by Decree No.37of the Shanghai Municipal People's Government on 30December ,1996〉
     Article l (Purpose〉
     The present Procedures are promulgated in the light of the actual situation in Shanghai, in order to standardize the contracting of the construction project, protect the legitimate rights and interests of both contracting parties for construction projects and enhance the administration of the construction market in this city.
     Article 2 (Scope of Application〉
     The present Procedures shall apply to the contracting activities in relation to the items of prospecting, design and site work of a construction project of this city and related agency activities within the administrative area.
     Article 3 (Administrative Department 〉
     Shanghai Municipal Construction Commission (hereinafter referred to as the "SCC" ) shall be the administrative department responsible for the contracting activities relating to construction projects in Shanghai Municipal Construction Industry Administrative Office 〈hereinafter referred to as the "CIAO" 〉shall be specifically responsible for the administration of construction project contracting in this city.
     The district (county) construction administrative departments shall be responsible, within its scope of authority, for the administration of construction projects contracting in the area under its respective jurisdiction.
     Article 4 (Submission of Form for Carrying out the Construction Project)
     After getting the approval certificate of the application for the registration of the proposed construction project and before the construction project contracting, the construction unit shall, with the approval certificate, go through the formalities for the registration of the carrying out of construction project with the CIAO or the district (county) construction administrative department in the area where the construction project will take place, according to their respective competence of examination and approval.
     Article 5 (Contents of the Form for the Carry out of Construction Project)
     The form for the carry out of construction project shall include the following Items:
     1) Name of the project;
     2) Place of construction;
     3) Scale of investment;
     4) Source of funding;
     5) Investment amount for the current year;
     6) Scale of project;
     7) Dates of commencement and completion of construction;
     8) Mode of contracting-out; and
     9) State of project preparation.
     A unified form for the carry out of construction project shall be printed by the SCC.
     Article 6 (Basic Conditions of Contracting-out Unit)
     Any construction unit that contracts out a construction project shall meet the following conditions:
     1) Having the legal person status or being an organization otherwise set up according to law;
     2) Having funds or funding sources compatible with the construction project;
     3) Having professional and managerial personnel appropriate for the management of the construction project ;and
     4〉Other conditions as provided by laws, regulations and ru1es.
     The detailed contents of Items 2and 3of this Article shall be separately provided by the SCC. The construction unit which does not meet the condition under Item 3of this Article shall entrust a construction project contracting out agency with appropriate qualifications and grades (hereinafter referred to as "contracting out agency" ) to contract out by proxy.
     Article 7〈Conditions for Contracting out the Prospecting or Design Items of a Construction Project )
     Contracting out the prospecting or design items of a construction project shall meet the following conditions:
     1〉Having the approval certificate for the application for registration of the proposed construction project;
     2〉Having the basic data required for prospecting or designing of the construction project ;
     3) Having the directions of design requirements; and
     4〉Other conditions as provided by laws, regulations and rules.
     Article 8 (Conditions for Contracting out the Site Work of Construction Project)
     Contracting out the site work of a construction project shall meet the following conditions:
     1〉The initial design scheme being approved;
     2〉The construction project being included in the annual construction plan;
     3〉Having the construction drawings and relevant technical materials needed for site work; and
     4〉Other conditions as provided by laws, regulations and rules .
     Article 9 (Conditions for Contracting out All Items of Prospecting, Design and Site Work)
     Contracting out all items of prospecting, design and site work of a construction project to one construction project contractor (hereinafter referred to as the " contractor" ), shall comply with the provisions of Article 7 herein.
     Article 10 (Modes of Contracting out Construction Project)
     Construction project can be contracted out through call for tenders or negotiations of bids, or be contracted out directly.
     If a construction project is contracted out through call for tenders, tenders can be openly called for or invited.
     Article 11 (Construction Projects to be Contracted out Through Call for Tenders〉
     The following construction projects over the amount limit shall be contracted out through open call for or invitation of tenders.
     1) Invested by the government;
     2) Invested by the administrative or institutional units;
     3) Invested by the State owned enterprises;
     4) Invested by the enterprise with the State-owned assets having controlling interest);
     5) Invested by collective economic organization; and
     6) Other construction projects stipulated by laws, regulations and rules.
     The special construction projects such as secret projects and military facility projects within the scope set out in the preceding paragraph may adopt the mode of contracting out through negotiation of bids, or of direct contracting out.
     The amount limit of a construction project and the scope of special construction Projects shall be stipulated by the SCC.
     Article 12 (Procedures for Contracting out through Call for Tenders 〉
     Where contracting-out through call for tenders is adopted, the procedure shall comply with the relevant provisions on the administration of call for tenders in this city.
     Article 13 (Other Modes of Contracting-out Construction Project)
     Modes of contracting-out construction projects other than those provided for in Clause 1of Article 11 shall be determined by the construction units themselves, provided that such contracting-out shall be subject to the surveillance and administration of the CIAO or the district (county) construction administrative departments.
     Article 14 (Object of Contracting-out)
     The contracting-out units for construction projects (hereinafter referred to as the "contract-out Unit") shall contract out the construction project to units with appropriate qualifications, grades and business scopes.
     Article 15 (Contracting-out to General Contractor〉
     The items of prospecting, design and site work of a construction project may be who11y contracted out to a contractor under a general contract; one or several items out of individual item works, classified on the basis of items of prospecting, design and site work, may likewise be contracted out to a contractor under a general contract.
     A general contractor for all the items of prospecting, design and site work of a construction project may contract out one or two items to a contractor under a general Contract.
     Where the construction unit contracts out the items of site work, the individual item works in the construction project shall be the minimum subject -matter of a contract.
     Article 16 (Contracting-out to Sub-contractor〉
     A design unit having entered into a general contract may sub-contract to several design units with the individual item works in the construction project as the minimum subject-matter of contract.
     A site work unit having entered into a genera1contract may sub-contract to several site work units with unit works in the construction project as the minimum subject-matter of contract.
     The sub-contractor shall not resub-contract its sub-contracted works to others.
     Article 17〈Prohibition of Dismembering of Contracted out Construction Project Business in Contracting〉
     The following construction project business shall not be dismembered in contracting-out:
     1〉Design business of individual item works;
     2〉Site work business of unit works;
     3) Prospecting, design and site work business of a construction project below the amount limit;
     4〉Prospecting and design business contracted by prospecting and design units with the qualifications of Class C; and
     5〉Site work business contracted by site work units with the qualifications of Grade 4, of professional grade level or non-graded level.
     Article 18 (Handling of Special Business)
     The sub-contracting of special business regarding the prospecting, design and site work of a construction project is not subject to the restriction of Artick15, 16 and 17.
     The scope of special business regarding the prospecting, design and site work of a construction project shall be provided for by the SCC.
     Article 19 (Restriction on Recommendation of Project)
     No unit or individual is allowed to recommend any construction project to anyone else for the purpose of gaining profit.
     Article 20 (Restriction on Designation of Contractor)
     No re1evant administrative department and none of its personne1are allowed to designate any contractor for a construction project by making use of their authority.
     Article 21 (Limitations on Contracting-out U nit )
     A contracting-out unit shall not demand the advancing of fund as a condition for contracting-out.
     A contracting-out unit shall not, without proper reasons, require the contractor to purchase the materials and machinery equipment used in the construction project from such production enterprises or suppliers as designated by the contracting-out unit.
     Where any quality problem occurs with the materials, machinery and equipment used in the construction project which the contractor was, required by the contracting-out unit to purchase from such production enterprises or suppliers as designated by the latter, the contracting-out unit itself shall be liable therefor.
     Article 22 (Qualifications for Contractors)
     Any contractor engaged in contracting activities for construction projects shall hold the qualification certificate and accept contracts for the construction projects falling within the business scope as allowed by its qualifications.
     Subject to the above provisions, units from other provinces and cities or units under the central government shall go through the formalities for the application of registration with the CIAO, and they shall be a11owed to engage in the contracting activities for construction projects in Shanghai, only after getting the approval certificate for handling the prospecting and design business, or the permit for carrying out site work in Shanghai.
     The prospecting, design and site work enterprises from abroad or from HongKong, Macao and Taiwan shall, upon completion of the relevant procedures required by laws, regulations and rules, go through the formalities for the application of registration procedures with the CIAO, and shall be allowed to engage in the contracting activities for construction projects in Shanghai, only after getting the approval.
     Article 23 (Liability of Contractor)
     The contractor shall be responsible to the contracting-out unit in accordance with the agreed terms stipulated in the contract.
     Article 24 (Limitations on Sub-contracting)
     The main business of a construction project shall be completed by the contractor itself; the contractor shall not sub-contract the whole contracted construction project business to others, nor sub-contract it in disguised form to others.
     Article 25 (Qualifications for Contracting Agency〉
     The contracting agency undertaking the commission business regarding the contract and contracting-out of construction projects shall have corresponding grade of qualifications.
     Article 26 (Limitations on Contracting Agency Business)
     The contracting agency shall not be engaged in the commission business of both contracting and contracting-out for one and the same construction project at the same time and shall not be concurrent1y engaged in the commission business of accepting competitive contracts from two or more contractors with one and the same construction project as the contract subject-matter.
     The contracting agency shall pot be engaged in the contracting and contracting-out business on behalf of the opposite party of the contractor or contracting-out unit with whom the contracting agency has assets interest relations.
     The commission business of contracting construction projects shall not be transferred.
     Article 27 (The Signing of Contract)
     The contracting parties in a construction project shall sign the contract in accordance with the provisions of the laws, regulations and rules.
     The contract of a construction project shall be made in written form and take the sample contract recommended by the State or this Municipality as reference.
     The major terms and conditions of the contract of a construction project awarded through call for tenders shall be in conformity with the main contents of the tender inviting documents, of the tender and of the contract-awarding notice.
     Article 28 (Permit for Site Work)
     The construction unit shall, having met the requirements of site work for construction project, app1y for the site work permit of construction project with the CIAO or the district (county) construction administrative departments with the fo1lowing documents:
     1〉Approval certificate of the application for the registration of the construction project;
     2〉Planning 1icense of the construction project ;
     3) Vouches for the entry of fund into the accountbook;
     4〉Relevant certificate for the availability of water supply, electricity supply, traffic facility and the 1eveling of site;
     5〉Copy of the agreement of contracting of the construction project;
     6) Materia1s needed for reporting the survei1lance of quality, etc., for the construction project; and
     7) Other documents required by laws, regulations and rules.
     Where the provisions of relevant laws, regulations and rules as well as the present Procedures are not comp1ied with, the CIAO or the district (county) construction administrative department shall not issue the site work permit of construction project.
     No site work shall be carried out without the site work permit of construction project.
     Article 29 (Handling of the Act of Contracting in Violation of Provisions)
     In respect of the units carrying out contract activities without observing the present Procedures, in serious cases the SCC may in accordance with relevant provisions of the state lower the qualification grade of units or refuse to evaluate their qualification grade, and shall record such handling in their business manual.

     Article 30 (Time Limit of Examination and Verification)
     Where the relevant application procedures mentioned under Articks22 and28 herein are subject to examination and verification by the CIAO or the district (county) construction administrative departments, the CIAO or the district (county) construction administrative department shall give a written decision within 30days from the date of accepting and examine the case.
     Article 31 (Administrative Disciplinary Measure)
     For any act of violating the present Procedures, the CIAO or the district (county) construction administrative department shall mete out administrative punishment according to the fo11owing provisions:
     1〉Any unit violating the stipulations of Articles 4,6,7,8,9,14,15and 16 herein, shall be ordered to make rectification within a specified time limit, and be given a warning, and may be fined RMB2,000 up to RMB20,000;or
     2〉Any unit violating the stipulations of Articles 11and 12 herein, shall be ordered to make rectification within a specified time limit, and be given a warning, and may be fined RMB1,000 up to RMB20,000;
     3〉Any unit violating the stipulations of Articks17,20,21(1),22,24,25and 26herein, shall be ordered to make rectification within a specified time limit, and be given a warning, and may be fined RMB2,000 up to RMB25,000;
     4〉Any unit violating the stipulations of Articles 19 herein ,shall be ordered to make rectification within a specified time limit, and may be fined RMB1,000 up to RMB30,000; or
     5〉Any unit violating the stipulations of the third paragraph of Article 28herein, shall be ordered to make rectification within a specified time limit, and may be fined RMB 1,000 up to RMB30,000.
     Artic1e32 (Investigation of Law-enforcing Persons Involved in Illega1Activities)
     The construction administrative persons shall abide by the laws and enforce law impartially. Those who neglect their duties, abuse their power, practice favoritism and irregularities, demand or take bribes, or pervert the law in performing their duties, shall be prosecuted for criminal liability if their acts constitute a crime. Administrative punishment shall be imposed if such acts do not constitute a crime.
     Article 33 (Reconsideration and Litigation〉
     If the party concerned does not accept the administrative act of the construction administrative department, it may apply for administrative reconsideration or bring an administrative action according to the "Regulations on Administrative Reconsideration" or the "Administrative Litigation Law of the People's Republic of China" .
     Where the party concerned neither applies for reconsideration within the statutory time limit, or bring an administrative action, nor perform the specific administrative act, the department making a decision of such administrative act may apply to the people's court for enforcement in accordance with the provisions of the "Administrative Litigation Law of the People's Republic of China" .
     Article 34 (Definition〉
     Individual item works means the works consisting of a number of unit works in a construction project, which is covered by independent design documents and will independently produce functional effect upon its completion.
     Unit work means the works in the individual item works which can be independently designed and whose construction can be independently organized, it is a constituent part of the individual item works.
     Article 35 (Interpretation of Application〉
     The SCC shall be responsible for the interpretation of the specific application of the present Procedures.
     Article 36 (Date of Implementation〉
     The present Procedures sha11become effective on March 1,1997.

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