The Housing and Urban-Rural Development Bureau of Jinan City recently issued a notice inviting public comments on the “Management Measures for General Contracting of Housing Construction and Municipal Infrastructure Projects in Jinan City (Draft for Comments)”.
Key points include:
1. Government and state-owned capital investment projects, as well as prefabricated buildings, are generally required to adopt engineering general contracting. Social investment projects and public-private partnership (PPP) initiatives are encouraged to follow the same approach. Ideally, engineering consulting services should be integrated throughout the entire contracting process.
2. Efforts will focus on nurturing local engineering general contracting enterprises. “Dual qualification” enterprises—those with design or construction credentials—can apply for relevant construction or design qualifications. The completed general contracting project performance can be credited as construction and design performance.
3. The selection of the project’s general contracting unit will be conducted through bidding or direct contracting. Projects legally required to undergo tendering must set a maximum bidding limit. Evaluations typically use a comprehensive approach.
4. Social investment projects should use lump sum contracts, while government-funded projects should determine contract pricing reasonably. General contractors are not expected to bear all market risks.
5. Payments for project stages should be settled promptly upon sub-project acceptance. Settlements should not be delayed due to design changes, negotiations, or other reasons. Government projects must not use incomplete audits to postpone payments.
6. Engineering general contracting units awarded national, provincial, or municipal engineering honors may receive subsidies up to 1.5%, 1.0%, and 0.8% of construction and installation costs respectively, as incentives for high-quality and cost-effective work. Priority support will be extended to enterprises, projects, and project managers implementing EPC in prestigious awards and demonstration sites such as the “Luban Award,” “Mount Taishan Cup,” and “Quancheng Cup.”
Original document:
Notice on the Public Solicitation of the Management Measures for General Contracting of Housing Construction and Municipal Infrastructure Projects in Jinan City (Draft for Comments)
To implement the Ministry of Housing and Urban-Rural Development’s and the National Development and Reform Commission’s directives on the management of general contracting for housing construction and municipal infrastructure projects (Jian Shi Gui [2019] No. 12), along with the Ten Measures for implementation (Lu Jian Jian Guan Zi [2020] No. 6) and local government opinions on promoting high-quality construction industry development (Ji Zheng Ban Fa [2020] No. 29), this bureau, in collaboration with the Municipal Development and Reform Commission, has drafted the Management Measures for General Contracting in Jinan City (Draft for Comments) and now invites public feedback.
Please submit any comments or suggestions in writing or by email to the Municipal Housing and Urban-Rural Development Bureau by January 14, 2021.
Attachment: Draft of the Management Measures for General Contracting of Housing Construction and Municipal Infrastructure Projects in Jinan City
Jinan Housing and Urban-Rural Development Bureau
December 15, 2020
Management Measures for General Contracting of Housing Construction and Municipal Infrastructure Projects in Jinan City
(Draft for Soliciting Opinions)
To implement national and local regulations and promote reform in project organization and execution, this document outlines measures tailored for Jinan City to accelerate the adoption of engineering general contracting and improve overall construction quality and efficiency.
1. Promote Engineering General Contracting
Projects funded by the government and state-owned capital—including housing, municipal infrastructure, water conservancy, and prefabricated buildings—are prioritized for engineering general contracting. Social investments and PPP projects are also encouraged to adopt this model.
Large and medium-sized government-funded projects should undergo general contracting after preliminary design approval and budget estimation; smaller projects may proceed after approval, verification, or filing.
Engineering consulting services should cover the entire project lifecycle, including bidding, surveying, design, supervision, cost control, and project management, with construction units potentially entrusting a single consulting entity for these services.
2. Develop Core Engineering General Contracting Enterprises
Local construction companies are encouraged to partner with leading domestic general contractors to expand market reach and competitiveness. A database of local general contracting enterprises and projects will be established.
Enterprises holding qualifications in housing construction or municipal engineering can apply for corresponding design or construction credentials, with general contracting performance recognized as valid construction and design achievements. Consortiums may share performance credits among members.
Eligible contractors should update their performance records on the national construction market supervision public service platform, which will be recognized during qualification reviews.
3. Leverage Pilot Enterprises and Projects
Social investment projects are encouraged to participate in various promotion and demonstration efforts. Pilot enterprises and projects play a leading role and are subject to dynamic tracking. Regular meetings will facilitate the transition from pilot initiatives to widespread adoption.
4. Standardize Bidding Procedures
Project owners must select general contractors via bidding or direct contracting in accordance with the law. Consortium bidding is permitted. Projects requiring tendering must use prequalification and bidding documents aligned with national standards and include model contract texts.
A maximum bidding price must be set and announced upfront, reflecting all relevant costs such as design, construction, equipment, and management.
Evaluations will comprehensively consider price, project management, technical and design plans, equipment procurement, construction organization, quality and safety measures, performance history, and enterprise credit.
5. Enhance Contract Price Management
Social investment projects should use lump sum contracts, while government-funded projects may adopt other pricing forms as appropriate, including unit price or cost-plus contracts for complex cases. Government project investments should not exceed approved budgets.
Contracts must clearly define risk responsibilities, price adjustment mechanisms, and payment terms. General contractors are not expected to shoulder all market risks. Pricing risk clauses should be reasonably set in bidding documents and contracts. Lump sum contracts generally do not allow price adjustments except as specifically stipulated.
Contracts should also specify cost management clauses, including utilization plans, progress reports, and change approvals.
6. Ensure Timely Construction Process Settlements
Construction contracts must define settlement periods and payment methods. Payments should be settled promptly upon sub-project acceptance, without delay due to design changes or negotiations. Government projects must ensure timely fund disbursement per national regulations.
7. Strengthen Risk Prevention Mechanisms
A guarantee system will be promoted for engineering general contracting projects, especially those funded by government or state-owned investments. Construction units must provide payment guarantees, while general contractors are encouraged to provide performance guarantees through bank guarantees or insurance. Construction units should consider purchasing engineering quality liability insurance, with these costs included in total project investment.
8. Promote Building Information Modeling (BIM) Technology
BIM usage is strongly encouraged, particularly in government projects, prefabricated buildings, and large public construction. Eligible units should invest in R&D and establish compatible information management platforms to integrate BIM across surveying, design, construction, and maintenance, enabling data sharing throughout the project lifecycle.
Construction units may require BIM application in bidding documents, offer evaluation bonuses, and allocate dedicated implementation budgets.
9. Increase Policy and Financial Incentives
Government projects allow saved funds within approved budgets to reward or subsidize general contractors. Contractors applying advanced engineering technologies that improve quality, shorten schedules, reduce costs, and extend design life may receive corresponding rewards.
Contracts and bidding documents should specify quality and cost-effectiveness criteria. Subsidies for award-winning projects are capped at 1.5%, 1.0%, and 0.8% of construction and installation costs depending on award level.
Priority support will be given to enterprises, projects, and managers implementing EPC in prestigious awards and model sites.
10. Strengthen Implementation and Management Services
Construction drawing reviews may be submitted in stages or sections as agreed by the construction unit and review agency. Construction permits may require the general contracting contract and reviewed drawings submitted in parts.
General contracting units must provide construction organization design documents to ensure project quality and safety. Upon project completion, the construction unit must coordinate acceptance inspections promptly. Warranty agreements will be signed, and technical data transferred accordingly.
Management documents related to permits, acceptance, reviews, and signage will be updated to include engineering general contracting details and responsible persons.
11. Cultivate Engineering General Contracting Talent
Enterprises are encouraged to develop core talents in project management, design, and construction through diverse mechanisms and innovative training models. Educational institutions should offer relevant courses and foster cooperation with industry to cultivate professionals skilled in design, construction, and management. Project managers specialized in engineering general contracting will be prioritized. Construction units and design firms are encouraged to attract and develop talents to enhance consulting and project management capabilities.
12. Strengthen Organizational Support
Relevant government departments—housing and urban-rural construction, development and reform, administrative approval, finance, audit, among others—must support general contracting activities according to their responsibilities and actively promote market development.
Industry organizations should strengthen self-regulation, enhance policy research, establish industry standards, promote fair competition, and support the healthy growth of engineering general contracting.
These measures will take effect upon issuance and remain valid for three years.
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