No.029 <Soft Examination> "(Advanced) Exam Preparation Encyclopedia" [Chapter 13] Project Contract Management

1 chapter related

1.1 Exam

 Contract management generally takes 1 point in the morning test
 Case analysis test is not much
 Thesis writing just took the test on 21st

2 Basic concepts related to contract management

2.1 Classification by scope

type of contract	Features, scope of application
general contract	A contract in which the buyer contracts out the entire process of the project to the same seller as a whole. This contract requires only one contract to be concluded with the same seller, but it does not mean that only one general contract is concluded.
single contract	1. A seller only contracts one or several items, 买方分别与不同卖方订立的合同. 2. It is conducive to attracting more sellers to participate in the bidding, so that the buyer can choose a seller with strong strength in a certain single item.
Subcontract	1. The contract is concluded when the seller subcontracts a certain part or several parts of the contracted project (not the main structure of the project) to subcontractors with corresponding qualifications, as agreed in the contract and approved by the buyer. 2. If there is a problem in the subcontracted project, the buyer can ask the seller or the subcontractor directly to take responsibility. 3. Conditions:①经过买方认可、②分包的部分必须是项目非主体工作、③只能分包部分项目，而不能转包整个项目、④分包方必须具备相应资质条件、⑤分包方不能再次分包。

2.2 Classification by Payment Method

type	Features, scope of application
Lump sum contract	①Fixed lump sum contract (FFP) – is 最常用the type of contract. Most 买方（甲方）like this kind of contract. Because the price of the purchase is fixed at the outset and is not allowed to change (unless the scope of work changes). Seller is obliged to complete the work and 承担因不良绩效导致的任何成本增加. Under an FFP contract, the buyer should precisely define the products and services to be purchased, 对采购规范的任何变更都会增加买方的成本. ② Total Price Plus Incentive Fee Contract (FPIF)--allows certain 绩效偏离and is related to the achievement of established goals 财务奖励(usually depends on the seller's cost, schedule or technical performance). To set up 价格上限, the seller has to do the work and want to 承担高于上限的全部成本. ③ Total Price Plus Economic Price Adjustment Contract (FPEPA) – applicable to: 卖方履约期将跨越几年；将以不同货币支付价款. 通货膨胀、某些特殊商品的成本增降Allows for final adjustments to the contract price in a pre-determined manner in response to changing conditions (eg ). ④Purchase form (unilateral contract) – when 非大量purchasing 标准化products, the buyer can directly fill in the purchase form provided by the seller, and the seller will supply the goods accordingly.
cost reimbursement contract	①Cost plus fixed fee contract (CPFF) – for 卖方the reimbursement of the work incurred in performing the contract 一切可列支成本and 卖方payable to the contractor 一笔固定费用, the fee is calculated as a certain percentage of the initial cost estimate of the project. ②Cost Plus Incentive Fee (CPIF) – Reimburses the seller for all expenses incurred in performing the work under the contract, and when the seller reaches the performance goals stipulated in the contract, 向卖方支付预先确定的激励费用. If the final cost is lower or higher than the original estimated cost, the buyer and seller need to share the savings or the excess according to a pre-agreed cost-sharing ratio. Compared to total price plus incentive fee, 不存在总价上的最高限价. But sometimes there will be a maximum price limit and a minimum price limit for profits. Under the CPIF contract: 1. If the actual cost 大于target cost, the total amount of payment that the seller can get is " 目标成本+目标费用+买方应负担的成本超支"; 2. If the actual cost 小于target cost, the total amount of payment that the seller can get is " 目标成本+目标费用-买方应享受的成本节约". ③Cost Plus Incentive Fee (CPAF) – Reimburses the seller for all legitimate costs, but pays most of the fee to the seller only if the seller meets certain broadly subjective performance criteria specified in the contract. 完全由买方根据自己对卖方绩效的主观判断来决定奖励费用, and usually 不允许申诉.
Contract for materials	1. 计划价格*实际量（量实报实销，激发积极性）. 2. Applies to 工作性质清楚，工作范围比较明确，但具体的工作量无法确定的项目. It can be effectively used on 金额小、工期短、不复杂the project. 3. The unit manpower or material rate (including the seller's profit) is preset. 4. The buyer bears the risk of workload changes; the seller bears the risk of unit price.

2.3 Contract Type Notes

2.3.1 Cost + Fixed Fee Contract (CPFF)

The contract stipulates that the cost shall be reimbursed on an actual basis, and after Party B completes the project, Party A shall pay Party B
a fixed fee in addition.
Example: The contract stipulates that the cost shall be reimbursed, and Party B shall be paid another 1 million after the completion of the project. If the final cost is 3 million, how much should Party A pay Party B?
300+100=4 million (ten thousand).

2.3.2 Lump-sum plus incentive fee contract (FPIF)

Settlement formula: [Target cost (estimated cost), target profit (Target cost)]
Total payment = actual cost + target profit - (actual cost - target cost) × seller's sharing ratio
Test:
1) Total payment < maximum price, press Total payment payment
2) Total payment ≥ maximum price, pay according to the maximum price
Example: the budget cost is 3 million, the cost is 1 million, and the ceiling price is 4.5 million. If the cost is overrun or saved, it will be shared or shared at 80:20. If the actual cost is 4 million, how much should Party A settle for Party B?
400+100- (400-300)×20% = 4.8 million (ten thousand)
480 >450, so Party A only pays 4.5 million.

2.3.3 Cost + Incentive Fee Contract (CPIF:)

Costs are controlled according to the budget plus agreed expenses, such as cost overruns or
savings, shared or shared in agreed proportions.
Example: The cost budget is 3 million, and the agreed fee is 1 million. If the cost is overrun
or saved, it will be shared or shared according to 80:20. If the final cost is 4
million, Party A should settle the contract payment?
400+100- (400-300)×20%=4.8 million (ten thousand)
to pay 4.8 million.

2.4 Comparison of Contract Types

2.5 Choice of contract type

sequence	type of contract	scope of application
1	Lump sum contract	work 范围很明确, and the design of the project 已具备详细的细节[Seller bears the risk of cost]
2	Contract for materials	The nature of the work is clear, but 范围不是很清楚, moreover, the work 不复杂requires 快速signing a contract 【Both parties share the risk】
3	cost reimbursement contract	Work 范围尚不清楚[buyer bears risk of cost]
4	unilateral contract	buy 标准产品, and数量不大

2.6 The content of the contract - see the textbook for specific content to understand

①Project name, ②Objective content and scope, ③Quality requirements of the project, ④Project plan, progress, location, area and method, ⑤Various deadlines during the project construction process, ⑥Confidentiality of technical information and data, ⑦Risk responsibility ⑧ownership of technical achievements, ⑨standards and methods of acceptance, ⑩price, remuneration (or usage fee) and its payment method, ⑪calculation method of liquidated damages or damages, ⑫dispute resolution method, ⑬terms explanation

2.7 Contract classification

3 Contract Management Process

★1. Contract management includes: contract 签订management, contract 履行management, contract management 变更, contract 档案management, contract 违约索赔management.
★2. In order to make all parties to the contract have a consistent understanding of the contract, the following suggestions are suggested:
(1) Use the contract format of 国家or . (2) In order to avoid contract disputes caused by incomplete or ambiguous terms, it is therefore necessary for both parties to have a further understanding of the agreed terms before a deal is concluded and a contract is signed. The description of the subject matter of the contract must meet the standard requirements of accuracy, conciseness and clarity . For example: Where the object of the contract is equipment sale, the name, brand, unit of measurement and price of the equipment must be specified, and the description such as "purchase a computer" must not be written only. If the object of the contract is to provide services, the quality, standards, or effect requirements of the service must be specified. Do not just write descriptions such as "provide services according to the usual industry standards or meet the industry's usual service standard requirements, etc.". (3) For the quality clauses in the contract, the specifications, models, applicable standards, etc. should be written clearly, so as to avoid disputes after the contract is concluded because of whether the applicable standards are adopted or other standards. (4) The content of the contract that needs to be changed, transferred, and terminated should also be explained in detail. (5) If the contract has attachments, the content of the attachments should also be carefully prepared . (6) For contracts that include both tender documents and formal contracts, attachments, etc. (7) In order to avoid contract disputes and ensure the legality and validity of the contract, the parties concerned . 13.2 Contract management process 3. The management of contract performance includes tracking and management of the performance of the contract, mainly referring to the fulfillment of the obligations of the parties to the contract according to the contract.行业标准
切忌含混不清


国际、国家、地方、行业

注意保持与主合同一致，不要相互之间产生矛盾
在条款中列明适用顺序
可以将签订的合同到公证机关进行公证


Inspect the obligations and due responsibilities, and promptly and reasonably handle and resolve problems arising during the performance of the contract, including contract disputes, contract
breaches, and contract claims.
◆ If arbitration is agreed and the finality of the arbitral award is agreed, the court cannot be litigated.
◆ The priority of the method of dispute resolution is 谈判（协商）、调解、仲裁、诉讼.
4. When one of the parties requests to modify the contract, it should first propose to the other party in written form.
★5. Contract file management (text management) is the entire contract management 基础. Contract file management also includes original and copy management, contract document format, etc. In terms of text format, in order to restrict executives from amending the contract at will, it is generally required to use a computer to print the text 手写的旁注和修改等不具有法律效力.
★6. Claims and counterclaims are collectively referred to as contractual claims.
★7. According to the purpose of the claim, it can be divided into construction period claim and expense claim ( nature: economic compensation, non-punishment )
★8. The important prerequisite for contract claim is that one or both parties of the contract have breached the contract and caused losses , the responsibility shall be borne by the other party. As for the contract claims submitted, if the delay is caused by objective reasons and is unforeseen by the buyer, for example, if the special abnormal weather meets the conditions stipulated in the contract, the seller may get an extension of the construction period, but no compensation for the cost . 买方Not only shall be paid for the delay in the construction period caused by the reasons 卖方延长工期，还应给予费用补偿.
★9. After a claim event occurs in the project, 监理工程师mediation shall be conducted first. If mediation fails, 政府建设主管机构mediation shall be conducted. If mediation still fails, 经济合同仲裁委员会mediation or arbitration shall be conducted.
◆ Claim 赔三步走：监理工程师→政府→仲裁委员会
★10. Claim process: ①提出索赔要求→②报送索赔资料→③监理工程师答复→④监理工程师逾期答复后果→⑤持续索赔→⑥仲裁与诉讼（涉及到时间的是28天）

★11. Principles of contract interpretation
① Dominant language principle: When the two are inconsistent, the dominant language should be used语言文本prevail.
②Principle of Applicable Law : The contract should stipulate which country's law is the applicable law of the contract, and the interpretation of the contract must be carried out in accordance with the applicable law.
③ Overall interpretation principle: 特殊条件优先于一般条件，具体规定优先于笼统规定，手写条文优先于印刷条文，单价优先于总价，价格的文字表达优先于阿拉伯数字表达，技术规范优先于图纸.
④Principle of fairness and good faith : If it is still ambiguous after interpreting according to the principle of overall interpretation, it can be不利于合同起草一方（一般为买方）的原则进行解释。

4 papers

[2021 Thesis Topic] On Contract Management of Information System Projects
Project contract management is to avoid and mitigate identifiable project risks by managing the entire life cycle of project contracts.
Please discuss with the topic "Contract Management of Information System Projects":
1. Briefly describe the information system projects you have participated in and manage (project background, project scale, initiator, purpose, project content, organizational structure, project cycle, Delivered results, etc.), and explain the work you undertake in it (the project background requires your own real experience, and plagiarism and fabrication are not allowed).
2. Please combine the information system project you described, discuss your understanding of information system project contract management around the following points, and summarize your experience:
(1) 项目合同管理的过程:
(2) 在有监理参与的情况下，结合项目管理实际写出详细的合同索赔流程。
3. Please combine the information system project you described , 编制一份相对应的项目合同。（列出主要的条款内容）.

5 practice questions

[Example 1-14 above] After a claim event occurs in a project, ( ) usually conducts mediation in accordance with the contract.
A. Government administrative department B. Supervision engineer C. Arbitration committee D. Project manager
[Example 2-15 above] A company ordered 3,000 meters of high-standard copper cables according to a lump-sum contract, but the construction period was suspended due to the reason of the construction unit After half a month, after the resumption of construction, the construction unit requested the construction unit to compensate for the increased cost of purchasing cables on the grounds of the recent rise in copper prices, and asked for an appropriate extension of the construction period. Among the following statements, ( ) is correct.
A. The construction unit should compensate the construction unit for the increased cost of purchasing cables.
B. The supervision unit should protect the legal interests of the construction unit, so it should support the construction unit’s claim for compensation.
C. The claim is the embodiment of the interests of both parties in the contract, which can make the project cost more Reasonable
D. The increase in copper price is a project risk that the contractor should bear, and should not ask for compensation
. The contract signed with the tenderee belongs to ( ).
A. Single project contract B. Subcontract C. Unit price contract D. Cost incentive contract
[Example 4-16 above] When preparing a project procurement plan, different types of contracts are required to cooperate according to different procurement types. ( ) includes the actual cost paid to the seller, plus some fees that are usually included in the seller's profit.
A. Fixed total price contract B. Cost compensation contract C. Hours and materials contract D. Unit price contract
[Example 5-16 below] Outsourcing is often used in projects to improve the profitability of the project. For projects whose scale of work or product definition is not particularly clear, ( ) should generally be used when outsourcing.
A. Cost compensation contract B. Contract in the form of purchase order C. Working hours and materials contract D. Fixed lump sum contract
[Example 6-18 above] Regarding the description of contract management, which one is incorrect is ().
①Contract management includes: contract signing management, contract performance management, contract change management, contract file management, contract breach
claim
management The content of the contract should also be carefully prepared. When there is a conflict between the main contract and the appendix, the appendix should be the main one.
④ In order to make all parties to the contract have a consistent understanding of the contract, the contract must use the industry standard contract
⑤ Before signing the contract, you should understand the relevant environment and make correct decisions. Risk analysis and judgment of
A.①② B.③④ C.②⑤ D.①⑤
[Example 7-18 below] Regarding the description of the claim for breach of contract, which one is incorrect is ().
A. In the case of project claims, the supervision engineer and the government construction authority shall undertake the mediation responsibility, and the Economic Contract Arbitration Commission shall undertake the mediation or arbitration responsibility. B. The principles to be followed in
contract claims include: the rationality of claims, the validity of claims basis, and the accuracy of claim calculation Correctness
C. For delays in the construction period due to the buyer’s reasons, the seller only needs to extend the construction period, and no compensation should be given. D.
The provisions related to contract disputes in the General Principles of Civil Law and the Contract Law can be used as the law for engineering claims According to
[Example 8-19 above] the contract law has strict regulations on the contract claim process, the claimant shall formally submit a claim intention to the supervising engineer within 28 days after the occurrence of the claim in the form of a written notice; after the claim notice is issued Submit the claim report and related materials to the supervisory engineer within 28 days; the supervisory engineer will give a reply within ( ) after receiving the relevant materials of the claim report.
A. 15 days B. 15 working days C. 28 days D. 28 working days
[Example 9-19 above] When determining the type of project contract, if the scope of project work is clear and the risk is not high, it is recommended to use ().
A. Lump sum contract B. Material contract C. Cost compensation contract D. Cost plus incentive fee contract
[Example 10-19 below] Under the CPIF contract, Company A is the seller, Company B is the buyer, the actual cost of the contract is greater than the target cost, and the total payment received by Company A is ().
A. Target cost + target expense - cost overrun that Company B should bear
B. Target cost + target expense + cost overrun that Company A should bear C.
Target cost + target expense - cost overrun that Company A should bear
D. Target cost + Target cost + cost overrun to be borne by Company B
[Example 11-20 below] () Reimburses the seller for all legal costs incurred in performing the contract work (that is, the cost is reimbursed). The buyer then pays the seller a profit, which is entirely up to the buyer according to its own Subjective judgment of the seller's performance, and usually the seller has no right of appeal.
A. Total price plus incentive fee contract B. Total price plus economic price adjustment contract
C. Cost plus fixed fee contract D. Cost plus incentive fee contract
[Example 12-21 above] Under the cost plus incentive fee contract, the actual cost is greater than the target cost , the total amount of payments available to the seller is ( ).
A. Target cost + target fee - cost overrun to be borne by the buyer
B. Target cost + target fee + cost overrun to be borne by the buyer
C. Target cost + target fee + cost overrun to be borne by the seller
D. Target cost + target fee - Cost overruns to be borne by the seller
[Example 13-21 below] In the process of handling claims, the contract needs to be based, and contract interpretation is very important. ( ) principle does not belong to the principle of contract interpretation.
A. Overall explanation B. Applicable law C. Real-time correction D. Fairness and integrity
[Example 14-22 above] () scenario is suitable for signing a cost compensation contract.
①The scope of work is unclear ②The buyer bears the cost risk ③Buy standard products and the quantity is not large ④The buyer and the seller have established a stable cooperative relationship ⑤The project design has detailed details ⑥The project has a short construction period and is not complicated
A.①⑤⑥ B.①②④ C.②③⑤ D.③④⑥

reference answer