2018.6.8
Luke Hung
The Public Construction Commission (hereinafter, the “PCC”) issued the Gong-Cheng-Qi-10700176040 Circular of June 8, 2018 (hereinafter, the “Circular”) to communicate that the PCC has set up the Public Construction Price Database pursuant to law to handle construction procurement and advise that construction budgets should be prepared and bottom prices set in a reasonable manner that actually reflects the reality and based on the extent to which the costs of various work items have been affected by recent oil price fluctuations.
Article 11, Paragraph 1 of the Government Procurement Law (hereinafter, the “Law”) provides: “In order to provide reference information to procuring agencies for preparing budgets and setting bottom prices, the competent authority shall establish a procurement information center to collectively gather common business intelligence and information about categories of equivalent items and set up a construction price database.” Except for information which should be kept confidential, such information shall be provided free of charge to suppliers. Article 46, Paragraph 1 provides: “The procuring agency shall prepare itemized bottom prices based on drawings, specifications and contracts and in consideration of costs, market rates, and bid finalization data of government agencies for approval by the head of the procuring agency or personnel authorized thereby.” Article 53 of the Enforcement Rules of the Law provides: “With respect to bottom prices set by a procuring agency, the planning, designing, requesting or usage unit shall prepare estimated amounts and analyses thereof before the procuring unit in charge submits the same to the head of the procuring agency or authorized personnel thereof for approval, provided that for a procurement which is repeated or does not reach the announced amount, the procuring unit in charge may elect to make submissions for approval.”」
Pursuant to the above requirements, this Circular points out that the PCC has set up the Public Construction Price Database in accordance with Article 11, Paragraph 1 of the Law and advises that a procuring agency should reference the database in preparing its construction budgets and setting its construction bottom prices. In addition, when preparing an actual budget, the procuring agency is still advised to make flexible adjustments based on different usage purposes, in consideration of circumstances such as a project’s scale, nature, construction quality requirements, differences in construction sites, construction duration, price movements, etc., and according to professional construction judgment.