In the current bidding, how to deal with the reasonable lowest bid? Some opinions and suggestions on the problems existing in the highway market and the countermeasures. Key words: bidding: lowest reasonable price: winning the bid Under the mature market economy system, winning the bid at the lowest price, as an internationally accepted bid evaluation method, has been widely adopted in foreign government procurement and engineering construction bidding, and has become an international practice. After China's entry into WTO, in order to keep up with international practice, more and more engineering projects require that contractors be determined through bidding. In order to standardize the bidding market, China implemented the Bidding Law of People's Republic of China (PRC) on 200 1, in which Article 4 1 clearly stipulates that the lowest evaluated bid price wins the bid unless the bid price is lower than the cost. Simply put, it is the lowest reasonable price to win the bid. In order to meet the needs of the development of highway construction and improve the efficiency of bidding, China promulgated the Code for Valuation with Bill of Quantities of Construction Projects in 2003, and implemented the valuation with Bill of Quantities. This pricing model, which conforms to international practice, effectively introduces the price competition mechanism in bidding, plays down the role of pre-tender price, and finally wins the bid at a reasonable low price on the premise of ensuring quality and time limit. In this case, on the one hand, in order to increase the probability of winning the bid, the contractor hopes to win the bid at the lowest reasonable price; On the other hand, the owner also hopes to select the lowest bid price for calibration on the premise of ensuring the construction period and quality. Therefore, in the current bidding work, "quoting with bill of quantities and evaluating bids at a reasonable low price" has aroused widespread concern. 1 Owner's reasonable lowest bid winning strategy 1 In the current bidding work, there may be some risks in the owner's reasonable lowest bid evaluation. The initial transaction between the owner and the bidder only depends on the drawings, but there are too many uncertainties from the drawings to the finished products. It depends not only on the quality of construction, survey, design, construction, supervision and other departments, but also on the quality of building materials products. For example, if the accuracy and depth of the design documents are not enough, the low-priced bid winner will have an opportunity in the construction process, which will increase the cost of claim and change, and eventually make the settlement price greatly exceed the bid price; The owner did not monitor enough in the construction process, and the contractor cut corners, which seriously affected the project quality. Among many risk factors, it is very important for the owner to define the word "reasonable" in the "reasonable low price" of bidders when evaluating bids. Bid evaluation is the core task of bidding, and the wrong contractor selection caused by improper "rationality" evaluation will bring immeasurable losses to the owner. The risks caused by improper handling of "rationality" by the owner mainly include the following aspects: 1. 1. 1 The owner ignores the judgment of "rationality" in bid evaluation and blindly pursues low prices. Therefore, some construction enterprises and individuals with poor strength, chaotic management and even failing to meet the basic requirements of the project have also grasped the owner's psychology of pursuing low prices, and unrealistically worked out the bidding price lower than the enterprise's own cost through the affiliated relationship. However, due to its lack of real ability, it is impossible to guarantee the quality and construction period of the project. 1. 1.2 The owner did not make a substantive judgment on whether the low-priced bid was "reasonable". Most of the bid evaluation experts they hired were just going through the motions. Some owners simply divide the bidding documents into three parts, hire economic experts to review the quotation, engineering experts to review the construction organization design scheme, and the rest of the bidding documents are reviewed by themselves. As long as the construction scheme is technically feasible and other documents meet the tender terms, the lowest bid price will be adopted to win the bid. As a result, the contractor carried out the construction according to the construction plan, and necessary work items other than the construction drawings occurred, so the owner had to add the contract price. Some contractors won the bid at the lowest price, but many unfavorable clauses were attached to their bidding documents, implying the conditions that many owners could not meet in construction cooperation. In construction cooperation, once the owner breaches the contract, the contractor will claim for compensation at a high price. In this way, the contractor can still get higher profits when the project is completed and settled. 1. 1.3 The owner simply has no ability to accurately locate "reasonable". The evaluation ability of the owner's organization is limited, so it is impossible to find the mistakes in the quotation in time, such as mistakes, omissions, repetitions, etc. , that is, excluding possible immaterial low prices and rejecting bidders with significant deviation from the bidding documents. Or the basis for the bid evaluation committee to evaluate the reasonable lowest price is insufficient. The relevant documents they execute only stipulate in general terms that the bid evaluation committee should analyze and demonstrate the bidders' quotations in detail, without clearly stipulating the basis for argumentation, so it is impossible to evaluate the lowest price at all. 1.2 Measures that the owner can take in view of possible risks 1.2. 1 There are strict requirements for the review of the tendering units, so as to ensure that all the bidding units are capable of completing the project. At the same time, we should also do a good job in studying potential bidders and their bidding strategies and quotation skills, which is of great value to the formulation of bidding procedures and bid evaluation and calibration schemes. 1.2.2 Pre-tender estimate requires high quality, and both survey and design should be improved in depth and accuracy, especially the preparation of tender documents should be very meticulous and thoughtful. The larger the project scale, the more complex the technology, and the more detailed the bidding documents are required. Clearly describe the division of blocks, the main difficulties in engineering construction, the construction period, quality requirements, investment valuation methods, and the division of engineering insurance responsibility interface, so that bidders can clearly define their rights, responsibilities and obligations and formulate reasonable bidding strategies. Once the contract is signed, the rights and obligations of the owner, supervisor and contractor will be clear, including what kind of problems can be found in the contract. Everything to be done has been foreseen and planned. 1.2.3 is priced by bill of quantities. According to the principle of "separation of quantity and price", the owner is responsible for providing the bill of quantities reflecting the consumption of engineering entities and measures, which provides a common starting point for contractors, has unified measurement rules and dilutes the pre-tender estimate. The contractor can quote independently according to its own level and market conditions. This pricing method not only embodies the principle of "three publics", but also helps to form a competitive situation and promote contractors to adopt new technologies, new processes and new materials to reduce costs and ensure quality. At the same time, it also prevents the quotation from miscalculation and distortion due to insufficient design depth and unclear interpretation of construction drawings. 1.2.4 in the process of bid evaluation, attention should be paid to the scientific nature of bid evaluation methods, and there should be justified reasons for choosing a reasonable low price. Reasonable low price contains two meanings: one is low, and the other is reasonable low, that is, it cannot be lower than the internal cost of the enterprise. The internal cost of the enterprise is confidential, and the bid evaluation team cannot know the individual cost of the enterprise, so it is impossible to directly judge whether the bid price is reasonable by comparing the level between the enterprise cost and the bid price. Therefore, the owner can only select qualified and excellent bid evaluation members, and with the help of the collective wisdom of experts, try his best to evaluate the bid documents in many aspects and angles. If the inquiry link is added in the bid evaluation, the bidder is required to provide the comprehensive unit price analysis and quantity and machine unit price analysis table in the form of text files or spreadsheets as part of the bid documents. On the basis of analysis and comparison, the bidder is asked about the major differences or problems in the bidding documents in the form of "inquiry outline", and the bidder is required to explain on the spot at the inquiry meeting, including whether the quotation is reasonable, whether the low price is justified, whether the project quality and safety are guaranteed, etc. On this basis, the tender price is analyzed again, which changes the phenomenon of "only looking at the total tender price without looking at the price composition" and excludes the possibility of "winning the bid even if the tender price is seriously distorted". 1.2.5 Pay attention to dynamic and comprehensive supervision during construction to ensure quality. The success of cost control depends on the on-site supervision and inspection. Only effective supervision can effectively prevent the "distortion" of the project cost caused by activities such as construction linking and illegal subcontracting. It is necessary to strictly examine the construction unit when inviting tenders, and insist on regular on-site inspections, improve various acceptance systems, and ensure construction quality and safety. At the same time, it is necessary to strengthen the supervision work, require supervisors to supervise in strict accordance with the list items and contract terms, strictly distinguish between in-contract and out-of-contract items, strictly control the visa work of engineering quantity change, and reduce the disputes and claims of engineering cost. 1.2.6 Strengthen the whole process contract tracking management. In order to better control the project cost, strengthen the management of project change, claim and settlement, and solve the problem of "three excesses" in investment, we should start with standardizing the construction contract of construction projects and implement contract tracking management. Use the legal binding force of the contract to regulate and control the behavior of project construction, change and claim. Through contract filing and regular inspection, the dynamic management of the whole process of change, claim and settlement is realized, which plays a positive role in reducing the occurrence of mutual disputes and project cost disputes and ensuring the investment benefit, project progress and project quality of the construction unit. 1.2.7 There should be corresponding safeguard measures and insurance measures to facilitate risk transfer. In order to prevent the winning bidder from stopping work due to lack of funds after abandoning the bid or winning the bid at a low price for some reason, the bidder shall pay the bid bond when bidding and the performance bond before signing the contract, and the performance bond will increase with the increase of the difference between the winning bid and the pre-tender estimate. 2. The contractor adopts the strategy of winning the bid at the reasonable lowest price. 2. 1 It is risky for the owner and challenging for the contractor to win the bid at the reasonable lowest price. For example, in order to win the bid, some units do not hesitate to use various methods to make the quotation lower than their own cost price, which will lead to vicious competition among enterprises. In this way, the "reasonable low price" quotation compiled according to the actual situation will be eliminated. Enterprises face many challenges, but the biggest challenge is the law of natural selection of "survival of the fittest". Winning the bid at a reasonable low price will eliminate a number of construction units that are hopeless and difficult to survive. The screening results of bidders will make the construction units in the construction market stronger and weaker, and the weak will be at a disadvantage in the increasingly competitive market. Bidding has been screened out again and again, and there is no room for development. This is the magic of the market itself. It is necessary to change "more than enough" with market rules. 2.2 In view of the challenges that contractors may face, it is necessary to realize that the most intense competition is only the competition of strength in the final analysis. Therefore, for contractors, the most important thing is to improve their own strength, so as to be invincible in the fierce competition. The following suggestions are put forward: 2.2. 1 Establish enterprise quota suitable for this enterprise. Enterprise quota reflects the enterprise's own labor productivity, cost reduction rate, machinery utilization rate, management cost saving rate and main material purchase price level. Quota quotation is the bottom line for an enterprise to complete a certain engineering task. Only when the contractor bids at a price not lower than the bottom line can he win profits, provide sufficient economic guarantee for completing the construction task with good quality and quantity, be invincible in the fierce competition and lay the foundation for the internal cost accounting of the enterprise. 2.2.2 Cultivate high-quality professionals to provide intellectual guarantee for compiling high-level quotations. Bidding competition is essentially the competition of bidding price. It is not enough to compile a high-level quotation only by using the internal quota of the enterprise. It also needs professional cost personnel who can make full use of the quota and are familiar with the quotation composition, various expenses and rates, so as to compile a high-quality quotation, instead of making a rough and blind quotation by subjective will. 2.2.3 Strengthen cost analysis and control. The contractor should have independent private appraisal information, reflecting the individual cost of the enterprise and the actual level of the enterprise. 2.2.4 Strengthen risk management. The transaction between the owner and the contractor is essentially a futures transaction. There are too many uncertain factors in the process of project construction from commencement to completion acceptance, which may lead to many risks. In the case of winning the bid at a low price, the profit of the enterprise is meager, which reduces the bidder's ability to resist risks. Therefore, it is very necessary to strengthen risk management and control, reduce controllable losses and strive for the maximization of meager profits. 2.2.5 Strengthen the refined management of enterprises, make the dynamic management of construction projects refined, and increase revenue, reduce expenditure and reduce consumption. Under the guidance of multiple budget ideas and systematic management of all staff, whole process and all directions, the cost target approved by the post-bid budget is taken as the cost control target of the project. Through periodic cost target forecast, monthly cost plan, annual post-bid budget assessment and final calculation of post-bid budget in completion stage, the budgeted cost of the project is gradually close to the actual cost, and all indicators of post-bid budget are fully realized. 3. From the manager's point of view, the following measures are suggested: 3. 1 Improve building regulations, cultivate credit system, strengthen supervision and standardize market operation. Create a legal atmosphere of "those who abide by the law prosper, those who violate the law die", cultivate a complete social credit system, and reflect the value of honesty and credit and the price of breaking promises and breaking contracts. 3.2 Vigorously promote the "Bill of Quantities Quotation and Reasonable Low Price Bid Evaluation" and strengthen the supervision mechanism of bidding and inquiry. Using list valuation can reduce the waste of social resources, avoid contract disputes and claims caused by it, provide a unified low-price measurement standard for bid evaluation, and prevent cross-bidding and raising the winning bid price. 3.3 Cultivate and develop non-governmental intermediary organizations, and establish information and credit management system for engineering construction. Establish all kinds of information about enterprises, products and construction activities in the construction industry of the whole society for easy access and acquisition, so that both bidders can have a basic understanding of each other's situation. The construction of centralized information management will produce great social management ability, at the same time play the supervisory role of public opinion, improve the commitment value and default cost of construction units, and truly reflect the specific value of corporate reputation. 3.4 Establish the system of design compensation, design insurance and joint review of design documents to lay a solid foundation for applying for the lowest bid. By adopting this system, the general unit is required to compensate all economic losses caused by design errors, so as to restrain and promote the design unit to improve the design quality. At the same time, according to the national requirements for the design depth of design documents, the system of joint examination of design documents is established before bidding, which not only improves the design quality, but also enables appraisers to calculate the engineering quantity more quickly and accurately, laying a foundation for improving the accuracy of quotation and ensuring the authority of the lowest price. By changing the design in the construction, we can also curb the phenomenon of wrangling to achieve high price estimation. In the future bidding, it is the general trend to continue to carry out the reasonable lowest bid, which is in line with international standards, which is conducive to our better response to the challenges after China's entry into WTO and conforms to the development law of market competition. Some people may question whether there are quality hidden dangers behind the low price. There is a relationship between cost and quality, which we can't deny, but it is by no means antagonistic. The quality of the project is related to many factors, and a good project quality needs the joint efforts of all parties. At present, there is still a certain distance between the current situation of China's construction market and the conditions required by the lowest reasonable bid winning method. However, I believe that in the near future, the "reasonable low-price bidding method" will fully enter the field of construction project contracting and trading with its scientific, advanced and vigorous vitality. All construction parties should actively respond to the problems faced, communicate and discuss more, brainstorm and take corresponding feasible measures to promote the progress of the whole construction industry. References [1], Handbook on Management and Use of Road and Bridge Construction Projects edited by Lin, People's Communications Publishing House, 2005. [2] Zhou Zhi, edited by Cui Xinmao, Principles and Compilation of Highway Engineering Cost, People's Communications Publishing House, 2002. Wei Jinhua and Zhou Lin (Second Highway Engineering Bureau of Luqiao Group).