Source: Ministry of Housing and Urban-Rural Development, People's Republic of China

Shihan [2014] No. 163

Provincial and autonomous region Housing and Urban-Rural construction Department, Municipal Construction Committee, Xinjiang Production and Construction Corps Construction Bureau:

In order to facilitate accurate understanding of the Measures for the Identification, Investigation and Administration of Illegal Acts such as Illegal Subcontracting of Construction Projects (Trial Implementation) issued by our Ministry (Jianshi [2014]118), our company has organized the drafting of the interpretation of the measures, which is now distributed to you. If there is any problem in the implementation, please contact our construction supervision department.

Contact number: 010-58933327

Fax: 010-58934163

Department of Construction Market Supervision, Ministry of Housing and Urban-Rural Development, PRC

November 24, 2014

Measures for the Identification, Investigation and Administration of Illegal Acts such as Illegal Subcontracting of Construction Projects (Trial Implementation)

Department of Construction Market Regulation

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On August 4, 2014, the Ministry of Housing and Urban-Rural Development issued the Measures for the Administration of the Identification and Investigation of Illegal Acts such as Illegal Subcontracting of Construction Projects (Trial) (Jianchi City (2014) No. 118) (hereinafter referred to as the Measures for the Identification and Investigation). In order to facilitate everyone to correctly understand the specific meaning of the provisions of the "Determination and Investigation Measures", the Department of Construction market Supervision of the Ministry of Housing and Urban-Rural Development organized relevant personnel to draft the interpretation of the provisions of the "Determination and Investigation Measures" for everyone's reference, according to the provisions of relevant laws and regulations, combined with the analysis and judgment of relevant issues in the drafting process of the document.

Article 1 In order to regulate the contracting activities of construction projects, ensure project quality and construction safety, effectively curb illegal contracting, subcontracting, illegal subcontracting and linking, and maintain the order of the construction market and the legitimate rights and interests of the main participants in construction projects, These Measures are formulated in accordance with the "Construction Law", "Tendering and Bidding Law", "Contract Law", "Construction project quality Management Regulations", "Construction project safety production management Regulations", "Bidding and Bidding Law Implementation Regulations" and other laws and regulations, combined with the practice of construction activities.

This article is a provision on the purpose and basis for formulating the Measures for Identification and Investigation.

The purpose of formulating the "Measures for Identification and Investigation" is to effectively curb illegal acts such as subcontracting, illegal subcontracting and affiliated construction, standardize the order of the construction market, and ensure the quality and construction safety of the project. The establishment of the Measures for Identification and Investigation is based on the following laws and regulations: the Construction Law, the Tendering and Bidding Law, the Contract Law, the Regulations on the quality Management of Construction Projects, the Regulations on the Management of Safe production of Construction Projects, and the Regulations on the Implementation of the Tendering and Bidding Law.

Article 2 The term "construction projects" as mentioned in these Measures refers to building construction and municipal infrastructure projects.

This article is a provision on the scope of application of the Measures for Identification and Investigation.

Housing construction engineering refers to various structural forms of civil construction engineering, industrial construction engineering, structural engineering and supporting roads, communications, pipe network pipeline and other facilities engineering. The project includes foundation and foundation, main structure, building roof, decoration, building curtain wall, attached civil air defense works, water supply and drainage, heating, ventilation and air conditioning, electrical, fire protection, intelligence, lightning protection and other supporting works.

Municipal infrastructure projects include water supply engineering, drainage engineering, gas engineering, thermal engineering, urban road engineering, urban bridge engineering, urban tunnel engineering (refers to the mountain and river tunnels, subway tunnels, underground traffic engineering, underground street passageways in urban planning areas), public transportation engineering, rail transit engineering, environmental sanitation engineering, lighting engineering, greening engineering.

Article 3 The Ministry of Housing and Urban-Rural Development shall be responsible for the unified supervision and administration of the identification and investigation of illegal activities such as illegal contracting, subcontracting, illegal subcontracting and affiliations of construction projects throughout the country.

The competent departments of housing and urban and rural construction of the local people's governments at or above the county level shall be responsible for the identification and investigation of illegal contracting, subcontracting, subcontracting and affiliating of construction projects within their respective administrative areas.

This article is about the identification and investigation of illegal acts, the division of responsibilities and the implementation of the subject. The specific division of responsibilities for the identification and investigation of illegal construction projects within the administrative area, such as illegal contracting, subcontracting, illegal subcontracting and affiliations, shall be defined by the competent departments of housing and urban and rural construction of the provincial people's governments in accordance with the provisions of these Measures in the formulation of local implementation rules.

Article 4 The term "illegal contracting" as mentioned in these Measures refers to the acts of the construction unit that contracts the project to the unit or individual that does not have the corresponding qualification conditions, or dismemberes the contracting and so on in violation of laws and regulations.

This article is a provision on the definition of illegal contracting.

This article is based on the "Construction Law", "Construction project quality Management Regulations" and other laws and regulations on the prohibition of project contracting, the definition of illegal contracting behavior. Under this article, ".... And other violations of laws and regulations "is the focus and difficulty of understanding.

For example, Article 22 of the Construction Law stipulates: "The contracting unit shall contract the construction project to the contracting unit with the corresponding qualification conditions." Article 24 stipulates: "Advocate the implementation of general contracting of construction projects, and prohibit the subcontracting of construction projects." A construction project that should be completed by one contractor shall not be divided into parts and contracted out to several contractors." Article 7 of the Regulations on the Quality Management of Construction Projects stipulates: "The construction unit shall contract the project to the unit with the corresponding qualification level." A construction unit may not subcontract a construction project."

It should be pointed out that because individuals do not meet the main conditions of enterprise qualification, the current laws and regulations stipulate that the project should be contracted or subcontracted to the contractor. Therefore, in order to accurately define illegal contracting, subcontracting, affiliating, and illegal subcontracting, the practice of contracting the project to an individual by the owner or subcontracting the project to an individual by the contractor is classified as an illegal act. In addition, the construction units here also include agent construction units.

Article 5 In any of the following circumstances, it is illegal to contract:

(1) The construction unit contracts the project to an individual;

(2) The construction unit contracts the project to the construction unit that does not have the corresponding qualification or safety production permit;

(3) failing to perform the statutory contracting procedures, including bidding that should be conducted in accordance with the law without bidding, direct contracting that should be applied for without application or approval of the application;

(4) The construction unit sets unreasonable conditions for bidding and tendering, restricting or excluding potential bidders or bidders;

(5) The construction unit breaks down the construction of a unit project into several parts and contracts them to different general contractors or specialized contractors;

(6) The construction unit contracts out a unit project or a sub-division project within the scope of the construction contract;

(7) The construction unit violates the provisions of the construction contract and requires the contractor to select its designated subcontractor through various forms;

(8) Other illegal contracting acts as provided for by laws and regulations.

This article is about the provisions of eight specific manifestations of illegal contracting.

The cases (1), (2) and (5) are directly specified according to the definition of illegal contracting; (3), (4), (6) and (7) are the four specific situations stipulated in the Construction Law, the Law on Tendering and Bidding and the Regulations on the Implementation of the Law on Tendering and Bidding for projects, such as never performing the legal procedures for tendering and bidding, setting unreasonable conditions for tendering and bidding, awarding contracts separately and appointing subcontractors; (8) The situation is a backstop clause, which needs to be identified according to relevant laws and regulations and specific illegal acts. For example, Article 40 of the Urban and Rural Planning Law stipulates: "Where buildings, structures, roads, pipelines and other projects are constructed within a city or town planning area, the construction unit or individual shall apply to the urban and rural planning department of the city or county people's government or to the town people's government as determined by the people's government of a province, autonomous region or municipality directly under the Central Government for a construction project planning license." ... " If the construction unit violates the provisions and contracts the construction project without applying for the construction project planning permit, it should also be an illegal contract.

According to the "Construction Engineering Classification Standard" (GB/ T50841-2013), the unit project refers to a building or structure with independent construction conditions and can form an independent use function. Except for specialized projects that have been separately approved, a construction unit may not contract out the construction of sub-projects of a unit project to specialized contractors.

Article 6 Subcontracting as mentioned in these Measures refers to the act of transferring all the contracted projects or disassembling all the contracted projects to other units or individuals in the name of subcontracting after the construction unit has contracted the projects and fails to perform the responsibilities and obligations agreed in the contract.

This article is a provision on the definition of subcontracting.

Although the Construction Law and Contract Law do not specify the definition of subcontracting, they do stipulate two types of subcontracting prohibited by law. As stipulated in Article 28 of the Construction Law, "It is prohibited for a contractor to subcontract all the construction projects it has contracted to others, and it is prohibited for a contractor to subcontract all the construction projects it has contracted to others in the name of subcontracting." Article 272 of the Contract Law stipulates that "a contractor shall not subcontract all the construction projects he has contracted to a third party or subcontract all the construction projects he has contracted to a third party in the name of subcontracting." The third paragraph of Article 78 of the Regulations on the Quality Control of Construction Projects stipulates: "Subcontracting as mentioned in these Regulations refers to the act of a contractor contracting a construction project, failing to perform the responsibilities and obligations agreed upon in the contract, and transferring all the construction projects contracted by it to others or disintegrating all the construction projects contracted by it to other units in the name of subcontracting." The definition of "subcontracting" in this approach is derived from this, and the expression is more detailed and precise.

Article 7 Subcontracting occurs under any of the following circumstances:

(1) The construction unit transfers all the projects contracted by it to other units or individuals for construction;

(2) After the general contractor or specialized contractor dismemberes all the projects contracted by him, he transfers them to other units or individuals for construction in the name of subcontracting;

(3) The general contractor or professional contractor does not set up a project management organization at the construction site or does not send project leaders, technical leaders, quality management leaders, safety management and other main management personnel, does not perform management obligations, and does not organize and manage the construction activities of the project;

(4) The general contractor or specialized contractor does not perform the management obligations, only collects fees from the actual construction unit, and the procurement of major building materials, components and engineering equipment is carried out by other units or individuals;

(5) The scope of contracting by the labor subcontracting unit is all the projects contracted by the general contractor or the specialized contractor, and the labor subcontracting unit receives the entire project price except the "management fee" paid to the general contractor or the specialized contractor;

(6) The general contractor or specialized contractor directly or in disguised form transfers all the contracted projects to other units or individuals for construction by means of cooperation, joint venture, individual contracting, etc.;

(7) Other subcontracting activities as provided for by laws and regulations.

This article is a provision on seven specific manifestations of subcontracting.

Cases (1) and (2) are directly specified according to the definition of subcontracting; (3), (4), (5) and (6) are the four specific situations stipulated by the main management person, the performance of management obligations and the procurement of main materials and equipment, labor subcontracting and other forms; (7) The situation is a backstop clause, which specifies that in addition to the six situations specified, other subcontracting acts stipulated by laws and regulations should also be identified as subcontracting.

The first situation is a more typical and common subcontracting behavior, which is easier to understand and identify.

(b) Description of the situation: First, the subcontractor and the subcontractor must be two independent legal persons or other organizations or individuals. If the contractor contracts the project to his own branch or internal agency (excluding subsidiaries) in the form of internal contracting, it does not constitute subcontracting. Secondly, the contractor must dismember all the construction projects contracted by it and transfer them to other units or individuals in the name of subcontracting to constitute subcontracting. If the contractor only subcontracts the parts or a part of the contracted project to other units or individuals, it shall constitute subcontracting or illegal subcontracting and not subcontracting.

(3) Description of circumstances: In the normal and legal construction contracting relationship, after undertaking the project, the construction unit shall set up a project management organization at the construction site and send actual management personnel, perform the responsibilities and obligations agreed on in the contract, and organize and manage the construction activities of the project. If the construction unit does not set up a project management organization at the construction site or does not assign the corresponding project leader, technical leader, quality management person, safety management person and other main management personnel, while the site construction is in progress, it is deemed to have failed to perform the responsibilities and obligations agreed in the contract, and has not organized and managed the construction activities of the project, which can be identified as subcontracting. It should be noted that if the construction unit has set up a project management organization on the site in its own name, but the main management personnel of the project management organization (including the project leader, the technical leader, the quality management person, the safety management person, etc.) and the construction unit have no legitimate labor contract, salary, and social insurance relationship, the behavior of the construction unit can be identified as subcontracting. The actual constructor may be identified as an affiliate, and this paragraph corresponds to the identification of the circumstances in Article 11 concerning affiliate (5).

(4) Description of the situation: In the normal and legal construction contracting relationship, the procurement of major building materials, components and engineering equipment should be responsible for the procurement of the construction unit. However, laws and regulations do not prohibit the construction unit to entrust other units or individuals to purchase materials and equipment, especially the entrusted purchase of imported materials and equipment, if the construction unit can provide materials to prove that other units or individuals to purchase materials and equipment is entrusted by its, there is evidence of agency and other units or individuals are not responsible for the specific construction matters in addition to the entrusted purchase of materials and equipment; At the same time, the construction unit can prove that it has fulfilled the responsibilities and construction management obligations agreed in the contract, and it is not identified as subcontracting.

(5) Description of circumstances: labor subcontracting is legal, but the fees charged by the labor subcontracting unit shall be limited to labor compensation and necessary auxiliary materials. If the main building materials, components, equipment, etc. are purchased by the labor unit, the construction equipment and turnover materials are also leased by the labor subcontractor. The scope of contracting of the labor subcontractor is the same as that of the general construction contractor or the professional contractor, and the general construction contractor or the professional contractor can be identified as subcontracting.

(6) Description of the situation: cooperation, joint management, internal individual contracting and other forms are not prohibited by law, and are effective measures to enhance the competitiveness and enterprise efficiency of the construction unit in the production and operation process. However, in recent years, there have been a large number of illegal situations in the form or name of cooperation, joint venture, internal individual contracting, etc., directly or in disguise, all the contracted projects are transferred to others for construction. How to determine, the key lies in: (1) whether the contractor actually participates in the organization of construction and management of the project and cooperation, whether the associate participates in the construction in its own identity or the identity of the consortium; (2) Whether the partner or joint venture has the qualification to implement the project. Both must be met in order to be identified as cooperation, joint construction, rather than subcontracting or affiliate. If the partner or joint venture is not qualified, or does not appear in its own identity or the identity of the consortium in the project, but is still in the name of the contractor, the partner or joint venture shall be identified as an affiliate behavior, and the contractor shall be identified as subcontracting. The key to internal contracting is to see whether the project management organization is formed, and whether there is a labor contract, wage, social security relationship between the main site management personnel and the construction unit, and whether there is a unified asset and financial close