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ORDER OF THE CABINET OF MINISTERS OF THE AZERBAIJAN REPUBLIC

of December 31, 1991 No. 305r

About determination of estimated cost and forming of contract prices of construction products in the territory of the Azerbaijan Republic

For the purpose of streamlining and uniform execution of process of development and creation of works agreements on construction to approve developed by the State Committee for Construction of the Azerbaijan Republic, Gosekonomplan of the Azerbaijan Republic and Goskomstat of the Azerbaijan Republic with participation of contract organizations, ministries and departments customers the enclosed "Basic provisions by determination of estimated cost and forming of contract prices of construction products". To the State Committee for Construction of the Azerbaijan Republic to give practical help to the construction organizations, the ministries, departments and the companies customers in determination of contract prices of construction products.

 

Prime Minister

Azerbaijan Republic G. GASANOV

Appendix to the order of the Cabinet of Ministers of the Azerbaijan Republic of December 31, 1991 No. 305r

Basic provisions by determination of estimated cost and forming of contract prices of construction products

1. General provisions

1.1. These basic provisions are intended for ensuring methodological unity in case of determination of estimated cost of construction and forming of contract prices of construction products in the conditions of transition to the market relations by the companies and organizations irrespective of their patterns of ownership and departmental accessory in the territory of the Azerbaijan Republic.

1.2. In case of establishment of structure and content preproject and the design estimates on construction it is recommended to use the provisions provided by the instruction about structure and procedure for development, approval and approval of the design estimates on construction of the companies, the building and constructions (Construction Norms and Regulations 1.02.01-85) taking into account the additional requirements satisfying to the market relations.

Estimating by resource method is performed according to separate technique.

1.3. The contract price of construction (accomplishment of contract works or rendering services) is established by the customer and the contractor in case of the conclusion of the works agreement on capital construction by results of carrying out tenders (biddings) or to the mutual agreement. This price is created taking into account demand and offers for construction products, the developing conditions in the labor market, environments of material cost, the used machines and the equipment, providing profit of contract organization for expanded reproduction.

2. Methodology of cost determination of construction in the conditions of the market relations

2.1. For value assessment of construction and preparation of offers on contract price of building investor estimates (calculations) and estimates (calculations) of the contractor are constituted.

Investor estimates (calculations) - set of the documents (local and objective estimates and calculations, summary estimate calculation of construction cost, the report of costs and so forth) intended for provisional estimate by the customer of construction cost at stages of planning of capital investments, preparation of the biddings or for negotiations with contractors.

Estimates (calculations) of the contractor - set of the documents necessary at stage of preparation for the conclusion of the works agreement on capital construction intended for reasons by the contractor for the offer on the price of construction (works, services) and constituted by the contractor or by its order the project organization on the basis of announced (distributed) investor tender documentation or the materials replacing it.

2.2. Estimates (calculations) of the investor and contractor can be constituted as traditional method (i.e. on the basis of sheets of amounts of works and the corresponding standard rates, and also on the basis of the corresponding analogs), and resource method, i.e. by cost determination on the basis of data on requirement for construction of appropriate resources (materials, labor power, construction site engines, etc.) and the developed prices of these resources.

2.3. In investor estimates (calculations) the construction cost is given in two price levels:

* in permanent (basic), used for comparison of results of work of the organizations during different periods of time, the economic analysis of different fields of activity of the contractor and the customer and also as base for cost determination in current prices;

* in the flowing or predicted level which developed by the period of estimating or predicted by the time of implementation of construction and intended for forming of contract price of construction products.

2.4. The construction cost in basic level is determined with use of the basic (state) estimate norms and the prices enacted since January 1, 1991, wholesale prices and rates as of January 1, 1991, and in case of their absence - with use of estimate norms and the prices of 1984 with recalculation by application of the corresponding indexes. The level of estimated cost determined using the specified standard rates is accepted to basic.

In case of determination of basic level of estimated cost are considered:

* direct costs - on the basis of basic (state) estimate and the prices;

* overheads - on the regulations established by the Cabinet of Ministers of the Azerbaijan Republic (the resolution of November 22, 1991 No. 383) and the State Committee for Construction of the USSR (the resolution of December 29, 1990 No. 117) from the basic level of direct costs or base pay;

* planned accumulatings - on regulation of 8% of the basic amount of budgeted direct costs and overheads;

* the other costs relating to activities of the contractor proceeding from their developed level at the general contractor and the relevant subcontractors or on the basis of the calculations approved by the parties;

* reserve of funds for unexpected works, costs - according to the existing standard rates from the cost of building and construction works and other costs.

On the buildings performed by building cooperatives, joint-stock companies, rent, small and joint businesses, and also other non-state construction organizations, overheads and planned accumulatings are accepted in the sizes based on the decisions and calculations approved by the parties.

2.5. Cost in the current (predicted) price level, is determined by the customer on the basis of basic level with use of system of indexes (coefficients). Indexes (coefficients) can turn out in analysis result of data on cost, available contractors and customers, statistical observations of Goskomstat of the republic or to be established by the bodies performing price regulation. These indexes (coefficients) can be determined as in general on the cost of contractor's work or separate work types, and on the cost of the consumed resources or the cost item (material cost, labor costs, operation of construction site engines, overheads, planned accumulatings, etc.).

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