By treaty building contract the contractor is obliged, within the period established by the contract, to build a certain object on the instructions of the customer or to perform other construction works, and the customer undertakes to create the necessary conditions for the contractor to perform the work, accept their result and pay the stipulated price (clause 1 of article 740 of the Civil Code of the Russian Federation).
The regulatory framework for obligations to perform construction work is the general provisions on the contract, as well as the special norms of the paragraph on construction contracts in Ch. 37 of the Civil Code of the Russian Federation. In cases where work is performed under a construction contract to meet the household or other personal needs of a citizen-customer, the provisions of the paragraph on the rights of the customer under (and. 3, article 740 of the Civil Code of the Russian Federation) apply accordingly to the relations of the parties.
It is mandatory during construction to comply with SNiPs ( building codes and rules). SNiPs, as well as standards and technical specifications for building materials, parts, structures are regulatory and technical documents, i.e. acts regulating the technical processes of designing construction objects, carrying out construction and installation works, as well as containing technical requirements for materials and structures used in construction.
Parties contracts are the customer and the contractor. Any entity can be a customer civil law. If a citizen-consumer acts as a customer, then the contract is a household contract, and if a public entity, then a contract for state or municipal needs. Certain restrictions may be established for foreign investors in cases provided for federal law dated July 9, 1999 No. 160-FZ "On foreign investment in Russian Federation».
The contractor may be individuals and legal entities however, they must be licensed to carry out construction work.
The specifics of a construction contract is the possibility for the customer to involve an engineer (engineering organization) in the construction, provided for in Art. 749 of the Civil Code of the Russian Federation.
The relationship of the customer with the engineer (engineering organization), as follows from the specified Art. 749 of the Civil Code of the Russian Federation are based on an agency agreement. It defines the scope of the engineer's responsibilities to the customer. At the same time, to perform legal actions on behalf of the customer, the engineer must obtain a power of attorney from him, since in this case he acts on behalf of the customer, while actual actions are carried out by him on his own behalf.
The powers of an engineer may include control and supervision of construction, giving instructions binding on the contractor on behalf of the customer, etc. The need for the participation of an engineer may be caused by the customer's lack of special knowledge in the field of construction.
Subject a construction contract is the construction of a specific facility or the performance of other construction works.
In paragraph 2 of Art. 740 specifies the subject of a construction contract: it can be the construction or reconstruction of an enterprise, building (including a residential building), structure or other object, as well as the performance of installation, commissioning and other works inextricably linked with the object under construction. Unless otherwise provided by the contract, the rules on building contracts shall also apply to work on overhaul buildings and structures.
The construction contract may provide for the obligation of the contractor to ensure the operation of the object after its acceptance by the customer within the period specified in the contract.
A feature of the construction contract is the mandatory availability of technical documentation and estimates. In accordance with paragraph 1 of Art. 743 of the Civil Code of the Russian Federation, the contractor is obliged to carry out construction in accordance with the technical documentation that determines the scope, content of work and other requirements for them, and with an estimate that determines the price of the work.
Thus, the subject of a construction contract should be detailed in the technical documentation.
The essential terms of the construction contract are the composition and content of the technical documentation, as well as which of the parties and within what time period must submit the relevant documentation (paragraph 2 of article 743). At the same time, the absence of duly approved technical documentation is not an unconditional basis for recognizing the contract as not concluded if the totality of the terms of the contract (for example, a reference to standard project) allows you to define its subject.
Price in the construction contract should be determined by the estimate. Considering that, in accordance with Art. 746 of the Civil Code of the Russian Federation, payment is made in the amount provided for by the estimate, it should be assumed that the price of the contract is its essential condition.
Article 744 of the Civil Code of the Russian Federation provides for the right of the customer to make changes to the technical documentation, provided that the additional work caused by this does not exceed ten percent of the total construction cost indicated in the estimate and does not change the nature of the work provided for in the construction contract.
Changes in a larger volume are carried out on the basis of an additional estimate agreed by the parties.
Contractor must:
Customer must:
In accordance with Art. 742 of the Civil Code of the Russian Federation, the contract may provide for the obligation of the party, which bears the risk of accidental loss or accidental damage to the construction object, material, equipment and other property used in construction, or liability for causing damage to other persons during construction, to insure the corresponding risks.
The risk of accidental loss or accidental damage to the construction object before the acceptance of this object by the customer is borne by the contractor (clause 1 of article 741 of the Civil Code of the Russian Federation). However, the customer, who has previously accepted the result of a separate stage of work, bears the risk of the consequences of loss or damage to the result of work that occurred through no fault of the contractor (clause 3, article 753 of the Civil Code of the Russian Federation).
The customer has the right to exercise control and supervision over the progress and quality of the work performed by the contractor, compliance with the deadlines for their implementation, the quality of the customer's materials provided by the contractor, as well as the correct use of the customer's materials by the contractor, without interfering with the contractor's operational and economic activities. To exercise this right, as we said above, the customer has the right to involve an engineer (engineering organization).
A feature of a construction contract is cooperation of the parties which manifests itself here to a much greater extent than in other contract agreements (Article 750 of the Civil Code of the Russian Federation). If, during the construction and related works, obstacles to the proper execution of the contract are found, each of the parties is obliged to take all reasonable measures in its power to eliminate such obstacles. The party that has not fulfilled this obligation loses the right to compensation for damages caused by the fact that the relevant obstacles were not removed. The party's expenses related to the performance of such obligations shall be reimbursed by the other party only in cases expressly provided for by the contract.
The specifics of a construction contract is a relatively long cycle and nature of work (construction and reconstruction of buildings and structures).
The result of construction work is a finished, prepared for operation manufacturing enterprise, residential building, public building.
Under a building contract the contractor is obliged to build a certain object or perform other works on the instructions of the customer within the time period established by the contract. The customer is obliged to create the necessary conditions for the contractor to work, accept the results of the work and pay the price.
Essential conditions of this agreement are its subject, price and term (clause 1 of article 740 of the Civil Code of the Russian Federation).
Subject contracts can be: a new construction facility, reconstruction and technical re-equipment of an existing enterprise. overhaul of buildings, installation of technological equipment. performance of launching works (clause 2 of article 740 of the Civil Code of the Russian Federation). Features of the construction contract:
in the face of the customer are specialized organizations that are representatives of those persons. for which the facility is being built, construction organizations and individual entrepreneurs holding a license for construction activities act as contractors. Participants of such an agreement may also be investors - persons investing their funds in construction;
A necessary attribute is the construction site (assistance from the customer to the contractor).
The rules under the contract, unless otherwise provided by the contract, apply to the capital repairs of buildings.
Of particular importance is the technical documentation, estimates. estimate determines the price of work by items (parts or stages of work).
white paper establishes the specifics, frequency, sequence, nature of work, as well as climatic requirements (tropical, antarctic, etc.). The contractor is obliged to perform all the work specified in the technical documentation, and in accordance with the estimate. The text of the agreement defines the necessary content of the technical documentation, as well as the party that prepares it.
The customer has the right on general rule refuse to accept the result of the work if they have fatal flaws (clause 6 of article 753 of the Civil Code of the Russian Federation).
If during the course of work the contractor discovered the need to increase estimated costs, he is obliged to inform the customer about it. The contractor has the right to demand a revision of the estimate if, for reasons independent of him, the cost of the work exceeded the estimate by at least 10%. If a response is not received within 10 days, unless another period is established by the contract, the contractor is obliged to suspend the relevant work with the attribution of losses caused by downtime to the customer's account.
The customer has the right to prove that there is no need to increase the cost estimate, and if it was possible to prove this, he is exempt from additional costs.
A warning from the contractor also has legal implications. If the contractor continues work without warning or without a response from the customer, then he loses the right to demand additional payment, unless he proves the need for immediate action in the interests of the customer.
The customer has the right to make changes to the technical documentation. if the additional work caused by this does not exceed 10% of the estimate in value and does not change the nature of the work established by the contract.
As a general rule, in a construction contract, the provision of materials is the responsibility of the contractor.
If the customer supplies the materials and it is discovered that it is impossible to use the materials without deteriorating the quality of construction, and the customer refuses to replace the materials, the contractor has the right to refuse to perform the contract and demand payment for the work already completed.
Construction contract, unlike other types of contracts. characterized additional responsibilities.
The customer timely provides a site for a construction site with an area and in the condition provided for by the contract; provides the device of necessary communications (access roads, power supply). He has the right to monitor the progress and quality of work, compliance with deadlines and the use of materials, without interfering with the contractor's operational activities.
If a deviation from the terms of the contract is discovered that worsens the quality, the customer is immediately obliged to report this to the contractor.
If, for reasons beyond the control of the parties, there is a suspension of work and conservation of the object, the customer is obliged to pay in full for the work performed until the moment of conservation, as well as to reimburse the costs caused by the need to stop work. The risk of construction conservation lies with the customer.
The customer is obliged to immediately start accepting the results or the queue of the result of work upon receipt of a message from the contractor that they are ready for delivery.
As a general rule, the customer carries out acceptance at his own expense.
Regulatory acts provide for cases of participation in the acceptance of representative bodies of local self-government or state authorities.
Based on the results of acceptance, an act is drawn up, which is signed by the customer and the contractor. In case of refusal, a corresponding note is made in the act.
A unilaterally signed act may be declared invalid by the court if there are no grounds for refusal in it.
The contractor is responsible for the deviation from the requirements of technical documents, mandatory building codes and rules, for the failure of the facility to achieve the indicators provided for in the technical document.
The contractor is not responsible for minor deviations from the technical document if he proves that they did not affect the quality of the object (there is a presumption that deviations from the technical document are inadmissible, therefore the fact of non-deterioration of quality must be proved).
The Contractor shall be liable for deficiencies found within the warranty period, unless he proves that they occurred due to normal wear and tear of the object or part of it, improper operation or incorrectly drawn up operating instructions developed by the customer or persons involved by the customer.
The deadline for detecting deficiencies is 5 years.
The customer organizes and carries out the acceptance of the result of the work performed at his own expense, unless otherwise provided by the contract (paragraph 1, clause 2, article 753 of the Civil Code of the Russian Federation).
The customer, having received a message from the contractor about the readiness for delivery of the result of the work performed under the contract or the completed stage of work, is obliged to immediately proceed to its acceptance (clause 1, article 753).
In cases provided for by law, representatives of state bodies and local governments must participate in the acceptance (paragraph 2, clause 2, article 753). In particular, the participation of the state selection committee in the commissioning of residential buildings, in the acceptance of works financed from the budget, and in other cases is mandatory. Usually, the acceptance of construction work with the participation of government agencies is carried out in two stages: first, the work is accepted by a working commission with the participation of the customer, contractor, designer, and then the state commission with the participation of the customer, contractor.
The delivery of the result of work by the contractor and its acceptance by the customer are formalized by an act signed by both parties. If one party refuses to sign the act, a note is made in it and the act is signed by the other party. A unilateral act may be declared invalid by the court only if the motives for refusing to sign the act are recognized by it as justified (and 4, Article 753).
The Contractor shall be liable for deviations from the requirements provided for in the technical documentation and in the building codes and regulations binding on the parties. To this is added a special responsibility for the failure to achieve the production capacity of the enterprise specified in the technical documentation, as well as other indicators of the construction site. A similar rule is established for contracts the subject of which is the renovation, rebuilding, restoration or other reconstruction of a building or structure: the contractor is responsible for the reduction and loss of strength, stability, and reliability of the building, structure or its parts (clause 1, article 754 of the Civil Code of the Russian Federation ).
At the same time, the contractor is released from liability for minor deviations from the technical documentation made by him without the consent of the customer (paragraph 2 of article 754). However, for this he must prove that such deviations did not affect the quality of the construction object.
In accordance with paragraph 1 of Art. 755 of the Civil Code of the Russian Federation, the contractor, unless otherwise provided by the construction contract, guarantees the achievement by the construction object of the indicators specified in the technical documentation and the possibility of operating the facility in accordance with the construction contract during the warranty period. The statutory warranty period may be extended (but not reduced) by agreement of the parties.
The term for detecting deficiencies, which, in contrast to the two years generally established for a work contract (Article 724 of the Civil Code of the Russian Federation), is now five years from the date of transfer of the result of work, if more long term not established by contract.
In accordance with paragraph 1 of Art. 740 of the Civil Code, under a construction contract, the contractor undertakes to build a certain object on the instructions of the customer or perform other construction work within the period established by the contract, and the customer undertakes to create the necessary conditions for the contractor to perform the work, accept their result and pay the stipulated price.
Regulation of this type of contracting relationship is carried out by the norms of § 3 Ch. 37 GK "Construction contract". The general provisions on the contract contained in § 1 of this chapter shall apply, unless otherwise provided by the rules on construction contracts provided for in the Civil Code.
The norms governing relations on a construction contract are contained in many other regulatory legal acts. These include, in particular:
In cases where, under a building contract, work is performed to meet the household or other personal needs of a citizen, the rules of § 2 Ch. 37 of the Civil Code "Household contract" (clause 3 of article 740 of the Civil Code).
In addition, acts of a recommendatory nature are used in regulating construction contract relations. Such an act, in particular, is the Guidelines for the preparation of construction contracts for construction in the Russian Federation adopted by the Ministry of Construction of Russia on June 10, 1992.
The parties to a construction contract are the customer and the contractor.
Investors who make capital investments in the Russian Federation using their own and (or) borrowed funds in accordance with the legislation of the Russian Federation, as well as individuals and legal entities authorized by investors who implement investment projects(clauses 2, 3, article 4 of the Federal Law dated "On investment activities in the Russian Federation, carried out in the form of capital investments").
Contractors may be construction, construction and installation, design and construction and other organizations operating in the field of construction production, as well as individual entrepreneurs. To perform the relevant types of work, they must have a license (clause 4, article 4 of the said Federal Law).
When implementing capital construction the general contracting system is widely used, in which the customer enters into an agreement with one construction organization - general contractor, attracting specialized organizations as subcontractors to perform individual work packages. General contractors and subcontractors may also be citizens engaged in entrepreneurial activities without forming a legal entity.
With the consent of the contractor, the customer concludes contracts for the performance of certain installation and other special works on this construction object with other contractor installation and other specialized organizations. Such concluded customer contracts are commonly called direct contracts.
The subject of a construction contract (subcontract) is the end result of the contractor's (subcontractor's) activity. Under a construction contract, this is a corresponding construction object (enterprise, building, structure) handed over by the contractor to the customer, and under a subcontract - a complete set of certain works (installation, sanitary, etc.), which are part of the work on the construction object as a whole and delivered by the subcontractor to the general contractor.
There are the following kinds construction contracts:
Unless otherwise provided by the contract, the rules on a construction contract also apply to major repairs of buildings and structures (clause 2, article 740 of the Civil Code).
The building contract must be concluded in writing. In this case, the form (sample) of the contract can be used, which is an annex to the above-mentioned Guidelines for drawing up construction contracts in the Russian Federation.
The essential terms of a building contract are the terms on the subject matter, price and term of the contract.
When determining the price of the contract, the parties may be guided by The procedure for determining the cost of construction and free (contractual) prices for construction products in the conditions of development of market relations(Appendix to the letter of the Gosstroy of Russia dated December 29, 1993 No. 12-349).
In accordance with par. 1 p. 1 art. 708 of the Civil Code, the term of a construction contract is determined by agreement of the parties by indicating in the contract the initial and final dates for the performance of work. By agreement of the parties, the contract may also establish deadlines for the completion of individual stages of work, if the contract provides for the delivery of the result of the work performed, first by stages, and then as a whole for the construction object.
As a rule, the construction contract provides for the contractor's warranty obligations for the constructed buildings and structures or for the completed work packages.
In order to enter into a building contract, prior receipt certain documents. For the customer, such a document is a building permit issued by federal agency executive power, an executive body of a constituent entity of the Russian Federation or a local self-government body in accordance with their competence (Article 51 Urban Planning Code), and for the contractor, a license (permit) to carry out construction activities.
The main obligation of the contractor under a construction contract is to carry out the construction (expansion, reconstruction, technical re-equipment) of the enterprise, building, structure provided for by the contract. An important condition for the execution of the contract is that construction and installation and other work on the facility must be performed in accordance with the technical documentation that determines the scope, content of work and other requirements for them, and the estimate that determines the price of work (design and estimate documentation).
When carrying out construction, the contractor is obliged to comply with construction norms and rules (SNiPs), other technical norms and rules, as well as the requirements of the law and other legal acts on environmental protection and on the safety of construction work (Article 751 of the Civil Code).
The contractor is obliged to provide the construction site with the necessary materials, including parts and structures, as well as equipment, if the construction contract does not provide that the construction in general or in a certain part is ensured by the customer (Article 745 of the Civil Code).
The obligation of the contractor is also the erection of a building, structure or other construction object or the performance of other construction works and the delivery to the customer of the result of the work performed under the construction contract within the time period established by the contract.
The law provides for some specific obligations of the customer under a construction contract. Thus, the customer is obliged to provide a land plot for construction in a timely manner. Area and condition of the provided land plot must comply with the conditions contained in the contract, and in the absence of such conditions - ensure the timely start of work, their normal conduct and completion on time.
The customer is obliged, in cases and in the manner provided for by the construction contract, to transfer to the contractor for use the buildings and structures necessary for the performance of work, to ensure the transportation of goods to his address, temporary connection of power supply networks, water and steam pipelines, and provide other services.
Payment for the above services is made in the cases and on the terms stipulated by the construction contract (Article 747 of the Civil Code).
The customer is also required to transfer to the contractor documents confirming the permission of the relevant authorities to carry out work in places where underground utilities pass, in the area of overhead power lines and communication lines.
In accordance with Art. 748 of the Civil Code, the customer has the right to exercise control and supervision over the progress and quality of the work performed, compliance with the deadlines for their implementation (schedule), the quality of the materials provided by the contractor, as well as the correct use of the customer's materials by the contractor, without interfering in the operational and economic activities of the contractor.
The customer, who discovered in the course of control and supervision over the performance of work, deviations from the terms of the construction contract, which may worsen the quality of work, or other shortcomings thereof, is obliged to immediately notify the contractor about this. The customer who has not made such a declaration loses the right to refer to the shortcomings discovered by him in the future.
A characteristic feature of a construction contract is the cooperation of the parties (Article 750 of the Civil Code).
In view of the specific and complex nature of the object of the construction contract, the delivery and acceptance of work performed under this contract is especially regulated (Article 753 of the Civil Code). As provided by law or otherwise legal acts cases, representatives of state bodies and local self-government bodies should participate in the acceptance of the result of work.
The delivery of the result of work by the contractor and its acceptance by the customer are formalized by an act signed by both parties. If one of the parties refuses to sign the act, a note is made in it and the act is signed by the other party. A unilateral act of delivery or acceptance of the result of work may be declared invalid by the court only if the motives for refusing to sign the act are recognized by him as justified. The customer has the right to refuse to accept the result of the work in case of detection of deficiencies that exclude the possibility of its use for the purpose specified in the construction contract and cannot be eliminated by the contractor or customer.
Acceptance of completed construction objects is carried out by the customer or another person authorized by the investor. The customer may involve the user of the facility (operating organization), developers of technical documentation, specialized organizations and other legal and individuals, creating, if necessary, a selection committee.
In cases where this is provided for by law or a construction contract, or follows from the nature of the work performed under the contract, acceptance of the result of the work must be preceded by preliminary tests. Accordingly, acceptance is carried out only with a positive result of such tests (clause 5, article 753 of the Civil Code).
Acceptance of the completed construction object is documented by the act of acceptance.
The Contractor is obliged to timely eliminate the shortcomings and defects identified in the process of acceptance of construction and installation works. The deadline for eliminating these shortcomings is specifically stipulated in the acceptance certificate.
Payment for the work performed by the contractor is made by the customer in the amount provided for by the estimate, on time and in the manner established by law or the building contract. In the absence of relevant instructions in the law or contract, payment for work is made after the final delivery of the result of work (clause 1 of article 711 of the Civil Code). At the same time, the significant cost and duration of capital construction require advance payments for the contractor's activities. However, he has the right to demand the payment of an advance or a deposit only in the cases and in the amount specified in the law or the contract (clause 2 of article 711 of the Civil Code).
The responsibility of the contractor for the quality of work has its own specifics. According to Art. 754 of the Civil Code, the contractor is liable to the customer for deviations from the requirements provided for in the technical documentation and in the building codes and regulations binding on the parties, as well as for the failure to achieve the indicators of the construction object specified in the technical documentation, including such as the production capacity of the enterprise.
Unless otherwise provided by the construction contract, the contractor guarantees that the construction object will achieve the indicators specified in the technical documentation and the possibility of operating the object in accordance with the contract during the warranty period. The warranty period established by law may be extended by agreement of the parties (Article 755 of the Civil Code).
Upon presentation of requirements related to inadequate quality of work, the rules of paragraphs 1-5 of Art. 724 GK. At the same time, the deadline for detecting deficiencies in accordance with paragraph 2.4 of this article is five years (Article 756 of the Civil Code).
If the construction contract provides for the recovery of a penalty (fine, penalty) for its non-performance or improper performance, the losses shall be recovered net of its deduction (set-off penalty). However, the contract may provide otherwise: the recovery of only the penalty, the recovery of losses in the full amount in excess of the penalty, the recovery of either the penalty or damages.
On January 1, 2009, a new regulation on accounting"Accounting for construction contracts" (PBU 2/2008), approved by the Order of the Ministry of Finance of the Russian Federation of October 24, 2008 No. 116n (hereinafter PBU 2/2008), which established new rules for Russian accountants to record revenue and write off construction costs. The new rules are as close as possible to international standards. Yet the differences remain.
In IFRS, IAS 11 “Contracts for work” is devoted to accounting for income and expenses on construction contracts. The standard considers the accounting of construction work performed under contracts with customers, as well as works on the destruction or restoration of objects and the environment, the provision of services related to the construction of objects (for example, the creation or management of a project).
The main issue, which is regulated by the international standard IAS 11 "Contracts", is the issue of recognition in the reporting of income, expenses and financial results when performing construction work under long-term contracts with customers, namely the interconnection of reporting date expenses with accrued income.
The requirement of the international standard IAS 11 "Contracts" is that the construction company is obliged in each reporting period to reflect income and expenses on construction contracts and, thus, form a financial result based on the scope of work performed, taking into account the profitability of each contract.
According to IAS 11, the moment of recognition of the financial result under construction contracts is not made dependent on the actual document flow under specific contracts (acts signed by the parties), but is of a periodic nature. This methodology implements the main approach of IFRS: equal distribution of the financial result between the reporting periods. Recognition of the financial result on long-term construction contracts at the end of construction is not an acceptable approach from the point of view of IFRS.
Recall that in accordance with the IFRS Principles income an increase in economic benefits in the form of an inflow of assets or a decrease in liabilities resulting in an increase in capital, other than the contribution of owners, is recognized. Expenses are defined as a decrease in economic benefits in the form of an outflow of assets or an increase in liabilities, leading to a decrease in capital, not related to its distribution among owners. Income and expenses should be recognized in the financial statements when it becomes obvious that the possibility of receiving (outflow) of economic benefits and their reliable assessment is possible. In fact, this means that for the recognition of income in IFRS, it does not matter whether an interim act of acceptance of work is executed under the contract.
RAS. Recall that the domestic legislation on accounting is basically focused on source documents(See Law "On Accounting" No. 129-FZ of November 21, 1996).
At the same time, paragraph 13 of the accounting regulation “Income of the organization” (PBU 9/99), approved by Order of the Ministry of Finance of the Russian Federation dated 06.05.99 No. 32n, always contained an indication that organizations can recognize in accounting revenue from the performance of work , the provision of services, the sale of products with a long production cycle as soon as the work, service, product is ready. This method of determining revenue can be used if it is possible to determine the readiness of work, services, products.
This aspect of the legislation was ignored by domestic accountants and, as practice showed, was not used in accounting.
The possibility of recognizing income and financial results as soon as they are ready when performing work under a construction contract was also enshrined in the accounting provision “Accounting for contracts (contracts) for capital construction” (PBU 2/94, became invalid from January 1, 2009) . The volume of work performed in this case was to be determined in the prescribed manner based on their contractual value and the methods used for its calculation.
The second option for determining income provided for the method “by the cost of the construction object”, i.e., upon the completion of all work at the construction site.
Since the procedure for assessing the scope of work performed in the absence of a phased breakdown in the contract was not legally regulated, and the wording of clause 17 seemed vague, in most cases construction companies determined the revenue in accordance with the closed acts of acceptance of work.
The procedure for writing off costs at the end of individual stages at the same time corresponded to clause 17 of PBU 2/94, i.e., the costs attributable to the work performed were determined by the direct method, and more often by calculation.
The specified procedure for the formation of the financial result was simpler and, most importantly, met the requirements of tax accounting.
The adopted new PBU 2/2008 "Accounting for construction contracts" from January 1, 2009 cancels the option of recognizing income and financial results only after completion of construction work at the facility (similar to IAS 11). Now, revenue and expenses under construction contracts in Russian accounting are subject to recognition using the “as soon as they are ready” method (if the final financial result of the execution of the contract as of the reporting date can be reliably determined).
The condition for the recognition of income and expenses when using this method is the need to confirm the degree of completion of work under the contract, i.e., translating into the domestic accounting language, an accounting statement with a corresponding reference to the calculation or other document fixing the costs and the amount of work performed. Thus, the specified accounting statement (calculation), obviously, will be a supporting (primary) accounting document, the requirements for registration of which are regulated by paragraph 2 of Art. 9 of the Law "On Accounting".
Recognition of profit (loss) on work contracts
In accordance with the requirements of IAS 11, the procedure for recognizing the financial result under construction contracts depends on the profitability of the contract.
One category is profitable contracts. Profit from such contracts should be recognized gradually, in each reporting period, based on the degree of completion of construction work (“as completed”).
The next category are unprofitable contracts. The loss must be recognized in the profit and loss statement at a time in the reporting period in which information is received on the unprofitability of a particular contract. Loss can be identified even at the stage of contract conclusion by comparing the total value of the contract and the estimated cost of costs. The reported revenue and cost should also be calculated based on the stage of completion of the work.
Contract costs that are not likely to be recovered should be recognized as an expense immediately. Such contracts may include contracts that are legally unsound or whose performance depends on the expected judicial trial, legislative act. An example of a contract with a low probability of recovery would be the construction of an object that can be alienated by a court decision. Also, this category of contracts will include transactions in which one of the parties is unable to fulfill its obligations under the contract.
It is possible that a contract initially recognized as profitable is subsequently qualified as unprofitable. Then the reflection in the financial statements will depend on the assessment made on the basis of information that was available at the time of formation financial reporting. That is, in one period, under a construction contract, the company must recognize a profit (based on the stage of completion of work at the reporting date), in the other, it must show a loss that compensates for the previously recognized profit.
There is another category of contracts. These are contracts for which the financial result at the reporting date is not reliably determined. Under such contracts, income and expenses should be recognized in the reporting period in an equal amount based on an estimate of the costs incurred at the reporting date, which are recognized and reimbursed by the customer. As information becomes available in the future about the profitability of a contract, its financial result should be recognized in accordance with the methodology for accounting for profitable or unprofitable contracts, respectively.
RAS. The profitability of the contract as a condition for choosing the method of recognizing the financial result is now fixed in the new PBU 2/2008.
The procedure for recognizing income under contracts with an uncertain financial result complies with the requirements of Russian legislation. So, in accordance with paragraph 14 of PBU 9/99 “Income of the organization”, if the amount of proceeds from the sale of products, performance of work, provision of services cannot be determined, then it should be accepted for accounting in the amount of the costs of manufacturing recognized in accounting this product, the performance of this work, the provision of this service, which will subsequently be reimbursed to the organization.
The corresponding procedure is now indicated in paragraph 23 of PBU 2/2008.
With regard to unprofitable contracts, PBU 2/2008 (paragraph 3, paragraph 23) now indicates the need to recognize an expected loss from the performance of construction work, regardless of at what stage of the execution of the contract the expected loss arose.
When determining the profitability of a contract, one should proceed from the most probable events under the specified contract. Accordingly, at each reporting date, the likelihood of certain uncertain events accompanying the contract may change. The way financial results are recognized is also changing.
Regardless of the procedure for determining the price under the contract, the necessary and sufficient conditions for a reliable determination of the financial result are the following:
- the likelihood of obtaining economic benefits;
- the possibility of estimating costs under the contract.
Composition of income and expenses under construction contracts
Giving an assessment of the profitability of a construction contract, you should first determine which items of income and expenses that form the cost of construction work, in accordance with the international standard IAS 11, are to be attributed to specific contracts.
The list of income and expenses under construction contracts primarily depends on the type of agreement between the parties. For this purpose, there are:
Fixed-price contracts, which means that the contractor agrees to perform work in a specified amount for a fixed price specified in the contract, or taking into account a fixed rate per unit of work, which may increase with increasing costs;
Cost plus contracts that involve reimbursement unaccounted costs to the contractor at an agreed contractor profit (e.g. covert work).
Additional costs under "cost plus" contracts, in addition to being reflected in the cost of work, form the contractor's revenue.
Contract agreements may contain additional conditions that affect the amount of remuneration construction organization, for example, incentive payments or penalties, which also affects the amount of revenue of the contractor. The formation of the contractor's revenue "as soon as it is ready" implies the corresponding gradual accrual of the specified incentives or penalties.
According to IAS 11, revenue from a construction contract must include:
The cost of construction work specified in the contract;
Claims and incentive payments (when there is a possibility of an inflow of economic benefits and the possibility of their reliable assessment);
Other deviations from the terms of the contract.
Variations occur when the range of work performed under a construction contract changes. An example of a deviation is a change in the characteristics or design of an object under construction, which in turn affects the change in the duration of the contract. A variance changes the amount of revenue on a construction contract when it is probable that the customer will agree to the variance and the amount of revenue arising from it, and the amount of revenue can be estimated reliably.
RAS. In this regard, PBU 2/2008 “Accounting for construction contracts” provides that if a company has doubts about receiving the amounts included in revenue in previous reporting periods, then these amounts should be recognized as expenses for ordinary species activities, i.e., no adjustment is made to contract revenue recognized in previous periods for these amounts (paragraph 22 of PBU 2/2008).
According to IAS 11 expenses under the construction contract must include:
Direct costs for the performance of work under a specific contract, including:
Wages of workers at the construction site, including supervision at the construction site;
Cost of materials used in construction;
Depreciation of fixed assets used to fulfill the contract;
Costs of moving machinery, equipment and materials to and from the construction site;
The cost of renting machinery and equipment;
Costs for design and technical support directly related to the contract;
Estimated costs for correcting errors and performing warranty work, including the cost of warranty repairs;
Third party claims;
Costs that relate to the construction activity in general, but may be allocated to a specific contract, including:
Costs for design and technical support not directly related to a specific contract;
insurance payments;
Overhead costs of construction (for example, the cost of collecting and accruing wages construction personnel; borrowing costs).
The latter costs should be systematically apportioned on the basis of the normal level of construction activity. It is understood that the planning department of the organization for a number of reporting periods should determine the average volume of construction work, taking into account planned downtime and evaluate average level overhead. Further write-offs of overhead costs should be carried out in accordance with the average figure thus calculated;
Other additional costs that may be reimbursed by the customer in accordance with the terms of the contract.
RAS. It should be noted that, in accordance with paragraph 16 of PBU 2/2008, when forming the cost of construction, only costs related to the work performed are taken into account. Costs incurred in connection with future work are recognized as deferred expenses, including:
- transferred materials;
- transferred advances to subcontractors;
- listed rent.
The concept of deferred expenses in IFRS does not apply. In accordance with IAS 11, costs related to future activities under a construction contract (advance payments issued; materials transferred for construction) are recorded in the contract account and subsequently form the cost of work.
Advances transferred to the subcontractor cannot be taken into account when calculating the percentage of completion of the object, since they reflect only settlements with the counterparty, and not his actual participation in the construction work.
The procedure for determining the stage of completion and the formation of the financial result for the period
The key moment of recognition financial results under contracts is to determine the stage of completion.
IAS 11 provides three options for its definition:
Based on accepted papers;
Based on actual costs;
According to progress reports.
stage of completion based on accepted papers is defined as the ratio of the work actually accepted by the customer and the total cost of the contract. The cost is determined by calculation as the total planned cost estimate multiplied by the percentage of completion.
The income statement for the period reflects revenue as the cost of work accepted by the customer and the cost calculated based on the stage of completion. In addition, the composition of income reflected in the income statement should include the cost of expenses compensated by the customer, as well as the amount of premiums and penalties determined based on the terms of the contracts. The cost of construction work for the period must, in turn, be adjusted for unplanned costs for correcting errors and other compensated and non-compensated costs by the customer.
Example 1
The company "Stroymontazh" performs work under a contract with the company "Alfa". The cost of the contract (with a fixed price) is 40,000,000 rubles. Estimated cost costs under the contract is determined at 33,000,000 rubles.
In the current year, the cost of works accepted by the customer amounted to 16,000,000 rubles.
The total costs of Stroymontazh under the contract amounted to 15,000,000 rubles. (shown in the table):
Let's calculate indicators for reporting on the basis of "accepted works".
Based on the ratio of planned revenues and costs, the specified contract is profitable. Therefore, the calculation of revenue and cost on it should be carried out “as soon as it is ready”.
1) The degree of completion of construction works at the reporting date is:
RUB 16,000,000 / 40,000,000 rubles × 100% = 40%,
where 16,000,000 rubles. - cost of works accepted by the customer;
RUB 40,000,000 - the total value of the contract.
2) Revenue under the contract for the period is:
RUB 16,000,000 (40% × 40,000 = 16,000).
3) The cost of civil works (estimated value) is determined as the total estimated cost of contract costs multiplied by the percentage of completion, plus actual additional unplanned costs:
RUB 33,000,000 × 40% + 500,000 rubles. = 13,700,000 rubles.
Thus, under the construction contract in the reporting period, profit in the amount of 2,300,000 rubles will be recognized. (16,000,000 - 13,700,000).
stage of completion based on actual expenses is defined as the ratio of the planned costs incurred during the construction and the total estimated cost of the costs. Revenue and cost for the period are determined as the value of the contract multiplied by the estimated percentage of completion.
The stage-of-completion calculation should not include unplanned bug fix costs and additional customer-reimbursable and non-reimbursable costs. At the same time, unplanned costs for correcting errors, additional costs compensated and non-compensated by the customer are subject to inclusion in the expenses of the current period of the income statement.
Example 2
Let's use Example 1 to illustrate the definition of the degree of completion "by cost".
1) The degree of completion of work at the reporting date, using the "from costs" method, is determined as the ratio of actual costs (excluding building materials in the balance) to the total estimated cost of costs under the contract:
((5,000,000 + 6,000,000 + 1,500,000 + 1,000,000) / 33,000,000) × 100% = 41%.
2) The cost of construction work for the period will be determined by:
As actual costs excluding building materials in the balance plus
The cost of correcting poor-quality work, i.e.
41% × RUB 33,000,000 + 500 000 rub. = 13,500 rubles. + 500 000 rub. = 14,000,000 rubles.
3) Contract revenue for a period is defined as the total cost of the contract multiplied by the degree of completion:
RUB 40,000,000 × 41% = 16,400,000 rubles.
Thus, profit under the contract in the amount of RUB 2,400,000 will be recognized in the reporting period. (16,400,000 - 14,000,000).
The stage of completion of a construction work may be determined from actual progress reports, i.e. reports that represent the actual amount of work completed and the actual costs incurred to complete that amount.
In this case, the actual data on the performance of work are taken as the basis for revenue and cost indicators for the period, which, in turn, must be adjusted for additional costs compensated by the customer (increase revenue and cost indicators) and for unplanned, uncompensated expenses, including expenses for correct construction errors.
Example 3
The Stroytrade company performs construction work for the Beta company under a contract worth 10,000,000 rubles. The estimated cost of the costs under the contract is 8,000,000 rubles. The contract provides for compensation of expenses for indexation of wages of employees. During the reporting period, additional labor costs compensated by the customer amounted to 500,000 rubles.
According to experts, for reporting period work completed by 30%.
1) Revenue from a construction contract is determined as follows:
RUB 10,000,000 × 30% + RUB 500,000 = 3,500,000 rubles.
(estimated based on stage of completion plus reimbursable costs).
2) The cost of construction work is:
RUB 8,000,000 × 30% + RUB 500,000 = 2,900,000 rubles.
Thus, under the construction contract, the company "Stroytrade" in the reporting period will recognize a profit in the amount of 600,000 rubles. (3,500,000 - 2,900,000).
RAS. In accordance with PBU 2/2008, when determining the stage of completion, the following can be taken as a basis:
- the proportion of costs incurred at the reporting date to the total costs under the contract, or
- the proportion of work performed as of the reporting date of the total volume of work.
According to the author, the last option for determining the stage of readiness is more reminiscent of the method “based on reports on completed work”, described in IAS 11, since the method of determining the readiness of an object “based on accepted work” involves the acceptance of work, i.e. execution of the corresponding bilateral act .
It follows from this that such an option for determining the stage of completion of construction work, as “based on accepted work”, is not provided for in RAS.
Individual accounting of work contracts
The profitability of the contract according to IAS 11 must be determined separately for each construction contract. This provision of the standard is the key to the correct formation of income statement indicators, as well as the presentation of information in balance sheet.
It is allowed to combine two or more work contracts into one contract. In particular, when the contracts are so closely interconnected that they actually represent a single project with a common rate of return. Or when contracts are executed simultaneously or sequentially without interruption. Another situation is also possible, when several objects are being built at once within the framework of one contract. In this case, it is advisable to present the construction of individual facilities as separate construction contracts, if the costs and revenues for each facility can be allocated and accounted for separately.
Reflection of information in the statement of financial position
According to IAS 11, a company's statement of financial position (balance sheet) must show the gross amount due from customers (payable to the customer) for work under a construction contract, which is a balance consisting of the following indicators:
Costs incurred plus
Recognized profits minus
Losses recognized minus
The amount of interim invoices issued (paragraph 42 of IAS 11).
The gross amount of work contracts should be formed in balance sheet automatically, if the accounting entries are correctly made.
Costs under a construction contract are accounted for accumulatively on the account of the contract:
Dt"contract account"
ct"Settlements with suppliers", "Settlements with employees", "Materials", etc.
When revenue is recognized for the reporting period, an entry is made in the debit of the contract account:
Dt "Account of the contract"
CT “Profit and Loss Statement Revenue”
When recognizing the cost of construction work for the reporting period, a credit entry is made on the contract account:
Dt"Cost of income statement"
ct"contract account"
When issuing interim invoices, a debt is formed under a construction contract:
Dt"Accounts receivable"
ct"contract account"
Upon receipt of payment from the customer accounts receivable"closing":
Dt"Cash"
ct"Accounts receivable"
After reflecting the indicated accounting records the rolled-up balance formed on the account of the work contract and will be the gross amount of the construction work performed, to be presented in the balance sheet:
Separately, as part of the accounts receivable (accounts payable) of the balance sheet, the actual state of settlements with the customer on the invoices issued will be reflected.
According to IAS 11, gross amounts for various work contracts must be presented on a gross basis in the balance sheet.
Next, we will consider what requirements for the correspondence of accounts in this case are put forward by Russian legislation in accounting, in particular PBU2/2008 “Accounting for construction contracts” (when registering correspondence, the name of the articles will be used, not the account numbers).
Accounting for costs under the contract is carried out on the account "Work in progress" (account 20):
Dt"WIP"
ct"Materials", "Settlements with personnel", "Settlements with third parties" etc.
As indicated above, in domestic accounting, expenses incurred in connection with upcoming work should be accounted for as deferred expenses with subsequent write-off as revenue is recognized under the contract (clause 16 PBU 2/2008).
Recognition of expenses under the contract in terms of work performed is carried out by posting:
Dt"Profit and Loss Statement" (cost of sales)
ct"WIP"
Accounting for revenue under the contract, determined as soon as it is ready, is carried out in accordance with clause 26 of PBU 2/2008 as a separate asset, i.e.
Dt"Revenue not presented for payment"
ct"Profit and Loss Statement" (sales revenue)
When issuing interim invoices, the unreported revenue accrued as soon as it is ready is transferred to receivables:
Dt"Accounts receivable"
ct"Revenue not presented for payment"
Thus, in Russian balance sheet contract work is reflected in the form:
work in progress;
Deferred expenses;
Unclaimed accrued revenue (separate asset);
Negative difference between invoiced revenue and unreported revenue (separate liability),
Accounts receivable (on issued invoices);
Accounts payable (advance payments received).
For comparison, let's compare the indicators in terms of contracts for accounting (financial) statements in two accounting systems:
Below we will consider an example of how indicators are formed under a construction contract for financial statements under IFRS and for financial statements prepared according to Russian rules accounting.
Example 4
On January 1, 2004, the ABC Company (contractor) entered into a contract for the construction of a building in the amount of $1,100,000 for a period of 3 years.
In 2005, an increase in the cost of remuneration to $1,200,000 was agreed.
The initial cost estimate for the contract was $750,000. Due to the customer's fault, additional costs in 2004 amounted to $50,000.
ABC calculates completion rate based on costs.
We will show the calculation of income and expenses for each of the reporting periods.
Information on the contract during the entire construction period is presented in the table:
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2004 |
2005 |
2006 |
Total |
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Contract price |
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intermediate accounts |
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Costs (accumulative) |
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including advance payment to subcontractor |
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Further costs |
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Total costs |
1. Consider IFRS accounting.
Contract status: $1,100,000 minus $750,000 - the contract is profitable.
2004 (in $)
Actual costs: 450,000
Planned costs: 800,000
Completion percentage: 56.25% (450,000 / 800,000)
Revenue for the period: 1,100,000 × 56.25% = 618,750
Period Costs: 800,000 × 56.25% = 450,000
For presentation in the income statement for 2004:
Revenue: 618,750
Cost: (450,000)
Profit: 168,750
2005 (in $)
Actual costs: 650,000
Planned costs: 800,000
Percent complete: 81.25%
Cumulative revenue (for 2 periods):
1,200,000 × 81.25% = 975,000
800,000 × 81.25 = 650,000
For presentation in the income statement for 2005:
Revenue: 975,000 - 618,750 = 356,250
Cost: (650,000 - 450,000) = (200,000)
Profit: 156,250
2006 (in $)
Actual costs: 800,000
Planned costs: 800,000
Percent complete: 100%
Cumulative revenue (for 3 periods): 1,200,000
For presentation in the income statement for 2006:
Revenue: 1,200,000 - 975,000 = 225,000
Cost: (800,000 - 650,000) = (150,000)
Profit: 75,000
Accounting records in accounting according to international standards will be presented in the form of standard "airplanes":
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contract account |
|
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2004 costs - 550 |
0 - intermediate accounts |
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Revenue - 619 |
450 - cost |
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As of 31.12.04 Gross amount (Dt) 719 |
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2005 costs 100 |
600 - intermediate accounts |
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Revenue - 356 |
200 - cost |
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As of 31.12.05 Gross amount (Dt) 375 |
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2006 costs 150 |
600 - intermediate accounts |
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Revenue - 225 |
150 - cost |
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As at 31.12.06 Gross amount 0 |
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Postings under the above contract, which must be performed in two accounting systems, are comparable in the table:
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Operation |
IFRS |
RAS |
|
Contract costs |
Dt "Contract account" - 800,000 Kt "Calculations" - 800,000 |
Dt "NZP" ("RBP") - 800,000 CT "Calculations", "Materials" - 800,000 |
|
Revenue recognized |
Dt "Contract account" - 1,200,000 Kt "Revenue" - 1,200,000 |
Dt "Revenue not presented for payment" - 1,200,000 Kt "Profit and Loss Statement" - 1,200,000 |
|
Reflected cost |
Dt "OPU" - 800,000 Kt "Contract account" - 800,000 |
Dt "Profit and Loss Statement" - 800,000 Kt "WIP" - 800,000 |
|
Provisional invoices issued |
Dt "DZ" - 1,200,000 Kt "Contract account" - 1,200,000 |
Dt "DZ" - 1,200,000 CT "Revenue not presented for payment" - 1,200,000 |
|
Received cash |
Dt "DS" - 1,200,000 Kt "DZ" ("KZ") - 1,200,000 |
Dt "DS" - 1,200,000 Kt "DZ" ("KZ") - 1,200,000 |
For comparison, we will present in the table information on the contract, which is formed in the IFRS statements and prepared in accordance with Russian accounting standards on an interim date (31.12.04).
The recommended list of articles of the contract is quite typified and universal, which allows it to be used as a reference scheme in the preparation of various types of contracts. List of main articles of the contract:
- definitions: the full name of the parties to the contract - the customer and the contractor, indicating their details, the name of the subject of the contract;
- the subject of the contract - a statement of the customer's task in general form in the text of the agreement and detailed in the annexes;
- the value of the subject of the contract;
- dates of commencement and completion of work under the contract; procedure and terms of settlements and payments;
- obligations of the parties under the contract;
- manufacturing jobs;
- acceptance of work;
- guarantees and guarantees under the contract;
- measures of responsibility of the parties for non-fulfillment or improper fulfillment of obligations;
- conditions and procedure for termination of the contract.
By agreement of the parties, the articles of the agreement may be supplemented and amended based on the specifics of the facility under construction, its location and other conditions.
The subject of a work contract, depending on its type, may be a facility completed by construction and prepared for operation or a certain set of works (an example of drawing up a work contract with a description of its articles is set out in the appendix to this Guide).
The cost of the subject of the contract is determined on the basis of the free (contractual) price for construction products. For this, the current Recommendations for determining free contractual prices for construction products can be used. The invariability of the contract price or its specification upon completion of construction should be indicated in the contract without fail.
In multilateral contractor agreements, the total contractual price under the contract is determined taking into account the full investment cycle, with the allocation of the contractual price of works and services performed by each participant.
The cost established in the contract may be changed in individual cases:
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when making changes to the scope and content of work at the suggestion of the customer |
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when changing, at the suggestion of the customer, the duration of construction; |
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when changing the range of materials and equipment supplied by the customer, if the contract price was determined taking into account their cost; |
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Change in contract price |
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with the mutual consent of the customer and the contractor; |
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in connection with the current change in the cost of building materials, products, equipment, tariffs and wages; |
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when work is stopped for reasons dependent on the customer or due to force majeure, provided that the contractor fulfills its obligations for the safety of the facility and the requirements for the safety of work; |
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in case of changes in legislation during the period of fulfillment of obligations under a work contract that change its conditions; |
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other cases. |
When determining the duration of construction, it should be taken into account that the main factor is the efficiency of capital investments. Duration recommendations are valid at the level of the construction organization project, developed taking into account the construction duration standards and the work organization project. The final duration of construction is set by the customer and the contractor at the conclusion of the contract. The contract may specify:
- the period during which the object must be built. For example, "within 24 months from the date of signing by the parties of documents on the transfer of the construction site";
- deadline. For example, "the period of construction of an object should not exceed 24 months from the date of commencement of work, according to the contract, until the date of putting the object into warranty operation";
- exact dates of completion of all works stipulated by the contract. For example, "the object should be handed over on September, 1st". In any case, the conditions for the completion of work and the procedure for their acceptance must be specified in the contract.
Terms of fulfillment of obligations are determined by agreement of the parties. They can be set in days, decades, months, etc.
The contract specifies the conditions for the commencement of construction or the entry into force of the contract. They can be: the date of signing the contract, the transfer of the advance by the customer, the transfer of the construction site to the contractor and other conditions that affect the performance of work and the completion of work under the contract.
In a multilateral contract for work, the parties establish a general start and end date for works and services throughout the investment cycle and for each set of works and services performed by each participant. In the event that in the course of the performance of work it becomes necessary to make changes to the documentation of the contract regarding the timing of the performance of work, including the early completion of work under the contract, they are made by agreement of the parties in writing and, depending on the significance of these changes, may be formalized by an additional agreement .
The procedure and deadlines for acceptance of the work performed and settlements for them during the construction process, as well as upon full completion of work under the contractor agreement, the deadlines for the contractor to eliminate the comments received from the customer on the quality of the work performed and the final settlements between the customer and the contractor are established in the contractor agreement by agreement of the parties. Calculations can be carried out: by structural elements for the performance of individual works and services, by stages or after the completion of all work under the contract.
The parties agree on the amount of funds reserved for financial guarantees and the procedure for their transfer, unless they provide in the contract for other conditions that provide financial guarantees. The contractor retains ownership of the object until full payment of the price agreed in the contract. It also bears the risk of accidental destruction and accidental damage to the object until it is put into warranty operation.
The contract should provide for the conditions under which the customer has the right to withhold payment for the work performed to the contractor:
- failure to eliminate the previously mentioned defects in the work submitted for payment;
- causing damage to the customer;
- cases of delay in the performance of work from the volumes provided for by the work schedule.
The final settlement is made by the customer after the contractor has completed all the work under the contract, including the elimination of defects identified during the acceptance of the subject of the contract, with the offset of the previously transferred funds to the contractor and the amount of financial guarantees, if they were provided for in the contract.
When drawing up a turnkey contract, it is necessary to agree on the procedure, conditions and terms for the transfer by the customer to the contractor financial resources at the agreed price. When registering the transfer of these funds as a separate document, the latter must be attached to the contract as an integral part of it.
The obligations of the participants in the work contract, the degree of their detail and the requirements for their implementation are determined by the contracting parties, based on the type, subject and specific conditions of the contract.
The issues of distribution between the parties of responsibilities for providing construction with materials and equipment are resolved in Article 745 in principle in the same way as in the general norm - Article 704 of the Civil Code of the Russian Federation. It is assumed that this obligation lies with the contractor, if the obligation to provide the construction with materials and equipment is not fully or partially assigned by the contract to the customer. The issue of the responsibility of the party that provided the materials and equipment is more fully settled: it is responsible for the discovered impossibility of using them without deteriorating the quality of the work performed. A party is released from this liability if it can prove that the negative consequences in question arose due to circumstances for which the other party is responsible (for example, if it turns out that the materials transferred by the customer cannot be used only because the contractor does not have necessary equipment).
Clause 3 of Article 745 of the Civil Code of the Russian Federation gives the contractor the right to withdraw from the contract if the materials and equipment provided by the customer cannot be used, and the customer refuses to replace them. However, this right, as already noted when covering the general provisions, is under certain conditions and the obligation of the contractor with all the ensuing consequences (if the contractor has assumed the risk of continuing work under the described circumstances).
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performance by one's own and involved forces at the expense of the accepted contractual price of all work in the amount stipulated by the contract, and delivery of work to the customer; |
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1. The concept and types of capital construction
Capital construction is the activity of state bodies, local governments, individuals and legal entities, aimed at creating new and modernizing existing fixed assets of production and non-production purpose. It is one of the most important industries material production, the basis for the development of all its other branches, serves as the main source of expanded reproduction. Capital construction as one of the branches of material production also includes activities for the implementation of design and survey work, preparation of technical documentation necessary for the implementation of construction, installation, commissioning and other special capital works.
Construction is a set of buildings and structures, the construction of which is carried out on one or more construction sites on a single project. A construction object is each separate building or structure (with all equipment, tools and inventory related to it, galleries, flyovers, internal engineering networks etc.), for which a separate project and estimate were drawn up.
The types of capital construction are new construction (new building), expansion, reconstruction and technical re-equipment of existing enterprises, buildings and structures, i.e. their modernization.
New construction - the construction of a complex of objects of newly created enterprises, buildings and structures, individual industries that are being built on new construction sites and after commissioning will be on an independent balance sheet, i.e. there is a new organization - a legal entity.
Expansion of existing enterprises - the construction of additional production facilities, new separate workshops and facilities on their or adjacent territory, or the implementation of work to expand such workshops and facilities already existing at enterprises. This type of capital construction also includes the construction of branches and production facilities of existing enterprises, which, after commissioning, will not be on an independent balance sheet.
Reconstruction of existing enterprises - the reorganization of existing workshops and facilities associated with the improvement of production and an increase in its technical and economic level based on the achievements of scientific and technological progress. Such reorganization is carried out according to a complex project for the reconstruction of the enterprise as a whole, and, as a rule, without expanding existing buildings and structures.
Technical re-equipment of existing enterprises - a set of measures to improve the technical and economic level of individual industries, workshops and sites. It is carried out according to projects and estimates for individual facilities or individual types of work, and, as a rule, without expanding production capacity.
Depending on whether capital construction is being carried out on the developer's own resources or third-party specialized construction, installation and other organizations of the construction profile are involved, there are three construction methods:
The main method of capital construction is contracting. Work in this way is carried out under a construction contract.
2. The concept of a construction contract
The terms of the contract shall remain in force during the entire term of the contract. In cases where, after the conclusion of the contract, the legislation establishes conditions that worsen the position of at least one of the parties, the contract may be amended.
1. Conclusion of a construction contract
Preliminary development and approval in the prescribed manner of certain documents binding on both parties, the availability of which is necessary for the conclusion of a construction contract (the so-called planned prerequisites or grounds for concluding a contract), are not provided for by the current legislation. As noted above, the conclusion of the contract, the choice of the counterparty and the determination of the terms of the contract (which do not contradict the law) are within the competence of the parties to the contract by law.
However, in order for the concluded contract to be valid, the parties must first obtain certain documents. For the customer - a building permit issued by the local government, and for the contractor - a license (permit) to carry out construction activities.
According to this Temporary Regulation, the object is presented by the contractor for acceptance after completion of all work on the object stipulated by the contract. Acceptance of completed construction objects is carried out by the customer or another person authorized by the investor. The customer may involve the user of the facility (operating organization), developers of technical documentation, specialized organizations and other legal entities and individuals in the acceptance, creating, if necessary, a selection committee.
Acceptance for operation of industrial facilities, the construction of which is carried out at the expense of the federal budget, is carried out taking into account industry specifics established by the ministries of the Russian Federation and other federal executive authorities in agreement with State Committee of the Russian Federation for construction and housing and communal services, state acceptance commissions appointed by these bodies. The executive authorities of the constituent entities of the Russian Federation may establish, in agreement with the said State Committee, the specifics of the procedure for accepting objects in the respective territories.
Production facilities, the construction of which is carried out at the expense of funds federal budget, are subject to acceptance only when they are prepared for operation and the production of products (performance of work, provision of services) has begun on the installed equipment in the amount stipulated by the construction contract.
Acceptance of a completed construction facility is formalized by an act, the form of which (sample) is given in Appendix 1 to the Temporary Regulations for the Acceptance of Completed Construction Objects. The acceptance certificate is the basis for the final payment for all work performed by the contractor under the contract.
Payment for the work performed by the contractor is made by the customer in the amount provided for by the estimate, on time and in the manner established by law or the contract. In the absence of relevant instructions in the law or the contract, payment for the work is made after the final delivery of the result of the work.
This form of payment is the most progressive and beneficial for the customer. In this case, the contractor is interested in the end result of his activity, which is reduced or completely lost with gradual, phased or, for example, monthly payment for the work actually performed by him. However, the significant cost and duration of capital construction requires advance payment of the contractor's activities, and he has the right to demand payment of an advance payment or a deposit only in cases and in the amount specified in the law or contract (clause 2 of article 711 of the Civil Code). Therefore, the procedure for payment for work agreed by the parties, taking into account their mutual interests, is an important tool effective organization of their relationship.
4. Features of the contract for the construction of turnkey facilities
Such an agreement is concluded between the customer and the contractor (general contractor) and provides for the latter to complete the cycle: design, construction, installation and special construction works, commissioning of the facility.
The main obligation of the customer is to provide the general contractor with documentation on the basis of which the object is being designed: development projects for microdistricts, quarters, urban complexes, towns and rural settlements; approved feasibility studies for the construction of industrial facilities and large public buildings and structures, etc.
The main responsibilities of the general contractor include:
The cost of work under the contract is determined by agreement of the parties. The costs of the general contractor before the object is handed over to the customer are covered by his own funds and bank loans received by him.
The customer settles accounts with the general contractor after signing the object acceptance certificate. The general contractor makes final settlements with subcontractors after they complete the work packages in accordance with the price established at the conclusion of the subcontract.
Thus, in this contract, the contractor assumes all responsibilities for the organization and provision of construction, freeing the customer from them. On the latter, in fact, there remains only the obligation to pay for the result of the work, and only after its acceptance (without advance payment). Therefore, a contract for the construction of turnkey facilities is considered one of the most progressive forms of capital construction.
5. Property liability for violation of the terms of the construction contract
Such liability can be established both in a contractual manner, i.e. by agreement of the parties, and in a regulatory manner, i.e. prescribed by law or other legal acts. It comes in line with general provisions on civil liability for breach of obligations: the debtor is obliged to compensate the creditor for losses caused by non-performance or improper performance of obligations. Losses are understood as expenses that a person whose right has been violated has made or will have to make to restore the violated right, loss or damage to his property (actual damage), as well as lost income that this person would have received under normal conditions of civil circulation, if his right was not violated (lost profit) (Article 15, 393 of the Civil Code). Since the parties to a construction contract are usually entrepreneurs, this responsibility arises regardless of whether the parties are guilty of non-performance or improper performance of contractual obligations (clause 3 of article 401 of the Civil Code). If the construction contract for non-fulfillment or improper fulfillment of contractual obligations provides for the collection of a penalty (fine, penalty), the damages shall be recovered minus this penalty. But the contract may provide otherwise: the recovery of only the penalty, the recovery of losses in the full amount in excess of the penalty, the recovery of either the penalty or damages.
The application of measures of property liability to the counterparty in the event of a violation by him of obligations under a construction contract is a right, not an obligation, of the injured party.
Along with the civil liability of the parties to a construction contract for violation of its terms, construction legislation also provides for administrative liability for violations in the field of construction. Such responsibility is established by the Law of the Russian Federation of December 17, 1992 "On the administrative responsibility of enterprises, institutions, organizations and associations for offenses in the field of construction."
In accordance with paragraph 1 of Art. 2 of this Law, enterprises, institutions, organizations and associations, regardless of their departmental affiliation and forms of ownership, for violations of the mandatory requirements of normative acts in the field of construction in the performance of design, construction and installation works, in the production of building materials, structures and products, resulting in a decrease in the strength parameters of manufactured building materials, structures and products, reduction or loss of strength, stability, reliability of buildings, structures, structures, their parts or individual structural elements, are subject to an administrative fine. The amount of fines for various offenses is determined in fixed amounts, which were indexed several times by decrees of the Government of the Russian Federation.
6. Modification and termination of a building contract
A change in the content of the contract may take place, for example, when the customer makes changes to the technical documentation for the construction object (it determines the volume, content of work and other requirements for the construction object), entailing additional work at a cost exceeding 10% specified in estimate of the total cost of the work. The introduction of such changes in the technical documentation is carried out on the basis of an additional estimate agreed by the parties (paragraphs 1, 2 of article 744 of the Civil Code).
Termination (cancellation) of a construction contract may take place for various reasons. They may be conservation or complete cessation of construction, systematic violation by the contractor of the deadlines for the implementation of construction and installation works or their poor quality, systematic violation by the customer of obligations stipulated by the contract, recognition of the customer as insolvent (bankrupt) in the prescribed manner, etc. In addition, the customer (investor) has the right to terminate or suspend the contract at any time with compensation to the contractor for the losses caused by this, including lost profits.
Termination or suspension of capital construction (hence, the operation of a construction contract) is also possible by decision of the competent state body in cases of natural disasters and other manifestations of force majeure, the introduction of a state of emergency, if during the construction process it turned out that its continuation would lead to a violation of the established laws sanitary-hygienic, environmental and other norms, legally protected rights and interests of citizens, legal entities and the state.
1. Design and surveys for capital construction
Design for capital construction - the process of creating a project for a capital construction object, is one of the stages of the investment process in the field of capital construction.
Surveys for capital construction - the process of preparing (during a comprehensive study of the natural conditions of the area, site, section, route of the projected construction, local building materials and water supply sources) the materials necessary to develop economically viable and technically sound solutions for the design and construction of facilities.
Technical documentation (or construction project) - a set of documents, including feasibility studies, drawings, explanatory notes and other materials that determine the scope and content of work on the construction site, as well as other requirements for these works.
Design estimates are materials prepared as a result of the development of technical documentation and estimates for the construction site. Construction without the availability of design and estimate documentation is not allowed.
Design can be carried out in one or two stages. When designing in one stage, a working draft is developed with a summary budget calculation construction cost. When designing in two stages, a project is first developed with summary calculation construction costs (first stage), and then - working documentation(second stage), compiled on the basis of the project after its approval in the prescribed manner. Design in two stages is carried out in the construction of technically complex facilities and in complex natural conditions construction.
The legal form of mediation of relations for the development of the relevant design and estimate documentation is a contract for the performance of design and survey work.
As in contractual relations for a construction contract, the conclusion of a contract for the performance of design and survey work, the choice of a partner (counterparty), the definition of obligations, any other terms of relations that do not contradict the law, is the exclusive competence of the parties to the contract, and the main legal document regulating the production economic and other relations of the parties, along with the current legislation, is the contract concluded by them (Article 7 of the Law on Investment Activities).
2. Elements and content of the contract for the performance of design and survey work
The parties to the contract for the performance of design and survey work are the customer and the contractor (designer, prospector). They may be the same persons as under the construction contract. However, the contractor under the mentioned contract can also act as a customer in cases where the obligation to develop the relevant technical documentation lies with him, and he does not have the opportunity to perform such work on his own.
In relation to design and surveys for capital construction, especially in the presence of a significant number of design and survey organizations, designers and surveyors - individual entrepreneurs importance acquires the protection of customers from the manufacture of low-quality design and estimate documentation. The institution of licensing serves to achieve this goal - the issuance of permits (licenses) for the performance of special types of work that require appropriate certification of the contractor. The list of such types of work and the procedure for issuing licenses is determined by law (clause 2, article 6 of the Law on Investment Activities).
For the contract for the performance of design and survey work, as well as for the construction contract, the system of general contracting is characteristic: the contract for the performance of the entire range of design and survey work is concluded by the customer with the leading design organization - the general contractor, who, in order to perform certain types of design and survey work , sections and parts of technical documentation concludes subcontract agreements with specialized design and survey organizations. For the performance of certain types of work, sections or parts of technical documentation, the customer has the right, with the consent of the contractor, to conclude direct contracts.
The subject of the contract for the performance of design and survey work is the result of the work of the contractor (designer, surveyor). For design organizations, this is the design and estimate documentation (its part, section) made on the instructions of the customer (general designer), necessary for the implementation of construction and installation works, and for survey organizations - materials received on the instructions of the customer (general designer) necessary for the correct and economically expedient solution of the main issues of design (production of design estimates), construction and operation of enterprises, buildings and structures. The design task, as well as other initial data necessary for the preparation of technical documentation, are usually developed by the customer and transferred to the contractor. But the task to be completed design work can be prepared by the contractor on behalf of the customer. In this case, the task becomes binding on the parties from the moment it is approved by the customer. The contractor has the right to deviate from the requirements contained in the design assignment and other initial data only with the consent of the customer (Article 759 of the Civil Code).
The contract for the performance of design and survey work shall indicate the subject of the contract (name project documentation requirements for its quality and technical level), composition and content of design and estimate documentation, term of the contract, terms of development and stages of issuance of documentation, price, procedure for delivery and acceptance of documentation, property liability of the parties for violation of the terms of the contract, other essential conditions that ensure the interests of the parties.
As noted above, the determination of the terms of the contract by law is within the competence of the parties, but they should not contradict the current legislation. So, by virtue of paragraph 1 of Art. 6 of the Law on Investment Activities, the parties are obliged to comply with the norms and standards, the procedure for establishing which is determined by law. Therefore, for example, when determining the composition and content of the design and estimate documentation to be developed, the parties are obliged to be guided by the requirements of sanitary, environmental and other standards established by law, comply with uniform rules for the preparation of documentation, etc.
The price for the technical documentation to be developed is negotiated at the conclusion of the contract. The customer and the contractor (designer, prospector) are involved in its establishment, regardless of the form of ownership their activities are based on. The excess of costs in comparison with the price stipulated by the contract, allowed by the contractor without agreement with the customer, is compensated by the designer, prospector at his own expense.
The terms of the contract shall remain in force for the entire duration of the contract. In cases where, after its conclusion, the legislation establishes conditions that worsen the position of the parties, the contract may be amended (clause 2, article 7 of the Investment Activity Law).
3. Conclusion and execution of a contract for the performance of design and survey work
Work under a contract for the performance of design and survey work may be financed from the same funds as work under a construction contract. The contract for the performance of design and survey work is concluded at the discretion of the parties, their mutual agreement (Article 7 of the Law on Investment Activities). There are no "planned grounds" or "planned prerequisites" binding on both parties. The contract may be concluded for the performance of both the entire complex of works, and their individual stages, parts, sections. The procedure for concluding a contract for the performance of design and survey work is not defined. When concluding it, the parties are guided by the general provisions on the conclusion of the contract.
The contract for the performance of design and survey work is concluded in writing. There is no mandatory form of such an agreement for the parties. The parties have the right to draw up an agreement in a form arbitrarily developed by them. At the same time, they can use the form of a construction contract given in the above-mentioned Guidelines for drawing up a contract for construction in the Russian Federation (taking into account the specifics of a contract for design and survey work). The main obligation of the contractor (designer, prospector) is to perform the work stipulated by the contract within the time period established by it and in accordance with the design assignment and other initial data, in compliance with the requirements of regulatory and technical documents on design issues, including building codes and rules, that are mandatory for him , norms process design, standards and specifications on the Construction Materials, parts and designs, etc.
The contractor's responsibilities also include:
The contractor has the right to transfer the completed technical documentation to third parties only with the consent of the customer.
The main obligation of the customer is to accept the technical documentation developed by the contractor (designer, prospector) in accordance with the terms of the contract and pay for it.
The customer is also obliged, unless otherwise provided by the contract:
4. Examination and acceptance of technical documentation
In accordance with the Decree of the Council of Ministers - the Government of the Russian Federation of June 20, 1993 "On the state examination of urban planning and design estimates", projects for the construction, reconstruction, expansion and technical re-equipment of enterprises, buildings and structures in the Russian Federation (hereinafter referred to as construction projects ) regardless of sources of funding, forms of ownership, prior to their approval, they are subject to state examination in the Main Directorate of State Non-Departmental Expertise under the State Committee of the Russian Federation for Construction and Housing and Communal Complex, organizations of state non-departmental expertise in the constituent entities of the Russian Federation, industry expert divisions of ministries and departments and others specially authorized bodies.
Such an examination is carried out in accordance with the Procedure for conducting state examination of urban planning documentation and construction projects in the Russian Federation, approved by the Gosstroy of Russia on October 29, 1993 on behalf of the Council of Ministers - the Government of the Russian Federation. The aforementioned resolution of the Council of Ministers - the Government of the Russian Federation established that:
Acceptance of technical documentation is formalized by an act. The form of such an act binding on the parties is not established by law; it is drawn up in an arbitrary form developed by the parties themselves. The act usually notes whether the technical documentation complies with the terms of the contract, it is given short description, the effectiveness of the technical documentation is recorded and on the basis of which it is determined, the price stipulated by the contract is indicated, as well as the amount of the premium or discount to the price as a percentage, taking into account the fulfillment of the terms of the contract. Based on the stipulated price and the advance paid, as well as the amount of the allowance and discount, the act indicates the amount to be transferred to the contractor (designer, prospector). The final payment for fully completed technical documentation is made after its acceptance and confirmation of compliance by the customer design decisions technical and economic indicators established in the design assignment, with a positive conclusion of the examination.
5. Amendment, termination of the contract and property liability for violation of its terms
A change in the content of the contract for the performance of design and survey work may take place when the customer makes changes to the technical documentation, provided that the additional work caused by this exceeds ten percent of the total construction cost indicated in the estimate. In this case, an additional estimate agreed by the parties is drawn up.
The customer (investor) has the right to terminate the contract at any time with compensation to the contractor for the losses caused by this, including lost profits (clause 1, article 17 of the Law on Investment Activities).
Termination (termination) of the contract is also possible at the initiative of any of the parties in the event of a systematic violation by the counterparty of contractual obligations with compensation by the guilty party to the other party for losses incurred in connection with the termination of the contract. The basis for terminating the contract is also the recognition of the customer as insolvent (bankrupt) in accordance with the established procedure.
The Civil Code contains instructions on the responsibility of only the contractor under this contract. He is responsible for the improper preparation of technical documentation and the performance of survey work, including deficiencies subsequently discovered during construction, as well as during the operation of an object created on the basis of technical documentation or survey work data. If deficiencies are found in the technical documentation or in survey work, the contractor, at the request of the customer, is obliged to eliminate these deficiencies free of charge, as well as compensate the customer for the losses caused, unless otherwise provided by law or contract (Article 761 of the Civil Code).
Since the Law on Investment Activities, as well as other legislative acts, does not contain special instructions on the responsibility of the customer under the contract for the performance of design and survey work, the customer for violation of the terms of this contract must be fully liable in accordance with the provisions of Art. 15, 393 GK. As noted above, the responsibility of the customer in full in the event of unilateral termination of the contract by him is provided for in paragraph 1 of Art. 17 of the Investment Activity Law.
1. The concept of a state contract for the performance of contract work for state needs
Under the state contract for the performance of contract work for state needs (hereinafter referred to as the state contract), the contractor undertakes to perform construction, design and other work related to the construction and repair of industrial and non-production objects and transfer them to the state customer, and the state customer undertakes to accept the work performed and pay them or ensure their payment (clause 2 of article 763 of the Civil Code).
In accordance with government contract contract, construction, design and survey work is carried out, necessary to meet the needs of the Russian Federation or a constituent entity of the Russian Federation. These works are financed at the expense of the relevant budgets and extrabudgetary sources.
Government contracts are intended for:
The fundamental norms on the state contract are contained in § 5 Ch. 37 of the Civil Code "Contract work for state needs". It is planned to adopt a special law on contracts for state needs. The main by-laws regulating relations for the performance of contract work for state needs at the present time are:
Federal Law of May 6, 1999 "On tenders for placing orders for the supply of goods, performance of work, provision of services for state needs";
The main provisions of the procedure for concluding and executing state contracts (contracts of work) for the construction of facilities for federal state needs in the Russian Federation, approved by the Decree of the Council of Ministers - the Government of the Russian Federation of August 14, 1993 N 812 (hereinafter - the Basic Provisions). The parties to the state contract are the state customer and the contractor. A state body acting as a state customer has the necessary investment resources, or an organization endowed by the relevant government body with such resources. Legal entities and citizens engaged in entrepreneurial activities can act as a contractor (Article 764 of the Civil Code).
2. Grounds and procedure for concluding a state contract
In accordance with Art. 765 of the Civil Code, the grounds and procedure for concluding a state contract for the performance of contract work for state needs is determined in accordance with the provisions of Art. 527 and 528 of the Civil Code, establishing the grounds and procedure for concluding a state contract for the supply of goods for state needs. The state contract is concluded on the basis of the order of the state customer for the performance of works for state needs, accepted by the contractor (clause 1 of article 527 of the Civil Code), and orders for the purchase of works for state needs are placed at auctions (competitions), unless otherwise expressly provided by federal laws and decrees of the President of the Russian Federation (clause 1 of the above-mentioned Decree of the President of the Russian Federation of April 8, 1997).
The procedure for organizing and holding such tenders is determined by the above-mentioned Federal Law on tenders for placing orders for state needs, the Regulations on contract tenders in the Russian Federation, approved by the order of the State Committee of the Russian Federation for Management state property and the State Committee of the Russian Federation for Architecture and Construction of April 13, 1993 N 660-r / 18-7 and the Basic Provisions for the Organization and Conduct of Contract Bidding (Competitions) for the Construction of Facilities (Construction, Installation and Design Work) for State needs, approved by the Gosstroy of Russia on May 6, 1997. Since the state contract for the performance of work for state needs is concluded on a competitive basis, its conclusion with the winner of the tender is mandatory (clause 4 of article 527 of the Civil Code). As for the winner of the tender, the conclusion of a state contract is obligatory for him only in cases established by law, and on condition that the state customer will compensate for all losses that may be caused to the contractor in connection with the execution of the state contract. However, the condition on compensation for such losses does not apply to a state-owned enterprise (paragraphs 2, 3 of article 527 of the Civil Code). The procedure for concluding a state contract is as follows. The draft state contract is developed by the state customer (by agreement of the parties, such a project can be developed by the contractor). The contractor (or state customer) who has received the draft state contract, if he has no objections to the terms of the state contract, signs it no later than thirty days and returns one copy of the state contract to the other party.
If the party that received the draft state contract has objections to its terms, it shall draw up a protocol of disagreements within thirty days and send it along with the signed state contract to the other party or notify it of the refusal to conclude a state contract.
The party that received the state contract with the protocol of disagreements must consider the disagreements within thirty days, take measures to agree on them with the other party and notify the other party of the acceptance of the state contract in its version or the rejection of the protocol of disagreements. If the protocol of disagreements is rejected or the specified period expires, unresolved disagreements under a state contract, the conclusion of which is mandatory for one of the parties, may be submitted by the other party no later than thirty days for consideration by an arbitration court. If the party, for which the conclusion of the state contract is obligatory, evades its conclusion, the other party has the right to apply to the arbitration court with a demand to compel this party to conclude the state contract.
Since the state contract for the performance of contract work for state needs is concluded on a competitive basis, in accordance with paragraph 4 of Art. 528 of the Civil Code must be concluded no later than twenty days from the date of the competition.
Mandatory (essential) conditions of the state contract are the conditions:
Since the state contract is concluded on a competitive basis, these conditions, by virtue of paragraph 2 of Art. 766 of the Civil Code, must be reflected in the terms of the competition.
In the event that state bodies reduce the funds of the relevant budget allocated to finance contract work, the parties agree on new terms, and, if necessary, other conditions for the performance of work. At the same time, the contractor has the right to demand from the state customer compensation for losses caused by the change in terms (clause 1 of article 767 of the Civil Code).
If the deadlines established by the state contract for the commissioning of enterprises, buildings, structures, launch complexes and queues, as well as individual facilities, are not met budget financing and preferential state lending to their construction are suspended by the body that allocated these funds. The decision to complete the construction is made in the prescribed manner at the proposal of the state customer, agreed with the Ministry of Economy of the Russian Federation, the Ministry of Finance of the Russian Federation, the State Committee of the Russian Federation for Construction and the Housing and Communal Complex and other interested ministries and departments (clause 8 of the Basic Provisions).
The procedure for payment for the work performed is determined by clause 5 of the Basic Provisions.
The state customer allocates an advance payment to the contractor, ensures timely and continuous financing of construction. The amount and timing of the advance payment, the procedure for its repayment, as well as the conditions for interim settlements for the work performed within 95 percent of their value are established at the conclusion of a state contract. If, through the fault of the contractor, the scope of work provided for by the schedule of their production, the amount of the submitted interim payment for the actually performed work is reduced by the cost of the work not completed, or payments are delayed until the lag is eliminated.
The final settlement is made within a month after the acceptance of the facility as a whole or its turn, launch complexes, as well as individual buildings and structures, unless a different settlement period is provided for in the state contract.
In the event of a delay in the terms established by the state contract for the transfer of the advance payment, payment for the work performed and final settlements, the state customer shall reimburse the contractor for the losses caused as a result of this, including the costs of paying interest rate for a loan.
The state customer is responsible for the timely transfer of equipment for installation, if this obligation under the state contract is assigned to him. The amount of sanctions for the untimely transfer of equipment for installation is established at the conclusion of the contract (clause 7 of the Basic Provisions). The contractor, in case of violation due to his fault of the deadlines established by the state contract for the commissioning of enterprises, buildings, structures, launch complexes and queues, as well as individual facilities, shall pay a fine in the amount of one thousandth of the cost of the work provided for by the state contract, for each day of delay until the actual completion construction (clause 9 of the Basic Provisions).
