| dc.description.abstract | The second paragraph of Article 72 of the Government Procurement Act states that “an acceptance with price-reduction may be conducted under conditions,” which shows it is one of the discretionary rights of the government agency during the handover stage. The purposes of this article are to save unnecessary waste or to promote efficiency of the procurement. However, many agencies tend not to apply this article by insisting strict standards even when the conditions are obviously applicable, or until dispute resolution processes are completed. Construction disputes often arise from such cases.
This research collected 102 litigation cases which were related to “acceptance with price-reduction” in public construction projects from a litigation database retrieval system of the Judicial Yuan. Case analyses reveal that certain procurements with less contract amount having sentence results not highly maintained if appealed. The most often seen cases can be categorized into five types: applicability, responsibility, reduction amount, penalty, and others. In addition, the price-reduction ranges between 2% and 6 times of the amount of non-conformity, in which one time is the majority. As for the penalty, it ranges from 10% to 6 times of the reduction amount; while 6 times or none with price reduction, are the most common ones.
This research proposed 5 and 3 suggestions for improvements from contractual and executive aspects, respectively. From the contractual aspect, it is recommended that maximum price-reduction amount, maximum penalty, related indirect costs, and tabulated calculation be clearly stated, and only common words be used instead of litigation vocabulary. For the executive aspect, the contractor should comply with the drawings and specifications, and should be responsive if difficulties arise; the government agency should follow the article when applicable, minding the statute of limitations, and enforcing supervision during contractual performance. These research results can serve as useful references to both the contractors and the government agencies to reduce disputes and to achieve a fair, reasonable, and effective environment when applying the “price-reduction” article. | en_US |