Chapter 3 Fee calculation formulas
Article 25
Where an entity entrusts a provider for its technical services, the calculation of service fees shall, according to the type, nature, scale, scope of work, area of work, environment of work, or duration of the work, and so forth, be selected among the following one or more than one method(s) and shall prescribe explicitly in the contract the chosen method:
1. Cost plus fee.
2. A percentage to construction expense.
3. Monthly, daily or hourly payment.
4. Consolidated pricing or unit pricing methods.
The service fees calculated according to the methods referred to in the preceding paragraph shall be evaluated and approved according the fees generally charged. Where additional fees are to be paid after approval, the coverage of the items and amount of such fees shall be stated clearly in the contract.
Article 25-1
Where an entity entrusts a provider for its technical services, the calculation of service fees may, according to the manpower category, number of people, working hours, salary or wage, and other related fees not included in the manpower for various technical service tasks during the performance of the contract, be reasonably estimated prior to drafting the budget. The service fees shall be applied as the reference for the chosen calculation method of services fees referred to in the preceding article.
Article 26
An entity that entrusts a provider for technical services and that the cost plus fees for work method for service fees shall be adopted, may calculate service fees include the following:
1. Direct fees:
a) Direct salary or wage:
This includes the actual salary or wage payable to the staffs directly involved in providing the services, including architects, professional engineers, engineers, and any other experts or staffs of the fields of planning, economics, finance, law, management or operations, plus a certain percentage of the above amount for fees incurred that are related to the staff for paid leaves and special day-off; bonuses paid not on a regular basis; and those which shall be paid by employers by law such as: labor insurance premium, the arrear wage payment fund premium, national health insurance premium, and labor pension.
b) Management fees:
This includes the salary or wages of management and accounting staffs, who are not within the category for payment under direct salary or wages, as well as the insurance, pension allowance, office expenditure, bills for water, electricity, heater and air-conditioner, depreciation or rental on furniture, machinery, equipment, etc., administrative cost, transportation cost of machinery and equipment, cost of mail and telephone, cost on contracting business, advertising cost, cost incurred in the preparation for commencing and ending of work , cost incurred for attending vocational and technical conference domestically or internationally held, cost on the development of market and human resources, research cost or professional communication cost for special business purpose, related tax issues, and so forth. The total amount of management fees however shall not exceed 100% of the amount of the direct salary or wages deducted by bonuses paid not on a regular basis.
c) Other direct fees:
This includes the direct costs incurred during the process of implementing the entrusted project that are not included in the direct salary or wages. This includes such as the cost or fees of: business trip(s), subsidy for construction site, after hour work, professional liabilities insurance, setting up project or site offices and laboratories at the construction site, vehicles used for construction site, data collection, patent, external training of operation and maintenance staffs, production or uses of software for computers, land survey, exploration, tests, chart and report copying and printing, external consultants and various related taxes and certification by the accountant, and so forth.
2. Fees for work:
Means compensations paid to the provider for providing professional services, including risks, profit, and related taxes.
3. Business tax.
The fees incurred for the paid leaves and special day-off as referred to in item 1 of subparagraph 1 of the preceding paragraph may be prescribed at a certain percentage of the actual salary or wage based on actual needs. Entities may priscribe the percentage and terms of payment in the tender documentation, and the payment may be made without receipts of the staffs. However, the percentage shall not exceed 16% of the actual salary or wage.
Bonuses paid not on a regular basis as referred to in item 1 of subparagraph 1 of paragraph 1 may be prescribed at a certain percentage of the actual salary or wage based on actual needs. Entities may priscribe the percentage and terms of payment in the tender documentation, and the payment shall be made with receipts of the staffs. However, the percentage shall not exceed 30% of the actual salary or wage.
Labor insurance premium, the arrear wage payment fund premium, national health insurance premium, and labor pensions which shall be paid by employers by law as referred to in item 1 of subparagraph 1 of paragraph 1 shall be paid by entities after verification.
The fees for work referred to in subparagraph 2 of paragraph 1 shall be set as a fixed amount and shall not be a variable amount that increases proportionately to the amount of the direct salary or wages and management fees. The total amount of the fees for work shall not exceed 25% of the combined value of both the direct salary or wages and the management fees deducted by bonuses paid not on a regular basis.
Article 27
An entity that entrusts a provider for technical services and that the cost plus fees for work method for service fees shall be adopted, may state in the invitation documents the conditions that the provider may be awarded incentive payment for delivering services at lower costs or better efficiency.
Methods of payment of incentive reward referred to in the preceding paragraph, which shall be clearly stated by the entity in the invitation documents, shall be as follows:
1. Where the service fee payable has been lowered, a set percentage of the amount of the contract price thus reduced and saved.
2. Where the actual performance evaluated is better than that agreed in the contract, the calculation method defined in the contract applies.
The set percentage referred to in subparagraph 1 of the preceding paragraph shall not exceed 50%. The amount payable referred to in subparagraph 2 of the preceding paragraph shall not exceed 10% of the total contract value or 10% of the upper limit of the contract price.
Article 28
An entity that entrusts a provider for technical services and that the cost plus fees for work method for service fees shall be adopted, shall prescribe and state the following items in the contract:
1. The provider shall record every entry of fees or costs incurred, and shall prepare and save documentary proof. The entity may, depending on the actual needs, visit or entrust a professional third party to visit the office of the provider for the purpose of examination and audit.
2. The upper limit on costs and the handling procedures when such costs exceed the limit.
The documentary proof referred to in subparagraph 1 of the preceding paragraph shall include invoices, receipts, record or statements of all of the items; except otherwise provided in the contract, photocopies may be used as proof.
Article 29
An entity that entrusts a provider for technical services and that the method of a percentage to construction expense for service fees shall be adopted, shall determined the rates and range of the construction expense percentage referring to Tables 1 through 4 as attached, according to the subject matter of the construction work, the service items and the degree of difficulty. The entity shall report to the head of the entity or the personnel authorized by the head and obtain his or her prior approval, and specify the rate and percentage in the tender documentation. Where the service items are not included in the attached tables, the costs of the service items are not in the coverage of a percentage to construction expense method. The entity shall list the items separately for suppliers to submit their price offers, or use the estimation results prescribed in Article 25-1 as a reference, and specify the fixed price in the tender documentation.
The term “construction expense” referred to in the preceding paragraph means,the government estimate of construction contract approved by the entity or an amount recommended by an evaluation committee. This does not include the fees and costs on governmental permits, planning, designing, supervising, professional construction management fees, adjusting construction expense due to price index, business tax, land and right expenses, legal expenses, project management fees of the procuring entity, insurance, interest on items related to the contracting of the construction work by the contractor and other excluding items prescribed in the contact.
Where there is no government estimate or the amount recommended by an evaluation committee for a construction contract, the construction expense referred to The preceding paragraph 1 may be substituted by the budget, but the excluding fees or tax referred to in the The preceding paragraph shall be deducted.
In the event where the contract of construction referred to in paragraph 1 is amended, terminated or rescinded, during the performance of the construction contract, the service fees shall be adjusted by negotiation according to the circumstances. The calculation of service fees shall be decided by mutual agreement according to the methods prescribed in the provision of Article 25.
Article 30
An entity that entrusts a provider for technical services and the method of monthly, daily or hourly payment for service fees shall be adopted, may calculate the salary or wages payable for the service fees according to one of the following methods. Fees apart from salary or wages may be calculated and paid additionally.
1. The amount of monthly payment is calculated according to the monthly salary rates of the staffs specified in the contract.
2. The amount of daily payment is calculated according to the daily wage rates of the staffs specified in the contract.
3. The amount of hourly payment is calculated according to the hourly wage rates of the staffs specified in the contract.
Article 31
Under the circumstances, any of the following costs additional to the service fees shall be added.
1. Where an amendment of the design must be undertaken after the design has been evaluated and approved.
2. Extra fees on supervision, professional construction management and other related costs when the construction exceeds the time-limit prescribed in the contract of technical services constructions.
3. Service fees on tender documentation amendment for re-invitation.
4. Design fees on reports, drawings, submitting for examinations and drawing examinations that are beyond the required design reports, drawings, submitting for examinations and drawing examinations as provided in the contract.
The extra fees referred to in the preceding paragraph may be calculated by using the method of cost plus fees, or by negotiating with the provider.
The additional fees referred to in paragraph 1 where the provider is not responsible for, shall be reviewed and agreed by the entity.
Article 32
Where the technical services entrusted to a provider by the entity are partially completed services, in addition to the service fees calculation method for the uncompleted part of the services according to the methods referred to in Article 25, the fees that are required for reviewing the completed part of the services shall be added to, but the fees shall be reviewed and agreed by the entity.
Article 33
Where the completion deadline of the service required has been shortened, the service fees may be increased according to the level of the time reduced. Such increment may be negotiated on a case-by-case base.
Where repeated construction services are required by using the same design drawing, the deign fees payable shall be reduced accordingly.
Article 34
Under the circumstances where the provider is not responsible for, the entity requests the provider to conduct planning or designing under different conditions for the same service item on different occasions, the repeated planning and designing shall be paid with additional service fees by the entity, but the fees shall be reviewed and agreed by the entity.
Article 35
Where it is necessary for an entity to alter part of the content of the entrusted services, the entity may adjust the service fees and the deadline according to the changes on the service items and the quantity required. With regard to the completed part of the work, service fees that are reviewed and agreed by the entity shall be paid for it.
Article 36
The contract may prescribe that the provider shall be entitled to receive a partial payment of service fees in advance after signing the contract. The remaining fees are payable monthly or by installments. The amount and conditions of each installment payment shall be clearly stated in the contract.
In principle, the advanced fees payable referred to in the preceding paragraph shall not exceed 30% of the total contract value or 30% of the upper limit of the total price payable.
In principle, the service fees are payable monthly or by installments referred to in paragraph 1. If the retention money of service fees are payable after the completion of all service items, the retention money shall not exceed 20% of the total contract value.
Article 37
Where the time frame for fulfilling the contract is longer than a year, the entity that entrusts a provider for technical services may prescribe in the contract the monthly calculating and adjusting contract value stating from the second year according to the index of Average Monthly Earnings of Employees by Professional, Scientific & Technical Services in Taiwan, the applicable adjusting items, methods and the maximum amount of adjustment.