|
THE
MINISTRY OF CONSTRUCTION
|
SOCIALIST
REPUBLIC OF VIETNAM
Independence
- Freedom - Happiness
|
|
No.
06/2007/TT-BXD
|
Ha
Noi, July 25, 2007
|
CIRCULAR
PROVIDING GUIDANCE ON CONTRACTS IN CONSTRUCTION ACTIVITIES
Part I
GENERAL
PROVISIONS
1. Contracts
in construction activities
1.1. A contract in construction
activities is a civil contract. A contract in construction activities (below
referred to as construction contract for short) is a written agreement between
the principal and the contractor on the establishment, change or termination of
their rights or obligations for the performance of one, several or all jobs in
construction activities. A construction contract is a document legally binding
on the contracting parties regarding their rights and obligations; disputes
between the contracting parties shall be settled based on the legally effective
signed contract; disputes not yet mentioned in the contract shall be settled in
accordance with relevant laws.
1.2. The principal is the
investor, general contractor or principal contractor.
1.3. The contractor is the general
contractor or principal contractor, in case the principal is the investor, or
the subcontractor, in case the principal is the general contractor or principal
contractor.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
2.1. Scope of application
Construction jobs, bidding
packages under works construction investment projects funded with state
capital, including state budget capital (including official development
assistance - ODA), state-guaranteed credit capital, state development
investment credit capital, and state investment capital of other sources.
For Build-Operate-Transfer (BOT)
construction contracts, Build-Transfer-Operate (BTO) contracts or
Build-Transfer (BT) contracts, in the course of investing in the construction
of works, project investors shall, depending on their contributed capital
amounts, study and apply the guidance in this Circular.
For contracts on execution of
ODA-funded projects, if a treaty signed by competent agencies or organizations
of the Socialist Republic of Vietnam contains provisions different from those
of this Circular, the provisions of that treaty prevail.
2.2. Subjects of application
This Circular applies to
principals and contractors that are domestic and foreign organizations and
individuals with adequate operation and practice capacity when signing
contracts for carrying out construction activities in Vietnam.
Organizations and individuals
involved in construction contracts under works construction investment projects
funded with capital of other sources are encouraged to apply the provisions of
this Circular.
3. Principles
of signing a construction contract
3.1. A contract shall be signed on
the principles of voluntariness, equality, good will, cooperation, honesty and
observance of law and social ethics. All agreements must be expressed in a
contract.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
3.3. Depending on the complexity
of a contract, the contracting parties may apply the provisions of this
Circular to contract drafting, negotiation and signing. For a contract
involving simple and small-scale jobs or bidding packages, the parties may
state all relevant contents in the contract. For contracts involving bidding
packages under complex and large-scale projects, the contractual terms may be
separated into general and specific conditions.
General conditions of a contract
are documents expressing basic rights and obligations of and relations between
the contracting parties.
Specific conditions of a contract
are documents specifying or supplementing a number of contents of the
contract’s general conditions.
3.4. The contract price (contract
signing price) must neither exceed the winning bid (in case of bidding) nor the
approved cost estimate of the bidding package (in case of contractor
designation), except for the volume arising outside the bidding package
approved by a competent authority.
3.5. The investor or investor’s
representative may sign contracts with one or many principal contractors for
performance of jobs. When an investor signs contracts with many principal
contractors, the contents of these contracts must ensure the unified and
coordinated performance of contractual jobs in order to assure the progress and
quality of projects.
3.6. The principal contractor may
sign contracts with one or several subcontractors provided that those
subcontractors must be approved by the investor and the subcontractors must be
consistent with the contract signed by the principal contractor and the
investor. The principal contractor is answerable to the investor for the
progress and quality of the signed jobs, including those performed by
subcontractors.
3.7. In case of partnership
contractors, the partners must make a partnership agreement bearing the
signatures of all of them; if the partners agree to authorize a contractor who
is the head of the partnership to sign a contract directly with the principal,
that contractor shall sign the contract with the principal.
3.8. The principal and the
contractor may appoint their representatives to negotiate, sign and perform a
contract:
- The parties’ representatives to
negotiate a contract must have full power to make decisions and bear
responsibility for their decisions throughout the course of contract
negotiation. Any contents which are subject to approval of competent
authorities must be stated in the contract negotiation record.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
4. Types of
construction contract
Depending on the size, nature and
conditions of investment projects on the construction of works, kinds of jobs
and relations between parties, a construction contract may be of different
types with different contents.
4.1. Construction consultancy
contract
Construction consultancy contract
is a construction contract for the performance of one, several or all
consultancy jobs in construction activities, such as formulation of a
construction planning; formulation of a works construction investment project;
construction survey; construction engineering; selection of contractors;
construction supervision; management of investment projects on the construction
of works; verification of designs, total cost estimates and cost estimates; and
other consultancy activities related to works construction.
Consultancy contract for the
performance of all jobs of construction engineering under a project is a
general engineering contract.
4.2. Contract on supply of
construction supplies and equipment
Contract on supply of construction
supplies and equipment is a construction contract for the supply of supplies
and equipment included in a technological chain installed to a construction
work according to the technological design for an investment project on work
construction.
4.3. Construction contract
Construction contract is a
contract on the construction of a work, work item or construction job according
to the work construction design.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Contract for the performance of
all jobs of engineering and construction of a work under a project is a general
contract for work engineering and construction.
4.4. Engineering, procurement and
construction contract (EPC contract)
EPC contract is a construction
contract for the performance of all jobs, including engineering, procurement of
supplies and equipment, and construction of a work or work item.
4.5. Turnkey contract
Turnkey contract is a construction
contract for the package performance of all jobs of project formulation,
engineering, procurement of supplies and equipment, and work construction.
5. Management
of contract performance
The principal and the contractor
shall, within the ambit of their rights and obligations, work out
implementation plans and measures compliant with the contents of the signed
contract in order to realize the agreements reached in the contract. Contents
of management of the contracting parties’ contract performance include
management of the quality and progress of jobs; contract volumes and prices;
management of labor safety, environmental sanitation, fire and explosion
prevention and combat; management of contract change and modification; and other
contents stated in the construction contract, for the attainment of the signed
contract’s objectives.
The supervision of contract
performance complies with Clause 1, Article 59 of the Bidding Law.
Part II
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
1. Dossiers
of a construction contract
A construction contract dossier
comprises a construction contract, attached documents and documents added in
the course of contract performance (below referred to as documents attached to
a contract).
Documents attached to a contract
constitute an integral part of a construction contract. Depending on the size
and nature of jobs, documents attached to a contract may be all or some of the
following:
1.1. Contract-winning notice or
contractor designation document;
1.2. Contractual conditions
(general and specific conditions);
1.3. The contractor’s proposal;
1.4. Technical instructions and
reference conditions;
1.5. Blueprints;
1.6. Written amendments or
supplements, contract negotiation record;
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
1.8. Other relevant documents.
Depending on each specific
contract, the contracting parties shall reach agreement on the order of
priority in the application of contractual documents if those documents contain
contradictory provisions.
2. Contents
of a construction contract
Depending on the size,
characteristics and nature of each specific work, bidding package and job and
the type of construction contract, a construction contract may contain all or
some of the following principal contents: information on the contract and
contracting parties; definitions and explanations; applicable laws and used
languages; payment currencies; job volumes; contract price; advances; contract
payment; contract price adjustment; job performance schedule and completion
deadline; contract performance guarantee; general rights and obligations of the
contractor; general rights and obligations of the principal; subcontractor/s
(if any) designated by the investor; quality management of construction works;
take-over test of completed jobs; work insurance and warranty, environmental
protection, labor safety and fire and explosion prevention and combat;
electricity, water and security for the construction site; responsibilities for
errors; suspension and termination of the contract by the principal and the
contractor; risks and responsibilities; force majeure circumstances;
bonus; fine for contract breach; settlement of disputes over the contract;
contract finalization; and contract liquidation.
2.1. Information on the contract
and contracting parties
A contract must fully contain
general information on the contract and information on the contracting parties.
2.1.1. General information on a
contract covers the serial number of the contract; the name of the bidding
package; the name of the project and bases for signing the contract;
2.1.2. Information on the
contracting parties covers transaction names of the contracting parties; representatives
of the parties; business registration addresses or transaction addresses; tax
identification numbers, business registration certificates, account numbers;
telephone and fax numbers, and email addresses; paper of authorization (in case
the contract is signed under authorization); the time of signing the contract;
and other relevant information.
2.2. Definitions and explanations
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
If a term has a different meaning
when it is used in an article, a clause or a specific context, this meaning
must be explained in such article, clause or context.
2.3. Applicable laws and used
languages
2.3.1. Applicable laws: A contract
is governed by the legal system of the Socialist Republic of Vietnam.
ODA-funded projects comply with Point 2.1, Part I of this Circular.
2.3.2. Language used in a contract
is Vietnamese. When a contract involves foreign party(ies), Vietnamese and
English shall be used.
2.4. Payment currencies
Payment currencies must be clearly
stated in a contract. Different payment currencies may be used under a contract
on the principle that payment shall be made in the currency used for bids in
compliance with the bid invitation dossier or requirement dossier. Payment may
be made by account transfer, in cash, account transfer telegram, etc., which, however,
must be specified in the contract.
2.5. Job volumes
A contract must specify the
volumes and scopes of jobs to be performed. Job volumes and scopes shall be
determined based on the requirement dossier of the investor (the principal) or
the bid invitation dossier and the record clearly describing the requirements
of the investor (the principal, if any), or relevant records of negotiation
between the parties.
2.6. Construction contract price
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
In a contract, the parties shall
specify the contract price contents, including taxes, charges and the parties’
responsibilities to pay relevant taxes and charges.
Based on the bid invitation
dossier, bidding participation dossier and contract negotiations results, the
parties shall determine the contract price. A contract price may take one of
the following forms:
2.6.1. Package contract price
(package and pro rata prices stipulated in the Bidding Law) is the price of a
construction contract which remains unchanged throughout the course of contract
performance with regard to jobs under the signed contract, except for cases of
adjustment specified in the contract (if any).
The package contract price applies
to works or bidding packages for which the volume, quality and implementation
duration have been identified, or, in some cases, for which the volume cannot
be identified yet but the contractor has adequate capacity, experience and
documents for the calculation and determination of the package price and
accepts to take risks related to the price determination.
Construction contracts of all
types may use a package contract price if the contract price can be determined
before the contract is signed, even when the contract price is determined as a
percentage (%) of the work value or the volume of a regular consultancy job.
2.6.2. Contract price based on
fixed unit price (unit price- and time-based prices stipulated in the Bidding
Law) is a construction contract price determined on the basis of the
temporarily calculated job volume and the unit price of each job under the
contract which are fixed and kept unchanged throughout the course of contract
performance, except for cases of adjustment specified in the contract (if any).
The contract price based on fixed
unit price applies to works or bidding packages the volume of which cannot be
accurately determined but the unit prices for job performance can be determined
and the contractor has adequate capacity, experience and documents for the
calculation and determination of fixed unit prices for work construction and
risks related to the unit price determination. Those fixed unit prices are kept
unchanged throughout the course of contract performance, except for cases of
adjustment specified in the contract.
Fixed unit prices may be full unit
prices, for construction jobs, or time-based labor unit prices (monthly,
weekly, daily or hourly), for several consultancy jobs.
2.6.3. Contract price based on
adjustable price is the price of a construction contract under which the volume
and unit price of a job under the contract may be adjusted in the cases
specified in the contract.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
Contract price based on adjustable
price (at the time of contract signing, the contract price is temporarily
calculated) shall be adjusted when the volumes and unit prices can be
determined according to the contractual terms.
2.6.4. Combined contract price is
a contract price determined in the forms specified at Points 2.6.1, 2.6.2 and
2.6.3 above.
Combined contract price applies to
large-scale and long-term works or bidding packages with complicated technical
requirements. The principal and the contractor shall, based on the types of job
under the contract, agree on, and determine in an appropriate manner the types
of job subject to the application of the package contract price, contract price
based on fixed unit price or contract price based on adjustable price.
2.7. Construction contract advance
Contract advance is a sum of money
the principal advances to the contractor for the performance of jobs under a
contract.
The advance of investment capital
for works construction must be stated in the construction contract and made
right after the contract comes into force and after the principal has received
the contract performance guarantee (for cases requiring contract performance
guarantee under Point 2.11). A construction contract must specify the advance
level, the advance time, the number of advances, and the advance recovery. The
advance levels are specified as follows:
- For consultancy contracts, the
minimum advance is equal to 25% of the contract price;
- For construction contracts, the
minimum advance is equal to 10% of the contract price, for contracts valued at
over VND 50 billion each; 15%, for contracts valued at between VND 10 billion
and 50 billion each; or 20%, for contracts valued at under VND 10 billion each;
- For contracts on supply of
supplies and equipment, the advance depends on the contract value, which,
however, must not be lower than 10% of the contract price;
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
- For ground clearance, the
advance is based on ground clearance plans;
The advanced amount is gradually
recovered upon each payment; the recovery of the advanced amount starts right
upon the first payment and finishes when the paid amount reaches 80% of the
contract value. For ground clearance jobs, the advanced amount is fully
recovered upon completion of ground clearance jobs.
The principal and the contractor
shall reach agreement on plans to pay and recover advances for manufacturing
high-value components and semi-finished products first for construction
activities or procuring supplies for seasonal reserve.
Depending on the size and nature
of contractual jobs, the contractor may suggest advance levels lower than the
above levels.
2.8. Construction contract payment
2.8.1. Contract payment must be
based on the type and price of, and conditions under, the contract signed by
the contracting parties. The number of payments, payment periods, payment time
and payment conditions must be clearly specified in the contract.
2.8.2. Contract payment in case of
package contract price: Payment shall be made according to percentage (%) of
the price of the contract, work, work item, or job volume completed
corresponding to payment periods specified in the contract after the payment
dossiers are examined and certified by the principal. The contractor will be
paid the whole price of the contract signed with the principal and adjustable
price-based money amounts (if any) after completing the contract and the
completed contractual jobs are taken over.
2.8.3. Contract payment in case of
contract price based on fixed unit price: Payment shall be made based on
completed job volumes (including arising volumes, if any) tested and taken over
in the payment period and on unit prices corresponding to such jobs stated in
the contract or the contract annex.
2.8.4. Contract payment in case of
contract price based on adjustable price: Payment shall be made based on
completed job volumes (including arising volumes, if any) tested and taken over
in the payment period and on the adjusted unit prices according to the
contractual terms. If, at the payment time, the unit prices cannot yet be
adjusted, the unit prices temporarily calculated at the time of signing the
contract shall be used for temporary payment and the payment value shall be
adjusted when the adjusted unit prices are available according to the
contractual terms.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
2.8.6. Depending on the size and
nature of bidding packages, works or work items, and the contract type and
price, the parties may agree to make payment in a lump-sum or payment in
installments. In case of payment in installments, the contract must specify the
payment schedule (based on time, percentage (%) or completed job volume) and
payment level at each payment time (payment deadlines). Installments must be
paid according to this payment schedule; if the actual job performance progress
is slower than the payment progress, the principal may agree with, or determine
the adjusted payment levels, taking into consideration the scope and extent of
such delayed performance.
2.8.7. Dossiers of construction
contract payment
The order, procedures, documents
and certifications necessary in payment dossiers (including forms) must be
clearly stated in the contract. Payment dossiers shall be compiled by the
contractor according to the forms stated in the contract. A payment dossier comprises
the following principal documents:
- Payment dossier in case of
package contract price:
+ Take-over test record (quality
and volume test record): In each payment period, there may be one or several
kinds of records for take-over of completed works, work items or job volumes,
with the certification of a representative of the principal or the consultant
(if any) and a representative of the contractor; certification of detailed
completed volumes is not required. Dossier of completion of jobs tested for
take-over in the payment period (if any);
+ Table for determination of the
value of completed job volumes under the contract (Appendix 2, not printed
herein);
+ Table for determination of the
value of volumes arising outside the contract, with the certification of a
representative of the principal or the consultant (if any) and a representative
of the contractor (Appendix 4, not printed herein);
+ Table for calculation of the
value requested to be paid (Appendix 1, not printed herein), with the following
items: value of completed volumes under the contract, value of job volumes
arising outside the contract (if any), advance amount, and remaining payment
value after the above amounts are subtracted.
- Payment dossier in case of
contract price based on fixed unit price:
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
+ Table for determination of the
value of completed volumes under the contract (Appendix 2, not printed herein);
+ Table for determination of the
value of volumes arising outside the contract (Appendix 4, not printed herein);
+ Table for determination of
adjusted unit prices under the contractual terms (if any) (Appendix 3, not
printed herein), with the certification of a representative of the principal or
the consultant (if any) and a representative of the contractor;
+ Table for calculation of the
value requested to be paid (Appendix 1, not printed herein), with the following
items: value of completed volumes under the contract, value of job volumes
arising outside the contract (if any), advance amount, and remaining payment
value after the above amounts are subtracted.
- Payment dossier in case of
contract price based in adjustable price:
+ Dossier of completion of jobs
tested for take-over in the payment period; record of take-over test of
completed job volumes (quality and volume test record) corresponding to jobs
under the signed contract in the payment period, with the certification of a
representative of the principal or the consultant (if any) and a representative
of the contractor;
+ Table for determination of
adjusted unit prices under the contractual terms (Appendix 3, not printed
herein), with the certification of a representative of the principal or the
consultant (if any) and a representative of the contractor;
+ Table for determination of the
value of completed volumes under the contract (Appendix 2, not printed herein);
+ Table for calculation of the
value requested to be paid (Appendix 1, not printed herein), with the following
items: value of completed volumes under the contract, advance amount, and
remaining payment value after the above amounts are subtracted.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
2.8.8. Payment time limit
The parties shall state in the
contract the time limit within which the principal must make payment to the
contractor after receiving a complete and valid payment dossier according to
the contractual terms, which, however, must not exceed 10 working days.
For construction works funded with
state budget capital, within three working days after receiving a complete and
valid payment request dossier from the contractor, the investor shall carry out
procedures and transfer the payment request to the capital-allocating or
-lending body. In the year when construction finishes or the work is put to
use, the investor shall make payment to the contractor for the value of completed
jobs, excluding the amount retained for work warranty according to regulations.
2.8.9. Delayed payment
The parties shall clearly state in
the contract financial compensations for late-paid amounts according to the
extent of delay; compensation levels may vary, but the first-time compensation
must not be lower than the amount calculated at interest rate set by a
commercial bank in each period.
2.8.10. Payment of retained money
amounts
The parties shall state in the
contract the payment of retained money amounts when the contractor has
fulfilled his/her/its obligations defined in the contract, such as the
remaining money amounts of previous temporary payments or any amounts which the
principal has not yet paid to the contractor, including the amount for work
warranty (if any).
2.9. Adjustment of construction
contract price
2.9.1. The contract price
adjustment must be stated in the contract and compliant with the bid invitation
dossier, bidding participation dossier and contract negotiation results. The
parties shall clearly state in the dossier cases eligible for contract
modification, and methods, modes and scopes of adjustment of the contract
price.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
- Addition of jobs not covered by
the signed contract;
- At the time of contract signing,
temporarily calculated unit prices were used for jobs or job volumes for which
the principal and the contractor could not yet accurately determine unit prices
and agreed to adjust them when conditions permit;
- When the arising volume is 20%
larger than the corresponding job volume to be performed by the contractor
under the contract, unit prices shall be considered and adjusted for such
arising volume;
- There are some unit prices which
the principal and the contractor agree to consider and adjust after a certain
period of time from the starting date of contract performance;
- When prices of fuel, supplies or
equipment specified in the contract see great fluctuations, directly affecting
the contract performance, or when the State amends relevant policies, price
adjustment must be reported to a competent authority for consideration and
decision;
- Force majeure
circumstances specified in the contract;
- To-be-inflated amounts specified
in the contract. Bases for inflation calculation are determined 28 days before
the date the contractor submits the payment dossier;
2.9.3. Methods of contract price
adjustment
In case of adjustment of the
contract price, the to-be-paid job volumes are determined on the basis of
completed job volumes already tested; unit prices used for making payment for
jobs are determined under the contractual terms applicable to the
re-determination or adjustment of unit prices in the contract according to the
adjustment co-efficient. One or all of the following methods may be used for
adjusting the contract price:
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
- Direct clearing;
- Formula for determination of the
adjustment co-efficient (Appendix 5, not printed herein).
2.10. Implementation schedule and
job completion deadline
2.10.1. The parties shall specify
in the contract the points of time for starting and finishing the contract.
2.10.2. The contractor shall work
out a detailed schedule and submit it to the principal for approval, serving as
a basis for contract performance.
2.10.3. The contracting parties
shall anticipate and plan measures to deal with situations which may prolong
the job performance duration and may not arbitrarily prolong this duration for
other reasons.
2.10.4. The parties shall agree in
detail the extent of damage and ways of dealing with damage caused by the
parties’ delayed performance.
2.11. Construction contract performance
guarantee
2.11.1. Construction contract
performance guarantee means that the contractor takes one of the measures of
deposit, collateral, or submission of letter of underwriting in order to
guarantee the successful bidder’s responsibility to perform the construction
contract in a given period of time as required in the bid invitation dossier.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
2.11.3. The value of contract
performance guarantee is specified in the bid invitation dossier and does not
exceed 10% of the contract price; in order to prevent high risks, this value
may be higher but must not exceed 30% of the contract price and must be
approved by a competent authority.
2.11.4. The validity duration of
construction contract performance guarantee shall last till the time of
performance of the warranty obligation, if any.
2.11.5. The contractor may not
reclaim the guarantee for construction contract performance in case he/she/it
refuses to perform the contract after it comes into force.
2.12. General rights and
obligations of the contractor
Depending on the size and nature
of jobs, the parties shall specify in the contract general responsibilities of
the contractor, such as:
2.12.1. Representative of the
contractor
The contractor may designate his/her/its
representative and authorize the representative to perform certain tasks, which
must be specified in the contract.
If the contractor’s representative
is not specified in the contract, before the date of construction commencement,
the contractor shall submit to the principal the name and details of the
representative and his/her/its powers and responsibilities for consideration
and approval. Without prior approval of the principal, the contractor may not
dismiss his/her/its representative or appoint another replacement.
2.12.2. Key personnel of the
contractor
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
- The contractor’s key personnel
at the construction site and the office;
- Report on the contractor’s key
personnel and equipment;
- The principal’s supervision of
the contractor’s key personnel.
2.12.3. The contract must also
specify general rights and obligations of the contractor with respect to:
- Subcontractors (if any);
- The transfer of benefits of a
subcontract;
- The parties’ cooperation in
contract performance;
- Placement of land markers;
- Safety regulations;
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
- Rights to roads and vehicles;
- Responsibilities for existing construction
works and inhabitants;
- Roads leading to the
construction site;
- Goods transportation;
- The contractor’s main equipment;
- Equipment and materials supplied
by the principal;
- Progress report;
- Supply and use of documents;
- Delayed drawings or
instructions;
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
- Secret details;
- Joint responsibilities and
multiple responsibilities;
- Removal of the contractor’s
employees out of the construction site after the work is tested;
- Other relevant issues (antiques,
etc.).
2.13. General rights and
obligations of the principal
The contract must specify general
rights and obligations of the principal with respect to:
2.13.1. The principal’s key
personnel;
2.13.2. The principal’s
responsibility to make financial arrangements;
2.13.3. The principal’s use of the
contractor’s documents;
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
If the principal hires qualified
organizations or individuals to provide consultancy services to ensure the
proper performance of jobs, the contract must specify issues related to
consultants, such as:
- Consultants’ tasks and powers;
- Consultants’ authorization;
- Consultants’ instructions;
- Replacement of consultants;
- Consultants’ decision.
2.14. Subcontractors (if any)
designated by the investor
The contracting parties may agree
to employ subcontractors designated by the investor to perform certain jobs in
order to attain the ultimate goal of the jobs, but such employment must be
approved by the principal contractor. Then, the contract must specify issues
related to designated subcontractors, such as:
2.14.1. Definition of designated
subcontractor;
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
2.14.3. Payment to the designated
subcontractor(s).
2.15. Quality management of
construction works
Quality management of works must
comply with state regulations on quality management of construction works. A
contract must state in detail the quality management of works, including
quality management by the contractor; quality management by the investor (the
principal) and the consultant (including construction survey consultant,
engineering consultant, supervision consultant and other related consultants).
2.16. Take-over test of completed
jobs
The contract must specify the
parties’ responsibilities and obligations or take-over test of all jobs, each
job and jobs which need be tested before other jobs are performed, covering:
- Contents of to-be-tested jobs
(test of part or the whole of a job);
- Testors, persons signing test
records;
- Form of the test record, for
each tested job, including assessment of tested jobs;
- Jobs which need be measured for
payment purposes, methods of measurement;
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
2.17.1. The contract must specify
the parties’ responsibilities for insurance, covering the following contents:
insured objects, insurance sums and insurance duration.
2.17.2. The principal shall buy
insurance for construction works and assets under his/her/its ownership. If
this insurance premium has been included in the successful bid, the contractor
shall buy insurance.
2.17.3. The contractor shall buy
necessary insurance for its activities in accordance with law.
2.17.4. The principal and the
contractor shall reach agreement and state in the contract warranty conditions,
warranty duration and the parties’ warranty responsibilities for construction
works. Work warranty contents comply with regulations on quality management of
construction works.
2.18. Environmental protection,
labor safety, fire and explosion prevention and combat
The parties shall state in the
contract each party’s duties, responsibilities and obligations regarding
environmental protection, labor safety and fire and explosion prevention and
combat in the course of job performance.
Environmental protection and labor
safety contents comply with state regulations on management of investment
projects on the construction of works.
2.19. Electricity, water and
security for the construction site
The contract must specify each
party’s rights and obligations related to the supply of water and electricity,
payment of electricity and water charges, and security for the construction
site.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
The contract must specify the
parties’ responsibilities for errors made in the course of job performance,
such as:
- Completion of unfinished jobs
and correction of errors or repair of malfunctions;
- Expenses for error correction;
- Time of notification of errors;
- Failure to correct errors;
- Removal of erroneous jobs out of
the construction site;
- Additional inspections of
post-correction errors;
- Error causes;
- Unfulfilled obligations under
the contract.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
In a construction contract, the
principal and the contractor shall reach agreement and specify cases of
contract suspension or termination, the parties’ right to suspend or terminate
the contract; order and procedures for contract suspension or termination by
the parties; determination of the contract value at the time of contract
suspension; and the parties’ payment responsibilities after contract
termination.
2.21.1. The principal and the
contractor may suspend a construction contract in the following cases:
- Due to a fault of the principal
or the contractor;
- Force majeure circumstances;
- Other cases as agreed by the
parties.
In these cases, either party may
suspend the contract but shall notify in writing another party in advance as
agreed by the parties. The parties shall discuss solutions for proper
performance of the signed construction contract.
The duration of construction
contract suspension and levels of damages payable for such suspension shall be
agreed by the parties themselves in the contract.
2.21.2. Construction contract
termination by the principal or the contractor
- Either party may terminate the
contract and need not pay damages when another party breaches the contract to
an extent that the contract must be cancelled as agreed by the parties in the
contract or as provided for by law;
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
- Before terminating a
construction contract, the contract-terminating party shall notify the other
party in advance as agreed by the parties themselves; if failing to make
notification, thereby causing damage to the other party, the
contract-terminating party shall pay damages to the other party;
- When the contract is terminated,
it becomes invalid from the time of termination and the parties shall return
related assets or money to each other.
2.22. Risks and parties’
responsibilities
The contract must specify
responsibilities of the principal and the contractor for risks, such as
compensations for damage caused by one party to the other; and each party’s
handling of arising risks.
2.23. Force majeure
circumstance
The parties shall list in the
contract force majeure circumstances, such as earthquake, storm, flood,
cyclone, tsunami, landslides, war or war danger; and ways of dealing with those
circumstances.
2.24. Bonus, fine for contract
breach
Contract bonus or fine for
contract breach must be specified in the contract. The bonus level must not
exceed 12% of the value of the yielded benefit, while the fine level must not
exceed 12% of the breached value of the contract. Bonus money shall be deducted
from profits earned from the early use or operation of quality works or from
amounts saved reasonably in the course of contract performance.
2.25. Settlement of disputes over
a construction contract
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
2.26. Construction contract
finalization
The contract must specify the
order, procedures, time limit for submission of finalization reports, which
must not exceed 30 days, contents of a contract finalization dossier, and
enclosed forms (if any) for contract finalization. The contract finalization
dossier shall be made by the contractor, depending on each specific kind of
contract, on the principle that only a list of available documents (test
record, payment dossiers in different periods) is required and unavailable
documents shall be made. A dossier comprises:
- Work completion document (for
work construction contract), certified by the parties;
- Records of take-over test of
completed job volumes;
- Record of certification of
arising job volumes;
- Record of take-over test of
construction survey results;
- Record of take-over test of work
construction designs;
- Record of transfer and putting
of the work to use;
- Table for determination of the
contract finalization value, certified by the parties;
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
2.27. Construction contract
liquidation
Right after the contractor
fulfills his/her/its contractual obligations, the contracting parties shall
liquidate, and terminate the validity of, the contract and other related
obligations.
Contract liquidation must be
completed within forty-five (45) days from the date the contracting parties
fulfill their contractual obligations.
2.28. Validity of a contract
A construction contract becomes
valid on the date the contracting parties sign the contract, unless otherwise
agreed by the parties.
Part III
ORGANIZATION OF
IMPLEMENTATION
1. This Circular takes effect
15 days after its publication in “CONG BAO” and replaces the Construction Ministry’s Circular 02/2005/TT-BXD of February 25, 2005,
providing guidance on contracts in construction activities.
2.
Ministers, heads of ministerial-level agencies, presidents of
provincial/municipal People’s Committees, Boards of Directors of state
corporations, economic groups, and heads of concerned units shall organize the
implementation of this Circular.
...
...
...
Please sign up or sign in to your Pro Membership to see English documents.
FOR THE MINISTER OF CONSTRUCTION
VICE MINISTER
Dinh Tien Dung