THE
GOVERNMENT
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|
SOCIALIST
REPUBLIC OF VIET NAM
Independence - Freedom – Happiness
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|
No.
48/2010/ND-CP
|
Hanoi,
May 07, 2010
|
DECREE
ON CONTRACTS IN CONSTRUCTION ACTIVITIES
THE GOVERNMENT
Pursuant to the December 25, 2001
Law on Organization of the Government;
Pursuant to the June 14, 2005 Civil Code;
Pursuant to the November 26, 2003 Construction Law;
Pursuant to the November 29, 2005 Bidding Law;
Pursuant to the June 19. 2009 Law Amending and Supplementing a Number of
Articles of the Laws Concerning Capital Construction Investment;
At the proposal of the Minister of Construction,
DECREES:
Chapter I
GENERAL PROVISIONS
Article 1.
Scope of regulation and subjects of application
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2. This Decree applies to
organizations and individuals involved in construction contracts under projects
with 30% or more state capital in the Vietnamese territory. Organizations and
individuals involved in construction contracts under projects with less than
30% state capital are encouraged to apply the provisions of this Decree.
3. Construction contracts under
projects funded with official development assistance (ODA) may comply with
relevant treaties to which the Socialist Republic of Vietnam is a contracting
party and which contain provisions different from those of this Decree.
Article 2.
Interpretation of terms
In this Decree, the terms below
are construed as follows:
1. Construction contract means a
civil contract established in the form of a written agreement between a
principal and a contractor on the establishment, change or termination of the
rights, responsibilities and obligations of the contracting parties for the
performance of one. some or all of jobs in construction activities.
2. Principal means an investor
or a general contractor or a principal contractor.
3. Contractor means a general
contractor or principal contractor in case the principal is an investor; a
sub-contractor in case the principal is a general contractor or principal
contractor. A contractor may be a partnership of contractors.
4. General conditions of a
construction contract means a document enclosed with the contract defining
basic rights and obligations of and relationships between parties to the
contract.
5. Particular conditions of a
construction contract means a document enclosed with the contract specifying or
supplementing a number of general conditions applicable to the contract.
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7. Working day referred to herein
means calendar day. except Sundays and public holidays prescribed by law.
8. Project standards means
technical regulations, economic-technical norms, job performance processes,
technical specifications and natural condition indicators elaborated or compiled
by investors or their consultants for application to specific construction
investment projects. Project standards must conform to regulations and
standards promulgated or accredited by the State.
9. FEED design means a design
made by a foreign consultant according to international practices after a work
construction investment project is approved to serve as a basis for realizing
detailed designs for works.
10. Main contract means a
construction contract signed between an investor and a principal contractor or
general contractor.
11. Sub-contract means a
construction contract signed between a principal contractor or general
contractor and a sub-contractor.
12. Lump-sum contract, fixed
unit-price contract, adjustable unit-price contract, time-based contract and
percentage contract referred to herein means the forms of lump-sum contract,
unit-price (contract unit price or adjustable unit price) contract, time-based
contract and percentage contract specified in the Government's Decree No.
85/2009/ND-CP of October 15. 2009. guiding the implementation of the Bidding
Law and selection of contractors under the Construction Law.
Article 3.
Types of construction contract
1. By characteristics of work,
construction contracts are divided into the following types:
a/ Construction consultancy
contract (below referred to as consultancy contract) means a contract for the
performance of one. some or all of consultancy jobs in construction activities;
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c/ Technological equipment
provision contract (below referred to as equipment provision contract) means a
contract for the provision of equipment for installation in construction works
according to technological designs: technological equipment provision general
contract means a contract for the provision of equipment for all works of an
investment project.
d/ Work engineering and
construction (EC) contract means a contract for the performance of work or work
item engineering and construction jobs; work engineering and construction
general contract means a contract for engineering and construction of all works
of an investment project.
e/ Engineering and technological
equipment provision (EP) contract means a contract for the performance of
engineering jobs and provision of equipment for installation in construction
works according to technological designs; engineering and technological
equipment provision general contract means a contract for engineering and provision
of technological equipment for all works of an investment project.
f/ Technological equipment
provision and construction (PC) contract means a contract for the provision of
technological equipment for and construction of works or work items: technological
equipment provision and construction general contract means a contract for the
provision of technological equipment for and construction of all works of an
investment project.
g/ Engineering-technological
equipment provision-construction (EPC) contract means a contract for the
performance of all jobs from engineering, provision of technological equipment
to construction of works and work items: EPC general contract means a contract
for the engineering of, provision of technological equipment to and construction
of all works of an investment project.
h/ Turnkey general contract
means a construction contract for the performance of all jobs of project
formulation, engineering, provision of technological equipment and construction
of works of a work construction investment project.
2. By contract prices,
construction contracts are divided into the following types:
a/ Lump-sum contract:
b/ Fixed unit-price contract;
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d/ Time-based contract:
e/ Percentage contract.
Article 4.
Principles of signing construction contracts
1. A construction contract shall
be signed on the principles of free will, equality, good will, cooperation,
lawfulness and in accordance with social ethics.
2. A construction contract shall
be signed after the principal completes the selection of contractor(s) under
regulations and involved parties finish contract negotiations.
3. The contract signing price
must not exceed the bid-winning price (in case of bidding) or the approved bid
package cost estimate (in case of contractor appointment). In case of addition
of a work volume or an equipment quantity outside the volume or quantity
indicated in the bidding dossier (dossier of requirements) which results in a
contract signing price higher than the bid-winning price (proposed price) but
neither changes investment objectives nor cause an excess of the approved total
investment capital, the investor may decide on the contract signing price. In
case such an addition results in a change in investment objectives or an excess
of the approved total investment capital, the investor shall report such to the
person with investment-deciding competence for decision.
4. For contracts for the
performance of simple and small jobs or bid packages, all contractual contents
may be written in a single contract document. For contracts for the performance
of complex and large jobs or bid packages, contractual contents may be divided
into general conditions and particular conditions of the contract.
5. In case a project investor
signs contracts with multiple contractors for the performance of different bid
packages, these contracts must be consistent and uniform in terms of schedule
and quality, ensuring overall investment efficiency of the project.
6. In case the contractor is a
partnership of contractors, partners shall reach a partnership agreement and
the contract must contain signatures of all partners.
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Article 5.
Principles of performing construction contracts
1. Parties to a construction
contract shall strictly comply with the contract's provisions on scope of jobs,
requirements on quality, quantity, category, deadline and mode, and other
agreements in the contract.
2. A construction contract shall
be performed in an honest and lawful manner, ensuring cooperation and mutual
trust.
3. Parties to a construction
contract may not infringe upon state and public interests and lawful rights and
interests of other persons.
Article 6.
Validity and legality of construction contracts
1. A construction contract is
valid when fully meeting the following conditions:
a/ The contracting parties have
the full civil act capacity:
b/ The contract signing
principles specified in Clauses 1. 2. 3.6 and 7. Article 4 of this Decree are
adhered to;
c/ The contract is made in
writing and signed by authorized representatives at law of the contracting
parties. In case a contracting party is an institution, this party shall give a
signature and append a seal;
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2. The date when a construction
contract becomes valid is the date of its signing (with a seal, if any) and
after the principal receives a contract performance security from the
contractor (for contracts requiring contract performance security) or another date
agreed upon by the parties in the contract.
3. Legality of construction
contracts:
a/ A valid construction contract
is a legal ground binding on the principal, contractor and involved parties;
b/ A valid construction contract
serves as a ground for settling disputes between parties. Disputes arising
outside a construction contract shall be settled in accordance with relevant
provisions of law:
c/ State administrations,
agencies controlling, allocating or lending capital and inspecting, examining
or auditing loans, and other relevant agencies shall base themselves on valid
construction contracts to perform their respective functions and tasks under
regulations and may not infringe upon lawful rights and interests of
contracting parties.
Article 7.
Management of performance of construction contracts
1. Within the ambit of their
rights and obligations, contracting parties shall work out contract performance
plans and measures in accordance with the signed contract in order to realize
their agreements in the contract.
2. Depending on each type of
construction contract, the management of performance of a construction contract
may cover:
a/ Management of contract
performance progress;
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c/ Management of work volume and
contract price;
d/ Management of labor safety,
environmental protection and fire and explosion prevention and fighting:
e/ Management of contract
adjustments and other contents of the contract.
Chapter II
SPECIFIC PROVISIONS
Section 1.
INFORMATION ON CONSTR UCTION CONTRA CTS
Article 8.
Information on construction contracts
Information on a construction
contract must be written in the contract, including:
1. Type of contract, contract
number, name of bid package, name of project, construction location, and
grounds for contract signing.
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In case the contractor is a
partnership of contractors, sufficient information on partners must be written
under Clause 2 of this Article, indicating the head of the partnership.
Article 9.
Grounds for signing construction contracts
1. Grounds for signing a
construction contract include requirements on jobs to be performed agreed upon
by contracting parties, results of contractor selection, results of contract
negotiation and finalization. and relevant provisions of law.
2. For EPC contracts, in
addition to the grounds mentioned in Clause I of this Article, contract signing
grounds include also approved work construct ion investment projects and FEED
designs (in case designs are made by foreign consultants).
Article 10.
Construction contract dossiers
1. A construction contract
dossier comprises a written construction contract and its accompanying
documents.
2. A contract must contain the
following principal details: jobs and work volumes to be performed: quality and
technical requirements: performance duration and schedule: takeover and
handover conditions: contract price, advance, payment and settlement and
payment method: warranty duration (for construction contracts involving works
for which warranty is required): rights and obligations of contracting parties:
liability for contract breaches: language used in the contract: and other
agreements depending on each type of contract.
3. Documents accompanying a
construction contract constitute an integral part of the contract. Depending on
the scale, nature and scope of jobs and specific type of construction contract,
documents accompanying a construction contract may include:
a/ Notice of contract winning or
contractor appointment document or written approval of contractor appointment:
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c/ General conditions:
d/ Bidding dossier or dossier of
requirements of the principal:
e/ Design drawings and technical
instructions;
f/ Bid dossier or dossier of
proposal of the contractor:
g/ Contract negotiation minutes,
and written amendments and supplements thereto;
h/ Contract annexes;
i/ Other relevant documents.
4. The contracting parties shall
reach agreement on priority order for the application of documents accompanying
the contract to settling contradictory issues (if any).
Article 11.
Applicable law and language used in construction contracts
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2. Language used in construction
contracts is Vietnamese, except the cases specified in Clause 3 of this
Article.
3. Languages to be used in a
construction contract involving a foreign party are Vietnamese and English. For
a bilingual construction contract, the contracting parties shall agree on a
language to be used in the course of contract transaction and the priority
order for the use of the languages in settling disputes over the contract (if
any).
Section 2.
JOBS AND WORK VOLUMES, QUALITY REQUIREMENTS AND PERFORMANCE SCHEDULE
Article 12.
Jobs and work volumes of construction contracts
1. Jobs and work volumes of a
construction contract are those clearly agreed upon by the principal and
contractor in the contract upon its signing. Jobs and work volumes shall be
determined based on the bidding dossier or dossier of requirements, bid dossier
or dossier of proposal, negotiation minutes and relevant legal documents.
Depending on each type of construction contract, jobs to be performed shall be
determined as follows:
a/ For construction consultancy
contracts, these jobs include planning; formulation of a work construction
investment project: engineering; survey; construction supervision; verification
of designs and cost estimates; and other consultancy jobs:
b/ For construction contracts,
these jobs include provision of construction materials, manpower, construction
machinery and equipment and work construction activities:
c/ For equipment provision
contracts, these jobs include provision of equipment; provision of instructions
for installation, use. test operation, operation, training and technology
transfer (if any):
d/ For EPC contracts, these jobs
include engineering, provision of materials and equipment and construction of
works:
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2. Adjustment of the work volume
of a contract must comply with Article 35 of this Decree.
Article 13.
Requirements on quality, takeover test and handover of products of construction
contracts
1. Requirements on quality of
products of a construction contract:
a/ Quality of products of a
construction contract must comply with and satisfy the quality requirements set
out by the law. Regulations and standards or project standards (international.
Vietnamese or branch) applied to products of works shall be agreed upon by the
parties in the contract:
b/ Imported equipment and goods
not mentioned at Point a of this Clause are also subject to regulations on
origin.
2. Takeover test and handover of
products of completed jobs:
a/ Agreements on procedures for
takeover test and handover between contracting parties must comply with
regulations on quality management of construction works:
b/ Jobs subject to takeover test
and handover: bases for takeover test and handover: the process and time of takeover
test and handover of products of completed works: persons to participate in
takeover test and handover: forms of takeover test and handover; regulations on
signatories, minutes and documents on takeover test and handover shall be
agreed by the parties in the contract;
c/ Contracting parties may only
conduct takeover test and handover of products satisfying quality requirements
referred to in Clause 1 of this Article:
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e/ Faulty products (which fail
to satisfy the contract's requirements) must be repaired. Those which arc
irreparable must be discarded. The party at fault shall bear all expenses for
repair, re-inspection and other expenses related to the correction of defects
as well as assurance of the contract performance schedule.
Article 14.
Duration and schedule of performance of construction contracts
1. The duration of performance
of a contract is counted from the effective date of the contract to the date
when the contracting parties fulfill contractual obligations and must conform
to the project implementation schedule.
2. The contractor shall work out
a detailed schedule of contract performance, then propose it to the principal
for approval for use as a basis for contract performance.
3. The contract performance
schedule must indicate dates of completion and handover of major jobs and
products.
4. For big construction
contracts with a long duration of performance, the construction schedule shall
be worked out for each stage.
5. For equipment provision
contracts, the equipment provision schedule must indicate dates of equipment
handover, stating equipment quantities and categories for each handover.
6. For EPC contracts and turnkey
contracts, in addition to the construction schedule for each stage, a schedule
for each type of work (project formulation, engineering, equipment provision
and construction) shall also be made.
7. Acceleration of the contract
performance progress is encouraged provided the quality of the contract's
products is assured. In case the progress acceleration brings about higher
efficiency for the project, the contractor will be rewarded as agreed upon in
the contract.
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Section 3.
CONTRACT PRICES, ADVANCE, PAYMENT SETTLEMENT AND LIQUIDATION OF CONSTRUCTION
CONTRACTS
Article 15.
Prices of construction contracts
1. The price of a construction
contract means a sum of money which the principal pledges to pay to the
contractor for the performance of job(s) according to requirements on volume,
quality, schedule and payment conditions and other requirements as agreed upon
in the contract.
2. A contract price must clearly
indicate expenses, taxes and charges (if any); an adjusted contract price must
conform to the type of contract, contract price and be agreed upon by the
parties in the contract.
3. There are following kinds of
contract prices:
a/ The lump-sum contract price,
which is kept unchanged throughout the course of contract performance, for the
volume of jobs within the scope of the signed contract, except the case of
additional volume provided at Point a. Clause 1. Article 35 of this Decree;
b/ Fixed unit-price contract
price, which is determined on the basis of a fixed unit price for contractual
jobs multiplied by the corresponding work volume. A fixed unit price means a
price which is kept unchanged throughout the course of contract performance;
c/ Adjustable unit-price
contract price, which is determined on the basis of a fixed unit price for
contractual jobs which has been adjusted based on market price fluctuation,
multiplied by the corresponding work volume. Price adjustment based on market
price fluctuation shall be made by the method prescribed in Clauses 3 and 4.
Article 36 of this Decree;
d/ Time-based contract price,
which is determined on the basis of remuneration for experts and expenses other
than remuneration for experts and the working duration (volume) calculated in
month, week, day or hour.
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- Expenses other than
remuneration for experts include travel and survey expenses, working office
rent and other reasonable expenses.
e/ Percentage contract price,
which is calculated in a percentage of the value of a work or work volume. When
the contractor completes all contractual obligations, the principal shall pay
to the contractor a sum of money equal to a certain percentage indicated in the
contract multiplied by the value of work or work volume.
4. For a construction contract
covering many jobs subject lo different types of contract price, a combination
of contract prices specified in Clause 3 of this Article may be applied.
5. Contract prices shall be
determined as follows:
a/ In case of bidding, the
contract price shall be based on the bid-winning price and results of contract
negotiation between the parties;
b/ In case of contractor
appointment, the contract price shall be based on the approved cost estimate
and bid package price, proposed price and results of contract negotiation
between the parties.
Article 16.
Security for construction contract performance and guarantee for contract
advance payment
1. Contract performance security
means the application of any of the measures of deposit payment, collateral and
submission of a letter of guarantee by the contractor to secure the performance
of its obligations in the course of contract performance.
2. Contract performance security
must be paid to the principal before the contract takes effect, accepted by the
principal and exist until the warranty obligation is performed, except
construction consultancy contracts and self-performed construction contracts.
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4. The contract performance
security value shall be indicated in bidding dossiers or dossiers of
requirements and must not exceed 10% of the contract price. When necessary to
prevent a high risk, the contract performance security value may be higher but
must not exceed 30% of the contract price and shall be approved by the
investment decider.
5. The contractor may not
receive back the contract performance security if it refuses to perform the
contract after the contract takes effect and in a case of breach as specified
in the contract.
6. The principal shall refund
the contract performance security to the contractor as soon as the latter
shifts to perform the warranty obligation and the principal receives the
warranty security.
7. Guarantee for contract
payment advance (in case the contracting parties agree on such guarantee):
a/ Before the principal makes a
contract advance payment to the contractor, the contractor shall pay to the
principal a guarantee for the contract advance payment of a value equal to the
advance amount. In case the contractor is a partnership of contractors, each
partner shall pay to the principal a guarantee for contract advance payment of
a value equal to the advance amount paid to it;
b/ The value of the guarantee
for contract payment advance shall be subtracted equal to the value of reduced
advance amount upon each payment as agreed upon by the contracting parties.
Article 17.
Construction contract advance payment
1. Construction contract advance
payment means a sum of money advanced by the principal to the contractor for
the performance of jobs under the contract.
2. Contract advance payment
shall be made immediately after a construction contract takes effect and the
principal receives the advance payment guarantee (if any).
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4. The minimum advance level is
prescribed
as follows:
a/ For consultancy contracts, it
is 25% of the contract price;
b/ For work construction
contracts, it is:
- 10% of the contract price, for
contracts valued at over VND 50 billion:
- 15% of the contract price, for
contracts valued at between VND 10 billion and 50 billion:
- 20%; of the contract price,
for contracts valued at below VND 10 billion.
c/ For equipment provision
contracts, EPC contracts, turnkey contracts and other types of construction
contracts, it is 10% of the contract price.
5. The maximum advance level is
50% of the contract price. In special cases, the maximum advance level shall be
permitted by the investment decider.
6. Advance amounts shall be
retrieved right at the first contract payment. The advance amount to be
retrieved upon each payment shall be agreed upon by the contracting parties and
indicated in the contract. The retrieval shall be completed when the paid value
reaches 80% of the contract price.
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7. In case of manufacturing
components and
semi-finished products of large value for which
some materials must be seasonally stored, the principal and contractor shall
agree on a plan on advance payment and advance level to assure contract
performance progress.
Article 18.
Payment for construction contracts
1. Payment for a construction
contract must accord with the type of the contract, contract price and
contractual terms.
2. Contracting parties shall
agree in the contract on payment installments, periods, points of time, time limit,
dossier and conditions.
3. The principal shall pay fully
(100%) the value of each payment installment to the contractor after deducting
the advance and work warranty amount as agreed upon in the contract, unless
otherwise agreed by the parties.
4. For lump-sum contracts:
Payment shall be made in a percentage of the contract price or prices of works,
work items or job volumes corresponding to payment periods agreed upon by the
parties in the contract and requires no detailed certification of completed
volumes.
5. For fixed unit-price and
adjustable unit-price contracts: Payment shall be made on the basis of actually
completed volumes (including also increased or reduced volume, if any) which
have been tested for takeover and unit prices in the contract or unit prices
adjusted based on market price fluctuation as agreed upon in the contract.
6. For time-based contracts,
payment is prescribed as follows:
a/ Expenses for experts shall be
determined on the basis of salaries of experts and related expenses as agreed
upon by the parties in the contract multiplied by the verified actual working
period (calculated in month, week, day or hour).
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7. For percentage contracts,
payment shall be made according to a percentage of the contract price.
Percentages of payment installments shall be agreed upon by the parties in the
contract. When the contractor fulfills all contractual obligations, the
principal shall pay to that contractor a sum of money equal to the percentage
of the value of the completed work or job volume as indicated in the contract.
8. For contracts applying
combined contract prices specified in Clause 4. Article 15 of this Decree,
payment shall be made according to these contract prices.
9. Payment for additional
volumes (outside the contract) without any unit prices indicated in the
contract shall be made according to contract addenda agreed upon by the parties
before the performance of these volumes and comply with relevant laws.
10. Payment time limit
The payment time limit shall be
agreed upon by the parties but must not exceed 14 working days after the
principal receives a complete and valid payment dossier as agreed upon in the
contract and is specified as follows:
a/ Within seven (7) working days
after receiving a complete and valid payment request dossier of the contractor,
the investor shall complete procedures and forward the payment request to the
capital-allocating or -lending agency;
b/ Within seven (7) working days
after receiving a complete and valid payment dossier of the investor, the
capital-allocating or -lending agency shall transfer the whole payment
installment to the contractor.
Article 19.
Construction contract payment dossiers
1. Construction contract payment
dossiers shall be made by contractors in conformity with types of construction
contract, construction prices and agreements in contracts. Payment dossiers
(including also enclosed forms, if any) must be clearly indicated in
construction contracts and certified by principals.
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a/ For lump-sum contracts:
- A written record of takeover
test of volumes completed in the payment period with certification by representatives
of the principal or the consultant (if any) and the contractor. This written
record serves as written certification of the completion of works, work items
or job volumes within the scope of works or jobs to be performed under the
contract (within the scope of works or jobs to be performed according to
designs, for work construction contracts: within the scope of consultancy tasks
to be performed, for consultancy contracts) requiring no certification of
detailed completed volumes:
- A calculation table of the
values of additional volumes (if any) outside the signed contract, certified by
representatives of the principal or consultant (if any) and the contractor:
- The contractor's payment
request which must have the following details: value of the volume completed
under the contract, value of the additional job volume (if any), deduction of
advances and the value requested to be paid in the period following the
clearing of these amounts, certified by representatives of the principal and
the contractor.
b/ For fixed unit-price
contracts:
- A written record of takeover
test of the actually completed volume (larger or smaller than the contractual
volume) in the payment period certified by representatives of the principal or
consultant (if any) and the contractor:
- A calculation table of the
values of jobs without any unit prices indicated in the contract (if any),
showing both volumes and unit prices of these jobs, certified by
representatives of the principal or consultant (if any) and the contractor:
- The contractor's payment
request which must have the following details: value of the volume completed
under the contract, value of the additional job volume (if any), deduction of
advances and the value requested to be paid in the period following the
clearing of these amounts, certified by representatives of the principal and
the contractor.
c/ For adjustable unit-price
contracts:
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- A calculation table of unit
prices adjusted based on market price fluctuation (also referred to as payment
unit prices) according to agreements in the contract, certified by
representatives of the principal or consultant (if any) and the contractor:
- A calculation table of the
values of jobs without any unit prices indicated in the contract (if any),
showing both volumes and unit prices of these jobs, certified by
representatives of the principal or consultant (if any) and the contractor:
- The contractor's payment
request which must have the following details: value of the volume completed
under the contract, value of the additional job volume (if any), deduction of
advances and the value requested to be paid in the period following the
clearing of these amounts, certified by representatives of the principal and
contractor.
d/ For time-based contracts:
- A written record of verification
of the actual working period or worksheet (work time calculated in month, week,
day or hour) corresponding to jobs completed in the payment period, certified
by representatives of the principal or consultant (if any) and the contractor.
In case there arise additional jobs in the course of contract performance which
require additional experts for whom the contract specifies no remuneration
level, the parties shall agree on such remuneration level before payment. In
this case, the payment dossier must include a calculation table of the values
of additional jobs (if any) other than jobs to be performed under the contract,
certified by representatives of the principal or consultant (if any) and the
contractor:
- The contractor's payment
request which must have the following details: value of the volume completed
under the contract, value of the additional job volumes (if any), deduction of
advances and the value requested to be paid in the period following the
clearing of these amounts, certified by representatives of the principal and
the contractor.
e/ For percentage contracts:
- A written record of takeover
test of the volume completed in the payment period, certified by
representatives of the principal or consultant (if any) and contractor. This written
record shall be made based on dossiers, documents or products completed by the
contractor and certified by the principal corresponding to payment periods
(installments) as agreed upon by the parties in the contract:
- A calculation table of the
values of additional jobs (if any) other than jobs to be performed under the
contract, certified by representatives of the principal or consultant (if any)
and the contractor:
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f/ For construction contracts
involving the job of equipment provision, completed job volumes shall be
determined based on invoices of the contractor or bills of lading; written
record of takeover test and handover of equipment, certificates of origin and
other relevant documents.
3. For construction contracts
applying combined contract prices, the payment dossier for each type of
contract shall be compiled under relevant provisions of Clause 2 of this
Article.
Article 20.
Currencies and methods of payment for construction contracts
1. The currency used in payment
for construction contracts is Vietnam dong. Contracting parties may agree to
use a foreign currency in payment for their construction contracts not in
contravention of law.
2. If a construction contract
involves jobs requiring payment in different currencies, the parties shall
include a clear agreement thereon in the contract on the principle that the
payment currencies conform to requirements of the bidding dossier or the
dossier of requirements (in case of contractor appointment).
3. Payment may be made in cash
or by account transfer or other methods as agreed upon by the parties under law
and indicated in the contract.
Article 21.
Settlement of construction contracts
1. Settlement of a construction
contract means the determination of the final total value of the contract
payable by the principal to the contractor after the latter completes all jobs
as agreed upon in the contract.
2. Contract settlement dossiers
shall be made by contractors in conformity with types of contract and contract
prices. Contents of a construction contract settlement dossier must conform to
agreements in the contract and such a dossier comprises the following
documents:
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b/ A written certification of
the value o\' additional job volumes (if any) outside the contract;
c/ A calculation table of the
construction contract settlement value (referred to as A-B settlement), clearly
indicating the paid value and remaining value to be paid by the principal to
the contractor;
d/ A dossier of work completion
and a work construction diary, for contracts involving construction jobs:
e/ Other documents as agreed
upon in the contract.
3. The time limit for submission
of the contract settlement dossier shall be agreed upon by the parties but must
not exceed sixty (60) days from the date of takeover test of all jobs performed
under the contract, including also additional jobs (if any). For big contracts,
that time limit may be extended but must not exceed one hundred and twenty
(120) days.
Article 22.
Liquidation of construction contracts
1. A construction contract shall
be liquidated in the following cases:
a/ The parties fulfill their
obligations under the signed contract;
b/ It is terminated (cancelled)
under law.
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Section 4.
RIGHTS AND OBLIGATIONS OF PARTIES TO CONSTRUCTION CONTRACTS
Article 23.
Common rights and obligations of the principal and the contractor
1. Rights and obligations of the
panics to a construction contract shall be agreed upon by the parties in the
contract and comply with law.
2. The principal or the
contractor shall notify in writing the other party of the rights and responsibilities
of its representative for contract performance management. When a part} changes
its representative for contract performance management, it shall notify in
writing the other party of the change. Particularly in case the contractor
changes its representative for contract performance management or key staff
members. the principal's approval is required.
3. Depending on each type of
contract, the rights and obligations of the principal and the contractor are
also provided in .Articles 24 thru 33 of this Decree.
Article 24.
Rights and obligations of the consultancy principal
1. Rights of the consultancy
principal:
a/To own and use consultancy
products under the contract:
b/ To refuse to conduct the takeover
test of poor-quality consultancy products under the contract;
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d/ Other rights provided by law.
2. Obligations of the consultancy
principal:
a/ To provide the contractor
with information on requirements of jobs, documents and necessary equipment for
job performance (if so agreed in the contract);
b/ To guarantee the copyright to
copyrightable consultancy products under the contract;
c/ To settle proposals of the
contractor according to its competence in the course of contract performance
within seven (7) working days after receiving these proposals. Past that time
limit, if the principal fails to settle proposals without any plausible reason,
causing damage to the contractor, the principal shall take total responsibility
and pay compensations (if any);
d/ To pay to the contractor
according to the payment schedule as agreed upon in the contract;
c/ Other obligations provided by
law.
Article 25.
Rights and obligations of the consultancy contractor
1. Rights of the consultancy
contractor: a/ To request the principal to provide information and documents
related to the consultancy task and working equipment (if so agreed upon in the
contract):
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c/ To refuse to perform
unreasonable jobs outside the contract and unlawful requests of the principal;
d/ To have its copyright
protected under law (for copyrightable consultancy products):
e/ Other rights provided by law.
2. Obligations of the
consultancy contractor:
a/ To complete contracted jobs
according to the set schedule and quality as agreed upon in the contract:
b/ For engineering contracts: To
take part in the takeover test of the construction work together with the
investor under regulations on quality management of construction works, author
supervision and answering of the investor's inquiries about engineering
dossiers:
c/ To preserve and return to the
principal documents and working equipment (if any) provided by the principal
under the contract after completing the contracted jobs:
d/ To promptly notify in writing
the principal of insufficient information and documents and poor-quality
working equipment with which the consultancy contractor cannot complete
contracted jobs:
e/ To keep confidential
information relating to consultancy services as required by the contract or
law:
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Article 26.
Rights and obligations of the work construction principal
1. Rights of the work
construction principal:
a/ To cease the construction of a
work and request the remedying of consequences caused by the contractor's
violation of regulations on work quality, labor safety, environmental
protection and fire and explosion prevention and fighting;
b/ To inspect the quality of
performed jobs and products processed or manufactured by the contractor's
establishments without impeding the contractor's normal operation;
c/ Other rights provided by law.
2. Obligations of the work
construction principal:
a/ In case the principal is the
investor, a construction license is required under regulations;
b/To hand over the construction
site in whole or part by part to the contractor for management and use
according to the set schedule and agreements ol the contract:
c/ To assign its persons to
participate in managing and performing the contract and notify in writing the
contractor of these persons;
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e/ To pay to the contractor
according to the payment schedule in the contract;
f/ To supervise the work
construction;
g/ To inspect measures taken by
the construction contractor to assure labor safety, environmental protection,
fire and explosion prevention and fighting;
h /To conduct takeover test and
make payment and settlement of the contract within the set time limit;
i/ To clearly define tasks and
powers of consultants in case of hiring organizations or individuals to provide
consultancy services:
j/ To promptly consider and
approve in writing the contractor's proposals related to engineering and
construction in the course of work construction:
k/ Other obligations provided by
law.
Article 27.
Rights and obligations of the work construction contractor
1. Rights of the work
construction contractor:
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b/ To change construction
measures after obtaining the principal's approval in order to accelerate the
construction progress and assure quality, safety and efficiency of the work on
the basis of the price of the signed contract:
c/ To request the principal to
pay loan interests due to late payment under agreements in the contract; to
claim compensations for damage caused by the late handover of the construction
site and other damage caused by the principal;
d/ Other rights provided by
relevant laws.
2. Obligations of the work construction
contractor:
a/To supply construction
workers, materials, machines and equipment and other related physical
conditions in sufficient quantities and proper categories under the contract;
to make construction blueprints (in case the contractor undertakes to do so)
for performing jobs under the signed contract;
b/ To receive and manage the
construction site, and preserve the middle line, ground level and boundary
landmarks of the work:
c/ To conduct construction
according to the design, project standards, construction regulations and
standards, and to assure quality, construction progress, safety, environmental
protection and fire and explosion prevention and fighting;
d/ To keep a work construction
diary;
e/ To experiment materials and
test construction equipment and products under the State's regulations on
quality management of construction works, project standards, technical
regulations and standards;
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g/ To work out measures to
organize construction, make a construction completion dossier and take part in
the takeover test of the work:
h/ To take responsibility for the
quality of the work it constructs. To correct defects in work construction jobs
it performs:
i/ To coordinate with other
contractors in activities carried out in the same construction site;
j/ To periodically report to the
principal on the construction progress, workers and main equipment for work
construction;
k/ To move its supplies,
machines, equipment and other assets out of the construction site after the
work is tested for takeover and handed over, unless otherwise agreed upon in
the contract:
1/ To return the ground to its
original state as agreed upon in the contract;
m/ To keep confidential
information on the contract or as prescribed by law:
n/ Other obligations provided by
law.
Article 28.
Rights and obligations of the equipment provision principal
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2. To coordinate with the
contractor in training, transferring technologies and providing instructions on
installation, use and operation.
3. To refuse to conduct takeover
test and receive technological equipment handed over not according to the
agreements on quantity, quality, category and origin.
4. To take full responsibility
for the quality of and intellectual property rights to technological designs it
provides to the contractor.
5. Other rights and obligations
provided by law.
Article 29.
Rights and obligations of the equipment provision contractor
1. To hand over technological
equipment to the principal according to the agreements on quantity, quality,
place and time of delivery, packaging and preservation methods and origin, and
other agreements in the contract.
2. To provide to the principal
sufficient necessary information on technological equipment; to guide the
installation, use. operation, preservation and maintenance of technological
equipment: to train managerial staff and workers to operate and use the work
(if so agreed upon in the contract).
3. To conduct test operation of
technological equipment.
4. Intellectual property over
technological equipment:
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b/ In case technological
equipment is manufactured according to designs or data provided by the
principal, the contractor will not be responsible for complaints about
intellectual property infringements stemming from such technological equipment:
c/ One contracting party shall
take responsibility for failure to promptly notify the other party of a third
party's complaints about intellectual property rights to technological
equipment upon knowing or by the time it should have known such complaints.
5. Other rights and obligations
provided by law.
Article 30.
Rights and obligations of the EPC principal
1. Rights of the EPC principal:
a/ To refuse to take over
products not up to the quality standard agreed upon in the contract and
technological equipment not according to the agreement on quantity, quality,
category and origin and products infringing upon intellectual property rights:
b/ To inspect the performance of
jobs by the contractor according to the signed contract without impeding the
contractor's normal operation:
c/ To cease the performance of
jobs under the contract and request the remedying of consequences upon
detecting that the contractor performs these jobs in violation of the
agreements in the signed contract or the State's regulations:
d/ To request the contractor to
hand over dossiers and documents related to products of the contract according
to the signed contract:
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f/ Other rights provided by law.
2. Obligations of the EPC
principal:
a/ To pay to the contractor according
to the payment schedule agreed upon in the contract:
b/ To assign its persons to
participate in managing and performing the contract and notify in writing the
contractor of these persons:
c/ To provide to the contractor
information, documents and facilities necessary for job performance (if so
agreed upon in the contract):
d/ To promptly conduct takeover
test, appraise and approve technical designs and construction drawing designs
of works and work items under regulations;
e/ To apply for a construction
license under regulations, and hand over clear grounds to the contractor
according to the contract performance schedule:
f/ To supervise the performance
of jobs according to the signed contract: to inspect measures to assure labor
safety, environmental protection, fire and explosion prevention and combat
under regulations;
g/ To reach agreement with the
contractor on the bidding dossier for procurement of technological equipment
(if so agreed upon in the contract):
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i/ To guarantee the copyright to
consultancy products under the contract:
j/ To organize the training of
managerial staff and workers to operate and use the work;
k/ Other obligations provided by
law.
Article 31.
Rights and obligations of the EPC contractor
1. Rights of the EPC contractor:
a/ To request the principal to
provide information, documents and working equipment (if so agreed upon in the
contract) for the performance of jobs of the contract according to the signed
contract:
b/ To propose to the principal
jobs arising outside the signed contract: to refuse to perform jobs outside the
signed contract not yet agreed upon by the two parties or unlawful requests of
the principal:
c/ To organize and manage the
performance of jobs under the signed contract:
d/ Other rights provided by law.
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a/ To provide sufficient
workforce, materials, machines, equipment and other necessary facilities for
the performance of jobs under the contract;
b/ To receive, manage, preserve
and return documents and facilities provided by the principal (if so agreed
upon in the contract);
c/ To notify the principal of
insufficient information and documents or poor-quality working facilities which
affect the performance of jobs under the signed contract;
d/ To keep confidential
information related to the contract as agreed upon in the contract or provided
by law:
e/ To perform jobs under the
contract, assuring safety and quality, according to the set schedule and other
agreements in the contract:
f/ To make designs (technical
designs and construction drawing designs) of work items and major works of the
bid package and project in conformity with approved basic designs or FEED designs
and submit them to the investor for appraisal and approval:
g/ To organize the procurement,
manufacture and provision of technological equipment to meet requirements and
performance progress of the contract; to select sub-contractors (if any)
through bidding or appointment, then propose them to the investor for approval:
to reach agreement with the investor on contents of the bidding dossier for
procurement of technological equipment (if so agreed upon in the contract):
h/ To train managerial staff and
workers to operate and use the work, and transfer technologies and accompanying
technical services (if so agreed upon in the contract):
i/ To perform jobs of testing,
adjustment and test operation of the whole work and hand over the completed
work to the principal as agreed upon in the contract and provided by current
law;
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k/ To hand over dossiers and documents
related to products of the contract to the principal under the signed contract:
l/ Other obligations provided by
law.
Article 32.
Rights and obligations of the turnkey contract principal
In addition to the rights and
obligations provided in Article 30 of this Decree, the turnkey contract
principal also has the obligation to conduct the takeover test of the
construction investment project before submitting it to the investment decider
for appraisal and approval or appraise and approve the project according to its
competence.
Article 33.
Rights and obligations of the turnkey contract contractor
In addition to the rights and
obligations provided in Article 31 of this Decree, the turnkey contract
contractor also has the obligation to formulate the construction investment
project and take part in defending the project together with the principal
before the investment decider and finalizing the project at the request of the
principal as agreed upon in the contract.
Section 5.
ADJUSTMENT OF PRICES AND CONSTRUCTION CONTRACTS
Article 34.
Principles of adjusting prices and construction contracts
1. Adjustment of prices and
construction contracts max be effected during the period of contract
performance under signed contracts. In case the adjustment of prices and
construction contracts (post-adjustment prices) will not result in an excess of
the approved total investment capital, investors may decide on the adjustment.
In case it will result in an excess of the approved total investment capital,
the adjustment shall be reported to persons with investment-deciding competence
for permission.
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Article 35.
Adjustment of work volumes in construction contracts
1. Work volumes in a construction
contract may be adjusted only in the following cases:
a/ For lump-sum contracts and
percentage contracts: In case there arise reasonable jobs outside the signed
contract (jobs other than those which must be performed according to designs or
consultancy tasks which must be performed for work construction contracts or
consultancy contracts, respectively). In this case, if the adjustment of work
volumes will not result in a change in investment objectives or an excess of
the approved total investment, the investor and the contractor shall calculate,
reach agreement and sign an annex to the contract. Any excess of the approved
total investment shall be considered and decided by the person with
investment-deciding competence. If no agreement is reached, those additional
work volumes will form a new bid package and the selection of a contractor to
perform this bid package shall be made under current regulations:
b/ For fixed unit-price
contracts and adjustable unit-price contracts: In case work volumes which are
actually completed and tested for takeover are smaller or larger than those
indicated in the signed contract, payment shall be made according to actually
completed volumes;
c/ For time-based contracts: In
case the actual period of time for work volume completion by the contractor is
shorter or longer than that indicated in the signed contract, the payment shall
be made according to the actual period of time.
2. For work volumes arising
outside the signed contract and having no unit prices indicated in the
contract, the contracting parties shall reach prior agreement on unit prices
for performance of these work volumes.
Article 36.
Adjustment of prices of construction contracts
1. Adjustment of contract prices
may apply only to fixed unit-price contracts, adjustable unit-price contracts
and time-based contracts. In a construction contract, contracting parties shall
agree on specific cases in which contract price adjustment is permitted, and
the order, scope. method of and ground for contract price adjustment. The
method of contract price adjustment must be suitable to the type of contract
price and characteristics of jobs in the contract.
2. Contract price adjustment may
be made through adjusting unit prices and work volumes and is prescribed as
follows:
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b/ In case the additional work
volume is equal to or smaller than 20% of the corresponding work volume
indicated in the contract, the unit price indicated in the contract, including
also the one adjusted under the agreement in the contract (if any), may be used
for payment;
c/ For fixed unit-price
contracts and time-based contracts, when prices of fuels, supplies and
equipment subject to valorization measures applied by the State under the
Ordinance on Prices abnormally fluctuate or when the State revises tax and
salary policies, directly affecting the contract price, unit price adjustment
may be made when it is permitted by the investment decider and agreed upon in
the contract:
d/ For adjustable unit-price
contracts, the unit price in the contract may be adjusted by the method guided
in Clause 3 or 4 of this Article for work volumes for which the unit price
shall be adjusted based on market price fluctuation after a given period of
time from the effective date of the contract as committed by the principal and
the contractor at the time of contract signing.
3. Methods of construction
contract price adjustment:
a/ The application of price
adjustment methods must be suitable to characteristics of work, type of
contract price and agreed upon by the parties in the contract;
b/ Input data for price
calculation and adjustment must be suitable to jobs indicated in the contract.
The contract must indicate the use of competent state agencies' sources of
information on prices or price indexes for price adjustment according to the
following formula:
GTT
= GHD x Pn
In which:
- GTT is the payment price
corresponding to the work volume completed and tested for takeover.
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- Pn is the coefficient for
adjustment (increase or decrease) applicable to the contract payment for the
work volume completed and tested for takeover during the period of time "n".
4. The Ministry of Construction
shall specifically guide methods of construction contract price adjustment.
Article 37.
Adjustment of construction contracts
1. The adjustment of a contract
covers adjustment of work volume, adjustment of contract price, adjustment of
contract performance schedule and other contents (if any) agreed upon by the
parties in the contract.
2. In case the adjustment of a
construction contract will not result in a change in investment objectives or
an excess of the approved total investment, the investor may decide on the
adjustment. In case the adjustment will result in a change in investment
objectives or an excess of the approved total investment, it must be permitted
by the person with investment- deciding competence.
Article 38.
Adjustment of construction contract performance schedule
1. In a construction contract
the parties shall agree on cases eligible for contract performance schedule
adjustment. In case the date of contract performance completion is behind the
set contract performance schedule, the contracting parties shall clearly
identify the responsibility of each party for damage caused by the delay.
2. The contract performance
schedule may be adjusted in the following cases:
a/ An earthquake, storm, flood,
tsunami, fire, enemy sabotage or another force majeure event occurs;
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c/ The construction ground is
handed over not in accordance with agreements in the contract or related
procedures slows down the construction contract performance but the contractor
is not at fault.
3. In case the adjustment of the
contract performance schedule will not extend the deadline for project
completion, the investor and the contractor may agree on the adjustment. In
case the adjustment will extend the project completion deadline, the investor
shall report such to the investment decider for consideration and decision.
Section 6 .
SUSPENSION OR TERMINATION OF CONSTRUCTION CONTRACTS. BONUSES, AND FINES FOR
BREACHES OF CONSTRUCTION CONTRACTS
Article 39.
Suspension of performance of jobs in construction contracts
1. Circumstances in which the
performance of jobs in a construction contract may be suspended and the right
to suspension; order and procedures for suspension, and level of compensation
for damage caused by suspension must be agreed upon by the principal and
contractor in the contract.
2. A construction contract may
be suspended in the following cases:
a/ The principal decides to
suspend the performance of jobs in the contract when the contractor fails to
satisfy requirements on quality, labor safety and progress under the signed
contract:
b/ The contractor exercises the
right to suspend the performance of jobs in the contract when the principal
fails to pay to the contractor 28 days after the payment deadline specified in
Clause 10. Article 18 of this Decree, unless otherwise agreed upon by the
parties.
3. Before any party suspends the
performance of jobs in the contract, it shall notify such in writing to the
other party, clearly stating the reason for suspension. The principal and
contractor shall negotiate on and settle the case for continued performance of
the signed contract's agreements, except force majeure cases.
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1. Circumstances in which a
construction contract may be terminated, the right to termination of contract,
order and procedures for termination, and level of compensation for damage
caused by termination must be agreed upon by the parties in the contract.
2. Each party has the right to
terminate the contract without having to pay compensation for damage in the
cases specified in Clauses 7 and 8 of this Article.
3. In case the performance of a
contract has been already suspended but the breaching part> still fails to
remedy its fault during the period ol' time agreed upon by the parties without
any plausible reason, the suspending party may terminate the contract.
4 In case any party unilaterally
terminates the contract for a reason for which the odier party is not at fault,
the contract-terminating party shall pay compensation for damage caused to the
other party.
5. Before any party terminates
the contract, it shall notify such in writing to the other party within a
certain time limit which is agreed upon in the contract but must be at least
twenty one (21) days, clearly stating the reason for termination. If the
contract-terminating party fails to do so. causing damage to the other party, it
shall pay compensation for damage caused to the latter.
6. A construction contract
becomes invalid from the time of termination and the parties shall
complete contract liquidation procedures
within a time limit which is agreed upon in the contract but must not exceed 45
days from the date of contract termination. Past that time limit, if any party
fails to carry out contract liquidation procedures, the other party has the
full right lo decide on the contract termination.
7. The principal may terminate
the contract in the following cases:
a/ The contractor goes bankrupt
or transfers its contractual benefits to its creditor without the principal's
consent.
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8. The contractor may terminate
the contract in the following cases:
a/ The principal goes bankrupt
or is dissolved.
b/ Jobs are suspended for 45
consecutive days due to the principal's fault, unless otherwise agreed upon by
the parties.
c/ The principal fails to pay to
the contractor 45 days after the principal receives a complete and valid
payment dossier, unless otherwise agreed upon by the parties.
9. Two (2) days after the date
of termination of a construction contract, the contractor shall remove all
supplies, workforce, machine, equipment and other assets under its ownership
from the construction site. Past that time limit, if the contractor still fails
to do so, the principal has the right to dispose of these assets.
Article 41.
Contract bonuses, fines for contract breaches
1. Contract bonuses and fines
for contract breaches must be specifically indicated in the contract. Bonus and
fine levels shall be agreed upon by the contracting parties but must comply
with Clause 2 of this Article.
2. The bonus level must not
exceed 12% of the saved contract value and the fine level must not exceed 12%
of the breached contract value. The source for bonus payment comes from profits
brought about by the early commissioning of the work of required quality or the
reasonable saving of contract performance expenses.
Article 42.
Responsibilities for construction contract breaches
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1. The contractor shall pay
compensation to the principal in the following cases:
a/ The quality of jobs is not up
to that agreed upon in the contract or the performance of jobs is prolonged due
to the contractor's fault;
b/ Damage is caused to humans
and assets during the warranty period due to the contractor's fault.
2. The principal shall pay
compensation to the contractor in the following cases:
a/ Jobs of the contract are left
uncompleted, delayed or stopped, risks occur or unusable machines, equipment,
materials and construction components are transferred to the contractor due to
the principal's fault;
b/ The principal provides
documents and conditions necessary for jobs not in accordance with agreements
in the contract, causing work re-construction, suspension or adjustment of jobs
by the contractor:
c/ The construction contract
requires the principal to provide raw materials, materials and equipment or
contains other requirements which the principal fails to satisfy on schedule or
improperly satisfies:
d/ The principal that delays
payment shall pay compensation to the contractor at the overdue interest rate
announced by the commercial bank at which the principal has an account from the
first day of late payment to the date of full payment to the contractor.
3. In case any party fails to
fulfill its contractual obligations or improperly fulfills its contractual
obligations, it shall, after fulfilling its obligations or applying remedial
measures, also pay compensations for other damage caused lo the other party.
The compensation level must be equal to the extent of the damage.
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In case a contract breach
committed by any party infringes upon the body, rights or assets of the other
party, the suffering party may request the other party to bear the
responsibility for the contract breach as agreed upon in the contract and
provided by relevant laws.
Section 7.
COMPLAINTS AND SETTLEMENT OF CONSTRUCTION CONTRACT DISPUTES
Article 43.
Complaints in the course of performance of construction contracts
1. Complaint in the course of
performance of a construction contract mentioned in this Decree means that any
party detecting the other party's improper performance of or failure to perform
its contractual obligations may request the other party to comply with contents
of the signed contract. The detecting party may lodge a complaint against the
other party regarding such matter.
2. Any party lodging a complaint
against the other party shall show specific grounds and evidence to clarify the
complained contents.
3. Within 30 days after detecting
matters incompatible with the signed contract, the detecting party shall
promptly notify the other party of such contents and complain about these
matters. Past that time limit, if no party lodges a complaint, the parties
shall comply with signed agreements.
4. Within 30 days after
receiving a complaint, the complained party shall show grounds and evidence to
prove that the matters complained about by the other party are incompatible
with the signed contract. In case the :complained party's grounds and evidence
are neither convincing nor reasonable, it shall accept the other party's
complaint. Past that time limit, if the complained party gives no opinion, it
shall be regarded as having accepted matters complained about by the other
party.
Complaints of each party shall
be sent to the correct address for transaction or information exchange as
agreed upon by the parties in the contract.
Article 44.
Settlement of disputes over construction contracts
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2. In case the contracting
parties have reached an agreement on settlement of contractual disputes through
conciliation, the conciliatory agency or organization may be named in the
contract or identified by the parties upon the occurrence of a dispute.
3. In case any party disagrees
with the conciliation conclusion, it may request an arbitration or a court to
settle the dispute. Procedures for dispute settlement by arbitration or at
court comply with law.
4. The time limit for requesting
an arbitration or initiate a lawsuit at a court for settling a dispute over a
construction contract is two years after the parties' lawful rights and
interests are infringed upon.
5. Invalidity or termination of
contracts does not affect the validity of contractual terms on dispute
settlement.
Section 8.
OTHER CONTENTS OE CONSTRUCTION CONTRACTS
Article 45.
Insurance and warranty under construction contracts
1. Insurance
a/ Insurance for construction
works shall be purchased by investors. In case insurance cost has been included
in the contract price, the contractor shall purchase work insurance under
regulations;
b/ The contractor shall purchase
necessary types of insurance (insurance for equipment and insurance for a third
party) to assure its operation under law.
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a/ The contractor shall provide
warranty for the work and equipment according to relevant agreements in the
contract. The warranty for works is provided as follows:
- For special-grade and grade-I
works: The warranty duration is at least 24 months from the dale the investor
signs the written record of takeover test for commissioning the work and the
warranty level is 3% of the contract value.
- For other works: The warranty
duration is at least 12 months and the warranty level is 5% of the contract
value.
b/ Warranty security may be
provided in the form of guarantee or another form as agreed upon by the
parties.
c/ The contractor may only
refund the work warranty security upon the expiration of the warranty duration
and after obtaining the investor's certification of warranty completion.
d/ In the warranty duration, the
contractor shall conduct repair under warranty within twenty one (21) days
after receiving the principal's request for repair. Within that time limit, if
the contractor fails to conduct repair under warranty, the principal may use
the warranty sum lo hire another organization or individuals to conduct the
repair.
Article 46.
.Sub-contracts
1. A main contract or general
contract may include many sub-contracts. Upon entering into a sub-contract, the
principal contractor or general contractor shall comply with the following
regulations:
a/ Sub-contractors not on the
list of subcontractors enclosed with the contract must be approved by the
investor, unless otherwise agreed upon by the parties;
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c/ The principal contractor or
general contractor may not transfer all jobs under the contract to sub-contractors
for performance.
2. Sub-contractors appointed by
the investor (if any)
a/ A sub-contractor appointed by
the investor means a contractor appointed by the investor for the principal
contractor or general contractor to hire as a sub-contractor to perform some
specialized jobs with hi-tech requirements or when the principal contractor or
general contractor fails to keep up with the contract performance schedule as
required by the investor.
The contracting parties shall reach
specific agreements on circumstances in which the investor may appoint a
sub-contractor;
b/ The principal contractor or
general contractor may deny the sub-contractor appointed by the investor if
jobs currently performed by the principal contractor or general contractor or
sub-contractor still comply with agreements in the contract or it has
sufficient grounds lo believe that the sub-contractor appointed by the investor
is not up to the contract's requirements.
3. The investor may pay directly
to the sub contractor based on the payment proposal of the principal contractor
or general contractor. In this case, the parties shall reach agreement in the
main contract.
Article 47.
Labor safety, environmental protection and fire and explosion prevention and fighting
1. Responsibilities of the
contracting parties for labor safety must be agreed upon in the contract and
are prescribed as follows:
a/ The construction contractor
shall work out safety measures for humans and works on the construction site,
including adjacent works. In case safety measures involve many parties, these
parties' agreement is required;
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c/ The construction contractor,
the investor and related parties shall regularly inspect and supervise labor
safety on the construction site. Upon detecting breaches of labor safety rules.
they shall stop construction activities. Persons who let breaches of labor
safety rules occur within the scope of their management shall be held
responsible before law;
d/ The construction contractor
shall train their employees in and guide and disseminate labor safety
regulations among their employees. For some jobs with stringent labor safety
requirements, workers must possess certificates of training in labor safety;
e/ The construction contractor
shall supply sufficient labor protection and safety devices to its workers
working on the construction site under regulations;
f/ Upon occurrence of a labor
incident, the construction contractor and related parties shall handle it and
report it to the state management agency in charge of labor safety under law
and concurrently remedy consequences and pay compensation for damage caused by
the contractor that fails to assure labor safety.
2. The responsibility of each
party for protecting the construction environment must be agreed upon in the
contract and is prescribed as follows:
a/ The construction contractor
shall take measures lo assure a clean environment for workers on the
construction site and to protect the surrounding environment, including
anti-dust, anti-noise and site-cleaning measures. Wastewater, solid waste and
other kinds of waste must be collected and treated up to environmental
standards and technical regulations. For construction works in urban centers,
measures to cover the construction site and collect and transport waste to
designated places must be taken;
b/ In the course of
transportation of construction materials and waste, measures must be taken to
cover vehicles and assure safety and environmental sanitation:
c/ The construction contractor
and the investor shall inspect and supervise the protection of the construction
environment, and concurrently submit to the inspection and supervision by the
state management agency in charge of environment. In case the construction
contractor fails to comply with environmental protection regulations, the
investor and the state management agency in charge of environment may suspend
the construction and request the contractor to properly take environmental
protection measures:
d/ Persons who let polluting
acts occur in the course of work construction shall be held responsible before
law and pay compensation for damage caused by their fault.
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Article 48.
Construction site electricity, water and security
The parties shall agree in the
contract on their rights and obligations to supply and pay charges for
construction site electricity, water and security.
Article 49.
Transportation of technological equipment
1. The contractor shall notify
the principal of the date of equipment delivery at least 21 days in advance.
2. The contractor shall take
responsibility for the packaging, loading, unloading, transportation, storage
and preservation of equipment, unless otherwise agreed upon by the parties.
3. The contractor shall pay
compensation to the principal for any damage and loss and expenses for the
transportation of equipment by the contractor.
Article 50.
Risks and force majeure circumstances
1. Risk means a danger likely to
adversely affect the performance of a construction contract. A contract must
indicate the responsibility of the parties to handle a risk upon its occurrence
to each party and the responsibility of each party upon occurrence of a risk.
2. Force majeure circumstance
means a risky event which is irresistible once it occurs and unforeseeable upon
the signing of a construction contract, such as earthquake, storm, whirlwind.
flood, tsunami, landslide, volcano eruption, war or epidemic outbreak.
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4. The parties shall agree in
the contract on actions taken in response to force majeure circumstances,
including notification of force majeure circumstances, identification of
responsibilities of the parties for force majeure circumstances, termination of
and payment for the construction contract in force majeure circumstances (if
any).
Chapter
III
IMPLEMENTATION
PROVISIONS
Article 51.
Effect
This Decree takes effect on July
I. 2010. From the effective date of this Decree, the provisions of the
Government's Decree No. 99/ 2007/ND-CP of June 13. 2007. on contracts in
construction activities, cease to be effective.
Article 52.
Organization of implementation
1. Construction contracts
performed before the effective date of this Decree are not required to comply
with this Decree. For contracts in the process of negotiation and not yet
concluded, investment deciders shall decide on the application of this Decree.
2. The Ministry of Construction
shall guide and inspect the implementation of regulations on construction
contracts; guide methods of adjusting construction contract prices and other
relevant provisions of this Decree to meet the requirement of the state
management of construction contracts, and promulgate model construction
contracts.
3. Organizations and individuals
are encouraged to apply the set of conditions of contract of the International
Federation of Consulting Engineers (FIDIC) and model construction contracts to
the establishment and performance of construction contracts.
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ON
BEHALF OF THE GOVERNMENT
PRIME MINISTER
Nguyen Tan Dung