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THE MINISTRY OF
CONSTRUCTION
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SOCIALIST REPUBLIC
OF VIET NAM
Independence – Freedom – Happiness
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No. 05/2007/TT-BXD
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Hanoi, July 25, 2007
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CIRCULAR
GUIDING
THE FORMULATION AND MANAGEMENT OF WORK CONSTRUCTION INVESTMENT EXPENDITURES
Pursuant to the Government’s Decree No. 36/
2003/ND-CP of April 4, 2003, defining the functions, tasks, powers and
organizational structure of the Construction Ministry;
Pursuant to the Government’s Decree No. 99/ 2007/ND-CP of June 13, 2007, on
management of work construction investment expenditures;
The Construction Ministry concretely guides the formulation and management of
work construction investment expenditures as follows:
I. GENERAL PROVISIONS
ON FORMULATION AND MANAGEMENT OF WORK CONSTRUCTION INVESTMENT EXPENDITURES
1. Work construction investment expenditures means
all necessary expenses for constructing new works or repairing, renovating or
expanding construction works.
Work construction investment expenditures arc
manifested through the criteria of total investment capital at the stage of
formulation of a work construction investment project, work construction cost
estimate at the stage of execution of a work construction investment project,
and value of investment capital payment and settlement upon the completion of
construction and commissioning of the work.
2. Work construction investment expenditures
are formulated for each specific work as appropriate to the current stage of
work construction investment, engineering steps and the State’s regulations.
3. The formulation and management of work
construction investment expenditures must ensure investment objectives and
efficiency as well as feasibility of work construction investment projects and
be based on correct, adequate and reasonable calculations suitable to the
actual conditions and objective requirements of the market mechanism.
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5. This Circular provides for the formulation
and management of work construction investment expenditures applicable to
projects funded with state capital, including state budget capital, official
development assistance (ODA), state development investment credit capital, the
State-guaranteed credit capital and other investment capital of the Slate. For
projects funded with capital of other sources, investors shall decide on the
application of the provisions of this Circular.
For ODA projects, if a treaty signed by a
competent agency or organization of the Socialist Republic of Vietnam contains
provisions on management of work construction investment expenditures different
from those of this Circular, the provisions of that treaty prevail.
II. TOTAL INVESTMENT
CAPITAL AMOUNTS OF PROJECTS AND WORK CONSTRUCTION COST ESTIMATES
1. Total investment capital amounts of
investment projects on construction of works
1.1. Contents of total investment capital
amounts of investment projects on construction of works
Total investment capital amount of a work
construction investment project (below referred to as total investment capital
amount) means all estimated work construction investment expenses stated in the
investment decision and serving as a basis for the investor to plan and manage
capital in the course of making work construction investment.
Total investment capital amount shall be
calculated and determined at the stage of formulation of a work construction
investment project according to the project’s contents and basic design. For a
project for which only the econo-technical report is required, the total
investment capital amount shall be determined according to the construction
drawing design.
Total investment capital amount comprises:
construction expenses, equipment expenses: ground clearance compensation and
resettlement expenses; project management expenses; construction investment
consultancy expenses; other expenses and contingency expenses.
1.1.1. Construction expenses include: expenses
for building of works and work items; expenses for destruction and
dismantlement of old architectural objects; expenses for construction ground
leveling and fill-up; expenses for building of makeshift and auxiliary
structures in service of construction, and makeshift houses in construction
sites for accommodation and construction management.
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1.1.3. Expenses for ground clearance compensation
and resettlement include: expenses for compensation for houses, architectural
objects and crops on land...; expenses for resettlement related to compensation
for ground clearance for projects; expenses for organization of ground
clearance compensation; land use expenses during the time of construction, and
expenses for investment in technical infrastructure.
1.1.4. Project management expenses are those
for performance of project management tasks from the stage of project
preparation and execution to the completion, takeover test, handover and commissioning
of works, including;
- Expenses for elaboration of investment
reports, formulation of in vestment projects or econo-technical reports;
- Expenses for performing ground clearance
compensation and settlement work under the responsibility of investors;
- Expenses for organization of architectural
design contests:
- Expenses for appraisal of investment
projects, econo-technical reports and total investment capital amounts;
expenses for verification of technical designs, construction drawing designs
and work construction cost estimates;
- Expenses for selection of contractors in
construction activities;
- Expenses for management of quality,
quantity, progress and work construction costs;
- Expenses for assurance of safety and environmental
sanitation of works;
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- Expenses for inspection of material quality
and expertise of work quality at the request of investors;
- Expenses for inspection and certification of
quality standard conformity of works;
- Expenses for contract performance test,
payment and settlement; work construction investment capital payment and
settlement;
- Expenses for takeover test and handover of
works;
- Expenses for construction commencement and
inauguration ceremonies, and publicity work;
- Expenses for performance of other
management activities.
When investors lack grounds for determining
project management expenses (they are unable to determine total investment
capital amounts of projects t but need to make project preparations, they shall
make and submit estimates of expenses for this activity to investment deciders
for approval, serving as a basis for working out capital plans and organizing
the performance of this activity. These expenses will be included in project
management expenditures in total investment capital amounts.
1.1.5. Construction investment consultancy
expenses include:
- Expenses for construction survey;
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- Expenses for architectural design contests;
- Expenses for verification of technical
designs, construction design drawings and work construction cost estimates;
- Expenses for compilation of dossiers of
request, dossiers of invitation to prequalification, dossiers of invitation to
bids, and expenses for analysis and assessment of dossiers of proposal,
dossiers of prequalification participation and bidding dossiers for selecting
consultancy contractors, construction contractors, material and equipment
provision contractors and construction general contractors;
- Expenses for supervision of construction
survey, construction, equipment installment;
- Expenses for elaboration of environmental
impact assessment reports;
- Expenses for formulation of work
construction norms and unit prices;
- Expenses for management of construction
investment costs: total investment capital amounts, construction cost estimates
and norms, work construction unit prices, contracts...
- Expenses for project management
consultancy;
- Expenses for quality inspection of
materials and quality expertise of works at the request of investors;
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- Expenses for conversion of work
construction investment capital for projects with an execution duration of more
than 3 years;
- Expenses for performing other consultancy
activities.
1.1.6. Other expenses are necessary expenses
not included in above construction expenses, equipment expenses, ground
clearance compensation and resettlement expenses, project management expenses and
construction investment consultancy expenses, including:
- Expenses for verification of total
investment capital amounts;
- Expenses for sweeping of bombs, mines and
explosive materials;
- Expenses for work insurance;
- Expenses for transportation of construction
equipment and workers to construction sites;
- Expenses for international quality registry
and observation of deformation of works;
- Expenses for assurance of traffic safety in
the course of work construction;
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- Fees and charges as prescribed;
- Expenses for scientific and technological
research related to projects; initial working capital amounts for investment
projects on construction of works for business purposes, loan interests during
the time of construction; expenses for load and non-load trial operation under
the technological process before the handover, less the value of recovered
products;
- Other expenses.
Some other project expenses, which are not
subject to any regulations or cannot be promptly calculated may be estimated
for inclusion in total investment capital amounts.
1.1.7. Contingency expenses include those for
work volumes which, upon the project formulation, are unforeseeable and those
for inflation during the time of project execution.
For projects with an execution duration of up
to 2 years, contingency expenses are equal to 10% of the total of construction
expenses, ground clearance compensation and resettlement expenses, project
management expenses, construction investment consultancy expenses and other
expenses.
For projects with an execution duration of
more than 2 years, contingency expenses shall be determined based on the
following two factors:
- Contingency expenses for the factor of
arising work volume, which are equal to 5% of the total of construction
expenses, ground clearance compensation and resettlement expenses, project
management expenses, construction investment consultancy expenses and other
expenses.
- Contingency expenses for the factor of
inflation shall be calculated on the basis of the execution duration of
projects and the construction price index for each type of work in each
construction site.
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1.2. Method of determining total investment
capital amounts
Total investment capital amounts are
determined by the methods defined in Clause 1, Article 5 of the Government’s
Decree No. 99/2007/ND-CP of June 13, 2007, on management of work construction
investment expenditures, and the guidance in Appendix 1 to this Circular.
2. Cost estimates for construction of works
2.1. Contents of cost estimates for
construction of works
Cost estimates for construction of works
(below referred to as cost estimates of works) shall be determined for every
construction work or work item.
The cost estimate of a work covers
construction expenses, equipment expenses, project management expenses,
construction investment consultancy expenses, other expenses and contingency
expenses of the work.
Cost estimates of works shall be formulated
under the guidance in Appendix 2 to this Circular.
2.2. Method of formulating cost estimates of
works
2.2.1. Construction expenses:
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Estimates of expenses for construction of
works and work items shall be formulated under the guidance in Appendix 2 to
this Circular.
If construction expenses are calculated for
each part to-be-performed job or task of a work or work item, the construction
expense in the cost estimate of the work or work item is the total of expenses
for each part or to-be-performed job or task.
Estimates of construction expenses cover
direct expenses, general expenses, pre-determined taxable income, value-added
tax and expenses for make-shift houses in construction sites for accommodation
and construction management.
2.2.1.1. Direct expenses:
Direct expenses include expenses for
materials (including materials provided by investors), expenses for labor,
expenses for use of construction machines and other direct charges.
a/ Expenses for materials, labor and
construction machines in direct expenses shall be determined by any of the
following methods:
- On the basis of volume and consolidated construction
unit price.
- On the basis of volume and consolidated
construction unit price.
- Combination of the above two methods.
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a. 1.1. Determination of volume:
The volume of construction activities is
determined based on the technical design drawing or the working drawing design
or to-be-performed jobs of a work or work item and sum up from a group of
construction and installation activities in order to form a structural unit or
part of the work.
a. 1.2. Determination of consolidated
construction unit price;
The consolidated construction unit price
shall be formulated corresponding to the list and contents of volumes of
construction activities specified at Item a. 1.1 above. The consolidated
construction unit price-is formulated on the basis of detailed construction
unit prices. The consolidated construction unit price may comprise only
material expenses, labor expenses and construction machine expenses or include
also all other direct expenses, general expenses and pre-determined taxable
income. The method of formulating consolidated unit prices comply with the
guidance in Appendix 4 to this Circular.
Detailed construction unit prices used for
determining consolidated construction unit prices are determined according to
Item a.2.2 below.
a.2. Determination of material, labor and
construction machine expenses on the basis of volume and detailed construction
unit price
a.2.1. Determination of volume:
The volume of construction activities is determined
based on the technical design drawing or the working drawing design or to-be-performed
jobs of a work or work item according to the list and contents of construction
activities in the detailed construction unit price.
a.2.2. Determination of detailed construction
unit price:
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- Material prices are prices of materials
transported to construction sites, which are determined appropriate to works
and their construction locations. Material prices must be reasonable and
accordant with market prices in localities where works are constructed;
determined on the basis of price quotations of producers, price information of
suppliers or prices already applied to other works subject to the same quality
standards or prices announced by localities; and be competitive. If materials
are not available on the market or are produced by contractors themselves at
the request of investors, material prices must be reasonably set on the
condition that they satisfy category, quality, quantity and supply schedule
requirements, and are competitive.
Upon formulation of work construction unit
prices, it is necessary to cheek the compatibility between prices and
categories of materials used in construction of works according to their
designs.
- Labor prices must be accurately and
adequately inclusive of wages and wage-based allowances (including wage
supports) on the basis of the minimum wage level announced by a competent state
agency in order to ensure that laborers’ wages are based on common market labor
prices in each locality for each category of laborers, specific working
conditions of works, and investors’ capital source and financial capability to
pay wages.
- Construction machine prices (including
machine rent rates) shall be calculated under the Construction Ministry’s
guidance on the method of determining construction machine and equipment shift
prices applicable to construction works or on the basis of construction machine
and equipment price tables announced by localities.
b/ Other direct expenses are expenses for
necessary jobs in direct service of work construction, the volumes of which
cannot be determined at the designing stage, such as movement of the labor
force within construction sites and assurance of labor safety, protection of
working environment and surrounding environment, water pumping, mud dredging,
tests of materials, etc.
Other direct expenses are equal to 1.5% of
total material, labor and construction machine expenses. Particularly for
construction activities in road tunnels, hydropower tunnels or mining pits,
other direct expenses (including also expenses for operation and regular repair
of water supply and drainage, ventilation and electricity supply systems for
in-tunnel construction) are equal to 6.5% of total material, labor and
construction machine expenses.
If other direct expenses calculated in the
prescribed percentage arc unreasonable, that percentage shall be considered and
adjusted to suit practical conditions.
2.2.1.2. General expenses:
General expenses include enterprise
management expenses, expenses for production management in construction sites,
expenses for workers, expenses for construction in construction sites and some
other expenses. General expenses shall be calculated in a percentage (%) of
direct expenses or labor expenses in cost estimates as prescribed for each type
of work.
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2.2.1.3. Pre-determined taxable income:
Pre-determined taxable income shall be
calculated in a percentage (%) of direct expenses and general expenses
prescribed for each type of work.
Norms of general expenses and pre-determined
taxable income count with the guidance in Table 2.4, Appendix 2 of this
Circular.
2.2.1.4. Value-added tax:
Value-added tax on construction activities
complies with current regulations.
2.2.1.5. Expenses for make-shift houses in construction
sites for accommodation and construction management:
Expenses for building make-shift houses in
construction sites for accommodation and construction management are equal to
2% of the total of direct expenses, general expenses and pre-determined taxable
income for works arranged in lines outside urban centers and residential areas,
such as power transmission lines, post and communication lines, roads, canals
and ditches, pipelines, other works constructed in lines, or equal to 1% of the
total of direct expenses, general expenses and pre-determined taxable income
for other works.
For other special cases (for example, big and
complicated works, works on islands, etc.), if expenses for make-shift houses
in construction sites for accommodation and construction management calculated
in the above percentage are unreasonable, investors shall base themselves on
practical conditions to make appropriate estimates of these expenses and bear
responsibility for their decisions.
In case of bidding, these expenses must be
included in bid package prices and bids, and paid according to prices of signed
contracts.
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2.2.2. Equipment expenses
Equipment expenses in cost estimates of works
include expenses for procurement of technological equipment (including
non-standard technological equipment that need to be manufactured or processed);
training and technology transfer expenses; equipment installation, test and
adjustment expenses.
Equipment procurement expenses comprise
purchase prices (inclusive of designing and manufacture supervision expenses),
expenses for transportation of equipment from ports or purchasing places to
works, expenses for storage in warehouses or storing yards or keeping of
containers in Vietnamese ports (for imported equipment), expenses for equipment
preservation or maintenance in warehouses in construction sites, taxes and
insurance premiums for equipment of works.
Equipment procurement expenses shall be
determined by cither of the following methods:
- For equipment the prices of which can be
determined, these expenses may be calculated based on the quantity and category
of each type of equipment or the whole technological chain and the price per
ton, per unit or per complete equipment chain.
- For equipment the prices of which cannot be
determined yet. these expenses may be temporarily calculated according to price
quotations of suppliers, manufacturers or market prices of similar equipment at
the time of calculation or executed works having similar equipment.
For non-standard technological equipment that
need to be manufactured or processed, these expenses shall be determined on the
basis of the quantity of equipment to be manufactured or processed and the
manufacturing or processing price per ton (or per unit of calculation) suitable
to the nature and type of equipment under manufacture or processing contracts
already signed or according to product processing prices advised by
manufacturers selected by investors or manufacturing or processing prices of
similar equipment of constructed works.
Training and technology transfer expenses
shall be estimated, depending on specific requirements of each work.
Equipment installation, test and adjustment
expenses shall be estimated like construction expenses.
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Equipment expenses of works shall be
formulated under the guidance in Table 2.5 in Appendix 2 to this Circular.
2.2.3. Project management expenses
Project management expenses in cost estimates
of works include necessary expenses for investors to organize project
management as specified in Item 1.1.4, Part II of this Circular.
Project management expenses may be determined
according to the percentage norms announced by the Construction Ministry or
estimated.
2.2.4. Construction investment consultancy expenses
Construction investment consultancy expenses
in cost estimates of works include expenses specified in Item 1.1.5, Part II of
this Circular. For a project involving many works, expenses for elaboration of
the investment report, formulation of the project or elaboration of the
econo-technical report are not included in work construction investment consultancy
expenses in cost estimates of the works.
Construction investment consultancy expenses
shall be determined according to the percentage norms announced by the
Construction Ministry or estimated.
2.2.5. Other expenses
Other expenses in cost estimates of works
include expenses specified in Item 1.1.6, Part II of this Circular and are
determined in a percentage norm (%) or estimated. For a project involving many
works, expenses for verification of total investment capital amount: expenses
for scientific and technological research related to the project; initial
working capital, for investment projects on construction of works for business
purpose; loan interests for the construction duration; expenses for non-load
and load trial operation according to the technological process before handover
(exclusive of the value of recovered products) and charges and fees, are not
counted as other expenses of cost estimates of works.
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If works of a project require hiring of
foreign consultants, consultancy expenses shall be estimated according to
current regulations and requirements for use of consultants for works or the
value of the signed consultancy contract before being included in cost
estimates.
Some other expenses, which are not yet
governed by any regulations or cannot be immediately calculated, may be
temporarily calculated and included in cost estimates of works for the purpose
of projecting operating funds.
2.6. Contingency expenses
Contingency expenses are those projected for
arising work volumes and for offsetting inflation during the time of work
construction.
For works with a construction duration of up
to 2 years, contingency expenses are equal to 10% of the total of construction
expenses, equipment expenses, project management expenses, construction
investment consultancy expenses and other expenses.
For works with a construction duration of
more than 2 years, contingency expenses shall be determined based on the
following two factors:
- Contingency expenses for the factor of
arising work volume, which are equal to 5% of the total of construction
expenses, equipment expenses, project management expenses, construction
investment consultancy expenses and other expenses.
- Contingency expenses for the factor of
inflation, which shall be calculated on the basis of the construction price
index for each type of work in each region and construction duration.
The duration used for calculating contingency
expenses for the inflation factor is the duration of construction of works
according to approved work construction schedules.
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III. MANAGEMENT OF
WORK CONSTRUCTION INVESTMENT EXPENDITURES
1. Management of total investment capital
amounts and cost estimates for work construction
1.1. Management of total investment capital
amounts
1.1.1. When formulating work construction investment
projects or elaborating econo-technical reports for cases in which projects are
not required to be formulated, investors shall determine total investment capital
amounts in order to compute construction investment efficiency. The competence to
evaluate and approve total investment capital amounts is defined in Article 6
of the Government’s Decree No. 99/2007/ND-CP of June 13, 2007, on management of
work construction investment expenditures (referred to as Decree No.
99/2007/ND-CP for short). Approved total investment capital amounts are maximum
expenditures investors may use to invest in work construction and serve as a
basis for investors to work out capital plans and manage capital in the course
of work construction investment.
1.1.2. Total investment capital amounts may
be adjusted in the cases specified in Clause 1; Article 7 of Decree No.
99/2007/ND-CP.
For projects funded with state budget
capital, if adjusted total investment capital amounts are not higher than
approved total investment capital amounts, even when expenses in total
investment capital amounts are restructured to include also contingency
expenses, investors shall themselves adjust these expenses and report on
adjustment results to investment deciders. Investors shall take responsibility
for their decisions. If to be-adjusted total investment capital amounts are
higher than approved total investment capital amounts investors shall report
such to investment deciders for the latter’s permission before effecting the
adjustment.
For works funded with the State-guaranteed
credit capital, state development investment credit capital and investment
capital of other sources of the State, investors shall themselves decide on
adjustment of total investment capital amounts and take responsibility for
their decisions.
Differences between adjusted total investment
capital amounts and approved ones must be evaluated according to the provisions
of Article 6 of Decree No. 99/2007/ND-CP.
1.1.3. Project management expenses shall be
determined by investors for performance of project management jobs. For small
and simple projects each capitalized at less than VND 1 billion, if investors
do not set up project management units but use their professional units in
managing the projects, they shall use the project management funding source to
finance project management activities and give overtime pays to part-time
project management staff according to current regulations.
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If project management units are capable of
performing some construction investment consultancy jobs, they may enjoy
expenses for performance of these jobs.
When project management consultants are
hired, hiring expenses shall be estimated on the basis of contents and volumes
of management jobs to be performed by hired consultants and policies and entitlements
under regulations. The hire of foreign consultants must comply with the
Government’s regulations.
1.2. Management of cost estimates of works
1.2.1. Before being approved, cost estimates
of works must be verified. Cost estimates of works and work items must include
all expenses as specified. Investors shall organize the verification of cost
estimates of works under Clause 1, Article 10 of Decree No. 99/2007/ND-CP.
1.2.2. Investors that are incapable of
verification may hire capable and experienced organizations or individuals to
verify cost estimates of works. Organizations or individuals that verify cost
estimates of works shall take responsibility before law and investors for
verification results. Expenses for verification of cost estimates of works arc
decided by investors.
1.2.3. Investors shall approve and take responsibility
before law for the approval of cost estimates of works after they are verified,
and use these cost estimates as a basis for determining bid package prices and
construction costs or for negotiating contracts with and making payments to contractors
in case of contractor appointment.
1.2.4. Cost estimates of works are adjusted
in the cases specified in Clause 1, Article 11 of Decree No. 99/2007/ND-CP.
Investors shall organize the verification and
approval of adjusted cost estimates.
2. Management of construction norms, work
construction prices and construction price indices
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2.1.1. Construction norms consist of
econo-technical norms and percentage norms defined in Article 12 of Decree No.
99/2007/ND-CP.
2.1.2. The Construction Ministry shall
announce investment capital ratios and construction norms, including the norm
of work construction cost estimate (construction section, survey section and installation
section), the norm of cost estimate for repair in work construction, the norm
of materials in construction, the norm of project management expenses, the norm
of construction investment consultancy expenses, and other construction norms.
2.1.3. Ministries and provincial-level People’s
Committees shall base themselves on the method of formulating norms guided in
Appendix 3 to this Circular to organize the formulation and promulgation of
norms for their own particular construction activities, which are not yet
included in the system of construction norms promulgated by the Construction
Ministry.
2.1.4. For construction norms in the
promulgated system of construction norms, which, however, are not compatible
with construction measures and conditions or technical requirements of works,
investors shall adjust or supplement them as appropriate.
2.1.5. For construction norms not yet
included in the promulgated system of construction norms specified in Items
2.1.2 and 2.1.3 above, investors shall base themselves on technical
requirements, construction conditions and the method of formulating norms
specified in Appendix 3 to this Circular to organize the formulation of those
norms or apply similar construction norms already used in other works.
In case of use of new construction norms not
yet included in the promulgated system of construction norms as a basis for
formulating unit prices for payment for bid packages funded with the state
budget and applying the mode of contractor appointment, investors shall report
such use to investment deciders for consideration and decision. Particularly
for construction works under projects in which investment has been decided by
the Prime Minister, ministers of line management ministries or presidents of
provincial-level People’s Committees shall consider and decide on the use of
such construction norms.
2.1.6. Investors shall themselves organize or
hire capable and experienced organizations to guide the formulation or adjustment
of construction norms according to Items 2.1.4 and 2.1.5 above. Consultancy organizations
shall take responsibility for the reasonability and accuracy of norms they
formulate.
2.1.7. Investors shall decide on the
application of promulgated or adjusted construction norms to the formulation
and management of work construction investment expenditures.
2.1.8. Every year, ministries and
provincial-level People’s Committees shall send construction norms already
promulgated in the year to the Construction Ministry for monitoring and
management.
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2.2.1. Investors shall base themselves on the
nature and particular conditions of works, the norm system specified in Item
2.1, Part III above and the method of formulating work construction unit prices
under the guidance in Appendix 4 to this Circular to formulate and decide on the
use of unit prices of works for making cost estimates and managing work construction
investment expenditures.
2.2.2. For ODA projects that need to employ
foreign laborers and use imported materials and construction equipment and meet
other particular requirements, expenses for such laborers, materials and
equipment must be additionally included in construction unit prices in
accordance with practical conditions and particular characteristics of works.
2.2.3. Work construction investors may hire
capable and experienced professional consultancy organizations or individuals
to perform all or some of jobs related to the formulation of work construction
unit prices. Consultancy organizations or individuals shall take responsibility
before law and investors for the reasonability and accuracy of work
construction unit prices they formulate.
2.2.4. Provincial-level People’s Committees
shall direct provincial-level Construction Services in basing themselves on the
guidance of this Circular and practical conditions of their localities to
promulgate systems of construction unit prices, construction machine and
equipment working shift prices, building material prices, etc.. for reference
in the process of determining work construction prices.
2.3. Management of construction price indices
2.3.1. Construction price indices include:
price index for a group or a type of construction works; price index according
to the expenditure structure; price index according to elements of materials,
labor and construction machines. Construction price indices constitute a basis
for determining total investment capital amounts of work construction
investment projects, work construction cost estimates, bid package prices and
payment prices under construction contracts.
2.3.2. The Construction Ministry shall
promulgate the method of formulating construction price indices and
periodically announce construction price indices for investors’ reference and
application. Investors and contractors may also refer to and apply construction
price indices announced by capable and experienced consultancy organizations.
2.2.3. Investors shall base themselves on the
trend of price increase or decrease and particular characteristics of works to
decide on appropriate construction price indices.
IV. ORGANIZATION OF
IMPLEMENTATION
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2. The Construction Ministry shall promulgate
the system of construction norms. Norms promulgated by ministries; construction
unit prices, construction machine and equipment working shift prices and building
material prices promulgated by localities before the effective date of Decree No.
99/2007/ND-CP shall be announced for investors’ reference or application as a
basis for determining work construction prices and managing work construction investment
expenditures.
3. Ministries and provincial-level People’s Committees
shall base themselves on the provisions of Decree No. 99/2007/ND-CP on
management of work construction investment expenditures, the guidance in this
Circular and other relevant legal documents to organize and guide the
formulation and management of investment expenditures for construction of works
under their management.
Provincial-level People’s Committees shall
guide the application of investment capital ratios, construction norms, work
construction unit prices and construction price indices of works funded with
local budget capital.
4. This Circular takes effect 15 days after its
publication in “CONG BAO” and replaces the Construction Ministry’s Circular No.
04/2005/TT-BXD of April 1, 2005. guiding the formulation and management of
expenses for construction of works under investment projects, and previous
stipulations contrary to this Circular.
Any problems arising in the course of
implementation should be reported to the Construction Ministry for sum-up,
study and settlement.
FOR THE
CONSTRUCTION MINISTER
VICE MINISTER
Dinh Tien Dung
APPENDIX
1
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Total investment capital amounts of work
construction investment projects are calculated and determined at the stage of
formulation of work construction investment projects or elaboration of
econo-technical reports. Total investment capital amounts shall be determined
by one of the following methods:
1. Method of determination according to basic
designs of projects
The total investment capital amount of a work
construction investment project is calculated according to the following
formula:
V = GXD + GGPMB + GQLDA + GTV + GK + GDP
(1.1)
In which:
+ V: Total investment capital amount of the
work construction investment project.
+ GXD: Construction expenses of the project.
+ GTB: Equipment expenses of the project.
+ GGPMB: Ground clearance compensation and
resettlement expenses.
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+ GTV: Construction investment consultancy
expenses.
+ GK: Other expenses of the project.
+ GDP: Contingency expenses.
1.1. Determination of construction
expenditure of projects
The construction expenditure of a project (GXD)
is the total of construction expenses of works and work items under the project
and calculated according to the following formula:
GXD + GXDCT1 + GXDCT2 + ... + GXDCTn (1.2)
In which: n is the number of works and work
items under the project.
Construction expenses of a work or work item
under the project arc calculated as follows:
(1.3)
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+ m: Number of principal construction
jobs/main structural parts of the work or work item under the project.
+ j: Ordinal number of principal construction
job/main structural part of the work or work item under the project (j = 1÷ m).
+ QXDj: Volume of principal construction job
No. j/main structural part No. j of the work or work item under the project.
+ Zj: Unit price of principal construction
job No. j/unit price of main structural part No. j of the work. The unit price
may be a complete detailed construction unit price or complete consolidated
construction unit price (consisting of direct expenses, general expenses and
pre-determined taxable income), or a complete unit price of each structural
part of the work. If Zj is an incomplete construction unit price, expenses for
construction of the work or work item are summed up according to Table 2.2 in
Appendix 2 to this Circular.
+ GQXDK: Construction expenses for other
remaining jobs/other remaining structural parts of the work or work item, which
are approximated in a percentage (%) of the total construction expenses of
principal construction jobs/total construction expenses of main structural
parts of the work or work item.
The percentage (%) of construction expenses
of other remaining jobs/other remaining structural parts of the work or work
item shall be approximated depending on each type of construction work.
+ TGTGT-XD: Value-added tax rate prescribed
for construction activities.
1.2. Determination of equipment expenditure
of projects
Depending on specific conditions of a project
and available information and data, one of the following methods may be used to
determine equipment expenses of the project.
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Equipment expenses of works are determined by
the method of estimation guided in Section 2, Appendix 2 to this Circular.
b/ If the project has information on offer
prices of complete equipment and technological chain (inclusive of expenses
specified in Item 1.1.2, Part II of this Circular) from equipment manufacturers
or suppliers, equipment expenditure (GTB) of the project may be quoted prices
or offer prices of such complete equipment.
c/ If the project has only general
information or data on the capacity and technical specifications of
technological chain and equipment, equipment expenditure may be determined
according to the equipment expense ratio for a unit of production or service
capacity of works, and the formula (1.10) in Part II of this Appendix.
1.3. Determination of ground clearance compensation
and resettlement expenditure
Ground clearance compensation and resettlement
expenditure (GGPMB) of a project is determined according to the volume of
compensation and resettlement work of the project and the State’s current
regulations on compensation and resettlement prices in the locality where works
are constructed, which are approved or promulgated by competent authorities.
1.4. Determination of project management expenses,
construction investment consultancy expenses and other expenses of projects
Project management expenses (GQLDA),
construction investment consultancy expenses (GTV) and other expenses (GK) of a
project are determined by the method of estimation or calculated according to
percentage norms (%) (see Sections 3, 4 and 5, Appendix 2 of this Circular).
Otherwise, the total of these expenses (exclusive of loan interests during the
time of project execution and initial working capital) may be approximated at
10÷15% of the total of construction expenditure and equipment expenditure of
the project.
Initial working capital (VLD) (for production
and business projects) and loan interest during the time of project execution
(LVay) (for projects using loan capital) may be determined depending on
specific conditions, execution progress and capital distribution plan of each
project.
1.5. Determination of contingency expenses of
projects
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Contingency expenses are calculated according
to the following formula:
GDP = (GXD+GTB+GGPMB+GQLDA+GTV+GK) x 10%
(1.4)
For projects with an execution duration of
more than 2 years, contingency expenses are determined based on two factors of
arising work volume and inflation and according to the following formula:
GDP = GDP1 + GDP2
(1,5)
In which:
+ GDP1: Contingency expenses for arising work
volume:
GDP1 = (GXD+ GTB+ GGPMB+ GQLDA + GTV+ GK) x 5%
(1.6)
+ GDP2: Contingency expenses for inflation:
GDP2 = (V’ – LVAY) x (IXDbp ±ΔIXD)
(1.7)
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- V’: Total investment capital amount
exclusive of contingency expenses.
- IXDbp : Average construction price index.
The average construction price index is equal
to the work construction price index of the group of works with the highest
expense proportion in the total investment capital amount. The work
construction price index of this group of works is the average of work
construction price indices of 3 or more years preceding the time of
calculation.
- ±ΔIXD: Forecast level of price fluctuation
against the calculated average construction price index.
For works with one-step designs, total
investment capital amounts for their construction are determined by the method
of work construction cost estimation under the guidance in Appendix 2 to this
Circular and added with other related expenses not yet included in cost
estimates.
2. Method of calculation according to areas
or use capacity of works and consolidated construction prices and work
construction investment capital ratios
In case the total investment capital amount
of a project is determined according to areas or use capacity of works, the
construction expenditure ratio (SXD)) and equipment expenditure ratio (STB) or
consolidated construction prices may be used for calculating the construction
investment expenditure for each work under the project, and the total
investment capital amount of the project is determined according to formula
(1.1) in Part I above.
The determination of the total investment capital
amount is carried out as follows:
2.1. Determination of construction
expenditure of projects
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GXDCT = SXD x N + GCT-SXD
(1.9)
In which:
+ SXD: Construction expenditure ratio for a
unit of production or service capacity or consolidated construction unit price
for an area unit of a work or work item under the project.
+ GCT-SXD: Expenses not yet included in the
construction expenditure ratio or consolidated construction unit price for an
area unit of a work or work item under the project.
+ N: Area or use capacity of a work or work
item under the project.
2.2. Determination of equipment expenditure
of projects
The equipment expenditure of a project (GTB)
is the total of equipment expenses of works under the project. Equipment expenses
of a work (GTBCT) are determined according to the following formula:
GTBCT = STB x N + GCT-STB
(1.10)
In which:
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+ CPCT-STB: Expenses not yet included in the
equipment expenditure ratio of a work under the project.
2.3. Ground clearance compensation and resettlement
expenses, project management expenses, project management expenses,
construction investment consultancy expenses, other expenses and contingency expenses
are determined under the guidance in Sections 1.3, 1.4 and 1.5, Part I of this Appendix.
3. Method of determination according to
figures of constructed works with similar econo-technical specifications
Constructed works with similar
econo-technical specifications are those of the same type and grade, and
furnished with equipment and technological chains of the same size and capacity
(for production works).
Depending on the nature and particular
characteristics of constructed works with similar econo-technical
specifications and the availability of information and figures of these works,
one of the following methods may be used to determine the total investment
capital amount of the project.
a/ If information and figures on construction
investment expenditures of constructed works or work items with similar
econo-technical specifications are sufficient, the total investment capital
amount is determined according to the following formula:
(1.11)
In which:
+ GCTTTi: Construction investment expenditure
for similar constructed work or work item No. i of the project (i = 1÷n).
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+ Hkv: Coefficient for conversion to the
location of project construction.
+ GCT-CTTTi: Expenses not yet included or
already included in the construction investment expenditure of similar
constructed work or work item No. i.
b/ If only construction expenses and equipment
expenses of constructed works or work items with similar econo-technical
specifications can be determined based on their available construction
investment expenditure figures and these expenses can be converted to those at
the time of project formulation.
Based on determined construction and
equipment expenses of a project, ground clearance compensation and resettlement
expenses, project management expenses, construction investment consultancy
expenses, other expenses and contingency expenses shall be determined under the
guidance in Items 1.3, 1.4 and 1.5, Part I of this Appendix.
4. Combined method of determination of total
investment capital amounts
For a work construction investment project
involving many works, depending on specific conditions of the project and
available data, the above methods may be combined to determine the total
investment capital amount of the project.
APPENDIX
2
METHOD
OF DETERMINATION OF COST ESTIMATES OF WORKS
(Attached to the Construction Ministry’s Circular No. 05/2007/TT-BXD of July
25, 2007)
Cost estimates of works are determined on the
basis of technical designs or construction drawing designs. The cost estimate
of a work comprises construction expenses (GXD); equipment expenses (GTB):
project management expenses (GQLDA); construction investment consultancy
expenses (GTV); other expenses (GK) and contingency expenses (GDP).
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GXDCT = GXD + GTB + GQLDA + GTV + GK + GDP
(2.1)
The cost estimate of a work shall be summed
up according to Table 2.1 of this Appendix.
1. Construction expenses (GXD)
1.1. Expenses for construction of works, work
items, parts, jobs or tasks, including direct expenses, general expenses,
pie-determined taxable income, value-added tax and expenses for make-shift
houses on construction sites for accommodation and construction management are
determined according to Table 2.2 of this Appendix.
1.2. If construction expenses are formulated
for parts, jobs or tasks, construction expenses in cost estimates of works or
work items are calculated according to the following formula:
(2-2)
In which:
+ gi: after-tax construction expenses of part,
job or task No. i of a work or work item (i = 1÷ n).
1.3. For auxiliary works and make-shift works
in service of construction or simple and ordinary works, construction expenses
may be estimated according to the construction expenditure ratio in the work
construction investment capital ratio or to a percentage norm.
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Equipment expenses, including expenses for
procurement of technological equipment (including also non-standard
technological equipment that need to be manufactured or processed); expenses
for training and technology transfer; and expenses for equipment installation,
test and adjustment, are determined according to the following formula:
GTB = GMS + GDT + GLD
(2.3.)
In which:
+ GMS: expenses for procurement of technological
equipment.
+ GDT: expenses for training and technology
transfer.
+ GLD: expenses for equipment installation,
test and adjustment.
2.1. Expenses for procurement of
technological equipment arc calculated according to the following formula:
(2.4)
In which:
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+ Mi: price per ton or per unit of equipment
(equipment assembly) No. i (i = 1÷n), which is determined according to the
following formula:
M = Gg + Cvc + Clk + Cbp + T
(2.5)
In which:
- G.: price of equipment at the place of
purchase (place of production; manufacture or supply of equipment in Vietnam)
or price upon arrival at a Vietnamese port (for imported equipment), which is
inclusive of designing and manufacture supervision expenses.
Cvc: freight per ton or per unit of equipment
(equipment assembly) from the place of purchase or a Vietnamese port to the
work.
Clk: expenses for warehouse, storing yard or
container storage per ton or per unit of equipment (equipment assembly) in a
Vietnamese port for imported equipment.
Cbp: expenses for preservation and
maintenance per ton or per unit of equipment (equipment assembly) at the construction
site.
T: tax on and insurance cost for equipment
(equipment assembly).
+ TiGTGT-TB: value-added tax rate applicable
to equipment (equipment assembly) No. i (i = 1÷n).
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Expenses for non-standard technological
equipment that need to be manufactured or processed are determined according to
the principle and method defined in Item 2.2.2, Section II of this Circular and
comprise the above expenses.
2.2. Expenses for training and technology
transfer are calculated by the method of estimation with particular
characteristics of each project taken into account.
2.3. Expenses for equipment installation,
test and adjustment arc estimated like construction expenses as guided in Item
2.2.1, Part II of this Circular.
Equipment expenses are summed up according to
Table 2.5 of this Appendix.
3. Project management expenses (GQLDA)
Project management expenses arc calculated according
10 the following formula
GQLDA = T x (GXDtt + GTBtt)
In which:
+ T: percentage norm (%) for project management
expenses.
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+ GTBtt: pre-tax equipment expenses.
4. Construction investment consultancy
expenses (GTV)
Construction investment consultancy expenses
are calculated according to the following formula:
(2.7)
In which:
+ CI: construction investment consultancy
expense No. i calculated in a percentage (i = 1÷n).
+ Dj: construction investment consultancy
expense No. j calculated by the method of estimation (j= 1÷m).
+ 
. value-added tax rate currently applicable
to construction investment consultancy expense item No. i, calculated according
to a percentage norm.
+ 
: value-added tax rate currently applicable
to construction investment consultancy expense item No. j, calculated by the
method of estimation.
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Other expenses are calculated according to
the following formula:
(2.8)
In which:
+ Ci: other expense No. i calculated
according to a percentage norm (i = 1÷n).
+ Dj: other expense No. j calculated by the
method of estimation (j = 1÷m).
+ TiGTGT-K: value-added tax rate currently
applicable to other expense item No. i, calculated according to a percentage
norm.
+ TjGTGT-K: value-added tax rate currently
applicable to other expense item No. j. calculated by the method of estimation.
6. Contingency expenses (GDP)
For works with an execution duration of up to
2 years, contingency expenses are equal to 10%r of the total of construction
expenses, equipment expenses, project management expenses, construction
investment consultancy expenses and other expenses and calculated according to
the following formula:
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For works with an execution duration of more
than 2 years, contingency expenses arc determined based on two factors:
contingency expenses for arising work volume and contingency expenses for
inflation.
Contingency expenses for a work with an
execution duration of more than 2 years are calculated according to the
following formula:
GDP= GDP1 + GDP2 (2.10)
In which:
+ GDP1: contingency expenses for arising work
volume, which are calculated according to the following formula:
GDP = 5% x (GXD + GTB + GQLDA + GTV + GK)
(2.11)
+ GDP2: contingency expenses for inflation,
which are calculated according to the construction price index of each type of
construction work, location and construction duration.
Table 2.2. CONSTRUCTION COST ESTIMATE
Ordinal number
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Method of calculation
Symbol
I
Direct expenses
1
Material expenses
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2
Labor expenses
NC
3
Construction expenses
M
4
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(VL + NC + M) x prescribed rate
TT
Direct expenses
VL + NC + M + TT
T
11
General expenses
T x prescribed rate
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III
Pre-determined taxable income
(T + C) x prescribed rate
TL
Pre-tax construction expenses
(T + C + TL)
G
IV
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G x TGTGT-XD
GTGT
After-tax construction expenses
G + GTGT
GXD
V
Expenses for building make-shift houses on
construction sites for accommodation and construction management
G x prescribed rate x (1 + TGTGT-XD)
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Total
GXD + GXDNT
GXD
In which:
+ If material, labor and construction machine
expenses are determined according to volume and consolidated construction unit
price:
Qj : volume of job group, structural unit or part
No. j of a work (j = 1÷n).
Djvl, Djnc, Djm: material, labor and
construction machine expenses in the consolidated construction unit price of
job group, structural unit or pan No. j of a work.
+ If material, labor and construction machine
expenses are determined on the basis of volume and detailed construction unit
price:
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- Djvl, Djnc, Djm: material, labor and
construction machine expenses in the detailed construction unit price of
construction job No. j.
Material expenses (Djvl), labor expenses
(Djnc) and construction machine expenses (Djm) in detailed and consolidated
unit prices shall be calculated and summed up according to Table 2.3 of this
Appendix. Work construction unit prices (including detailed and consolidated
unit prices) constitute a content of the DOSSIER of Work cost estimates.
+ Knc, Kmtc: labor and construction machine adjustment
coefficients (if any).
+ Percentage norms of general expenses and
pre-determined taxable income specified in Table 2.4 of this Appendix.
+ G: pre-tax expenses for construction of
work, work item, part, job or task.
+ TGTGT-XD: value-added rate prescribed for
construction activities.
- GXD. after-tax expenses for construction of
work, work item, part, job or task.
+ GXDNT: expenses for building of make-shift
houses on the construction site for accommodation and construction management.
+ GXD: after-tax expenses for work, work
item, part, job or task and expenses for building of make-shift houses on the
construction site for accommodation and construction management.
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NORMS OF GENERAL EXPENSES AND PRE-DETERMINED
TAXABLE INCOME
Unit of calculation: %
Ordinal number
Type of work
General expenses
Pre-determined taxable income
On direct expenses
On labor expenses
1
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6.0
5.5
Particularly for works of embellishment and
restoration of historical and cultural relics
10.0
2
Industrial works
5.5
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6.0
Particularly for works of building tunnels
and pits
7.0
3
Traffic works
5.3
6.0
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66.0
4
Irrigation works
5.5
5.5
Particularly for manual excavation and
embankment of earth in irrigation works
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5
Technical infrastructure works
4.5
5.5
6
Installation of technological equipment in
construction works, building and installation of transmission lines, testing
and adjustment of electricity in transmission lines and transformer stations,
testing of materials, components and construction structures
65.0
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Notes:
- Pre-determined taxable income is calculated
in a percentage (%) of direct expenses and general expenses in construction
cost estimates.
- For construction works in mountainous or
border areas or islands, the percentage norm of general expenses may be
adjusted with a coefficient of between 1.05 and 1.1 as decided by investors
depending on specific conditions of works.
APPENDIX
3
METHOD
OF FORMULATING WORK CONSTRUCTION NORMS
(Attached to the Construction Ministry’s Circular No. 05/2007/TT-BXD of July
25, 2007)
I. METHOD OF FORMULATING NEW CONSTRUCTION NORMS
OF WORKS
New construction norms of a work are
formulated in the following order:
Step 1: Drawing up a list of the work’s new
construction jobs or structures which are not on the announced list of
construction norms.
The list of new construction jobs or structures
must clearly state the unit of volume calculation and requirements of
construction techniques, conditions and measures of the work.
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The composition of construction jobs must
clearly state steps to be performed at each stage under the design of the
technological chain for construction from commencement to completion, which are
suitable to construction conditions and measures and scope of performance of
jobs of the work.
Step 3: Calculating and determining consumption
of materials, labor and construction machines
A.
METHODS OF CALCULATION :
Consumption norms of new construction jobs
are calculated by one of the following three methods:
Method 1: Calculation according to technical
parameters in the technological chain.
- Material consumption is determined
according to the design and work construction conditions and measures or
announced material use norms.
- Labor consumption is determined according
to the labor use in the technological chain and suitable to work construction
conditions and measures, or calculated according to announced labor norms.
- Construction machine consumption is
determined according to technical parameters of each machine in the chain or
announced construction machine performance norms, taking into account
efficiency brought about by the combined use of construction machines in the
chain.
Method 2: Calculation according to
statistical and analytical figures.
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- From consumed quantities of materials,
labor and construction machines for performance of a construction volume in one
or more than one cycle of an ongoing work.
- From the consumption of materials, labor
use and construction machine performance already calculated for similar works.
- From figures announced according to
experience of experts or professional organizations.
Method 3: Calculation according to field
surveys
To calculate and determine consumption levels
according to design documents, field survey figures of works (construction
time, location and volume in one or more than one cycle), taking into account
announced use norms of materials, labor and machine performance.
- Material consumption is calculated
according to field survey figures and compared with technical design,
regulations and standards.
- Labor consumption is calculated according
to the number of laborers at each stage of the production chain and total number
of laborers in the whole chain, and regulations on labor use.
- Construction machine consumption is
calculated according to survey figures on performance of each machine and
efficiency brought about by the combined use of construction machines in the
same chain, and regulations on technical performance of machines.
B.
CONTENTS OF CALCULATION OF CONSUMPTION ELEMENTS
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- Principal (main) materials: sand, stone,
cement, brick, roofing tile, iron, steel, etc. in jobs of preparing concrete,
laying bricks, framing reinforced concrete or prefabricating structures are
high-value materials accounting for large proportions in a volume or structure
unit. For these materials, consumption norm levels are prescribed in kind and
calculated in common units of measurement.
- Other (auxiliary) materials: soap,
lubricants, cleaning cloths, etc., which are of small value and hard to be
quantified and account for small proportions in a volume or structure unit. For
these materials, consumption norm levels are prescribed in percentages of
expenses for main materials.
Material consumption norms are determined on
the basis of announced material norms or calculated by one of the aforesaid
three methods.
B.1. 1. Calculation of consumption of
principal materials
The general formula for determining the
material consumption norm (VL) in construction norms is as follows:
VL = (QV x Khh + 
x KLC) x 
x Ktd (3.1)
In which:
+ QV: quantity of materials used for each
construction job component in the norm (except for recyclable materials), which
is calculated by one of the aforesaid three methods.
The quantities of materials constituting
products under designs arc determined according to design standards. For
example, quantities of macadam, cement and water consumed to make concrete
graded according to mortar grade are calculated according to Vietnam
construction standards or standards of construction works.
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+ 
: quantity of recycled materials (framework,
scaffolding, operating bridge, etc.) used for each construction job component
in the norm, which is calculated by one of the aforesaid three methods.
+ : coefficient for conversion of the units of calculation
for materials according to calculations, construction reality or experience
into those in construction norms.
+ Khh: percentage norm of allowable material
wastage in construction:
Khh = 1 + Ht/c (3.2)
Ht/c: material wastage in construction
according to announced material norms, surveys or practical conditions of
similar works or experience of experts or professional organizations, for
materials not subject to any norms.
Wastage prescribed for loose materials, semi-finished
materials (building mortar, concrete mortar) and structural elements (precast
piles and beams).
+ KLC: recycling coefficient of materials
that need to be recycled prescribed in material use norms. For non-recyclable
materials. KLC is 1. For recyclable materials. KLC is smaller than 1.
The recycling coefficient of a recyclable
material is calculated according to the following formula:
(3.3)
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- h: wastage compensation rate from the
second time on.
- n: number of times of use of recyclable
materials (n>1).
+ Ktd: time use coefficient depending on work
construction progress, which reflects irregular or maximal utilization of
materials to complete a construction job according to set schedule. This
coefficient is applicable only to recyclable materials, for example:
utilization of scaffolding, forms, props, etc.
When a construction solution is used only
once or for many times, this coefficient may be added to suit work construction
conditions. This coefficient is calculated according to construction progress
or solution or experience of concerned professional organizations.
B.1.2. Calculation of consumption of other
materials
Consumption of other (auxiliary) materials is
subject to prescribed percentages of the total expenses for main materials
quantified in construction norms and determined for different kinds of
construction jobs according to experience of consultants or norms of similar
works.
B.2. Calculation of labor consumption norm
Labor consumption norm in construction norms
is determined based on the announced (working) labor norm, or calculated by one
of the aforesaid three methods.
- The unit of calculation of the basic labor
norm is working hour.
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(3.4)
In which:
+ 
: basic labor norm, which is the consumption level
of labor directly used for construction for a unit of calculation of a specific
construction job volume or structure.
+ Kcdd: coefficient for conversion of
construction norms.
This coefficient is calculated based on construction
norms converted from working norms or on experience of experts.
Depending on job groups and single, or mixed
type of machine assembly, the value of this coefficient usually varies between 1.05÷1.3
for different construction jobs, technical requirements and specific
construction conditions.
+ KVcd: coefficient for conversion of units
of calculation from those in construction reality or experience into estimated
norms.
+ 1/8: coefficient for conversion of working
hour norm into workday norm.
B.3. Calculation of construction machine
consumption norm
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The unit of calculation of the basic norm of
construction machine performance is machine hour or machine shift.
B.3.1. Calculation of consumption of
principal construction machines
The general formula for determining the
consumption norm of a construction machine and equipment shift is as follows:
(3.5)
In which:
+ QCM: norm of construction performance of
one machine shift determined by one of the aforesaid methods.
+ Kcdd: coefficient for conversion of
construction norms.
This coefficient is calculated based on construction
norms converted from working norms or on experience of experts.
Depending on job groups and single or mixed type
of machine assembly, the value of this coefficient usually varies between 1.05÷1.3
for different construction jobs, technical requirements and specific
construction conditions.
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+ Kcs: performance utilization coefficient,
which reflects the utilization of performance of a machine assembly in a
combined chain. This coefficient is calculated according to the performance of
construction machines in each working step and appropriately adjusted when
machines of the poorest performance are used in the chain.
B.3.2. Calculation of consumption of other
construction machines and equipment
Consumption of auxiliary construction
machines and equipment is subject to norms in percentages of the total expenses
for main machines quantified in construction norms and determined for different
kinds of construction jobs according to experience of consultants or norms of
similar works.
Step 4: Formulation of norm items on the
basis of summing up material, labor and construction machine consumptions
To gather norm items on the basis of summing
up material, labor and construction consumption breakdowns.
A norm item consists of two parts:
Composition of jobs, which clearly and fully
specifies working steps in the order from the initial preparation for to the
completion of a construction job or structure, including also specific
construction conditions and solutions.
- Table of norms of consumption breakdowns,
which clearly states names and describes categories and specifications of
principal materials used in a construction job or structure, and other
auxiliary materials: kinds of workers: average grade of construction workers;
names, types and capacity of principal machines and equipment and some other
machines and equipment in the construction technological chain for accomplishment
or completion of a construction job or structure.
In the table of norms, the consumption of
principal materials is calculated in kind while that of auxiliary materials is
calculated in percentages of expenses for principal materials. Labor consumption
is calculated in workdays regardless of grades of workers but according to the
average grade of construction w orkcrs. The consumption of principal machines
and equipment is calculated in number of machine shifts while that of other
(auxiliary) machines is calculated in percentages of expenses for principal
machines and equipment.
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II. ADJUSTMENT OF MATERIAL, LABOR AND
CONSTRUCTION MACHINE CONSUMPTION ELEMENTS UPON APPLICATION OF ANNOUNCED
CONSTRUCTION NORMS
Upon application of announced construction
norms to a work, if some elements remain inappropriate to the provisions of
these norms due to construction conditions and solutions and technical
requirements of the work, relevant material, labor and construction machine
elements should be adjusted to suit the work.
II.1. Grounds for adjustment
- Construction conditions and solutions of
works.
- Technical and construction schedule requirements
of works.
II.2. Methods of adjustment
11.2.1. Adjustment of material consumption
- For consumption of materials constituting
products under designs, designing regulations and standards of works are bases
for calculation and adjustment.
- For materials used in construction
solutions, elements in announced norms shall be adjusted according to
consumption calculations based on designs of construction solutions or
experience of experts and professional organizations.
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Increase or decrease in the labor element in
announced norms and consumption calculations under conditions of construction
organization or according to experience of experts and professional
organizations.
II.2.3. Adjustment of construction machine consumption
- In case of change due to construction
conditions (complex or simple terrains, quick or slow progress of works),
calculations for increase or decrease of the norm value shall be made under
construction-organizing conditions or according to experience of experts and
professional organizations.
- In case of change due to increase or
decrease of construction machine capacity, adjustment shall be made on the
principle that an increase in capacity leads to a decrease in value and vice
versa.
APPENDIX
4
METHOD
OF FORMULATION OF WORK CONSTRUCTION UNIT PRICES
(Attached to the Construction Ministry’s Circular No. 05/20077TT-BXD of July
25, 2007)
Work construction unit prices are
econo-technical norms, including all direct expenses for materials, labor and
construction machines, for completion of a unit of construction or installation
job volume or work structure or part.
Work construction unit prices include
detailed construction unit prices (below referred to as detailed unit prices)
and consolidated construction unit prices (below referred to as consolidated
unit prices) of a work.
1. METHOD OF FORMULATING WORK CONSTRUCTION
DETAILED UNIT PRICES
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Bases for formulating detailed unit prices of
a work include:
- List of construction jobs for which
detailed unit prices need to be formulated;
- Norms of consumption elements of above
jobs;
- At-work prices of materials used for
calculation of unit prices, which are exclusive of value-added tax;
- Labor price of the work;
- Construction machine and equipment shift
price of the work.
1.2. Formulation of work construction
detailed unit prices
1.2.1. Determination of material expenses
Material expenses are determined according to
the following formula:
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In which:
+ Di: material quantity No. i (i = 1÷n)
calculated for a unit of construction job volume prescribed in work
construction norms.
+ 
:at-work price of material unit No. i (i=1÷n),
which is determined as follows:
- Being compatible with standards, category
and quality of materials used for the construction work and based on market
prices of materials provided by a capable organization, price quotation of the
manufacturer and price information supplied by the supplier or prices already
applied to other works with similar standards and quality.
- Being equal to original prices plus freight
for transportation to the work site and related expenses, for materials
unavailable on the market of the work location.
+ KVL: coefficient for calculation of
expenses for other materials compared with total expenditure for principal
materials prescribed in work construction norms of construction jobs.
1.2.2. Determination of labor expenses
Labor expenses are determined according to
the following formula:
NC = B x gNC x (1+f) (4.2.a)
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+ B: labor consumption calculated based on
the number of workdays of an average grade worker for a unit of construction
job volume prescribed in work construction norms.
+ gNC: average unit wage per direct
construction workday corresponding to the grade of workers prescribed in work
construction norms.
- f: total of stable wage allowances and
supplemental wages, which is included in the unit price by the following
formula:
f = f1 + f2 + f3
(4.2.b)
In which:
- f1: total of stable wage allowances.
- f2: some supplemental wage amounts equal to
12% of the basic wage and some expenses payable directly to laborers and equal
to 4% of the basic wage.
- f3: coefficient for adjusting labor
expenses to make them suitable to the local labor market and characteristics of
the work.
1.2.3. Determination of construction machine
expenses
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In which:
+ Mi. machine shift consumption of principal
machine or equipment No. i (i=1÷n) per unit of construction job volume
prescribed in work construction norms.
+ 
: estimated machine shift price of principal
machine or equipment No. i (i=1÷n) according to the cable of construction
machine and equipment shift prices of the work or machine rent rates.
+ : 
: coefficient for calculating expenses for
other machines (if any) compared with total expenses for principal machines and
equipment prescribed in work construction norms of construction jobs.
2. METHOD OF FORMULATING CONSOLIDATED UNIT
PRICES FOR WORK CONSTRUCTION
2.1. Bases for formulation of consolidated
unit prices for work construction
Bases for formulation of the consolidated
unit price of a work:
- List of construction jobs, structural
units, sections or functional units of a work:
- Detailed unit prices relevant to the list
of construction jobs, structural units, sections or functional units of a work.
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2.2.1. Drawing up a list of construction and installation
jobs, structural units for which a consolidated unit price needs to be
formulated, some major technical specifications, unit of calculation, and steps
of those jobs.
2.2.2. Calculating the construction and
installation volume (q) of each kind of construction and installation job
constituting the consolidated unit price.
2.2.3. Determining expenses for materials (VL),
labor (NC) and construction machines (M) corresponding to the construction and
installation volume (q) of each kind of construction and installation job
constituting the consolidated unit price according to the following formulas:
VL = q x vI; NC = q x
nc; M = q x m (4.6)
2.2.4. Figuring out results for each expense breakdown
in the consolidated construction unit price according to the following
formulas:
(4.7)
In which:
- VLi, NCi, Mi: material, labor and
construction machine expenses of construction and installation job No. i (i=1÷n)
included in the consolidated unit price.
A consolidated unit price may be formulated
into a complete one consisting of direct expenses, general expenses and
pre-determined taxable income.