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MINISTRY OF
CONSTRUCTION
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SOCIALIST
REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
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No.
09/2019/TT-BXD
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Hanoi,
December 26, 2019
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CIRCULAR
INSTRUCTIONS ABOUT DETERMINATION AND MANAGEMENT OF
CONSTRUCTION INVESTMENT COSTS
Pursuant to the Law on Construction No.
50/2014/QH13 dated June 18, 2014;
Pursuant to the Government's Decree No.
81/2017/ND-CP dated July 17, 2017, defining the functions, tasks, powers and
organizational structure of the Ministry of Construction;
Pursuant to the Government’s Decree No.
68/2019/ND-CP dated August 14, 2019 on administration of investment and
construction expenses;
Upon the request of the Director of the
Construction Economics Department;
Minister of Construction hereby promulgates
the Circular providing instructions on determination and management of
construction investment costs.
Chapter I
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Article 1. Scope
This Circular shall provide instructions about
the determination and management of costs of investment in construction
projects funded by the state budget and non-budgetary state capital, and other
public-private partnership (PPP) investment projects,
including: preliminary estimate of total investment, total
investment, construction cost estimate, construction contract costs,
construction norms, direct construction costs per unit, investment costs per
unit and overall costs per construction component or part unit.
Article 2. Subjects of
application
1. Entities and persons involved in determination
and administration of construction investment costs of investment and
construction projects funded by state budget and non-budgetary capital, and
other public-private partnership (PPP) investment projects.
2. Entities and persons involved in the
determination and management of construction investment costs of construction
projects, and the determination of construction investment costs as a basis for
discharge of financial obligations to the state of projects using other
capital.
Chapter II
PRELIMINARY ESTIMATE OF
TOTAL INVESTMENT, TOTAL INVESTMENT
Article 3. Components of the
preliminarily estimated total investment, total investment
1. Contents of preliminarily estimated total
investment, total construction investment prescribed in Clauses 2 and 4 of
Article 4 of the Government’s Decree No. 68/2019/ND-CP dated August 14, 2019
regarding the management of construction investment costs (hereinafter referred
to as Decree No. 68/2019/ND-CP), including construction, equipment, project
management, construction investment consultancy and other costs shall be
subject to the following specific regulations:
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b) Project management costs, including those
prescribed in clause 2 of Article 21 in the Decree No. 68/2019/ND-CP, shall be
expenses necessary for tasks of implementation of project management tasks from
the project preparation phase to the project completion and operation stage,
specifically including:
- Construction survey superintendence;
- Selection of architectural design or selection
of architectural design plan for the construction project;
- Compensation, support and resettlement carried
out on the part of the project owner/investor;
- Evaluation of feasibility study report or
investment, and construction economic – technical feasibility report;
- Preparation, assessment, review and approval
of engineering design, construction design drawing and construction cost
estimate;
- Selection of contractors undertaking
construction tasks;
- Management of construction quality, volume,
quantity, progress, expense and contract;
- Management of construction communication
system; acquisition and provision of data and information serving the
investment and construction management task to meet needs of competent state
authorities;
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- Formulation or revision of construction norms;
- Calculation of construction costs and price
indices for construction works;
- Inspection of quality of building materials,
components, products and installed equipment;
- On-demand quality inspection of construction
parts, work items, entire construction work and specialized tests;
- Investment and construction cost control;
- Conversion of construction investment capital
after completion, pre-acceptance test, commissioning, hand-over and operation
of construction project;
- Acceptance testing, commissioning, payment and
final settlement of project contract; payment and settlement of construction
investment capital;
- Conduct and implementation of superintendence
and evaluation of construction project;
- Project acceptance testing, commissioning and
transfer;
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- Determination and updating of construction
contract costs;
- Managerial tasks assigned to competent state
authorities (if any);
- Other project management tasks.
c) Construction investment consultancy expenses
include the costs prescribed in clause 2 of Article 23 in the Decree No.
68/2019/ND-CP which are necessary for carrying out construction investment
consultancy activities at different stages in the order of construction
investment, such as the project preparation stage, project implementation and
construction completion for commissioning and operation of construction
projects. These expenses are paid for the following specific works:
- Planning, conducting and superintending
construction surveys.
- Preparing pre-feasibility study report on
construction investment (if any), report on recommendation of investment
policies (if any), feasibility study report on construction investment or
economic-technical report on construction investment;
- Reviewing basic design and technological
design of the project;
- Reviewing compensation, support and
resettlement plan;
- Holding an examination for a qualified
architectural designer of the construction project;
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- Reviewing total construction investment,
construction design and construction cost estimate;
- Making and appraising the request for
expression of interest, request for prequalification, bid invitation, request
for proposal, and evaluation of expression of interest, prequalification
application, bid package and proposal for the purpose of selecting construction
contractors;
- Reviewing results of selection of construction
contractors;
- Superintending construction and equipment
installation;
- Setting up and reviewing construction norms,
construction costs and price indices;
- Assessing transport safety;
- Applying building information management
system (BIM) (if any);
- Providing project management consultancy (in
case of hiring of consultants);
- Conducting specialized construction tests;
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- Inspecting the quality of construction parts,
work items and entire project (if any);
- Superintending and evaluating construction and
investment projects (in case of hiring of consultants);
- Preparing the environmental impact assessment
report in accordance with laws on environmental protection;
- Converting construction investment capital
after completion, pre-acceptance test, commissioning, hand-over and operation
of construction project;
- Performing other consulting works.
Particularly for construction survey costs,
including direct costs, indirect costs, pre-assessed taxable income and
value-added tax are determined and managed as construction costs specified in
the construction estimate.
d) Other expenses, including expenses necessary
for execution of construction investment projects, shall be determined
according to regulations of competent state authorities by using
economic-technical norms or estimate of costs according to the regimes or
policies for execution of project-related tasks, comprising the followings:
- Demining of bombs and explosives;
- (Compulsory) insurance for works during
construction time;
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- Audit, verification and approval for
finalization of investment capital;
- Inspection of acceptance testing or
commissioning during the construction and completion acceptance of work items
and works of competent regulatory authorities (in case independent
professionals are hired to collaborate in performing these tasks);
- Technical and scientific researches pertaining
to the projects; initial working capital for the construction investment
projects for the purpose of business and loan interest during the construction;
the costs for trial running with and without load according to the
technological process before the transfer and handover (after value of products
recovered is taken away);
- Natural resources taxes, fees and charges in
accordance with regulations in force;
- Others (if any).
2. In case where any project is subject to the
requirement for preparation of the economic-engineering report on construction
investment feasibility, details of total investment in construction works shall
be subject to the provisions laid down in clause 3 of Article 4 in the Decree
No.68/2019/ND-CP.
3. For any project using the official
development assistance capital (shortly called ODA), in addition to the costs
calculated in the preliminary estimate of total investment, this total
investment shall be supplemented with other necessary cost items provided that
it matches the particularity and characteristics of the construction investment
project using this capital in accordance with the regulations of relevant laws.
Article 4. Approach to
preliminary estimate of total investment
1. Preliminary estimated total investment shall
be calculated under clause 1 of Article 5 in the Decree No.
68/2019/ND-CP. In case there is no sufficient conditions for
determination of the operational size, scale, capacity or service capability
according to the preliminary design plan of the project, or these criteria have
been determined despite none of available data on investment costs per unit,
the preliminary estimate of total construction investment shall be made in
reference to data about costs of projects similar in type and grade of works,
operational size, capacity or service capability which are already completed or
under construction, and shall be adjusted or supplemented with other necessary
costs which are then converted to be relevant to the time of preliminary
estimation of total investment, construction site, characteristics and nature
of the project.
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3. Review and approval of the preliminary
estimate of total investment shall be regulated as follows:
a) Review and approval of the preliminary
estimate of total investment in projects using state budget capital and
non-budgetary state capital shall be subject to regulations of laws on public
investment and investment legislation.
b) Review and approval of the preliminary
estimate of total investment in PPP projects shall be subject to laws on PPP.
4. Costs of turnkey bid packages shall be
estimated under the provisions of clause 2 of Article 11 herein. Investment
decision makers shall have authority to review and approve estimates of costs
of turnkey bid packages.
5. Details about approaches to the preliminary
estimate of total investment shall follow instructions given in the section 1
of Appendix No. 1 hereto.
Article 5. Approach to
determination of total investment
1. Total investment shall be determined on the
basis of the contents of feasibility study reports on construction investment,
including basic designs, explanatory notes on basic designs, applicable
standards and regulations, technological and engineering solutions and
equipment; solutions to building architectural objects and main structures of
construction works; solutions to construction work and major materials,
construction conditions; project execution plans and other necessary requirements
in accordance with the contents of feasibility study reports for investment and
construction.
2. Total investment shall be calculated
according to one of the approaches specified under clause 2 of Article 5 in the
Decree No. 68/2019/ND-CP, specifically including:
a) Total investment is determined on the basis
of construction work quantities calculated according to the basic design,
project execution plan, guided construction measures, practical project
execution conditions, other necessary requirements of specific projects, and
set of norms, bills of lading, related regimes and policies.
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c) Total investment is determined according to
investment costs per unit.
d) Total investment is determined by combining
all of the approaches referred to in a, b and c of this clause.
3. Approaches prescribed in point b and c of
clause 2 of this Article shall only be used for common construction works.
4. If there is none of regulations or bases for
calculation of calculation of several cost items included as components of
construction, equipment, project management costs, construction investment
consultancy expenses, and other project expenses, at the time of determination
of total investment, they may be added or estimated to become entries of total
construction investment.
5. With respect to projects implemented in the
form of an engineering-procurement-construction agreement (abbreviated as EPC);
an engineering-construction agreement (abbreviated as EC); an
engineering-procurement agreement (abbreviated as EP), construction and
equipment expenses included in the total construction investment must be
determined according to the approach specified at point a of clause 2 of this
Article, which is adopted as the main one, together with other approaches.
6. Details of approaches to determination of
total construction investment shall follow instructions given in the section 2
of Appendix No. 1 hereto.
Article 6. Subject matters
of and authority over review and approval of total investment
1. Subject matters of total construction
investment shall be subject to clause 1 of Article 6 in the Decree No.
68/2019/ND-CP.
2. Authority over review of total construction investment
shall be subject to clause 3 and 4 of Article 6 in the Decree No.
68/2019/ND-CP. Particularly for projects that only require
economic-technical reports on use of non-budgetary state capital, authority
over the review shall be subject to clause 5 of Article 1 in the Government’s
Decree No. 42/2017/ND-CP dated April 5, 2017, amending and supplementing a
number of articles of the Government’s Decree No. 59/2015/ND-CP dated June 18,
2015 on management of investment and construction projects.
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4. Sample reports on results of review and
appraisal of total construction investment shall follow instructions given in
Appendix No. 10 hereto.
Article 7. Adjustment of the
preliminary estimate of total investment and total investment
1. Adjustment of the preliminary estimate of
total construction investment shall be subject to regulations laid down in laws
on public investment, laws on investment and laws on PPP.
2. Adjustment of total investment already
approved shall be subject to clause 7 of Article 7 in the Decree No.
68/2019/ND-CP.
3. Sample reports on results of review and
appraisal of the preliminary estimate of total construction investment and
total construction investment shall be revised according to instructions given
in Appendix No. 10 hereto.
Chapter III
CONSTRUCTION COST
ESTIMATES
Article 8. Subject matters
of construction cost estimates
1. Subject matters of a construction cost
estimate shall be subject to Article 8 in the Decree No. 68/2019/ND-CP.
Cost components of a construction cost estimate shall be subject to specific
regulations of clause 2 through clause 7 of this Article.
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a) Direct costs comprise costs of materials
(including materials supplied by project owners/investors), labor costs,
machinery and equipment costs.
b) Indirect costs comprise:
- Overall costs, including general
administrative expenses; overhead and operating costs incurred at project
sites; insurance costs paid by employers for employees’ benefits.
- Temporary accommodation and office costs.
- Costs related to works with quantities which
cannot be identified in designs, e.g. Costs of occupational safety, health for
workers at construction sites and environmental health; costs of testing on
materials of contractors; expenses for intra-construction site workforce
movement; irregular water pumping, mud dredge or removal costs.
- Depending on the specific conditions of
specific construction projects, works or construction bid package, indirect
costs may be supplemented with additional indirect costs, including expenses
for moving special-purpose machines and equipment to and out of the
construction site; expenses for ensuring traffic safety for construction
activities (if any); expenses for restoration of technical infrastructure
affected by construction activities (if any); costs of material storage
facilities (if any); expenses for construction of sheds or canopies for
machines, machine foundations, electricity, compressed air and water
supply systems at construction sites, installation and dismantlement of several
machines (such as cement concrete, asphalt concrete mixing plants,
rail-traveling cranes, tower cranes, some other building machines and equipment
of similar nature).
c) Pre-assessed taxable income (profits of
construction enterprises calculated in advance in construction cost estimates).
d) Value added taxes regulated by the State.
3. Costs of equipment used for construction
works or work items shall include cost items or entries specified in point b of
clause 2 of Article 9 in the Decree No. 68/2019/ND-CP.
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5. Construction and investment consultancy costs
shall be subject to point c of clause 1 of Article 3 herein.
6. Other costs included in the construction
estimate shall be composed of those costs subject to regulations laid down in
point d of clause 1 of Article 3 in this Circular. As for any project with various
construction works, other costs included in the construction cost estimate
shall not include loan interests incurred during the construction period;
expenses for demining of bombs, mines and explosive objects; audit; review and
approval of investment capital settlements; expenses for scientific and
technological researches related to projects; initial working capital for
construction investment projects for business purposes; expenses for the
process of off-load or on-load commissioning tests according to the
technological process before projects are transferred or handed over (minus the
value of recovered products); fees, charges and some other costs charged to
projects.
7. Contingencies shall include costs of
provisions for factors of any additional work quantities and contingent costs
against inflation elements that may exist during the construction period.
Article 9. Construction
costing approaches
1. Construction cost estimate shall be made,
subject to clause 1 of Article 9 in the Decree No. 68/2019/ND-CP.
2. Determination of construction costs
Construction costs may be specific to cost
details or determined by consolidating costs according to the approaches
specified at point a and b below:
a) Construction costs shall be determined by construction
quantities and unit prices
- Direct costs, including: Building material,
labor, machinery and equipment costs shall be determined on the basis of
construction work quantities and unit construction prices.
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- Pre-assessed taxable income calculated in
percent (%) ratio to direct costs and indirect costs specified in instructions
given in the Table 3.11 of Appendix No. 3 hereto.
- Value added taxes regulated by the State.
- Construction quantities which are taken off or
measured based on engineering design drawings or construction design drawings
or FEED designs and guidelines for technical matters and required works to be
performed at construction works. Construction quantity takeoff approach shall
be subject to instructions issued by the Minister of Construction.
- Unit prices at which construction costs are
calculated may be detailed/broken-down or general prices corresponding to
construction quantities which are taken off or measured based on engineering
design drawings or construction drawings or FEED designs and guidelines for
technical matters and required works to be performed at construction works.
Subject matters of and approaches to determination of construction costs shall
be subject to Article 18 herein.
b) Construction costs calculated in proportion
to material, labor, machinery and equipment costs and values of corresponding
cost elements
- Building material, labor, machinery and
equipment costs constituting direct costs shall be determined by quantities or
volumes of materials, labor, machinery and equipment and values of these cost
elements.
- Quantities of materials, labor, machinery and
equipment may be determined on the basis of quantities of construction workload
taken off by using engineering designs, construction drawings or FEED designs
and economic-technical norms.
- Material costs shall be determined according
to the instructions given in Table 4.1 of Appendix No.4 hereto.
- Labor, machinery and equipment costs shall be
determined according to the instructions issued by the Minister of
Construction.
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3. Determination of equipment costs
a) Equipment costs shall be calculated under
point b of clause 2 of Article 9 in the Decree No. 68/2019/ND-CP, and the
following regulations:
- Weight, quantity and type of equipment shall
be determined by consulting technological, construction designs and list of
equipment items contained in approved projects.
- Costs of purchase of equipment shall be
calculated at market prices or according to quotations provided by suppliers,
manufacturers or construction works with similar equipment that have been and
are being carried out during the period relevant to the calculation period.
- For equipment to be manufactured or processed,
these costs shall be determined on the basis of the volume and quantity of
equipment to be manufactured and processed and their unit prices suitable to
the nature and type thereof according to the signed manufacturing or processing
contracts, or based on the manufacturers' quotations selected by the project
owners/ investors, or prices at which similar equipment are manufactured or
processed for construction works that have been or are being executed during
the period relevant to the calculation period.
b) Costs of procurement management (including
supplier’s costs of superintendence of equipment installation), and equipment
installation supervision by contractors; costs of purchase of copyrights to
software used for construction equipment and technological equipment of the
project (if any); costs of training and technology transfer; costs of
processing and manufacturing of non-standard equipment (if any), shall be
determined by cost estimates or based on cost norms issued by competent state
authorities.
c) Installation costs shall be detemined by
making estimates in the same way as construction cost estimates prescribed in
clause 2 of this Article.
d) Testing, calibration, training, technology
transfer and other associated costs shall be determined by making estimates
appropriate for workloads to be performed.
4. Project management costs
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5. Determination of construction investment
consultancy costs
a) Consultancy costs included in construction
cost estimates shall be determined on the basis of percentage norms (%),
quantity-based norms or by making cost estimates appropriate to work
quantities, scope, regimes or policies promulgated or announced by the Minister
of Construction, or issued or released by competent state authorities. In case
where several construction consulting works are carried out before making
construction cost estimates, these costs shall be determined by values of
consultancy contracts already signed in conformance to regulations of the
State.
b) In case foreign consultants need to be hired,
consultancy costs shall be determined by making cost estimates tailored to the
consultancy needs (in terms of quantity and quality), regulations of competent
state authorities and international conventions. Approach to determination of
costs of hiring of foreign consultants shall follow the instructions issued by
the Minister of Construction.
c) Approach to determination of construction
investment consultancy costs shall follow the instructions issued by the
Minister of Construction. In particular, the approach to determination of
construction survey costs shall be subject to the instructions given in
Appendix No. 9 hereto.
6. Other expenses shall be determined on the
basis of the percentage (%) under the guidance of competent state authorities
or by making cost estimates or the values of signed contracts in accordance
with the provisions of law. In case where there is any insufficiency in
conditions for determination of several other costs, they shall be estimated
during the process of making construction cost estimates.
For some specialized construction works with
specific cost elements or ODA-funded construction works, if other relevant expenses
are specified under applicable treaties, these costs must be added to their
construction cost estimates.
7. Determination of contingent costs
a) Contingent costs for any work quantity
subject to changes shall be calculated by the percentage (%) of the summation
of construction expenses, equipment expenses, project management costs,
construction investment consultancy expenses and other costs.
b) The contingent costs against inflation
factors shall be determined on the basis of the time of execution of
construction works, the duration of bidding package execution, project
implementation plan, contractor selection plan, capital allocation plan and
construction price indices (calculated in months, quarters and years) suitable
to the type of construction works, taking into account domestic and
international price fluctuations.
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8. Approaches to determination of construction
costs, equipment costs, other costs and contingent costs shall follow specific
instructions given in Appendix No. 2 and No. 3 hereto.
Article 10. Construction
tender estimates
1. An estimate of construction tender costs
shall include:
a) The estimate of costs of procurement of
construction work;
b) The estimate of costs of procurement of
building materials, equipment and technological accessories;
c) The estimate of costs of procurement of
equipment installation work;
d) The estimate of costs of procurement of
construction consultancy work;
dd) The estimate of costs of procurement of
engineering/design and construction work (EC);
e) The estimate of costs of procurement of
engineering/design work and building materials and equipment (EP);
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h) The estimate of costs of procurement of
design/engineering work, materials, equipment and construction work (EPC);
i) The estimate of costs of procurement of
project formulation work, procurement of design/engineering work and
procurement of construction work (turnkey);
k) Other construction tender estimates.
Construction tender estimates shall be specific
to bid packages and appropriate to contractor selection plans. In case where
there have already been construction cost estimates or total estimates, tender
estimates shall not be required.
2. Cost elements of a construction tender
estimate
a) A construction tender estimate shall comprise
the following costs, such as direct costs, indirect costs, pre-assessed taxable
income, value-added taxes, contingent costs offset against elements giving rise
to quantities and inflation elements.
b) The estimate of costs of procurement of
materials and equipment shall include the following expenses, such as
procurement of building materials, equipment and technological accessories,
value added taxes; costs of production and processing of non-standard equipment
(if any); costs of management of procurement of building equipment incurred by
contractors; costs of training and technology transfer (if any);
transportation, insurance costs and other types of charges (if any); other
related costs; contingent costs offset against elements giving rise to
quantities and inflation factors.
c) The estimate of costs of procurement of
equipment installation work shall comprise the following costs, such as
installation, testing and calibration costs, value-added taxes, other related
costs, and contingent costs offset against elements giving rise to quantities
and inflation elements.
d) The estimate of costs of procurement of
construction investment consultancy work shall comprise the following costs,
such as consultant costs, administrative overhead costs, other costs,
pre-assessed taxable income, taxes and contingent costs offset against elements
giving rise to quantities and inflation elements.
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e) The estimate of costs of procurement of engineering/design
work and building materials and equipment (EP) shall include the cost estimates
specified in point b and d of this clause.
g) The estimate of costs of procurement of
building materials and equipment, and construction work (PC) shall include the
cost estimates specified in point b and d of this clause.
h) The estimate of costs of procurement of
design/engineering, procurement of building materials and equipment,
procurement of equipment and construction work (EPC) shall include cost items
related to design/engineering work; procurement of building materials,
equipment and construction work which are included in the approved total
construction investment.
i) The estimate of costs of procurement of
project formulation work – design/engineering - procurement of building
materials, equipment and construction work (turnkey) shall comprise cost items
or entries of the total construction investment of the project specified in
point b, c, d, dd, e and g of clause 4 of Article 4 in the Decree No. 68/2019/ND-CP.
k) Costs of other estimates of construction
tender costs shall be determined on the basis of the scope of respective
procurement works.
3. Project owners/investors may make tender estimates
when they satisfy competency and qualification requirements prescribed by law.
In case of lack of competence, project owners/investors shall be authorized to
hire cost management advisory bodies that meet competency and qualification
requirements set out in regulations laid down in Decrees on administration of
investment and construction projects to make construction tender estimates.
Article 11. Construction
tender estimation bases and approaches
1. Bases for construction tender estimates shall
be regulated as follows:
a) With respect to investment and construction
projects with contractor selection plans already approved by competent persons,
construction cost estimates may be made on the basis of costs of specific
construction bid packages. In this case, costs incurred from construction bid
packages shall be determined according to the approach similar to the approach
to determination of cost elements of cost estimates prescribed under
regulations laid down in Article 10 herein.
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c) For bid packages developed for investment
preparation purposes, tender estimates shall be made on the basis of the tasks,
work outlines to be performed and cost estimates for the investment preparation
work, suitable to contractor selection plan, requirements of bidding documents
or request for proposals.
d) For turnkey bid packages, the tender estimate
shall be determined on the basis of the approved total construction investment
appropriate for the pre-feasibility study report, the approved investment
policy, preliminary design and scope of bid package according to the approved
contractor selection plan, requirements of bidding documents or request for
proposal. If the pre-feasibility study report, approved investment policy or
preliminary design does not form a sufficient basis to determine the turnkey
tender estimate, the project owner/investor must clarify the preliminary
design, requirements, regulations and standards applied to the bidding package
to determine the costs of the respective bid packages.
2. Approach to determination of construction
tender estimate shall follow the instructions given in the section 2 of
Appendix No. 2 hereto.
Article 12. Assessment,
review and approval of construction cost estimates
1. Subject matters of the review of construction
cost estimate shall be subject to clause 2 of Article 10 in the Decree No.
68/2019/ND-CP.
2. Authority over the review and approval of
construction cost estimates shall be subject to clause 3 and 4 of Article 10 in
the Decree No. 68/2019/ND-CP. Particularly for turnkey tender estimates
and mixed bid packages (EPC, EC, EP, PC), the tender estimate must be appraised
and approved by the investment decision maker before contractor selection.
3. Sample reports on assessment and review of
construction cost estimates shall follow the instructions given in the Appendix
No. 10 hereto.
Article 13. Adjustment and
revision of construction tender estimates
1. The approved construction cost estimate may
be adjusted or revised under clause 1 and 3 of Article 11 in the Decree No.
68/2019/ND-CP, and the following regulations:
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b) In case of adjustment in the cost structure
due to inflation, construction quantity adjustment according to the design
already assessed, approved, or change in design adjustment, is not falling into
the situation specified in point a of this clause, the re-assessment by the
construction authority shall not be needed . The project owner/investor shall
be responsible for carrying out the assessment and approval of cost items
subject to adjustment after receipt of consent from investment decision makers.
c) The investment decision maker shall be
accorded authority to approve adjusted construction cost estimates in the case
of adjustment in cost estimates as provided in point a of this clause. In
case of adjustment in the cost structure of the construction cost estimate
according to the economic-technical report as provided in point b of this
clause, the project owner/investor shall be authorized to approve the adjusted
construction cost estimate.
2. Approach to making the adjusted construction
cost estimate shall follow the instructions given in the section 3 of Appendix
No. 2 hereto.
Article 14. Construction
contract costs
1. Construction contract costs shall comprise
all of the following costs necessary for executing bid packages, including
direct costs, indirect costs, pre-assessed taxable income, taxes, fees
prescribed by law, contingent costs offset against additional quantities and
inflation elements of work quantities falling within bid packages in the approved
contractor selection plan.
2. Bases for construction contract costs shall
be calculated under clause 2 of Article 12 in the Decree No. 68/2019/ND-CP.
3. Direct costs of construction bid package
shall be determined on the basis of construction cost estimate or project cost
estimate or construction contract costs.
4. Indirect costs of construction bid package
shall be determined to be appropriate for work contents and scope of each bid
package.
5. Contingent costs included in an item of the
construction contract costs shall be determined to match work characteristics,
execution duration and form of the bid package, including:
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b) The contingent costs offset against inflation
elements shall be determined on the basis of the execution duration of the bid
package and the construction price indices appropriate for the nature and type
of work of the construction bid package, taking into account the possibilities
of variation in domestic and international prices.
c) Depending on each construction bid package,
the level of contingent cost included the construction contract costs must not
exceed the level of contingent cost included in the preliminarily estimated
total investment, total investment, construction cost estimate or tender
estimate which has already been approved.
d) Approach to determination of contingent costs
for construction bid packages shall be similar to the approach to determination
of contingent costs included in total investment or construction cost estimate.
6. Costs included as part of construction
contract costs must be determined and updated to adapt to the price level defined
28 days before the tender closing date. In case the updated construction
contract costs are higher than the approved tender estimate or construction
cost estimate, and exceed the total construction investment, the project
owner/investor must adjust the category and origin of materials and equipment
to meet the quality and technical requirements so that these construction
contract costs are appropriate so as not to exceed the total investment amount,
and must report on such adjustment to the investment decision maker. The
investment decision maker shall be authorized to use provisions when
determining or updating construction contract costs.
Article 59. Use of
contingent costs or provisions
Use of contingent costs or provisions shall be
subject to clause 4 of Article 11 in the Decree No. 68/2019/ND-CP, and the
following regulations:
The investment decision maker shall be
authorized to use contingent costs or provisions of projects and construction
cost estimates. Within the extent of contingent costs or provisions approved by
investment decision makers, project investors/owners shall be authorized to
decide how to use them to match characteristics, nature, execution period and
specific conditions of each construction bid package.
Chapter IV
CONSTRUCTION NORMS AND
DIRECT CONSTRUCTION COSTS PER UNIT
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Article 16. Set of
construction norms
1. The set of construction norms shall be
comprised of basic norms, construction estimate norms and cost norms, subject
to Article 13 and Article 14 in the Decree No. 68/2019/ND-CP.
2. Approaches to determination of construction
norms shall follow the instructions given in the Appendix No. 6, 7 and 8
hereto.
Article 17. Management of
construction norms
Management of the set of construction norms
shall be subject to Article 15 in the Decree No. 68/2019/ND-CP, and the
following regulations:
1. New construction norms are construction
estimate norms that have not yet been included in the issued construction norm
set or construction norms already have their names in the issued construction
norm set, but have other construction technologies.
2. Adjusted construction norms are the norms
adjusted in terms of depreciation components, norm values of the construction
norms that have already been issued in conformity with construction conditions
or measures or technical requirements of specific works or all of these three
elements.
3. When using the construction norms mentioned
in clause 1 and 2 of this Article for determining the bills of lading, but
higher than the bills of lading to which the issued norms are applied, project
owners/investors must report to the investment decision makers or the Minister
of Construction or the Minister of the Ministry in charge of specialized
construction works, the Presidents of the provincial People's Committees
authorized to undertake construction and investment projects under the Prime
Minister’s central decision-making authority shall seek agreement with the
Ministry of Construction before putting these norms to use.
Section 2. DIRECT
CONSTRUCTION COSTS PER UNIT
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1. Direct construction costs per unit shall be
subject to Article 16 in the Decree No. 68/2019/ND-CP, and the following
regulations:
a) Detailed/breakdown bills of lading shall
comprise complete and incomplete detailed bills of lading.
b) General bills of lading shall comprise
complete and incomplete general bills of lading.
2. Cost items constituting direct construction
costs per unit
a) Cost items constituting detailed bills of
lading:
- Incomplete detailed bills of lading shall
include direct costs related to materials, labor, machinery and equipment
costs.
- Complete detailed bills of lading shall
include direct, indirect costs and pre-assessed taxable income.
b) Cost items constituting direct construction
costs per unit shall be regulated as follows:
- Costs included in incomplete general bills of
lading shall include direct costs related to materials, labor, machinery and
equipment costs, and shall be sourced from detailed bills of lading prescribed
in point a of this clause.
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3. Unit prices of items constituting direct
construction costs per unit
a) The price of constructional materials is the
price of a unit of materials suitable to the unit calculated in the
construction norm (the price for 1 m3 of sand, 1 kg of steel, 1
building brick, ...) which is announced by state authorities, or the market
price.
b) Unit cost of construction labor is the price
per one day of work of a direct construction worker and is determined under the
guidance of the Minister of Construction.
c) The price of machine shift and building
equipment is the average price per a work shift and is determined under the
guidance of the Minister of Construction.
4. Bases for determination of direct
construction costs per unit
a) Detailed construction unit costs are
determined on the basis of construction norms and prices of respective cost
elements or determined at the market prices suitable to the time of
calculation.
b) Costs of general bills of lading are
determined with reference to detailed bills of lading or determined at the
market prices suitable to the time of calculation.
5. Approach to determination of unit
construction costs and material costs shall be subject to the instructions
given in Appendix No. 4 hereto.
Article 19. Management of
direct construction costs per unit
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1. Provincial-level People's Committees shall
assign provincial-level Construction Departments to assume the prime
responsibility for, and cooperate with concerned agencies in, based on the
guidance of the Minister of Construction, determining and announcing
construction material costs, unit costs of construction labor, construction
machine shift and equipment, and construction price indices as a basis for
management of direct construction costs per unit as prescribed in clause 2 of
Article 35 in the Decree No. 68/2019/ND-CP.
2. Project owners/investors, consultancy bodies
(providing counsels on formulation of investment projects, design, review), and
assessment units, shall be responsible for selecting common, environmentally
friendly, energy-efficient and popular construction materials on the market
when preparing pre-feasibility study reports, feasibility study reports,
construction designs and determining construction investment costs to ensure
cost efficiency, investment efficiency and conformance to project requirements.
3. If any project is subject to architectural,
structural or other requirements under which specific construction materials
that are particular, not popular in the market, or are imported, must be
selected, they must be clarified in pre-feasibility study, feasibility study
reports or explanatory notes on technical designs, construction drawings, and
FEED designs, and must be accepted or approved by investment decision makers.
Chapter V
INVESTMENT COSTS PER
UNIT AND OVERALL COSTS PER CONSTRUCTION COMPONENT OR PART UNIT
Section 1. INVESTMENT COSTS
PER UNIT
Article 20. Investment
costs per unit
1. Investment costs per unit (hereinafter
referred to as unit investment costs) refer to the amount of costs necessary
per a unit of measure (e.g. area, volume, length, etc.), service capacity or
capability, etc. according to designs for determination of construction
investment costs.
2. Unit investment costs shall include such
costs as construction, equipment, construction and investment project
management, construction investment consultancy and other costs. They shall
also include value-added taxes on the aforesaid costs.
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a) Compensation, support and resettlement costs,
including costs of compensation for land, houses, fixtures or property attached
to land, built on water surface and other compensation prescribed by laws;
financial support from the state in case of land expropriation; resettlement costs;
administrative costs for compensation, support and resettlement activities;
land use fees and rents during the construction period (if any); costs of
relocation and return for technical infrastructure already developed after
investment and construction (if any) and other related costs;
b) Loan interest incurred during the investment
and construction period (with respect to projects using loans);
c) Initial working capital (with respect to
investment and construction projects developed for manufacturing and business
purposes);
d) Contingencies or provisions included in total
investment (for work quantities that may arise and for inflation elements
during the project execution period).
dd) Several costs of particular nature specific
to projects, including environmental impact assessment and treatment of impacts
from projects on environment; register of international quality and monitoring
of project deformation; costs of project quality inspection; special
reinforcement related to project foundations; expenses for hiring foreign
consultants.
Article 21. Principles of
determination of investment costs per unit
1. Typical construction works selected for
calculation must be conformable to construction standards, construction
regulations, regulations on classification and grading of construction works,
may tend to be invested in and constructed and must be suitable to the
scientific, technological and socio-economic development tendency at the time
of calculation;
2. As for specific groups and types of construction
works, typical construction works must be chosen to correspond to
classifications and grading of construction works in accordance with
regulations in force;
3. Technical instructions and construction
standards applied to calculation of unit investment costs must be adequate and
explicit;
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5. Data and figures used for determination of unit
investment costs must ensure reliability and must be aligned with the design
phase;
6. Units of measure used for calculation of unit
investment costs must match types of construction works.
Article 22. Approach to
determination of unit investment costs
Approach to determination of unit investment
costs shall be subject to the instructions given in Appendix No. 5 hereto.
Section 2. OVERALL COSTS
PER CONSTRUCTION COMPONENT OR PART UNIT
Article 23. Details of
overall costs per construction component or part unit
1. Overall costs per construction component or
part unit shall comprise all costs necessary for completion of a quantity of a
group or type of construction works, or part of the construction
structure.
2. These costs per a part of the construction
structure shall be comprised of direct costs, indirect costs, pre-assessed
taxable income and value-added taxes.
Article 24. Principles of
calculation of overall costs per construction component or part unit
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2. List of construction works classified by parts
of the construction structure must be consistent, scientific and easy to use.
Selected parts of the construction structure must have full information about
symbols, size and quantity to serve the takeoff of quantities from design
documentation;
3. Data and figures used for calculation of unit
investment costs must ensure reliability and must be aligned with the design
phase;
4. These costs per parts of the construction
structure must be calculated sufficiently and ensuring constituent costs are
rational; ensuring that these costs are typical and general;
5. Technical instructions and construction
standards applied to calculation of unit investment costs must be adequate and
explicit;
6. Units of measure for construction costs per a
part of the construction structure must be selected in accordance with type of
calculation.
Article 25. Approach to
determination of overall costs per construction component or part unit
Approach to determination of overall costs per
construction component or part unit shall be subject to the instructions given
in Appendix No. 5 hereto.
Chapter VI
IMPLEMENTATION
PROVISIONS
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Determining and managing construction investment
costs in the transitional period shall be subject to regulations laid down in
clause 1 and 2 of Article 36 in the Decree No. 68/2019/ND-CP, including the
following specific regulations:
1. Construction investment projects that have
been carried out are those projects that have obtained investment decisions and
have works commenced after they are approved, such as surveys intended for
construction design after basic design; selection of contractors for
implementation of construction design after basic design.
2. Investment and construction projects already
approved but not yet commencing are those projects obtaining investment
decisions from competent authorities, but having the works specified in clause
1 of this Article which have not yet commenced.
3. If construction investment projects are prone
to adjustment in total investment and construction estimate such adjustment in
construction norms, construction costs or construction contract costs made 28
days prior to the bid opening date prescribed in documents in force at the
adjustment date shall be subject to decisions by investment decision makers on
the basis of conformance to effectiveness, progress and cost efficiency
principles.
4. With respect to construction bid packages
which have already been closed, of which contractors have already been
selected, or on which agreements have already been signed, requirements set
forth in documentation for invitation for bid, bid documents, terms and
conditions of signed agreements must be obeyed.
Article 27. Entry into
force
1. This Circular shall enter into force from
February 15, 2020, replacing the Circular No. 06/2016/TT-BXD dated March 10,
2016, providing instructions about estimation and management of construction
investment costs.
2. In the course of implementing this Circular, if
there is any difficulty that arises, persons and entities may send feedbacks to
the Ministry of Construction to seek approval of any possible solutions./.
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PP. MINISTER
DEPUTY MINISTER
Bui Pham Khanh