THE
MINISTRY OF CONSTRUCTION
|
SOCIALIST
REPUBLIC OF VIET NAM
Independence Freedom Happiness
|
No.
05/2008/TT-BXD
|
Hanoi,
February 22, 2008
|
CIRCULAR
GUIDING THE ADJUSTMENT
OF PRICES AND CONSTRUCTION CONTRACTS IN RESPONSE TO FLUCTUATIONS IN PRICES OF
RAW MATERIALS, FUELS AND CONSTRUCTION MATERIALS
Pursuant to the Governments Decree No. 17/2008/ND-CP
of February 4, 2008, defining the functions, tasks, powers and organizational
structure of the Ministry of Construction;
Pursuant to the Governments Decree No. 99/2007/ND-CP of June 13, 2007, on the
management of work construction investment expenses; and Decree No.
03/200S/ND-CP of January 7, 2008, amending and supplementing a number of ankles
of Decree No. 99/2007/ND-CP;
Based on the Prime Ministers instruction in Document No. 164/lTg-CN of
Jamuuy29, 2008, on the adjustment of prices and package contracts;
After consulting the Ministry of Planning and Investment and the Ministry of
Finance, the Ministry of Construction guides the adjustment of prices of raw
materials, fitels and construction materials (below collectively referred to as
construction material prices) and construction contracts in response to price
fluctuations beyond the control of investors and contractors as follows:
1. Subjects and scope of application
1.1. The adjustment of construction material prices
applies to bidding packages which have been being executed at package
contractual prices or fixed unit price-based contractual prices.
1.2. To adjust contractual prices of contracts which
have been performed from package contractual prices or fixed unit price-based
contractual prices into adjustable price-based contraciual prices in response
to fluctuations in construction material prices which are beyond the control of
investors and contractors.
2. Adjustment principles
2.1. Construction material prices shall be adjusted for
construction and installation volumes performed, from 2007. which are affected
by fluctuations.in construction material prices resulting in higher
construction costs which are beyond the control of investors and contractors
(below referred to as construction and installation volumes affected by price
hikes).
2.2. Investors and contractors shall determine
construction and installation volumes affected by price hikes and price
adjustment levels, and bear responsibility for such determination.
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2.4. Investors shall report to investment deciders for
consideration and decision any adjustment of construction material prices which
will result in an excess of the approved total investment capital and affecting
the investment efficiency of statecapiml-fundcd projects.
2.5. For construction investment projects executed under
the Governments Decree No. 99/2007/ND-CP of June 13, 2007, on the management of
construction investment expenses, their construction investment expenses shall
be adjusted under the Governments Decree No. 99/2007/ND-CP and guiding
documents.
3. Methods of adjusting construction material prices
Construction material prices may be adjusted for each
construction contract, each bidding package and the whole project. Additional
expenses arising from the adjusmient of construction material prices shall be
stated in estimates of additional construction costs to serve as a basis for
the adjustment of contractual prices, bidding package prices, cost estimates of
works and total invesunent capital.
Based on the terms of each contract, additional
construction costs may be estimated using adjustment coefficients of material
expenses or to offset direct material expenses. Additional construction costs
shall be estimated pursuant to the Appendix to this Circular.
4. Adjustment of construction cost estimates of works
after making additional construction costs
4.1. For bidding packages for which contractors have
been designated and projects will be self-implemented or contractors have been
selected but construction contracts have not yet been signed or are being
perfonned (at package contractual prices or fixed unit price-based contractual
prices), investors shall estimate additional construction costs under the
guidance in Section 3 above for use as a basis for the adjustment of construction
cost estimates of works.
4.2. Forbidding packages, work items or works for which
contractors have not yet been selected, investors shall adjust their cost
estimates according to current regulations.
4.3. The adjusted construction cost estimate of a work
shall be determined by adding additional construction cost estimates to the
approved construction cost estimate of the work.
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Investors shall adjust bidding package prices by adding
additional construction cost estimates determined under Section 3 to approved
successful bids.
For state capital-funded projects, if the adjusted price
of a bidding package does not exceed the approved price, the investor may
decide to approve that price. If the adjusted price of a bidding package
exceeds the approved price but does not result in an excess of the total
investment capital, the investor may decide to approve and shall report it to
the investment decider. If the adjusted price of a bidding package results in
an excess of the approved total investment capital, the investor shall report
it to the investment decider for consideration and decision.
6. Adjustment of total investment capital after
making additional construction cost estimates
For state capital-funded projects, if the adjustment of
construction material prices results in an excess of the approved total
investment capital and affects project investment efficiency, the investor
shall report it to the investment decider for consideration and decision.
Ministers, heads of ministerial-level or government-attached agencies,
presidents of provincial-level Peoples Committees, presidents of economic
groups, or chairmen of boards of directors of state corporations may decide on
the adjustment of the total investment capital of projects in which the
investment has been decided by the Prime Minister.
7. Modification of contracts after making additional
construction cost estimates
7.1. For signed contracts, based on their terms and
additional construction cost estimates, the investor and contractor shall sign
additional contractual prices for use as a basis for contract payment.
7.2. For bidding packages for which contractors have
been selected but contracts have not yet been signed, the investor shall
negotiate and sign a contract on the basis of additional construction cost
estimates, the bid invitation dossier and the bid dossier.
7.3. In case of adjustment of package contract prices or
fixed unit price-based contractual prices into adjustable price-based
contractual prices, the investor shall report to the investment decider (on the
scope, method, bases and time of adjustment, etc.) for approval before
adjustment. Terms of a construction contract comply with the Construction
Ministrys Circular No. 06/2007/TT-BXD of July 25, 2007, guiding construction
contracts.
Ministers, heads of ministerial-level or
government-attached agencies, presidents of provincial-level Peoples Committees,
presidents of economic groups, or chairmen of boards of directors of state
corporations shall decide on the modification of contracts for state
capital-funded projects for which bidding plans have been approved by the Prime
Minister.
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8.1. Investors shall check and certify construction and
installation volumes affected by price hikes, calculate, and bear
responsibility for the accuracy of, additional construction cost estimates,
adjusted cost estimates, bidding package prices and adjusted total investment
capital suitable to each fluctuation in construction material prices for use as
a basis for the addition of construction costs as a result of fluctuations in
construction material prices.
8.2. For construction contracts for which full payment
has been made in 2007, construction material prices shall not be adjusted
u::der the guidance of this Circular.
8.3. Ministries, ministerial-level agencies,
government-attached agencies, provincial/ municipal Peoples Committees, economic
groups and state corporation shall direct, guide and inspect investors and
contractors in adjusting construction material prices, costs estimates, bidding
package prices, total investment capital and contracts in accordance with this
Circular; and request investors not to let the adjustment of construction
expenses affect the contraction progress and, at the same time, to speed up the
progress of construction of works, especially important national ones.
8.4. The adjustment of construction cost estimates.according
to new wage levels complies with die guidance of the Construction Ministrys
Circular No. 07/2006/TT-BXD of November 10, 2006, and Circular No.
03/2008/TT-BXD of January 25, 2008, guiding the adjustment of construction cost
estimates.
8.5. Investors shall report to investment deciders for
consideration and decision the transition of constiuction investment projects
under Decree No. 99/2007/ND-CP on the management of construction investment
expenses (including total investment capital, construction cost estimates,
construction norms and prices, construction contracts, and payment and
settlement of construction investment capital). Ministers, heads of
ministerial-level or government-attached agencies, presidents of
provincial-level Peoples Committees, presidents of economic groups, or chairmen
of boards of directors of state corporations shall decide on the transition of
state capital-funded projects approved by the Prime Minister.
8.6. This Circular takes effect 15 days after its
publication in CONG BAO.
Problems arising in the course of implementation should
be reported to the Ministry of Construction for synthesis, study and
settlement.
FOR THE MINISTER OF
CONSTRUCTION
VICE MINISTER
Dinh Tien Dung
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APPENDIX
ADDITIONAL CONSTRUCTION
COST ESTIMATES BASED ON ADJUSTED CONSTRUCTION MATERIAL PRICES
(Attached to the Construction Ministrys Circular No. 05/2008/TT-BXD of
February 22, 2008)
No.
Expense items
Method of calculation
Sign
I
Direct expenses
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1
Material expense
VL =
or GVL x P x K
VL
2
Other direct expense
VL x percentage
TT
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Direct expenses
VL+TT
T
II
General expense
T x percentage
or NC x percentage of other direct expenses x KNCC
C
III
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(T+C) x percentage
TL
Pre-tax construction cost
(T+C+TL)
GBS
IV
Value-added tax
GBS x TGTGT-XD
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Post-tax construction cost
GBS + GTGT
GXDBS
1. Adjustment of material prices by offsetting direct
material expenses
VL =
Of which:
Qi is the volume of the ith material in the construction
and installation volume affected by price hike.
CLj is the difference between the price of the ith
material at the time of adjustment and the construction material price quoted
in the contract or bidding package cost estimate.
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In case the construction material price quoted in the
contract is lower than that announced by a competent state agency at a point of
time, CLj. is the difference between the construction material price announced
by a competent state agency at the time of adjustment and the construction
material price announced by the competent state agency at that point of time.
In case a competent state agency fails to notify a
construction material price in time or announces a construction material price
unsuitable to reality or the construction material price is not included in
such notification, the investor and contractor shall base themselves on valid
documents and invoices to determine the construction material price and bear
responsibility for its truthfulness and accuracy.
2. Adjustment of construction material prices based on
adjustment coefficients of material expenses
VL = GVL xP x K
Of which:
GVL is the direct material expense in the contract.
P is the proportion of the expense for the material with
an increased price to the direct material expense of the contract.
K is the coefficient of increase of the construction material
price at the time of adjustment compared to the contractual price of the
construction material before it is increased.
3. Other expenses
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KNCC is the general expense calculated based on the
labor cost, for construction and installation work for which the general
expense is calculated based on the labor cost.
The proportions of general expense and prepaid taxable
income are those set in contracts, bidding packages or cost estimates.
Value-added tax shall be calculated according to state
regulations