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THE GOVERNMENT
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SOCIALIST
REPUBLIC OF VIETNAM
Independence – Freedom - Happiness
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No. 37/2015/ND-CP
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Hanoi, April 22,
2015
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DECREE
DETAILED
REGULATIONS ON CONSTRUCTION CONTRACT
Pursuant to the Law on Government organization
dated December 25, 2001;
Pursuant to the Law on Construction dated June
18, 2014;
At the request of the Minister of Construction,
The Government
promulgates the Decree detailing construction contract
Chapter I
GENERAL PROVISIONS
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1. This Decree provides detailed regulations on
construction contract
2. This Decree applies to organizations,
individuals concerning formulation and management of the performance of
construction contract for construction projects (including construction
contract between investors in BOT, BTO, BT and PPP projects and contractors for
project packages) as follows:
a) Construction projects by regulatory agencies,
political organizations, socio-political organizations,
political-social-occupational organizations, socio-occupational organizations,
social organizations and units affiliated to People’s armed forces and public
service providers;
b) Construction projects by state-owned
enterprises;
c) Construction projects that are not defined in
Points a, b of this Clause but use state capital, corporate capital from 30%
and over or from under 30% to over VND 500 billion of total project investment
capital;
Relevant organizations, individuals using other
capital sources are encouraged to apply provisions set out hereof.
3. As for construction contract for ODA projects,
provisions set out in the International Agreement to which Vietnam is a
signatory shall be exercised in case they are different from provisions set out
hereof.
Article 2. Interpretation of
terms
In this Circular, some terms are construed as
follows:
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2. The employer means the investor or its
representative, general contractor or main contractor.
3. Contractor means general contractor or main
contractor if its employer is the investor; sub-contractor if its employer is
general contractor or main contractor. The contractor can be a joint venture
among contractors.
4. General provisions of the construction contract
refer to the accompanying documents defining rights, obligations and
relationship of the parties involved in the contract.
5. Particular provisions of the construction
contract refer to the accompanying documents detailing and making a number of
supplements to general provisions of the contract.
6. Appendices of the construction contract are the
documents attached to the contract that detail amendments and supplements to a
number of terms and conditions of the contract.
7. Working days in this Decree mean solar days
except Sundays, public holidays, Tet holidays as stipulated by the law.
8. Technical instructions mean a collection of
technical requirements based on technical regulations and standards applied to
construction works, construction engineering to instruct and define materials,
products and equipment used for construction packages and tasks of
construction, supervision, inspection and acceptance of construction works.
9. Front End Engineering Design means general
design developed in conformity with international practice as the basis for
development of detailed design.
10. Scope of work as prescribed in Clause 1,
Article 12 hereof;
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12. Sub-contractor means an organization that signs
the contract with main contractor or general contractor.
13. Foreign contractor means an organization established
under foreign law or individuals holding foreign nationality that are involved
in the signing and management of the performance of construction contract in
Vietnam. Foreign contractor can be main contractor, general contractor or
sub-contractor.
Article 3. Types of
construction contract
1. Depending on nature, types of construction
contracts are as follows:
a) Construction consultant contract (or contract
for consultancy) is a type of contract for performance of part or whole of the
consulting task in activities of investment and construction;
b) Work construction contract (or construction
contract) is a type of contract for the performance of construction of the
works, work items or part of construction work by design; General construction
contract is a type of contract for the performance of all of the works of an
investment project;
c) Technological equipment procurement contract (or
procurement contract) is a type of contract for the procurement of
technological equipment to be installed to the construction works under
technological design; General procurement contract is a type of contract for
the procurement of equipment to all of the works of an investment project;
d) Engineering and Construction contract (or EC
contract) is a type of contract for the engineering and construction of the
works, work items; General EC contract is a type of contract for the
engineering and construction of all of the works of an investment project;
dd) Engineering and Procurement contract (or EP
contract) is a type of contract for the engineering and procurement of
equipment for the installation of the construction works as designed; General
EP contract is a type of contract for the engineering and procurement of
equipment to all of the works of an investment project;
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g) Engineering,
Procurement and Construction contract (or
EPC contract) is a type of contract for the engineering, procurement and
construction of the works, work items; General EPC contract is a type of
contract for the engineering, procurement and construction of all of the works
of an investment project;
h) Turnkey contract is a type of contract for the
performance of all the tasks from project establishment, engineering,
procurement and construction of the works of an investment project;
i) Contract for supply of human force, working
machinery and equipment is a type of contract for the supply of human force,
working machinery, equipment and other necessary vehicles for serving the
construction of the works, work items, packages or construction work as
designed;
k) Other types of construction contract
2. Depending on contractual price manner,
construction contracts include the following types:
a) Lump sum
contract;
b) Fixed unit price contract;
c) Adjustable unit price contract;
d) Time-based contract;
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3. Depending on relationship of parties involved,
construction contracts include the following types:
a) Main contract is a type of contract signed
between the investor and main contractor or general contractor.
b) Sub-contract is a type of contract signed
between main contractor or general contractor and sub-contract.
c) Fixed rate
contract is a type of contract signed between the employer and contractor as an
agency or organization.
d) Foreign construction contract is a type of
contract signed between a foreign contractor and a domestic contractor or
investor.
Article 4. Principles for
signing construction contract
Principles for signing construction contract must
conform to Clause 2, Article 138 of the Law of Construction No. 50/2014/QH13
and ensure the followings:
1. At the time of signing, the contractor must meet
conditions for practice qualification and performance qualification as
prescribed in the Law on Construction. As for partnership contractor, division
of work quantity in the partnership agreement must be based on performance
qualification of each member of the partnership. As for foreign main
contractor, an undertaking to hire domestic sub-contractor to perform the tasks
under the contract must be included when such sub-contractor is capable of
meeting requirements of the bid package.
2. The investor or its representative is permitted
to sign a contract with one or more main contractors for the performance of
tasks. In case the investor signs contracts with
multiple main contractors, the content of these contracts must ensure
uniformity and comprehensiveness during the performance of the tasks under the
contract to meet schedule, quality and efficiency of the investment project
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4. Contractual price is not permitted to exceed the
bid price or result of negotiation on construction contract except the quantity
generated outside scope of the bid package permitted by competent persons.
Article 5. Principles for
execution of construction contract
When executing the construction contract, the
parties must meet the principles for execution of construction contract as
prescribed in Clause 3, Article 138 of the Law on Construction No.
50/2014/QH13:
Article 6. Validity and
legality of construction contract
1. A construction contract shall become legally
effective when it meets the following conditions:
a) Persons who participate in signing a contract
must obtain adequate legal capacity;
b) Meet the principles for contract signing as
prescribed in Article 4 hereof;
c) Form of a contract is in writing and signed by
representative of the parties to a contract according to the law. In case
either of the parties is an organization, such party shall sign its name and
affix stamp according to the law.
2. The effective date of a contract is the date
when it has been signed (affixed with stamp if any) or other specific times as
agreed in the contract and the employer has received performance bond issued by
the contractor (for a contract with provisions on performance bond being
specified).
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a) A construction contract that has become
effective shall be the highest legal foundation that the employer, contractor
and other related parties have the obligations to perform;
b) A construction contract that has become
effective shall be the highest legal foundation for settling dispute between
the parties. Any dispute that is not yet agreed by the parties to the contract
shall be settled on the basis of relevant law provisions;
c) Regulatory agencies and agencies that perform
controlling, allocation, provision of capital, investigation and auditing, and
other relevant agencies shall perform their functions and duties as defined
without encroachment on rights and interests of the parties in reliance on
terms and conditions of the effective construction contract.
Article 7. Management of
construction contract performance
1. Within one's rights and obligations, the parties
need to establish a plan and take appropriate implementation measures in
accordance with the signed construction contract to achieve terms and
conditions set out in the contract.
2. Depending on construction contract types,
management of construction contract performance shall include:
a) Management of contract performance schedule
b) Quality management;
c) Quantity and contractual price management;
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dd) Revision of contracts and other
contract-related issues;
3. Both the employer and contractor must appoint
and notify other party of its representative who shall manage construction
contract performance. Representative of the parties must be fully entitled to
decide and take responsibility for its own decision within authority as set out
in the contract.
4. All proposals, requests and feedbacks from
either party during the management of construction contract performance must be
made in writing. Such proposals and request should represent foundations,
efficiency (if any) and feedback deadline as agreed in the contract. Upon
receipt of a proposal or request from one party, the other party must make a
written reply about approval or disapproval of the deadline as agreed in the
contract within seven working days since receipt of such proposal or request
except otherwise as agreed. After this deadline, if the party that receives
proposal or request fails to respond without proper reason and causes damage to
the other party shall take full responsibility and pay compensation (if any).
5. Any proposal or request from either party during
the management of construction contract performance must be dispatched to the
address as agreed by the parties under the contract.
6. For any matter that is not prescribed hereof,
the parties shall rely on relevant law provisions for execution.
Chapter II
PARTICULAR PROVISIONS
Section 1: INFORMATION,
FOUNDATIONS FOR SIGNING, CONTENT, DOCUMENT, APPLICABLE LAW, AND LANGUAGE USED
IN CONSTRUCTION CONTRACT
Article 8. Information about
construction contract
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1. Contract type and number, name of bid package,
project name, construction site and foundations for contract signing;
2. Business name of the parties to the contract,
representatives of the parties, registered business address or transaction
address, tax codes, business registration certificate, account number, phone
number, fax number, email, time and venue for contract execution and other
relevant information;
3. In case of a partnership contractor, all the
information about the leading member and other individual members of such
partnership as prescribed in Clause 2 of this Article must be specified.
Article 9. Foundations for
signing construction contract
1. Foundations for signing a construction contract
include requirements for performance of the tasks as agreed by the parties,
result of selection of contractor, negotiation and completion of the contract
and other relevant foundations.
2. As for EPC, EC and EP contracts, in addition to
the foundations as specified in Clause 1 of this Article, a feasibility study
report or approved FEED is also required.
3. As for Turnkey contracts, in addition to the
foundations as specified in Clause 1 of this Article, other foundations such as
project performance duties, investment policies, approved feasibility study
report are also required.
Article 10. Content, document
and order of priority of documents enclosed in a construction contract
Content, documents and order of priority of
documents enclosed in a construction contract are instructed in Points 141, 142
of the Law on Construction No. 50/2014/QH13:
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1. The construction contract must conform to the
law system of the Socialist Republic of Vietnam and provisions set out hereof.
2. Language used in a construction contract is
Vietnamese.
3. As for a foreign construction contract, the
language used is Vietnamese and English as agreed by the parties; in case no
agreement on this is reached, English shall be used.
Section 2: CONTENT AND QUANTITY
OF WORK, REQUIREMENTS FOR QUALITY AND IMPLEMENTATION PROGRESS
Article 12. Content and
quantity of work in construction contract
1. Content and quantity of work in a construction
contract are subject matters and quantity of work that the employer signs with
the contractor in accordance with scope of work and specified in the contract.
Scope of work is determined on the basis of an invitation to bid (ITB) or
request for proposals, bid documents, negotiation minutes and other relevant
legal documents. Depending on specific construction contract type, scope of
work shall be determined as follows:
a) Contract for consultancy: Establishment of
planning, investment project; designing and survey; project management;
management of construction contract performance; construction supervision;
examination and verification of design, cost estimates and other consulting
works in activities of investment and construction;
b) Construction contract: Supply of building
materials, human force, working machinery and equipment, and construction in
accordance with approved design document;
c) Procurement contract: Supply of equipment;
instructions on installation, use, trial operation, official operation,
training and technology transfer (if any) in accordance with approved design
document;
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dd) Turnkey contract: Establishment of investment
project; engineering, procurement of materials and construction; training and
instructions on operation, maintenance, repair work; technology transfer;
on-load/off-load trial operation; handover of the works to the employer for operation;
other works in accordance with approved project;
2. Revision of quantity of work in the contract is
prescribed in Article 37 hereof;
Article 13. Requirements for
product quality, acceptance and handover of works
1. Requirements for construction product quality:
a) Construction product quality must meet
requirements under the contract and conform to the quality requirements as
prescribed by the law. The parties to the contract must reach a common
agreement on national regulations and standards, technical instructions applied
to the product.
b) As for imported equipment and goods, in addition
to the provisions set out in Point a of this Clause, provisions on origin must
be applied.
2. Acceptance and handover of finished works:
a) Agreements on procedures for acceptance and
handover of the works by the parties to the contract must conform to the
provisions set out in the Law on Construction Quality Control.
b) Works to be accepted and handed over;
foundations for acceptance and handover; procedures, date of acceptance and
handover of finished works; personnel involved in acceptance and handover;
forms; signers, written records, reports must conform to the law provisions and
be agreed by the parties to the contract.
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d) As for the works to be inspected and accepted
before moving on to other works, the contractor must make prior notice to the
employer for inspection as prescribed by the Law on Construction Quality
Control.
dd) As for defective products (failing to meet
requirements as prescribed in the contract), they must be remedied or
eliminated otherwise. Any party that commits the fault shall incur the
entire cost for remedial work, re-appraisal and implementation progress.
Article 14. Time and progress
of construction contract performance
1. Time of construction contract performance is
from the effective date of the contract till the parties have fulfilled their
obligations under the signed contract.
2. The contractor shall establish a detailed
implementation progress and make submission to the employer for approval.
3. The implementation progress must represent
milestones of completion and handover of key works and products.
4. As for a construction contract for a large-scale
bid package with a long implementation period, the implementation progress may
be divided into individual stages.
5. As for a procurement contract, progress of
equipment supply must represent milestones of handover of equipment of which
quantity and types of equipment in each stage of handover must be specified.
6. As for an EPC contract or turnkey contract, in
addition to each stage’s implementation progress, progress for each type of
work (project establishment, engineering, procurement and construction) must be
also established.
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8. Revision of contract implementation progress is
prescribed in Article 39 hereof;
Section 3: CONTRACTUAL PRICE,
ADVANCES, PAYMENT, FINAL SETTLEMENT AND LIQUIDATION OF CONSTRUCTION CONTRACT
Article 15. Contractual price
and conditions
1. Contractual price is an amount of money that the
employer undertakes to pay to the contractor for the implementation of the works
under the requirements for quantity, quality, progress, payment terms, advances
and others as agreed in the contract.
2. Expenses, taxes and other charges (if any)
included or not included in contractual price must be specified in the
construction contract; contractual price to be revised must conform to contract
type, contractual price manner and must be agreed by the parties in the
contract. As for a construction contract under which payment in multiple
currencies is agreed by the parties, contractual price in proportion to each
currency must be specified.
3. Construction contract price includes the
following types:
a) Lump sum contract price is the contractual price
that is unchanged throughout the implementation period for the quantity of work
within the scope of work under the signed contract except force majeure events
or compulsory changes to scope of work.
b) Contractual price of fixed unit price is
determined by multiplying fixed unit price of each work by respective quantity
of work. Fixed unit price is the unit price that is unchanged throughout the
implementation period except force majeure events.
c) Contractual price of adjustable unit price is
determined by multiplying the unit price subject to adjustment due to slippage
in prices as agreed in the contract by respective quantity of work (with the
price adjustable). Adjustment to unit price due to slippage in prices are
prescribed in Clauses 3, 4, Article 38 hereof;
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- Expenses for experts’works are determined by
multiplying their pay rate and other related expenses by the actual work time
(on a monthly, weekly, daily and hourly basis).
- Other expenses apart from the expenses for
experts’ work include travel expenses, working offices and other expenses.
dd) Contractual price of combined price is the
contractual price used in combination with other contractual prices as
prescribed in Points a – d of this Clause in accordance with each type of work
mentioned in the contract.
4. Construction contract price is determined on the
basis of bid price or result of negotiation on the construction contract
between the parties.
5. Conditions for applying construction contract
types are prescribed as follows:
a) Lump sum contract:
Lump sum contract price applied to bid packages at
the date of contractor selection and contract negotiation has met conditions
for determination of quantity and unit price for the implementation of the
works under the construction contract or in some cases, quantity and unit price
are not yet determined but the parties are qualified to calculate and determine
the lump sum contract price.
When the lump sum contract price is applied,
elements related to bid package price or contractual price such as risks to
quantity and slippage in prices must be taken into account during the contract
implementation period and each party must be responsible for its own risks.
b) Contractual price of fixed unit price:
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c) Adjustable unit price contract applied to bid
packages at the date of contractor selection and contract negotiation has not
yet met conditions for determination of quantity, unit price and elements of
contractual price such as slippage in prices during the contract implementation
period and the parties must be responsible for anticipating provisional budget
for risky elements of bid price and contractual price such as slippage in
prices and quantity.d) Time-based contract price is usually applied to a number
of construction contracts covering consulting work in activities of investment
and construction. Contract for consultancy is applied to all contractual prices
as prescribed hereof.
Article 16. Guarantee for
construction contract performance
1. Measures to guarantee construction contract
performance such as payment of deposit, security or performance bond for fulfillment
of obligations shall be undertaken by the contractor during the construction
contract period.
2. Contract performance guarantee must be submitted
to the employer before the contract takes effect as agreed by the parties on
value, currency and guarantee method according to the forms accepted by the
employer and valid until the contractor has fulfilled its obligations under the
contract or after the employer has received maintenance bond with respect to a
contract for construction and procurement of equipment. Particularly for a
contract for consultancy, fixed rate contract, construction contract for target
programs performed by households and construction contracts in the form of
self-performing, a performance guarantee is not required.
3. In case the contractor is a partnership
contractor, each member of such partnership must submit contract performance
guarantee to the employer and level of guarantee value must correspond to part
of the contract value undertaken by each member. If the partnership has an
agreement on submission of contract performance guarantee made by a leading
member, such leading member shall submit the performance guarantee to the
employer and each member of the partnership must submit its own performance
guarantee to the leading member in proportion to the contract value undertaken
by each member.
4. Value of contract performance guarantee and
guarantee method are prescribed in the invitation to bid or request for
proposals. Level of performance guarantee is determined within 2% - 10% or
higher but not exceeding 30% of the contract value and approved by competent
person.
5. The contractor shall not be permitted to get
back the contract performance guarantee in case of refusal to perform the
contract right after the contract takes effect and other violations as
prescribed in the contract.
6. The employer must return the contract
performance guarantee to the contractor after the contractor has fulfilled
obligations under the contract or has transferred to maintenance work and the
employer has received maintenance bond with respect to a construction contract
covering construction and procurement of equipment.
Article 17. Payment guarantee
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2. Before signing a construction contract, the
employer must issue a payment guarantee in accordance with the payment schedule
as agreed in the contract. The employer is not permitted to execute a
construction contract without approved capital arrangement plan as agreed in
the contract except urgent construction works.
Article 18. Advances
1. Advance on a construction contract is an amount
of money offered in advance by the employer to the contractor without interest
rate for necessary preparations before implementation of the tasks under the
contract.
2. Such advance is made only after the construction
contract takes effect. Particularly for work execution contract, a site
clearance plan must be included in the contract and at the same time the
employer has received advance payment guarantee (if any) corresponding to value
of each currency agreed by the parties.
3. Level of advance payment, date of payment and
recovery of advance shall be agreed specifically in the contract. Level
of advance payment and number of advance payments must be specified in the
invitation to bid, request for proposals or a draft construction contract
dispatched to the contractor as foundation for calculation of bid price,
proposal price.
4. Advance payment guarantee:
a) For a construction contract with an advance
payment value higher than one billion Vietnam dong, before the employer carry
out the advance payment, the contractor must submit to the employer an advance
payment guarantee with value and currency equivalent to the advanced amount of
money. Any construction contract with value from one billion Vietnam dong
and lower, and construction contracts in the form of self-performing including
the contract executed by a community under the target programs, advance payment
is not obligatory.
b) In case the contractor is a partnership
contractor, individual members of the partnership must submit to the employer
advance payment guarantee with value equivalent to the amount advanced to each
member except all the members of the partnership decide on the leading member
for submission of payment guarantee to the employer.
c) Validity period of advance payment guarantee
must be extended until the employer has recovered all the advanced amount of
money. Value of advance payment guarantee shall decrease gradually in proportion
to value of advance payment recovered via each payment made between the
parties.
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a) Contract for consultancy:
- 15% of the contract value for a contract valued
over VND 10 billion.
- 20% of the contract value for a contract valued
up to VND 10 billion.
b) Work execution contract:
- 10% of the contract value for a contract valued
over VND 50 billion.
- 15% of the contract value for a contract valued
from VND 10 to 50 billion.
- 20% of the contract value for a contract valued
under VND 10 billion.
c) Procurement contract, EC contract, EP contract,
PC contract and EPC contract, turnkey contract and other construction
contracts: 10% of the contract value;
d) In case the parties agree on a level of advance
payment that is higher than the minimum level as prescribed in Points a, b, c
of this Clause, value of the contract in proportion to such level of advance
payment shall not be adjusted in price since the date of advance payment.
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6. The contractor must use the advance as intended,
planned and effectively. Use of the advance for purposes outside the contract’s
scope of work is prohibited.
7. As for production of structures, semi-finished
products of high value, some materials reserved by season, the two parties must
negotiate on advance payment plan and level of advance payment to ensure the
contract implementation progress.
Article 19. Construction
contract payment
1. Construction contract payment must be in
accordance with contract type, contractual price and conditions prescribed in
the signed contract. When payment is made under the contract, the two parties
do not have to sign the appendices except some supplements are made to the
contract.
2. The parties shall negotiate in the contract
about number of payments, stage of payment, date of payment, payment term,
payment documents and conditions.
3. The employer must pay 100% of each payment value
to the contractor after advances and maintenance expenses are subtracted
according to agreement under the contract except otherwise as negotiated.
4. If the two parties are not eligible to carry out
the payment under the contract during the payment period (no data to adjust
price, insufficient time to determine product quality...), temporary payment
can be made. When the two parties are eligible to carry out the payment, the
employer must make the payment to the contract as prescribed in Clause 3 of
this Article.
5. Lump sum contract: payment shall be made on
percentage of contractual price or construction works price, work items,
quantity of work in proportion to payment stages as agreed in the contract.
Confirmation of completed quantity of work is not required when payment is
made.
6. Contracts of fixed unit price and adjustable
unit price: Payment shall be made on the basis of actual completed quantity
(including increasing or decreasing quantity if any) inspected and accepted for
each payment, and unit price in the contract or adjustable unit price as agreed
in the contract.
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a) Expenses for experts’ work are determined by
multiplying the expert’s pay rate and relevant expenses as agreed in the
contract by actual accepted work time (on a monthly, weekly, daily and hourly
basis).
b) Expenses apart from the expenses for experts’
work shall be paid according to provisions of the contract.
8. As for contracts of combined price, payment
shall be made according to regulations on contract payment as prescribed in
Clauses 5, 6, 7 of this Article.
9. Payment of additional quantity (apart from the
contract) without unit price in the contract shall be made according to
agreement in the contract or additional agreement and in accordance with
relevant law provisions.
10. Payment term as agreed by the two parties in
the contract must be in conformity with scale and nature of each contract. Time
for payment should not prolong over 14 working days since the employer receives
adequate payment documents as agreed in the contract and specifically
prescribed as follows:
a) Within seven working days since receipt of
adequate payment request from the contractor, the employer must complete
procedures and transfer payment request to the bank or State Treasuries to
facilitate the payment.
b) Within seven working days since receipt of
adequate payment request from the contractor, the employer must complete
procedures and transfer payment request to the bank or State Treasuries to
facilitate the payment.
c) For contracts of ODA projects, loans from
foreign credit institutions, payment term is prescribed in International
Agreement. When negotiating about payment term, the parties must rely on
provisions of the International Agreement and investment capital payment
procedures according to law provisions.
11. The employer's failure to pay or overdue
payment to the contractor as agreed in the contract shall not be accepted.
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1. Payment documents shall be established by the
contractor in accordance with contract type, contractual price and other
agreement in the contract. Payment documents (including forms) must be
specified in the contract and confirmed by the employer. Payment documents
include:
a) As for a lump sum contract:
- Inspection and acceptance report on completed
quantity with confirmations by the employer’s representative or consultant’s representative
(if any) and by the contractor’s representative; such reports are the
confirmation on fulfillment of the works, work items, quantity of work in
accordance with scope of work to be performed under the contract without
requirement for detailed confirmation of completed quantity.
- Table of additional quantity value (if any) apart
from the contract’s scope of work with confirmations by the employer's
representative or consultant's representative (if any) and the contractor's
representative;
- Payment request from the contractor should
represent the following matters: value of completed quantity under the
contract, value of additional quantity (if any), subtraction of advanced
amount, value stated in payment request after subtraction of these amounts with
confirmations by the employer’s and contractor’s representatives.
b) As for contracts of fixed unit price:
- Report on inspection and acceptance of actual
completed quantity (increasing or decreasing versus the quantity set out in the
contract) with confirmations by the employer’s representative or consultant’s
representative (if any) and by the contractor’s representative;
- Tabular calculation of value of works without
unit price in the contract (if any) of which quantity and unit price for these
works must be represented with confirmations from the employer’s representative
or consultant’s representative (if any) and the contractor’s representative;
- Payment request from the contractor should
represent the following matters: value of completed quantity under the
contract, value of additional quantity (if any), subtraction of advanced
amount, value stated in payment request after subtraction of these amounts with
confirmations by the employer’s and contractor’s representatives.
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- Report on inspection and acceptance of actual
completed quantity (increasing or decreasing versus the quantity set out in the
contract) with confirmations by the employer’s representative or consultant’s
representative (if any) and by the contractor’s representative;
- Tabular calculation of unit price adjusted due to
slippage in prices (or payment unit price) as agreed in the contract with
confirmations by the employer’s representative or consultant’s representative
(if any) and by the contractor’s representative;
- Tabular calculation of value of works without
unit price in the contract (if any) of which quantity and unit price for these
works must be represented with confirmations from the employer’s representative
or consultant’s representative (if any) and the contractor’s representative;
- Payment request from the contractor should
represent the following matters: value of completed quantity under the
contract, value of additional quantity (if any), subtraction of advanced
amount, value stated in payment request after subtraction of these amounts with
confirmations by the employer’s and contractor’s representatives.
d) Time-based contract:
- Report on inspection and acceptance of actual
work time or timekeeping table (on a monthly, weekly, daily and hourly basis)
in proportion to result of performance with confirmations by the employer’s
representative or consultant’s representative (if any) and by the contractor’s
representative; In case addition of experts to perform the tasks arising
during the implementation is required, the two parties must sit down, negotiate
and agree on the pay for such experts’ work before implementation. Then, the
payment documents must include a tabular calculation of value of additional
works (if any) beyond the contract’s scope of work with confirmations by the
employer’s representative or consultant’s representative (if any) and the
contractor’s representative;
- Payment request from the contractor should
represent the following matters: value of completed quantity under the
contract, value of additional quantity (if any), subtraction of advanced
amount, value stated in payment request after subtraction of these amounts with
confirmations by the employer’s and contractor’s representatives.
dd) As for a construction contract covering
procurement of equipment, the completed quantity of work may be based on
invoices, vouchers, bill of lading, reports on inspection and acceptance,
handover of equipment and other relevant documents.
e) As for a construction contract covering
consulting work that determination of completed quantity of work is difficult,
the completed quantity of work shall be determined on the basis of documents,
reports or any product confirmed by the employer as conformable with the payment
period agreed in the contract.
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3. When negotiating about payment document, the
parties must rely on scale, nature and used capital source to negotiate
required documents among key documents as prescribed in Clause 1 of this
Article.
4. In addition to the key documents as prescribed
in Clause 1 of this Article, for a contract using ODA, loans of foreign credit
institutions, payment documents must be done according to International
Agreement.
5. The employer, organizations, individuals
relating to contract payment are not permitted to provide requirements for
payment documents against agreement in the contract and provisions set out
hereof.
Article 21. Currency and
payment term
1. Currency used for contract payment is Vietnam
dong; use of foreign currency can be negotiated by the two parties but should
not be contrary to the regulations on foreign exchange.
2. For a construction contract involving some works
that require payment to be made in multiple currencies, the parties must carry
out negotiations under the contract but ensure the currency for payment is in
conformity with the ITB or request for proposals.
3. Payment may be made in cash, account transfer
and other manners as agreed by the two parties in accordance with the law and
specified in the contract.
Article 22. Construction
contract settlement
1. Contract settlement is the determination of
total final value that the employer is responsible for paying to the contractor
when the contractor has fulfilled all the works as agreed in the contract.
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a) Report on inspection and acceptance of the
entire works within the contract's scope of work and additional works beyond
the contract.
b) Tabular calculation of contract settlement value
(also called A-B settlement) on which the followings must be specified: value
of completed works, value of additional quantity (if any) beyond the signed
contract’s scope of work, value of payment or temporary payment and the
remaining value that the employer is responsible for paying to the contractor.
c) As-built
documents, construction diary for a construction contract covering construction
execution.
d) Other documents as agreed in the contract;
3. Time limit for contract settlement is instructed
in Clause 2, Article 147 of the Law on Construction No. 50/2014/QH13.
Article 23. Construction
contract liquidation
Contract liquidation is instructed in Clauses 3, 4
of Article 147 of the Law on Construction No. 50/2014/QH13.
Section 4: RIGHTS AND
OBLIGATIONS OF THE PARTIES TO A CONSTRUCTION CONTRACT
Article 24. Rights and
obligations of the employer and contractor
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2. Either party must make written notice to the
other party about rights and responsibilities of representatives for management
of contract performance. When either party changes its representative for
management of contract performance, a written notice must be made to the other
party. Particularly when the contractor changes its representative or key
personnel for management of contract performance, this must be approved by the
employer.
3. In case the contractor is an economic group or
corporation, it can assign work to its members but must ensure openness,
transparency and suitability for qualifications of individual members and this
must be approved in advance by the employer.
4. Depending on specific
contract type, rights and obligations of the two parties are also prescribed in
Articles 25-34 hereof.
Article 25. Rights and
obligations of the employer (contract for consultancy)
1. Rights of the employer:
a) Be entitled to ownership and use of consultancy
products;
b) Refuse acceptance of consultancy products of
non-conformity under the contract;
c) Inspect quality of the work performed by the
contractor without hindrance to its normal operation;
d) Other rights as prescribed;
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a) Provide requirements for works and documents to
the contractor ensuring payment and necessary means for implementation of works
as agreed in the contract (if any).
b) Ensure copyright for any copyright consultancy
product under the contract;
c) Settle the contractor’s proposals on schedule
within competence during the implementation of the contract as agreed.
d) Make full payment to the contractor according to
the payment schedule agreed in the contract;
dd) Other rights as prescribed;
Article 26. Rights and
obligations of the contractor (contract for consultancy)
1. Rights of the contractor:
a) Request the employer to provide information and
documents relating to consulting duties and working means as agreed in the
contract (if any).
b) Propose changes on conditions for provision of
consultancy services for the benefit of the employer or upon detection of
factors imposing adverse effects on quality of consultancy products;
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d) Get guarantee of copyright for any copyright
consultancy product under the contract;
dd) Other rights as prescribed by the law;
2. Obligations of the contractor:
a) Complete the works that meet schedule and
quality as agreed in the contract;
b) For engineering contract: Take part in work
acceptance with the investor according to the Law on Construction Quality
Control, designer's supervision and answer questions of engineering document at
the request of the employer.
c) Preserve and return to the employer documents
and working means provided by the employer under the contract after the work is
completed (if any);
d) Make written notice to the employer about
inadequacy of provided information and poor quality of working means;
dd) Keep confidential information relating to
consultancy services as prescribed in the contract or the law;
e) Other obligations as prescribed by the law;
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1. Rights of the employer:
a) Temporarily halt the construction and request
remedial work to consequences when the contractor has violated regulations on
construction quality, labor safety, environmental protection and fire and
explosion prevention and fighting;
b) Inspect quality of the work performed by the
contractor, production facilities without hindrance to its normal operation;
d) Other rights as prescribed by the law;
2. Obligations of the employer:
a) In case the employer is an investor, license for
construction must be obtained as prescribed.
b) Hand over whole or part of the construction site
to the contractor for management and use in accordance with the implementation
progress and other agreement in the contract;
c) Appoint and make a written notice to the
contractor about key personnel engaging in management of contract performance;
d) Provide design documents, information, means,
machinery, equipment and materials as agreed in the contract (if any) and as
prescribed by relevant law;
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e) Organize construction supervision:
g) Inspect the contractor’s measures to ensure
labor safety, environmental protection and fire & explosion prevention and
fighting;
h) Conduct inspection, acceptance, payment and
settlement of contract on schedule as prescribed;
i) If organizations or individuals are hired to
provide consultancy services, specify their duties, authority in the management
of contract performance and make notification to the contractor;
k) Review and approve in writing the contractor’s
proposals about engineering and construction during the construction period;
e) Other obligations as prescribed by the law;
Article 28. Rights and
obligations of the contractor (contract for work execution)
1. Rights of the contractor:
a) Propose additional quantity of work beyond the
contract to the employer; refuse performance of the works beyond the contract
without agreement between the two parties or unlawful requirements by the
employer;
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c) Be entitled to ask the employer to pay loan
interests due to late payment as agreed in the contract; be entitled to ask for
compensation for damages caused by late handover of plan layout and other
losses caused by the employer.
d) Other rights as prescribed by the law;
2. Obligations of the contractor:
a) Provide human force, materials, working
machinery and equipment, other related material conditions with adequate
quantity and type under the contract; design shop drawings (in case the
contractor performs shop drawing design) for implementation of the works under
the contract;
b) Receive and manage site plan, protect borderline
markers of the construction site;
c) Carry out construction in accordance with the
design, technical instructions, regulations and standards, ensuring quality,
schedule, environmental protection safety and fire & explosion prevention
and fighting.
d) Keep daily records of construction;
dd) Test materials, equipment and construction
product as prescribed in the Law on Construction Quality Control, technical
instructions, standards and regulations on construction;
e) Manage workers on the site; ensure safety, order
and security and no adverse effect on surrounding residential area;
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h) Take responsibility for quality of the
construction undertaken; Take remedial work to any mistake committed during the
construction;
i) Cooperate with other contractors on the site;
k) Make regular reports to the employer on
construction schedule, human force and main equipment for the construction;
l) Move materials, machinery, equipment, and other
properties out of the site within a defined time limit after the works have
been accepted, handed over or the contract is terminated according to Article
41 hereof except otherwise as agreed in the contract;
m) Return the site plan as agreed in the contract;
n) Keep confidential information relating to the
contract or as prescribed by the law;
o) Other obligations as prescribed by the law;
Article 29. Rights and
obligations of the employer (contract for procurement of technological
equipment)
1. Provide necessary information, site plan for
installation of equipment to the contractor;
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3. Refuse acceptance of technological equipment
found contrary to the agreement in the contract in terms of quantity, quality,
type and origin;
4. In case the employer carries out technological
design for the contractor, the employer must take full responsibility for
quality and intellectual property rights of this design;
5. Other rights and obligations as prescribed by
the law;
Article 30. Rights and
obligations of the contractor (contract for procurement of technological
equipment)
1. Hand over technological equipment to the
employer as agreed in the contract on quantity, quality, location, time,
packaging, preservation, origin and other agreement in the contract;
2. Provide to the employer all necessary
information about technological equipment; instructions on installation, use,
operation, preservation and maintenance of technological equipment; provide
training for management staff and operators in using the works (if agreed in
the contract);
3. Cooperate with the employer in conducting trial
operation of technological equipment;
4. Intellectual property rights of technological
equipment:
a) Technological equipment provided by the
contractor must ensure intellectual property rights. The contractor is not
permitted to provide technological equipment that violates intellectual
property rights. The contractor shall be responsible for any dispute relating
to intellectual property rights of technological equipment provided;
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c) Either party shall be responsible for failing to
make immediate notice to the other party about complaints filed by the third
party about intellectual property rights of the technological equipment upon
notification.
5. Other rights and obligations as prescribed by
the law;
Article 31. Rights and
obligations of the employer (EPC contract)
1. Rights of the employer:
a) Refuse acceptance of products failing to meet
quality as set out in the contract; refuse acceptance of technological
equipment found contrary to the agreement in the contract in terms of quantity,
quality, type and origin and products that violate intellectual property
rights;
b) Inspect the contractor’s performance of works as
set out in the contract without causing any hindrance to its normal operation;
c) Temporarily halt the works as set out in the
contract and request remedial work to the consequences upon finding that the
contractor has been in breach of the contract or state regulations;
d) Request the contractor to hand over documents,
information relating to the contract products as signed;
dd) Examine and approve the lists of qualified
sub-contractors not yet included in the EPC contract as requested by the
contractor;
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2. Obligations of the employer:
a) Make full payment to the contractor according to
the payment schedule agreed in the contract;
b) Appoint and make a written notice to the contractor
about key personnel engaging in management of contract performance;
c) Provide information, documents and necessary
means to the contractor for its performance (if agreed in the contract);
d) Conduct inspection, examination and approval of
technical design, shop drawing design with respect to the works, work items, or
make submission to competent agencies for appraisal and early approval as
prescribed;
dd) Apply for license for construction and hand
over clean site plan to the contract under the contract implementation
progress;
e) Supervise implementation of works as set out in
the contract; examine measures to ensure labor safety, environmental protection
and fire & explosion prevention and fighting as regulated;
g) Negotiate with
the contractor on the ITB for procurement of technological equipment (if agreed
in the contract);
h) Conduct inspection, acceptance, payment and
settlement of contract on schedule as prescribed;
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k) Organize training for management staff and
operators in using the works;
e) Other obligations as prescribed by the law;
Article 32. Rights and
obligations of the contractor (EPC contract)
1. Rights of the contractor:
a) Request the employer to provide information, documents
and working means (if agreed in the contract) relating to the contract’s scope
of work.
b) Propose additional quantity of work beyond the
contract to the employer; refuse performance of the works beyond the contract
without agreement between the two parties or unlawful requirements by the
employer;
c) Organize, manage and carry out tasks or
activities as set out in the contract;
d) Other rights as prescribed by the law;
2. Obligations of the contractor:
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b) Receive, manage, preserve and return documents
and means provided by the employer (if agreed in the contract);
c) Make written notice to the employer about
inadequacy of provided information and poor quality of working means that
affect execution of tasks or activities under the contract;
d) Keep confidential any contract related
information as agreed in the contract or as prescribed by the law;
dd) Carry out tasks under the contract ensuring
safety, quality, schedule and other agreement;
e) Establish design (technical design, shop drawing
design) of work items, main works of the bid package, project in accordance
with approved fundamental design or FEED, and make submission to competent
agencies, the investor for appraisal, approval according to the Law on
Construction;
g) Organize procurement, manufacture and supply of
technological equipment to meet requirements and contract implementation
progress; select sub-contractors (if any) via bidding or no-bid contracts and
make submission to the investor for approval; negotiate and agree with the
investor on intent of the ITB for procurement of technological equipment (if
agreed in the contract).
Provide to the
employer all necessary information about technological equipment; instructions
on installation, use, operation, preservation and maintenance of technological
equipment; provide training for management staff and operators (if agreed in the contract);
i) Carry out tests, corrections and trial overall
operation of the works and hand over the completed works to the employer as
agreed in the contract and as prescribed by the applicable law;
k) Ensure any product provided does not violate
intellectual property rights as prescribed by the law;
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m) Other obligations as prescribed by the law;
Article 33. Rights and
obligations of the employer (turnkey contract)
In addition to rights and obligations as prescribed
in Article 31 hereof, the employer shall be also responsible for carrying out
inspection and acceptance of the construction project for submission to
competent agencies as prescribed by the Law on Construction, or to a person
(who is competent to decide investment) for appraisal and approval or for
appraisal and approval within competence.
Article 34. Rights and
obligations of the contractor (turnkey contract)
In addition to rights and obligations as prescribed
in Article 32 hereof, the contractor shall be also responsible for establishing
construction project, taking part in protecting the project together with the
employer before the competent person’s decision to invest to invest and
completing the project as requested by the employer in accordance with
agreement in the contract.
Section 5. ADJUSTMENT TO
CONSTRUCTION CONTRACT
Article 35. Adjustments to
construction contract
1. Adjustments made to the contract include
adjustments in quantity, unit price, contract implementation progress,
contractual price and other matters (if an) as agreed in the contract
2. The contract shall be brought out for adjustment
only in the cases as prescribed in Clauses 2, 3, Article 143 of the Law on
Construction No. 50/2014/QH13.
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1. Adjustments to the contract shall be made only
during the contract implementation.
2. As for a lump sum contract, only additional
quantity of work beyond the signed contract's scope of work is adjusted (as for
the contract for work execution, procurement contract, adjustments are made to
additional quantity of work beyond the design’s scope of work, requirements of
the ITB or request for proposals; and as for the contract for consultancy,
adjustments are made to additional quantity of work beyond the scope of
consultancy work as agreed in the contract) and other force majeure events.
3. If the adjusted contractual price does not
exceed the bid package’s price or its approved cost estimates (including contingency
cost of such package), adjustments can be made by the investor; if the adjusted
contractual price exceeds the bid package’s price or its approved cost
estimates, it must be approved by the competent person before adjustments are
made and must ensure sufficiency of capital for payment to the contractor in
accordance with the agreement in the contract.
Article 37. Adjustments in
quantity of work to construction contract
1. The parties to the contract must carry out
negotiations on specific adjustments in quantity of work, scope, sequence and
procedures for adjustments;
2. Adjustments in quantity of work to construction
contract are prescribed as follows:
a) As for a lump sum contract: additional quantity of
work beyond the signed contract's scope of work are considered as appropriate
(as for the contract for work execution, procurement contract, additional
quantity of work beyond the design’s scope of work; and as for the contract for
consultancy, additional quantity of work beyond the scope of consultancy
service as agreed in the contract).
In this case, if the adjusted price does not exceed
the bid package’s price, both the investor and contractor shall carry out
calculations, negotiations and sign an appendix to the contract; if the
adjusted price exceeds the bid package’s price, this must be examined and
decided by the competent person; if no agreement is reached, such additional
quantity of work shall constitute a new bid package and selection of contractors
for the execution of this package shall conform to applicable regulations.
b) As for a fixed unit price contract and an
adjustable unit price contract: if the addition of appropriate quantity of work
(without unit price in the contract) to the contract does not make the price
exceed the bid package’s price, both the investor and contractor shall carry
out calculations, negotiations and signing an appendix to the contract; if such
addition of quantity of work makes its price exceed the bid package's price, it
must be examined and decided by the competent person; any quantity of work
(with unit price in the contract) shall be determined on the basis of actual
completed quantity of work (increasing or decreasing versus the quantity of
work set out in the contract.
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Article 38. Adjustments in
unit price and contractual price
1. The parties to the contract must make specific
negotiations on cases subject to adjustments in unit price and contractual
price; sequence, scope, method and foundations for adjustments in contractual
price; method of adjustment must accord with contractual price type, nature of
work in the contract.
2. Adjustments in unit price are prescribed as
follows:
a) Adjustments in unit price are made only to
adjustable unit price contract and time-based contract as agreed by the two
parties.
b) If actual completed quantity of work increases
or decreases by more than 20% of the respective quantity of work set out in the
contract, or additional quantity of work has not yet unit price established in
the contract, the two parties must jointly agree on a new unit price for this
quantity of work under the principle as agreed in the contract.
c) If actual
completed quantity of work increases or decreases by a maximum of 20% of the
respective quantity of work set out in the contract, the unit price as
established in the contract shall be applied including the unit price being
adjusted according to the agreement in the contract (if any).
d) Adjustments in unit price to the quantity of
work that both the employer and contractor have reached an agreement on
adjustment in unit price at the date of signing the contract shall be made in
accordance with Clause 3 of this Article and the Ministry of Construction’s
instructions.
3. Method of adjusting unit price and contractual
price:
a) Application of price adjustment methods must
accord with nature of work, contractual price type, payment currency and must
be agreed in the contract.
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GTT = GHĐ x Pn
Where:
- “GTT”: Payment price in proportion to
completed quantity of work
- “GHĐ”: Contractual price in proportion
to completed quantity of work
- “Pn”: Adjustment coefficient
(increasing or decreasing) applied for payment with respect to completed
quantity of work during a period “n”.
4. The Ministry of Construction shall provide
specific guidance on adjustments to construction contract
Article 39. Adjustments to
contract implementation progress
1. In the contract, the parties must negotiate on
adjustments to implementation progress. If the period of completion is delayed
versus the progress set out in the contract, the parties must define
responsibilities of each party for any damages caused by such delay.
2. Contract implementation progress is adjusted in
the following cases:
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b) Changes or adjustments made to the project,
scope of work, design, construction measures as requested by the employer;
c) Handover of site plan not consistent with
agreement in the contract; temporary suspension of contract caused by the
employer's fault; other procedures caused by neither party;
d) Temporary suspension of construction work at the
request of competent state agencies without the employer’s fault;
3. If the adjustments do not prolong the contract
implementation progress (including permissible extension as prescribed in the
construction contract) both the employer and contractor shall negotiate and
agree on the adjustments. If the adjustments prolong the contract
implementation progress, the investor must make the report to the competent
person for examination and decision.
Section 6: TEMPORARY SUSPENSION,
TERMINATION, REWARDS, PENALTIES FOR VIOLATIONS TO CONTRACT
Article 40. Temporary
suspension of construction contract performance
1. Situations resulting in temporary suspension of
construction contract performance, rights to temporary suspension; procedures
for temporary suspension, level of compensation for damages caused by temporary
suspension shall be negotiated and agreed by the employer and contractor in the
contract;
2. The parties to the contract are entitled to
temporarily suspend the contract in the following cases:
a) The employer has the right to temporarily
suspend the contract performance when the contractor fails to meet requirements
for quality, labor safety and contract progress as agreed in the contract.
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3. Before one party temporarily suspends the
contract performance, a written notice must be made to the other party 28 days
in advance with reasons for temporary suspension being specified; the employer
and contractor shall be responsible for carrying out negotiations to continue
to maintain agreements as signed in the contract except force majeure events.
In case one party
fails to make a notice about temporary suspension or reasons specified are
found contrary to the signed contract, it shall be responsible for making
compensation for losses caused to the other party.
Article 41. Termination of
construction contract
1. Situations resulting in termination of the
contract, rights to terminate the contract; sequence, procedures for
termination of the contract, level of compensation for losses caused by
termination of the contract must be agreed in the contract and in accordance
with the provisions set out hereof and relevant law provisions.
2. Either party has the right to terminate the
contract without compensation for losses caused in the cases as prescribed in
Clauses 7 and 8 of this Article.
3. In case the default party (party in breach of
the contract) fails to correct its mistakes after 56 days since the date of
temporary suspension by notice without proper reason except otherwise as
agreed, the other party (party ordering suspension temporary) has the right to
terminate the contract.
4. In case either party unilaterally terminates the
contract without the other party’s fault, such party must make compensation for
damages caused to the other party.
5. Before terminating the contract, one party must
make a written notice to the other party some time in advance but no later than
28 days with reasons being specified except otherwise as agreed in the
contract. If the party that terminates the contract fails to make the notice
causing losses to the other party, such party must make compensation for the
losses.
6. The contract
shall become ineffective since the date of termination and the parties must
fulfill the procedures for liquidation with a period of time as agreed in the
contract but no later than 56 days since the notice about termination is issued
except otherwise as agreed in the contract. After this period, if either
party fails to fulfill the procedures for liquidation, the other party is fully
entitled to liquidate the contract.
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a) The contractor goes bankrupt, dissolved or
transfers the contract to other individuals or organizations without consent of
the employer.
b) The contractor refuses to execute the
construction work under the contract for 56 straight days that results in
violations of the contract progress as agreed in the contract except otherwise
as approved by the employer.
8. The contractor has the right to terminate the
contract in the following cases:
a) The employer goes bankrupt, dissolved or
transfers the contract to other individuals or organizations without approval
of the contractor.
b) The construction work has been suspended for 56
straight days by the employer’s fault except otherwise as agreed by the two
parties.
c) The employer fails to make the payment to the
contractor after 56 days since receipt of adequate payment documents except
otherwise as agreed by the two parties.
9. Within two working days since the contract is
terminated, the contractor must move all the materials, human force, machinery,
equipment and other properties in its possession out of the construction site.
After this period, if the contractor fails to do so, the employer has the right
to settle these properties.
Article 42: Rewards and
penalties
Rewards and penalties are instructed in Clauses 1,
2, Article 146 of the Law on Construction No. 50/2014/QH13.
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1. Responsibilities for breach of the contract are
prescribed in Points 3-7, Article 146 of the Law on Construction No.
50/2014/QH13, provisions set out hereof and relevant law provisions;.
2. In case the employer fails to make timely and
adequate payment as agreed in the contract, it must pay interest on late
payments at the commercial bank where the contractor opens its payment
accounts. Interest on late payments shall be calculated from the first day of
late payment until the payment is fully made to the contractor except otherwise
as agreed by the two parties.
Section 7: COMPLAINTS AND
DISPUTE SETTLEMENT
Article 44. Complaints during
contract performance
1. Complaints during contract performance in this
Decree mean one party detects the other party malfunctions or fails to perform
the obligations as agreed in the contract, it has the right to request the
other party to fulfill. Therefore, the detecting party (the party that detects
the violation) has the right to lodge a complaint against the other party about
this matter.
2. When one party lodges a complaint against the
other party, it must give foundations or specific proof to clarify intent of
the complaint.
3. Within 56 days since detecting one party fails
to perform the contract as agreed, the detecting party must make immediate
notice to such party and lodge a complaint. After this period, if neither
party makes a complaint, the two parties must continue to perform the contract
as agreed.
4. Within 28 days since receipt of a complaint, the
receiving party (the party that receives the complaint) must give foundations
or proof to prove if such complaint is in accordance with the signed contract.
After this period, if the receiving party shows abstention, it is deemed as
approved the intent of the complaint lodged by the other party.
5. Complaints made by either party must be
dispatched to the address as agreed in the contract. Any complaint that is not
settled by the parties shall be settled according to Article 45 hereof.
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1. When settling disputes arising during contract
performance, the parties must comply with principles and procedures as
prescribed in Clause 8, Article 146 of the Law on Construction No.
50/2014/QH13.
2. If the two parties agree that dispute settlement
is conducted by an agency, organization or one or some expert individuals
(commonly referred to as the settlement committee), the settlement via this
committee shall be prescribed as follows:
a) The dispute settlement committee can be
specified in the contract at the time of signing or can be formed after the
dispute arises. Number of members of the dispute settlement committee shall be
negotiated by the parties. Members of the dispute settlement committee are
required to be highly qualified and experienced in dispute settlement and have
good knowledge of the law provisions on construction contract.
b) Within 28 days since the two parties receive
result of dispute settlement from the dispute settlement committee, if such
result is not accepted by either party, the dispute settlement shall then be
brought to arbitrator or court as regulated; after this period, if neither
party opposes the result, the result shall be deemed as agreed by the parties.
Hence, the two parties must comply with such result.
c) Expenses for the dispute settlement committee’s
works shall be included in the contract and incurred equally by both parties
except otherwise as agreed.
3. Statute of limitations for filing a complaint to
the arbitrator or to the court for settlement shall be instructed by relevant
law provisions.
Section 8. OTHER SUBJECT MATTERS
OF CONSTRUCTION CONTRACT
Article 46. Insurance and
maintenance
1. Insurance
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b) The contractor (in case of the contract for
consultancy) shall buy professional liability insurance for the tasks of
construction survey, construction design of construction works from Grade II
and over.
c) The contractor must buy other necessary
insurance types (insurance for workers on the site, insurance for equipment,
insurance for the third party...) to ensure its activities according to the law
provisions.
2. Maintenance
a) The contractor shall be responsible for carrying
out maintenance to the works and equipment as agreed in the contract.
Agreements by the two parties on period of maintenance, level of maintenance
guarantee must accord with the law on construction.
b) Maintenance guarantee can be made in the form of
guarantee or other forms as agreed by the two parties but form of guarantee is
preferred.
c) Maintenance guarantee shall be refunded to the
contractor only after the period of maintenance is completed and confirmation
from the investor on completion of maintenance is issued.
d) During the period of maintenance, the contractor
must carry out maintenance within 21 days since receipt of repair notice from
the employer; during this period, if the contractor fails to carry out
maintenance, the employer has the right to use the maintenance cost for hiring
other organizations, individuals to do the work.
Article 47. Sub-contractor
contract
1. One main contractor contract may have multiple
sub-contractor contracts When signing a sub-contractor contract, main
contractor, general contractor or foreign contractor must execute the following
provisions:
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b) Any foreign contractor executing a construction
contract within Vietnam’s territory as main contractor must hire domestic
sub-contractors that meet requirements of the bid package and is permitted to
hire foreign sub-contractors only when domestic sub-contractors do not meet the
requirements of the bid package. Materials and equipment temporarily imported
for export must be specified in the contract on the principle that use of
domestic materials and equipment that meet the requirements of the bid package
is prioritized.
c) Any sub-contractor not included in the lists of
sub-contractors with contracts enclosed must be approved by the investor.
d) General contractor, main contract must be
responsible to the investor for the contract progress, quality, labor safety,
environmental protection, its mistakes and other works performed by
sub-contractors.
dd) Main contractor, general contractor are not
permitted to re-assign all the works as undertaken under the contract to
sub-contractors for execution.
2. Sub-contractors as appointed by the investor (if
any)
a) Sub-contractors as appointed by the investor are
sub-contractors appointed to the main contractor or general contractor by the
investor for carrying out some work of high technique or when the main
contractor or general contractor fails to meet requirements for safety, quality
and progress as requested by the investor.
b) As for a construction contract that engages
sub-contractors appointed by the investor, the two parties must carry out
negotiations on the situations by which the investor is permitted to appoint
sub-contractors.
c) Main contractor or general contractor has the
right to reject sub-contractors appointed by the investor if the works
performed by main contractor or general contractor, sub-contractor still
conform to the contractor or have adequate foundations proving that
sub-contractors appointed by the investor do not meet the contract’s
requirements.
3. The investor shall make payment direct to
sub-contractors on the basis of payment request issued by main contractor or
general contractor except otherwise as agreed.
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Article 48. Labor safety,
environmental protection and fire & explosion prevention and fighting
1. Responsibilities of the parties for labor safety
must be agreed in the contract and prescribed as follows:
a) Construction contractor must establish safety
measures for people, machinery, equipment and the works on the site including
adjacent construction works. In case safety measures are related to multiple
parties, they must be agreed by the two parties.
b) Safety measures, rules on labor safety must be
made public on the construction site; dangerous positions on the site must be
set up with people for guidance and warnings about accidents.
c) Construction contractor, the investor and
related parties must frequently examine and supervise labor safety on the site.
Upon detection of any violation of labor safety, construction must be suspended
immediately. Any person who leaves labor safety violations to happen within
his/her management shall be responsible to the law.
d) The construction contractor shall be responsible
for training, instructing and disseminating regulations on labor safety among
its workers. As for some works of strict safety requirements, workers must
obtain certificate of labor safety training.
dd) The construction contractor shall be
responsible for providing adequate personal protective equipment to the workers
on the site as prescribed.
e) When an incident in labor safety happens, the
construction contractor and other related parties shall be responsible for
handling and making the report to state management agencies according to law
provisions and at the same time taking remedial work and making compensation
for the losses caused.
2. Responsibilities of either party for
environmental protection must be agreed in the contract and prescribed as
follows:
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b) During the transport of building materials,
measures for screening scraps must be taken to ensure safety and environmental
hygiene.
c) The construction contract, the investor must be
responsible for examining and monitoring the implementation of constructional
environmental protection, at the same time being subject to examination and monitoring
by state management agencies. In case the construction contractor fails to
comply with regulations on environmental protection, the investor and state
management agencies have the right to temporarily suspend the construction and
ask the contractor to comply with environmental protection measures.
d) Organizations, individuals that leave any
harmful act to the environment during the construction shall be responsible to
the law and make compensation for losses caused.
3. The parties to the contract must comply with
applicable regulations on fire & explosion prevention and fighting.
Article 49. Electricity, water
and site security
The two parties must negotiate in the contract on
rights and obligations of either party for supply and payment for electricity,
water and site security.
Article 50. Transport of
technological equipment
1. The contractor must make a notice to the
employer for some time in advance as agreed by the two parties but no less than
21 days.
2. The contractor must be responsible for
packaging, material handling, transport, storage and preservation of equipment
except otherwise as agreed.
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Article 51. Risks and force
majeure
1. Risks are possible negative effects on the
implementation of construction contract in the future. Under the contract,
either party must be responsible for managing and handling its own risks,
carrying out remedial work to consequences on its side in case of risk.
2. Force majeure is an risky event that takes place
objectively, unforeseeably and can not be controlled even though all necessary measures
and are taken and capabilities are employed such as natural disaster,
environmental problem, enemy-inflicted disaster, conflagration and other
irresistible factors.
3. When either party meets with the force majeure
event, such party must make a written notice to the other party as soon as
possible.
4. Under the contract, the parties must carry out
negotiations on handling of force majeure such as making written notice about
the force majeure event, responsibilities of both parties; termination of contract
and payment in case of force majeure (if any).
Chapter III
IMPLEMENTATION
Article 52. Effect
1. This Decree takes effect since June 15, 2015.
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Article 53. Transitional
handling
1. Any construction contract signed and currently
in execution before the effective date of this Decree shall be executed
according to the regulations on construction contract before the effective date
of this Decree.
2. Any construction contract under negotiation must
be reported to the competent person for examination and decision if any subject
matter contrary to this Decree is found on the basis of the principle that
quality, progress, efficiency of the investment project and no infringement of
lawful rights and interests of the two parties must be ensured.
3. Any subject matter of the construction contract
as set out in the approved but unreleased ITB, request for proposals must be
adjusted appropriately if found contrary to this Decree; Any change to the
construction contract as set out in the ITB, request for proposals approved and
released must be notified to all the bidders (who already buy the ITB and
request for proposals) for making adjustments to the ITB and request for
proposals; in case the bid is closed, provisions set out in Clause 2 of this
Article shall be executed.
Article 54. Implementation
1. Any organization, individual that conducts
formulation, appraisal and approval of the ITB, request for proposals covering
subject matters relating to construction contract and carries out negotiation,
signing and management of the contract performance must comply with the
provisions set out hereof.
2. The Ministry of Construction shall instruct and
monitor the execution of law provisions on construction contract; instruct
adjustments to construction contract, method of adjusting contractual price,
construction contract types, model construction contracts and other necessary
provisions set out hereof to meet state management requirements for
construction contract.
3. Use of model FIDIC conditions of contract, model
construction contracts for the formulation and implementation of construction
contract is encouraged. Adjustments to the contract on the basis of model
construction contract employed must be made to suit Vietnamese laws.
4. The Ministers, heads of ministerial-level
agencies, heads of governmental agencies, presidents of People’s committee of
central-affiliated cities and provinces, heads of political organizations,
political – social organizations, political-social-occupational organizations,
presidents of board of directors of economic groups, corporations and relevant
organizations, individuals shall be responsible for executing this Decree./.
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PP THE
GOVERNMENT
THE PRIME MINISTER
Nguyen Tan Dung