Circular No. 01/2015/TT-BXD dated April 26, 2015 of the Ministry of Construction guiding the determination of unit labor cost in the management of construction investment costs

CIRCULAR

Guiding the determination of unit labor cost in the management of construction investment costs[1]

Pursuant to the Government’s Decree No. 62/2013/ND-CP of June 25, 2013, defining the functions, duties, powers and organizational structure of the Ministry of Construction;

Pursuant to the Prime Minister’s opinion in the Government Office’s Notice No. 5724/VPCP-KTTH of July 29, 2014, on the rank system of workers who are directly involved in the production process, the determination of unit labor cost in the management of construction investment costs under the 2012 Labor Code and its guiding documents;

At the proposal of the directors of the Construction Economics Department and the Construction Economics Institute;

The Minister of Construction promulgates this Circular guiding the determination of unit labor cost in the management of construction investment costs.

Article 1.Scope of regulation

This Circular guides the determination of unit labor cost in the management of construction investment costs.

Article 2.Subjects of application

1. Agencies, organizations and individuals related to the management of construction investment costs of construction investment projects using state budget and non-state budget funds; projects in the form of build-operate-transfer (BOT) contract, build-transfer-operate (BTO) contract, build-transfer (BT) contract or public-private partnership (PPP) contract managed by state management agencies, shall apply provisions of this Circular.

2. Agencies, organizations and individuals related to the management of construction investment costs of construction investment projects using other funding sources are encouraged to apply provisions of this Circular.

Article 3.Principles of determination and adjustment of unit labor cost

1. Unit labor cost determined under the guidance of this Circular must comply with the following principles:

a/ Being suitable to skill levels according to worker ranks in the system of norms of construction costs;

b/ Matching the local market wage of construction workers but not lower than the regional minimum wage set by the Government;

c/ Being suitable to characteristics of jobs of construction workers;

d/ Being sufficient for payment of some expenses payable by workers according to regulations (social insurance, health insurance, unemployment insurance premiums and other payables).

2. Unit labor cost determined under the guidance of this Circular shall be used to determine the total construction investment, construction cost estimates, etc. for approval by competent authorities, which serve as the basis for calculating bidding package prices, selecting contractors for construction investment activities under the bidding law, and managing construction investment costs.

3. Unit labor cost determined under the guidance in this Circular may be adjusted when there is a change in the market wage of construction workers.

Article 4.Determination of unit labor cost

Unit labor cost shall be determined by the following formula:

G_NC= L_NCx H_CBx (1/t)

In which:

- G_NC: unit labor cost per workday of direct construction work.

- L_NC: Input wage rate for determination of unit labor cost per workday of direct construction work. This wage rate includes additional wages, traveling allowances, region-based allowances, and other allowances for unstable work, taking into account market factors specified in Appendix 1 to this Circular.

- H_CB: wage ratio according to ranks of direct construction workers specified in Appendix 2 to this Circular.

- t: 26 working days in a month.

Article 5.Organization of implementation

1. Provincial-level People’s Committees shall base on the guidance of this Circular to direct the determination and announcement of unit labor cost for use as a basis for the projection and management of construction investment costs.

2. Input wage rate (L_NC) specified in Appendix 1 to this Circular shall be adjusted by the Ministry of Construction when there is any change in the market wage of construction workers compared to the unit labor cost determined under this Circular.

Article 6.Transitional handling

1. For unit labor costs in total construction investments and construction cost estimates approved before the effective date of this Circular, investment deciders shall decide whether to apply provisions of this Circular. For bidding packages with construction contracts signed before the effective date of this Circular, they may be executed under the signed contracts.

2. For a number of construction investment projects that apply special wage rates and allowances permitted by competent agencies, these wage rates and allowances may continue to be applied until the end of investment when the project is put into operation or use.

Article 7.Effect

1. This Circular takes effect on May 15, 2015.

2. Any problems arising in the course of implementation should be reported to the Ministry of Construction for consideration and settlement.-

For the Minister of Construction
Deputy Minister
BUI PHAM KHANH

* All appendices to this Circular are not translated.