Circular 02/2023/TT-BXD guiding a number of contents on construction contracts

CIRCULAR

Guiding a number of contents on construction contracts

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Pursuant to the Construction Law dated June 18, 2014; the Law on Amending and Supplementing a Number of Articles of the Construction Law dated June 17, 2020;

Pursuant to the Government’s Decree No. 52/2022/ND-CP dated August 08, 2022, defining the functions, tasks, powers and organizational structure of the Ministry of Construction;

Pursuant to the Government’s Decree No. 37/2015/ND-CP dated April 22, 2015 on prescribing in detail construction contracts;

Pursuant to the Decree No. 50/2021/ND-CP dated April 01, 2021 amending and supplementing a number of articles of the Government’s Decree No. 37/2015/ND-CP dated April 22, 2015 on prescribing in detail construction contracts;

At the proposal of Director of the State Authority of Construction Economics;

The Minister of Construction promulgates the Circular guiding a number of contents on construction contracts.

Article 1. Scope of regulation

This Circular guide in detail a number of contents on construction contracts; announce and guide the use of forms of construction implementation contracts, construction consultancy contracts, contracts for engineering, procurement of technological equipment and construction (hereinafter referred to as EPC contract for short).

Article 2. Subjects of application

1. This Circular applies to organizations and individuals involved in the establishment and performance management of construction contracts of construction investment projects using public investment funds or state capital other than public investment funds and construction contracts between project enterprises and construction contractors executing bidding packages of projects on investment in the form of public-private partnership.

Organizations and individuals may refer to this Circular to establish and manage construction contracts for projects using other funding sources.

2. For construction contracts of projects using official development assistance (ODA) capital, concessional loans from treaties to which Vietnam is a contracting party contain provisions different from those of this Circular, provisions of these treaties shall prevail.

Article 3. Payment, temporary payment and temporary payment dossiers of construction contracts

1. The payment of construction contracts shall comply with Article 19 of Decree No. 37/2015/ND-CP.

2. For the manufacture of structures, semi-finished products of high value, or construction materials to be seasonally reserved that are required the advance payment for performance as specified in Clause 7 Article 18 of Decree No. 37/2015/ND-CP, the advance payment dossier must comprise the list, unit prices and total values of materials, structures, semi-finished products. The subtraction of value of completed work volume subject to pre-acceptance test corresponding to the value of advance payment under the contracts must be conducted upon payment.

3. For the temporary payment under Clause 4 Article 19 of Decree No. 37/2015/ND-CP, the temporary payment value and security interests for the temporary payment shall be decided based on the specific conditions of each temporary payment, ensuring efficiency and avoiding capital loss. A number of specific cases:

a) For adjustable unit price-based contracts, if there is no data on adjustment of unit price or contract price upon payment deadline, the unit price in the contract shall be used to make temporary payment.

b) For a product or work that is under construction and has not yet been completed according to the contract’s requirements, the temporary payment shall be made based on the completion, for each specific case and the details of the unit price of such product or work stated in the contract.

4. For products or works that have not been completed due to causes, including contract termination or one of the contracting parties not conducting pre-acceptance test of the products, the responsibility and obligations of relevant subjects must be clearly defined before payment.

5. A temporary payment dossier includes Written record of the testing and acceptance of completed work volume or Written record of certification of completed work volume (for cases not eligible for pre-acceptance test), Table of calculation of additional or reduced payment value; Table of calculation of temporary payment value and payment request.

Article 4. Adjustment of work volume under a construction contract

1. The adjustment of work volume under a construction contract shall comply with Article 37 of Decree No. 37/2015/ND-CP, amended and supplemented in Clause 13 Article 1 of Decree No. 50/2021/ND-CP.

2. The project owner shall, on the basis of partnership members’ agreement, the capacity and experience of each member, decide on the adjustment of work volume of members in partnership of contractors without any change in the construction contract price, ensuring the safety, quality, efficiency and progress of the contract.

Article 5. Adjustment of construction contract performance schedule

1. The adjustment of construction contract performance schedule shall comply with Article 39 of Decree No. 37/2015/ND-CP.

2. Upon adjustment of construction contract performance schedule specified at Point a Clause 2 Article 39 of Decree No. 37/2015/ND-CP, the principal and contractor shall be responsible for assessing the impacts of force majeure events on the construction contract performance schedule to determine and decide on the suitable adjustment.

3. For cases subject to suspension of the contract performance at the request of a competent state agency as specified at Point d Clause 2 Article 39 of Decree No. 37/2015/ND-CP, the following tasks are required:

a) The principal and contractor shall, based on the competent state agency’s request, assess its impacts on the construction contract performance schedule, determine and agree on the adjustment of construction contract performance schedule.

b) For cases with additional costs due to the contract performance period prolongation, the principal and contractor shall, based on the contract contents, the competent state agency’s guidance on the event causing the construction contract performance suspension, determine and agree on appropriate additional cost items.

Article 6. Adjustment of unit prices and contract prices

1. The adjustment of unit prices of construction contracts shall comply with Article 38 of Decree No. 37/2015/ND-CP, amended and supplemented in Clause 14 Article 1 of Decree No. 50/2021/ND-CP.

2. For cases in which the construction contract price adjustments result in amendment and supplementation of the contracts, the parties are required to sign contract appendices as the basis of implementation of adjustments. The project owners shall be responsible for approving or submitting for approval the adjusted and additional cost estimates in accordance with law regulations on management of costs of construction investment and construction contracts as the basis for signing contract appendices.

3. Method of adjusting contract prices

a) Method of adjusting contract prices shall comply with Appendix I to this Circular. The application of price adjustment methods must conform to the characteristics of relevant task, contractual price type and payment currency and shall be agreed upon in the contract.

b) For construction consultancy contracts with time-based payment (by month, week, day and hour), the adjustment of salary rate for experts shall comply with the adjustment formula for the labor cost element specified in Section I in Appendix I to this Circular.

Article 7. Guidance on use and application of forms of construction contracts

1. Organizations and individuals may refer to or apply forms of construction contracts promulgated together with this Circular to establish and manage the implementation of contracts for bidding packages of construction, ensuring that contents of construction contracts comply with Clause 1 Article 141 of the Law No. 50/2014/QH13 on Construction.

2. Forms of construction contracts promulgated together with this Circular are made between the project owners and contractors. In cases the principal is the general contractor or main contractor, the parties shall study and apply such contract forms’ necessary contents for establishment of contracts and management of contract performance.

3. Forms of construction contracts announced in this Circular include:

a) Form of construction consultancy contracts in Appendix II issued together with this Circular, for contracts of consultancy for implementation of preparation of feasibility study report, construction survey, work construction design, work construction implementation supervision.

b) Form of construction implementation contracts in Appendix III issued together with this Circular.

c) Form of EPC contracts in Appendix IV issued together with this Circular, for package contracts. For fixed unit price- or adjustable unit price-based contracts or combined price-based contracts, the parties shall, based on law regulations and this Circular, amend and supplement terms of form of EPC contracts for establishment of their contracts.

4. For small-sized and simply contracts, construction investment consultancy contracts and other combined contracts, the parties shall refer, amend and supplement construction contract forms specified in this Circular for establishment of their construction contracts.

5. Upon use of construction contract forms specified in this Circular for agreement and signing of construction contracts, the parties shall implement based on the specific requirements and conditions of bidding packages, projects, Decree No. 37/2015/ND-CP, amended and supplemented by Decree No. 50/2021/ND-CP, other law regulations and guiding contents hereof. The following contents must be agreed on in the contracts:

a) Specific provisions on payment deadline, contract performance security time limit, deadline for reply, contract termination period, and similar issues.

b) In cases of a contractor being a partnership of contractors, contract performance security, advance payment guarantee in accordance with law regulations are required.

c) Specific provisions on type of currency and methods of payment in the contracts in accordance with requirements of the bidding dossiers and law regulations on foreign exchange.

d) For adjustable unit price-based contracts, the method of contract price adjustment must be agreed upon, the price data and price grounds for contract adjustment must comply with bidding dossiers and law regulations on construction contract.

dd) Contract contents shall be adjusted and supplemented in conformity with the bidding package’s nature and conditions.

Article 8. Transitional provisions

1. Construction contracts that have been signed and implemented before the effective date of this Circular shall comply with regulations on construction contracts in force before the effective date of this Circular.

2. If containing contents not in conformity with this Circular, construction contracts currently under negotiation and not yet entered into shall be reported to the persons competent to decide the investment for examination and decision on the basis of the principle of ensuring quality, progress and efficiency of the construction investment projects and causing no harm to lawful rights and interests of the parties.

3. Any contents concerning construction contracts in the approved but unreleased bidding dossiers or dossiers of requirements which are unconformable with this Decree shall be adjusted appropriately. If bidding dossiers or dossiers of requirements have been released, any change to the contents concerning construction contracts in these dossiers shall be notified to all contractors that have bought the bidding dossiers or dossiers of requirements for making appropriate adjustments to their bid dossiers or dossiers of proposals. In case the bidding has been closed, Clause 2 of this Article shall apply.

Article 9. Effect

1. This Circular takes effect on April 20, 2023.

2. This Circular replaces the Minister of Construction’s Circular No. 07/2016/TT-BXD dated March 10, 2016 guiding the adjustment of construction contract prices, Circular No. 08/2016/TT-BXD dated March 10, 2016 on guiding a number of contents on construction consultancy contract; Circular No. 09/2016/TT-BXD dated March 10, 2016 on  providing for guidance on contracts for implementation of the construction of works and Circular No. 30/2016/TT-BXD dated December 30, 2016 on providing for guidance on contracts for engineering, procurement of technological equipment and construction./.

* All Appendices are not translated herein.