Circular 04/2020/TT-BTTTT cost management of information technology application investment projects

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Circular No. 04/2020/TT-BTTTT dated February 24, 2020 of the Ministry of Information and Communications prescribing the determination and management of costs of information technology application investment projects
Issuing body: Ministry of Information and Communications Effective date:
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Official number: 04/2020/TT-BTTTT Signer: Nguyen Manh Hung
Type: Circular Expiry date: Updating
Issuing date: 24/02/2020 Effect status:
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Fields: Investment , Information - Communications

SUMMARY

04 principles of determination and management of information technology application investment project costs

On February 24, 2020, the Ministry of Information and Communications issues the Circular No. 04/2020/TT-BTTTT prescribing the determination and management of costs of information technology application investment projects.

Accordingly, the determination and management of information technology application investment project costs must comply with 04 principles as follows: To ensure objectives and efficiency of information technology application investment projects; Total investment, cost estimates, cost norms and unit prices for information technology application shall be calculated by proper methods and must include all cost items under regulations; The State shall manage costs by promulgating, and guiding and inspecting the implementation of, regulations on cost management; Project owners shall take responsibility for cost management from the stage of investment preparation to the investment completion and putting of projects’ products into operation and use.

The formulation of information technology application cost norms must comply with the following order: To make a list of jobs, stating technical and technological requirements, implementation measures, etc.; To determine components of a job from the stage of preparation to completion of the job; To determine shrinkage of materials, labor and construction machinery; To formulate norms based on shrinkage of materials, labor and construction machinery.

This Circular takes effect on April 09, 2020.

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Effect status: Known

THE MINISTRY OF INFORMATION AND COMMUNICATIONS

 

THE SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness

No. 04/2020/TT-BTTTT

 

Hanoi, February 24, 2020

 

CIRCULAR

Prescribing the determination and management of costs of information technology application investment projects[1]

Pursuant to the June 29, 2006 Law on Information Technology;

Pursuant to the Government’s Decree No. 73/2019/ND-CP of September 5, 2019, prescribing the management of state budget-funded investment in information technology application;

Pursuant to the Government’s Decree No. 17/2017/ND-CP of February 17, 2017, defining the functions, tasks, powers and organizational structure of the Ministry of Information and Communications;

At the proposal of the Director of the Authority of Information Technology Application;

The Minister of Information and Communications promulgates the Circular prescribing the determination and management of costs of information technology application investment projects.

Chapter I

GENERAL PROVISIONS

Article 1.Scope of regulation

This Circular prescribes the determination and management of costs of information technology application investment projects funded by development investment expenditures of the state budget, including total investment, cost estimates, cost norms, and unit prices for information technology application.

Article 2.Subjects of application

1. This Circular applies to agencies, organizations and individuals engaged or involved in the determination and management of costs of information technology application investment projects funded by development investment expenditures of the state budget (below referred to as determination and management of costs).

2. To encourage agencies, organizations and individuals involved in the determination and management of costs of information technology application investment projects funded by other funding sources to apply this Circular.

Article 3.Principles of determination and management of costs

1. To ensure objectives and efficiency of information technology application investment projects.

2. Total investment, cost estimates, cost norms and unit prices for information technology application shall be calculated by proper methods and must include all cost items under regulations.

3. The State shall manage costs by promulgating, and guiding and inspecting the implementation of, regulations on cost management.

4. Project owners shall take responsibility for cost management from the stage of investment preparation to the investment completion and putting of projects’ products into operation and use.

 

Chapter II

SPECIFIC PROVISIONS

Section 1

TOTAL INVESTMENT AND COST ESTIMATES

Article 4.Methods of determining total investment

The total investment shall be determined according to the methods specified in Clause 4, Article 19 of the Government’s Decree No. 73/2019/ND-CP of September 5, 2019, prescribing the management of state budget-funded investment in information technology application (below referred to as Decree No. 73/2019/ND-CP). Methods of determining total investment are guided in Appendix 01 to this Circular.

Article 5.Methods of determining cost estimates

1. Determination of construction and installation costs

Construction and installation costs shall be determined by estimation method based on the norms as guided in Section 1 of Appendix 02 to this Circular.

2. Determination of equipment costs

a/ Equipment costs

- Equipment costs shall be determined based on the quantity and category of equipment to be procured and the market price of such equipment as guided in Section 2.1 of Appendix 02 to this Circular;

- Costs of building, development, upgrade and expansion of internal-use software shall be determined under the guidance in Section 2.1 of Appendix 02 to this Circular.

b/ Costs of equipment installation; software installation; and testing and calibration of equipment and software shall be determined under the guidance in Section 2.3 of Appendix 02 to this Circular;

c/ Costs of database building; data standardization and conversion serving data entry; and entry of data into databases shall be determined under the guidance in Section 2.2 of Appendix 02 to this Circular;

d/ Costs of training in equipment use instructions; and costs of training of system administrators and operators (if any) shall be determined under the guidance in Section 2.4 of Appendix 02 to this Circular;

dd/ Costs of equipment transport and insurance (if any); and relevant taxes and charges for the procurement of equipment shall be determined by estimation method if they are not yet included in equipment procurement costs;

e/ Costs (if any) of implementation, assistance, administration and operation of projects’ products or items before pre-acceptance test and handover shall be determined by estimation method under the guidance in Section 2.5 of Appendix 02 to this Circular.

3. Determination of project management expenses

Project management expenses shall be determined based on pro rata cost norms or by estimation method (in case of hiring project management consultants) in conformity with the project implementation period, and the scale and characteristics of project management jobs as guided in Section 3 of Appendix 02 to this Circular.

4. Determination of investment consultancy expenses

a/ Investment consultancy expenses shall be determined based on pro rata cost norms issued by the Ministry of Information and Communications or by estimation method on the basis of the scope of consultancy jobs, volume of jobs to be performed, and plan for execution of bidding packages as guided in Section 4 of Appendix 02 to this Circular;

b/ In case a number of investment consultancy jobs have been performed before the cost estimation, investment consultancy expenses shall be determined based on the value of signed consultancy service contracts in accordance with the State’s regulations.

5. Determination of other costs

Other costs, including those not specified in Clauses 1, 2, 3 and 4 of this Article, shall be determined based on pro rata cost norms as guided by the Ministry of Information and Communications, or by a specialized management agency, or by estimation method as guided in Section 5 of Appendix 02 to this Circular.

6. Determination of contingency amounts

Contingency amounts for newly arising job volumes shall be determined in percentage (%) of the total of installation costs, equipment costs, project management expenses, investment consultancy expenses and other costs;

Contingency amounts for inflation shall be determined based on the investment period (calculated in month, quarter or year) of a project.

Contingency amounts shall be determined under the guidance in Section 6 of Appendix 02 to this Circular.

Section 2

COST NORMS AND UNIT PRICES FOR INFORMATION TECHNOLOGY APPLICATION

Article 6.System of information technology application cost norms

1. Information technology application cost norms include techno-economic norms and pro rata cost norms.

2. Techno-economic norm means necessary level of shrinkage of materials, labor and construction machinery which shall be determined in conformity with technical and technological requirements, implementation measures and scope of specific jobs to complete a unit of workload.

3. Pro rata cost norms shall be used for determining costs of several jobs of an information technology application investment project, including project management expense, investment consultancy expense and other costs.

Article 7.Methods of formulating information technology application cost norms

1. Techno-economic norms shall be formulated in the following order:

a/ To make a list of jobs, stating technical and technological  requirements, implementation measures, scope of jobs to be performed and appropriate unit of calculation;

b/ To determine components of a job from the stage of preparation to completion of the job;

c/ To determine shrinkage of materials, labor and construction machinery;

d/ To formulate norms based on shrinkage of materials, labor and construction machinery.

2. Pro rata cost norms shall be issued by the Ministry of Information and Communications.

Article 8.Management of information technology application cost norms

1. The Ministry of Information and Communications shall issue information technology application cost norms for related agencies, organizations and individuals to determine and manage information technology application investment costs.

2. For particular and specialized jobs of sectors and localities, line ministries and provincial-level People’s Committees shall, based on the methods specified in Clause 1, Article 7 of this Circular, determine or hire organizations or individuals to determine, adjust and verify norms as a basis for issuing the norms after reaching agreement with the Ministry of Information and Communications and, at the same time, send them to the Ministry of Information and Communications for monitoring and management.

Issued techno-economic norms shall be used as a basis for determining unit prices, total investment and cost estimates and managing information technology application investment costs.

Article 9.Methods of determining information technology application unit prices

1. Unit price serves as a basis for determining costs of an information technology application investment project.

2. Methods of  determining information technology application unit prices shall be determined on the basis of selection from the system of techno-economic norms issued by the Ministry of Information and Communications and relevant cost items and must comply with the guidance in Appendix 04 to this Circular.

 

Chapter III

IMPLEMENTATION PROVISIONS

Article 10.Effect and transitional provisions

1. This Circular takes effect on April 9, 2020, and replaces the Minister of Information and Communications’ Circular No. 06/2011/TT-BTTTT of February 28, 2011, prescribing the determination and management of costs of information technology application investment projects.

2. Ongoing information technology application investment projects approved before the effective date of Decree No. 73/2019/ND-CP must comply with regulations on determination and management of costs of information technology application investment projects applicable at the time of approval of the projects.

When necessary, competent persons may consider and decide on the application of this Circular provided that such application does  not discontinue jobs.

Article 11.Implementation responsibility

1. The Authority of Information Technology Application under the Ministry of Information and Communications shall disseminate, guide and supervise the implementation of this Circular.

2. Agencies, organizations and individuals engaged or involved in the determination and management of costs of information technology application investment projects funded by development investment expenditures of the state budget shall implement this Circular.

3. Any problems arising in the course of implementation of this Circular should be reported to the Ministry of Information and Communications (the Authority of Information Technology Application) for consideration and settlement.-

Minister of Information and Communications
NGUYEN MANH HUNG

* The appendices to this Circular are not translated.

 



[1]Công Báo Nos 261-262 (06/3/2020)

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