Circular 11/2019/TT-BXD determination of construction machinery and equipment shift rates

CIRCULAR

Guiding the determination of construction machinery and
equipment shift rates^[1]

Pursuant to June 18, 2014 Construction Law No. 50/2014/QH13;

Pursuant to the Government’s Decree No. 81/2017/ND-CP of July 17, 2017, defining the functions, tasks, powers and organizational structure of the Ministry of Construction;

Pursuant to the Government’s Decree No. 68/2019/ND-CP of August 14, 2019, on the management of construction investment costs;

At the proposal of the Director of the Construction Economics Department;

The Minister of Construction promulgates the Circular guiding the determination of construction machinery and equipment shift rates.

Article 1.Scope of regulation

This Circular guides the determination of construction machinery and equipment shift rates (below referred to as machinery shift rates) to serve as a basis for the formulation and management of construction investment costs.

Article 2.Subjects of application

1. Agencies, organizations and individuals involved in the formulation and management of construction investment costs of projects using state budget funds or non-budget state funds and investment projects in the form of public-private partnership (PPP projects) as prescribed in Clause 1, Article 2 of the Government’s Decree No. 68/2019/ND-CP of August 14, 2019, on the management of construction investment costs (below referred to as Decree No. 68/2019/ND-CP)

2. Agencies, organizations and individuals involved in the determination and management of construction investment costs of projects funded with capital from other sources are encouraged to comply with this Circular to determine construction investment costs for fulfillment of their financial obligations toward the State.

Article 3.Principles of determination of machinery shift rates

1. Machinery shift rate means an average cost determined for a work shift as prescribed for construction machinery and equipment.

2. Machinery shift rates shall be determined based on requirements for use management of construction machinery and equipment, depreciation norms for calculation of these rates, and local market prices.

3. Machinery shift rates shall be determined according to the regulations on construction machinery within the norms of work construction cost estimates.

4. The machinery shift rate of a specific work shall be determined based on the type of construction machinery used (or expected to be used) in work construction, which is suitable to construction design, method, and progress and market prices in the locality where such work is constructed.

Article 4.Contents of machinery shift rates

1. Machinery shift rates include all or some of the costs, such as costs for depreciation, repair, fuel, and energy, machine operators, and other expenses.

2. Machine shift rates exclude the costs of building houses for machinery, machinery foundations, electricity, water and compressed air supply systems and other on-site construction jobs serving the installation and trial operation of a number of machines such as cement concrete mixing station, asphalt concrete mixing station, tracked cranes, and other similar equipment. These costs are separately estimated based on construction methods and included in indirect costs of construction cost estimates.

3. Cost items of a machinery shift rate shall be determined regarding compatibility in terms of the type of machine of the same technology, origin, and major technical criteria.

Article 5.Methods of determining machinery shift rates

1. The order for determination of machinery shift rates is as follows:

a/ To make the list of construction machinery and equipment;

b/ To identify  basic information and figures for calculating and determining machinery shift rates;

c/ To calculate and determine machinery shift rates according to depreciation norms, basic data or hired machinery shift rates.

2. The methods of determining machinery shift rates are provided in Appendix No. 1 to this Circular.

3. Depreciation norms and basic data used for determining machinery shift rates are provided in Appendix No. 2 to this Circular.

Article 6.Management of machinery shift rates

1. The Ministry of Construction shall guide survey methods and issue depreciation norms and basic data used for determining machinery shift rates.

2. People’s Committees of provinces and centrally run cities (below referred to as provincial-level People’s Committees) shall assign specialized construction agencies to, based on the methods of determining machinery shift rates prescribed in this Circular, determine machinery shift rates and submit them to provincial-level People’s Committees for promulgation in their provinces or centrally run cities on a quarterly or annual basis or when there are significant changes in construction market prices, to serve as a basis for determination of construction machinery costs for the formulation and management of construction investment costs in the localities, and send them to the Ministry of Construction for monitoring and management.

3. Specialized construction agencies shall conduct, or hire qualified consultants to conduct, part of or the entire survey to collect data used for determining machinery shift rates and a survey on basic costs of machinery shift rates. Expenses for the determination of machinery shift rates shall be allocated from current expenditures of budgets of ministries, sectors, provinces or centrally run cities.

4. Project owners shall use publicized machinery shift rates to determine work construction prices. In case construction machinery and equipment are not included in the publicized list or are included in such list but fail to satisfy use requirements and construction conditions of the construction work or in case an investment project is located in 2 provinces and centrally run cities, the project owner shall formulate the construction work’s machinery shift rate based on the principles and methods specified in this Circular, and submit it to the investment decider for consideration and approval for application to the construction project or work, and submit it to the local specialized agency and Ministry of Construction for management.

5. Consultancy contractors that formulate construction cost estimates shall propose machinery shift rates that have not been publicized or have been publicized but fail to satisfy use requirements and construction conditions to formulate cost estimates and must ensure the adequacy and accuracy of dossiers and documents for reporting to project owners.

6. Enterprises supplying or leasing construction machinery and equipment in provinces, project owners, and bid-winning contractors in construction investment projects funded with the state budget and PPP projects in the provinces shall provide information on machinery shift rates, costs for hiring construction machinery, and information serving the survey, determination and publicization of machinery shift rates in the provinces, made according to the form provided by the requesting specialized construction agencies.

Article 7.Transitional handling

1. In case total investment levels and work construction cost estimates are approved before the effective date of this Circular but construction contracts have not been signed, investment deciders shall decide on the adjustment of machinery shift rates in total investment levels and construction cost estimates to serve as a basis for determination of prices of construction bidding packages based on machinery shift rates publicized by provincial-level People’s Committees, ensuring the progress and efficiency of the project implementation.

2. For construction bidding packages of which construction contracts are signed before the effective date of this Circular, the contents of bidding dossiers, bid dossiers and signed construction contracts shall apply.

Article 8.Effect

1. This Circular takes effect on February 15, 2020.

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

For the Minister of Construction
Deputy Minister
BUI PHAM KHANH

* The appendices to this Circular are not translated.