Circular No. 12/2008/TT-BXD dated May 07, 2008 of the Ministry of Construction guiding the formulation and management of construction survey expenses

CIRCULAR

GUIDING THE FORMULATION AND MANAGEMENT OF CONSTRUCTION SURVEY EXPENSES

Pursuant to the Government s Decree No. 17/ 2008/ND-CP of February 4, 2008. defining the functions, tasks, powers and organizational structure of the Ministry of Construction;

Pursuant to the Government's Decree No. 99/ 2007/ND-CP of June 13. 2007, on the management of work construction investment expenses, and Decree No. 03/2008/ND-CP of January 7, 2008. amending and supplementing a number of articles of the Government's Decree No. 99/2007/ND-CP of June 13. 2007, on the management of work construction investment expenses,
The Ministry of Construction guides the formulation and management of construction survey expenses as follows:

1. General provisions

1.1. Management of construction survey expenses covers management of norms and estimates of construction survey expenses and construction survey prices.

1.2. Construction survey expenses include all expenses necessary for the fulfillment of construction survey jobs according to the State's technical standards on construction surveys.

1.3. Construction survey expenses formulated under the guidance of this Circular serve as a basis for the management of work construction investment expenses.

2. Methods of estimating construction survey expenses

Depending on the nature and specific conditions of works and projects, investors may estimate construction survey expenses by different methods such as basing on construction survey volumes and unit prices or using available figures of survey expenses of works with similar construction survey technical requirements and conditions.

2.1. Method of estimating survey expenses based on construction survey volumes and unit prices:

Cost estimates of construction survey expenses (below referred to as survey cost estimates for short) may cover different expense items and shall be determined according to the following formula:

The above items shall be determined as follows:

2.1.1. Volume of each survey job shall be determined according to the survey technical plan which is suitable to the survey conditions and location and accepted by the investor.

2.1.2. Unit price of each survey job:

Unit price of each survey job covers direct expense (material expense, labor cost, expense for machine or equipment use), general expense and pre-calculated taxable income.

Unit price of each survey job shall be determined according to the following formula:

Gi = (^Cti ^{+ P}_I)^x(^1+Lt) (¹)

Of which:

- G_i unit price of survey job i;

- C_ti direct expense for a volume unit of survey job i:

- P_i: general expense for a volume unit of survey job i;

- L_t: pre-calculated taxable income.

The above items shall be calculated as follows:

2.1.2.1. Direct expense (C_ti):

Direct expense for a volume unit of survey job i covers material expense, labor cost and direct expense for construction machine use and shall be determined according to the following formula:

C_ti=C_vi + C_ni + C_mi (2)

Of which:

- C_vi : direct material expense for a volume unit of survey job i:

- C_ni: direct labor cost for a volume unit of survey job i;

- C_mi: direct expense for machine or equipment use for a volume unit of survey job i.

a/ Direct material expense (C_vi)

Direct material expense may be material expense used in the construction survey price notified by the People's Committee of the province or centrally run city where the work is located, or shall be determined according to the following formula:

C_vi = (l + K_pi) x Z_j (3)

Of which:

- K_pi: norm of the ratio of subsidiary materials to principal materials of survey job i;

- M_ij: norm of waste of material j for a volume unit of survey job i:

- Z_j price of material j (exclusive of value-added tax) at the survey site.

Material prices at survey sites shall be determined suitable to work construction locations. Material prices shall be determined based on prices notified by localities, producers' price advices, suppliers' price information, or prices already applied to other works under similar conditions.

b/ Direct labor cost (C_ni):

Direct labor cost may be labor cost used in the construction survey price notified by the People's Committee of the province or centrally run city where the work is located, or shall be determined according to the following formula:

C_ni = N_ixL_i (4)

Of which:

- N_i: workday waste norm for a volume unit of survey job

- i: workday salary of the person doing survey job i.

The survey workday salary shall be calculated on the principle of accurately and fully covering the salary. additional pay and salary-based allowances based on me minimum salary level set by a competent state agency to ensure that a laborer's salary is calculated taking into account the average price level of the labor market in each region, each type of laborers and specific conditions of each work.

c/ Direct expense for machine or equipment use (C_mi)

Direct expense for machine or equipment use may be machine expense used in the construction survey price notified by the People's Committee of the province or centrally run city where the work is located, or shall be determined according to the following formula:

C_mi=(1 + K_mi) x G_q (5)

Of which:

- K_mi; norm of the ratio of other machines to principal machine for survey job i;

- S_iq: norm of the number of principal machine shifts q for a volume unit of survey job i:

- G_q: machine shift price of survey machine q.

Survey machine shift prices (including machine hire costs) shall be calculated under the Construction Ministry's Circular No. 07/2007/T7-BXD of July 25. 2007. guiding methods of determining machine shift and construction equipment prices applicable to works, or accord with machine shift and equipment prices publicized by localities.

2.1.2.2. General expense (Pi):

P_i = C_ni x K_pi (6)

Of which:

- C_ni: direct labor cost for a volume unit of survey job i:

- K_pi: norm of general expense for survey job equal to 70%

2.1.2.3. Pre-calculated taxable income (L_t) is equal to 6% of direct expense (C_ti) and general expense (P_i).

2.1.3. Expense for making a survey plan and survey result report is equal to 5% of the value of the total volume of each survey job multiplied by the unit price of such survey job.

2.1.4. Expense for makeshift accommodation is equal to 5% of the value of the total volume of each survey job multiplied by the unit price of such survey job.

2.1.5. Expense for removal of laborers or machines:

Depending on the specific conditions of each survey technical plan (specific surveys, small survey job volumes, etc.), investors shall decide and estimate the expense for removal of laborers or machines and some other expenses in survey cost estimates as appropriate.

2.1.6. Value -added tax on construction survey-jobs must comply with current regulations.

2.1.7. Contingency expense:

Contingency expense is standby expense for arising job volumes and price increases during the construction survey time, which must not exceed 10% of the construction survey expense exclusive of value-added tax.

2.2. Method of determining survey cost estimates by using available data of survey expenses of works with similar construction survey technical requirements and conditions:

When using available data of survey expenses of works with similar construction survey technical requirements and conditions to determine survey cost estimates of works, job volumes, conditions for doing survey- jobs and price increase coefficients should be taken into account on the basis of conditions, measures and time fordoing similar survey jobs.

3. Management of construction survey expenses

3.1. Management of norms for the estimation of construction survey costs:

Norms for the estimation of construction survey costs shall be notified by the Ministry of Construction.

Ministries and provincial-level People's Committees shall, based on norm-formulating methods guided by the Ministry of Construction, formulate and notify cost norms for specific construction surveys of ministries and localities which are not yet available in norms for the estimation of construction survey costs notified by the Ministry of Construction.

For new construction surveys which are not yet dealt with in notified norms or in current norms not suitable to works (which apply standards, processes or regulations different from current regulations), investors shall base themselves on technical requirements, construction measures and conditions and norm-formulating methods to formulate or adjust cost norms for these surveys for use as a basis for determining construction survey expenses.

Before applying new construction survey cost norms, which are not yet included in notified norms, to making unit prices, cost estimates and payment for state budget-funded bidding packages for which contractors are appointed, investors shall report them to investment deciders for consideration and decision. Particularly for construction works under investment projects decided by the Prime Minister, investors shall report to ministers, heads of ministerial-level agencies, heads of government-attached agencies, presidents of provincial-level People's Committees, presidents of economic groups, or chairmen of boards of directors of state corporations for consideration and decision.

Investors may themselves organize the formulation, supplementation or adjustment of the above norms, or hire capable and experienced consultancy organizations to do so. Consultancy organizations shall take responsibility for the rationality and accuracy of the norms they formulate.

Investors may decide on the application of notified survey cost norms, or supplement, adjust or formulate survey cost norms for formulating and managing work construction survey expenses.

For projects which are built in lines running through or in different provinces, investors shall decide on the application of notified survey cost norms, or supplement, adjust and formulate survey cost norms for formulating and managing work construction survey expenses.

Ministries and provincial-level People's Committees shall annually send construction survey cost norms already notified in the year to the Ministry of Construction for monitoring and management.

3.2. Management of construction survey prices:

Provincial-level People's Committees shall direct provincial-level Construction Sen ices to base themselves on the guidance of this Circular and their local situation to guide the formulation of construction survey unit prices, formulate and submit work construction survey prices to provincial-level People's Committees for notification.

Investors shall based on the nature and specific conditions of works and the guidance of this Circular, formulate, and decide on the application of, survey unit prices for formulating construction survey cost estimates of works.

4. Organization of implementation

4.1 Provincial-level People's Committees shall direct provincial-level Construction Services to assume the prime responsibility for. and coordinate with concerned Services in. formulating and notifying prices of construction surveys., materials, labor cost and construction survey machine shifts suitable to specific conditions of their local markets for use as a basis for the management of construction survey expenses; at the same time, send them to the Ministry of Construction for monitoring, management and examination.

4.2 Provincial-level People's Committees shall, based on the guidance of this Circular and relevant documents, guide and prescribe the application of construction survey prices to local budget-funded works.

4.3 The transitional implementation under Clause 2, Article 1 of the Government's Decree No. 03/2008/ND-CP of January 7,2008, amending and supplementing a number of articles of the Government's Decree No. 99/2007/ND-CP of June 13,2007. on the management of work construction investment expenses, is specified as follows:

For construction survey jobs under projects approved prior to the effective date of this Circular, the formulation and management of construction survev expenses comply with the Construction Ministry's Circular No. 14/2005/TT-BXD of August 10. 2005. In case when it is necessary to implement the provisions of this Circular, investment deciders shall consider and make decision. Particularly for investment projects decided by the Prime Minister, ministers, heads of ministerial-level agencies, heads of government-attached agencies, presidents of provincial-level People's Committees, presidents of economic groups, or chairmen of boards of directors of state corporations shall make such decision.

For projects not yet approved, the formulation and management of their construction survey expenses comply with the guidance of this Circular.

4.4 The hire of foreign consultants to conduct construction surveys complies with the Prime Minister's Decision No. 131/2007/QD-TTg of August 9. 2007. promulgating the Regulation on hire of foreign construction consultants in Vietnam, and the Construction Ministry's Circular No. 09/ 2007/TT-BXD of November 2,2007, guiding the determination and management of expenses for hiring foreign construction consultants in Vietnam.

4.5 This Circular takes effect 15 days after its publication in "CONG BAO" and replaces the Construction Ministry's Circular No. 14/2005/TT-BXD of August 10,2005. guiding the formulation and management of construction survey expenses.

In the course of implementation, concerned ministries, localities and units should promptly report arising problems to the Ministry of Construction for study and settlement.