Decree No. 10/2021/ND-CP the management of construction investment costs

DECREE

On the management of construction investment costs^[1]

Pursuant to the June 19, 2015 Law on Organization of the Government; and the November 22, 2019 Law Amending and Supplementing a Number of Articles of the Law on Organization of the Government and the Law on Organization of Local Administration;

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

Pursuant to the June 17, 2020 Law on Investment;

Pursuant to the June 13, 2019 Law on Public Investment;

Pursuant to the June 18, 2020 Law on Investment in the Form of Public-Private Partnership;

Pursuant to the November 26, 2013 Bidding Law;

At the proposal of the Minister of Construction,

The Government promulgates the Decree on management of construction investment costs.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

1. This Decree provides the management of construction investment costs of projects using public investment funds or state capital other than public investment funds and investment projects in the form of public-private partnership (PPP), covering preliminary total construction investment, total construction investment, construction cost estimates, and prices of construction bidding packages; construction norms, work construction prices, and project management and construction investment consultancy expenses; payment and liquidation of construction contracts, and payment and account-finalization of construction investment funds; and rights and responsibilities of investment deciders, and rights and obligations of project owners, construction contractors and consultancy contractors in the management of construction investment costs.

2. The management of construction investment costs of projects using official development assistance (ODA) loans or concessional loans of foreign donors must comply with relevant treaties, signed agreements on ODA loans and concessional loans, this Decree and regulations on use management of ODA loans and concessional loans of foreign donors.

Article 2. Subjects of application

1. This Decree applies to agencies, organizations and individuals involved in the management of construction investment costs of projects using public investment funds or state capital other than public investment funds and PPP projects.

2. Organizations and individuals may refer to the provisions of this Decree to manage construction investment costs of projects other than those specified in Clause 1 of this Article.

Article 3. Principles of management of construction investment costs

1. The management of construction investment costs must adhere to the principles specified in Article 132 of the Law on Construction and Clause 50, Article 1 of the Law Amending and Supplementing a Number of Articles of the Law on Construction as suitable to different funding sources for construction investment, forms of investment, and implementation modes and plans of projects, and relevant regulations.

2. To clearly define and properly exercise the rights and discharge the responsibilities of state management agencies, investment deciders and specialized construction agencies; and rights and obligations of project owners and organizations and individuals involved in the management of construction investment costs in conformity with the construction investment procedures specified in Clause 1, Article 50 of the Law on Construction.

3. The State shall promulgate, and guide and examine the implementation of, regulations on management of construction investment costs; provide necessary instruments for project owners and related subjects to apply or refer to in the management of construction investment costs, including construction norms, work construction prices, construction investment ratio, and construction price indexes; prices of building materials, prices of machine shifts and construction equipment, and unit labor costs; information and data on construction investment costs of projects or construction works; methods of determination and management of construction investment costs, quantity takeoff, control of expenses, construction norms, work construction prices, construction investment ratio, and construction price indexes.

4. The determination and management of construction investment costs of special projects and construction works must comply with the Decree detailing a number of provisions on management of construction investment projects and special mechanisms under the Government’s regulations or the Prime Minister’s decisions.

5. For projects and construction works serving national defense or security purposes, competence and procedures for appraisal of total construction investment in construction investment feasibility study reports or construction investment techno-economic reports and the competence and procedures for appraisal and approval of construction cost estimates in construction designs to be implemented following base designs must comply with regulations of the Minister of National Defense or Minister of Public Security.

6. For projects or construction works under national target programs, the principles and methods of determining construction investment costs specified in this Decree and relevant regulations shall be applied as suitable to characteristics and conditions for implementation of such projects or works.

7. The management of construction investment of offshore investment projects or construction works must adhere to the principles specified in the Decree detailing a number of provisions on management of construction investment projects.

Chapter II

PRELIMINARY TOTAL CONSTRUCTION INVESTMENT, TOTAL CONSTRUCTION INVESTMENT

Article 4. Determination, appraisal and approval of preliminary total construction investment

1. Preliminary total construction investment means construction investment costs of a project estimated in its construction investment prefeasibility study report. Cost items constituting preliminary total construction investment include ground clearance compensation support and resettlement expenses (if any); construction costs; equipment costs; project management expenses; construction investment consultancy expenses; other costs; and contingency amounts.

2. Preliminary total construction investment of a project shall be estimated on the basis of its scale, capacity or service capacity according to its preliminary design plan and construction investment ratio or cost data of implemented similar projects in terms of type or grade, scale, capacity or service capacity and characteristics, with analysis and evaluation carried out to adjust it to the market price level suitable to construction location, which may be added with other necessary expenses.

3. The appraisal and approval of preliminary total construction investment shall be carried out together with the appraisal and approval of construction investment prefeasibility study reports in accordance with the laws on public investment, investment in the form of PPP, and management and use of state capital invested in production and business at enterprises, and other relevant laws.

Article 5. Cost items constituting total construction investment

1. Total construction investment means all construction investment costs of a project determined according to its base design and other contents of its construction investment feasibility study report.

2. Cost items constituting total construction investment include ground clearance compensation, support and resettlement expenses (if any); construction costs; equipment costs; project management expenses; construction investment consultancy expenses; other costs; and contingency amounts, which are specified as follows:

a/ Ground clearance compensation, support and resettlement expenses include compensation for land, houses and works on land, and assets attached to land and on water surface, and other compensation expenses as specified by law; support amounts upon land recovery by the State; resettlement expense; expense for organization of compensation, support resettlement; expense for payment of land use levy and rental (if any) in the course of construction; expense for relocation of or payment for built technical infrastructure items (if any) serving ground clearance, and other relevant expenses;

b/ Construction costs include costs for construction of works and work items of a project; makeshift or auxiliary works or work items serving construction; and costs for dismantlement of construction works not covered by dismantlement and ground clearance costs calculated as compensation, support and resettlement expenses;

c/ Equipment costs include costs for procurement of work equipment and technological equipment; costs for management of equipment procurement (if any); costs of copyright of software purchased for use for work equipment and technological equipment (if any); costs for training and technology transfer (if any); costs for equipment processing and manufacture (if any); costs for installation, testing and calibration; costs for trial operation of equipment according to technical requirements (if any); transportation cost; insurance cost; assorted taxes and charges; and other relevant expenses;

d/ Project management expenses mean expenses for management of performance and for performance of project management jobs from the stages of project preparation and implementation to the stages of construction completion and putting of project works into operation or use and account-finalization of construction investment costs, which are specified in Article 30 of this Decree;

dd/ Construction investment consultancy expenses mean expenses for performing construction investment consultancy jobs from the stages of project preparation and implementation to the stages of construction completion and putting of the project’s works into operation or use and account-finalization of construction investment costs, which are specified in Article 31 of this Decree;

e/ Other expenses include expenses for implementation of construction investment projects, such as expenses for deactivating bombs, mines and explosives; expenses for relocation of special-type construction machines and equipment to and out of construction sites; expenses for assurance of traffic safety serving construction; expenses for restoration of technical infrastructure facilities affected by construction; expenses for material warehouses and storing yards; expenses for building of shelters for machines, machine bases, and electricity, compressed gas and water supply systems at construction sites, and for installation and dismantlement of machines; costs of insurance for works during construction; international quality registration and inspection and monitoring of deformities of works; expenses for audit, verification and approval of final accounts of investment capital; expenses for examination of acceptance test during construction and upon completion of work items or works by specialized construction agencies or the Council established by the Prime Minister; expenses for scientific and technological research, application and use of new materials relating to projects; initial working capital for construction investment projects for commercial purposes, and loan interests in during construction; expenses for no-load trial operation and load trial operation of technological or production lines according to processes before handover (excluding recovered product value); expenses for appraisal of construction investment feasibility study reports or construction investment techno-economic reports; royalty, charges and fees as prescribed and other necessary expenses for implementation of construction investment projects other than those specified at Points a, b, c, d and dd of this Clause;

g/ Contingency amounts include the contingency amount for additional volumes and jobs and contingency amount for inflation during the project implementation.

3. For projects requiring only construction investment techno-economic reports, the total construction investment includes the work construction cost estimates specified in Article 11 of this Decree, ground clearance compensation, support and resettlement expenses (if any), and relevant expenses calculated for projects. Work construction cost estimates shall be determined under Article 12 of this Decree.

Article 6. Determination of total construction investment

1. Total construction investment shall be determined by the following methods:

a/ Based on construction volume calculated according to the base design and other necessary requirements of a project;

b/ Based on construction investment ratio;

c/ Based on data on costs of implemented similar projects or works;

d/ Combination of the methods specified at Points a, b and c of this Clause.

2. The method specified at Point a, Clause 1 of this Article serves as a basic method for determining total construction investment of projects and works, of which base designs fully satisfy the law-specified conditions for determining volumes of construction jobs, groups and types of construction jobs, structure units, work parts and work construction prices.

3. The determination of total construction investment by the method specified at Point a, Clause 1 of this Article is provided as follows:

a/ Ground clearance compensation, support and resettlement expenses shall be determined under ground clearance compensation, support and resettlement plans of projects and relevant regimes and policies of the State;

b/ Construction costs shall be determined on the basis of volumes of construction jobs and activities; groups and types of construction jobs, structure units or work parts and work construction prices, and other relevant expenses;

c/ Equipment costs shall be determined on the basis of volume, quantity and type of equipment or equipment systems under selected technology, technique and equipment plans, market prices of equipment, and other relevant expenses;

d/ Project management expenses shall be determined under Article 30 of this Decree;

dd/ Construction investment consultancy expenses shall be determined under Article 31 of this Decree;

e/ Other expenses shall be determined in percentage (%) or by estimation method. Expenses for deactivating bombs, mines and explosives shall be determined under regulations of the Minister of National Defense;

g/ Contingency amount for additional volumes and jobs shall be determined in percentage (%) of the total of the cost items specified at Points a, b, c, d, dd and e of this Clause. Particularly, percentage of contingency amount for inflation shall be determined on the basis of project implementation period, project implementation plan and construction price index as suitable to types of construction works, with domestic and international price fluctuations taken into account.

4. The determination of total construction investment by the method specified at Point b, Clause 1 of this Article is provided as follows:

The total construction investment of a project shall be determined on the basis of volume, area, capacity or service capacity according to the announced relevant base design and construction investment ratio as suitable to the type and grade of the relevant construction work, while carrying out evaluation, conversion and calculation of the time of formulating total construction investment and location of project implementation, added with other necessary expenses not yet included in construction investment ratio to suit specific conditions of the relevant project or work.

5. The determination of total construction investment by the method specified at Point c, Clause 1 of this Article is provided as follows:

The total construction investment shall be determined on the basis of volume, area, capacity or service capacity according to the announced relevant base design and data on costs of implemented similar projects or works of the same type or grade and with the same scale, capacity or service capacity. Used cost data should be converted and calculated in terms of time of formulation of total construction investment and location of project implementation, added with other necessary expenses to suit specific conditions of the relevant project or work.

6. Based on how detailed the base design of a project is, announced construction investment ratio, and data on costs of implemented similar projects or works, total construction investment may be determined by the combination of the two or three methods specified at Points a, b and c, Clause 1 of this Article.

Article 7. Verification and appraisal of total construction investment 

1. Appraisal of total construction investment constitutes a content of appraisal of construction investment feasibility study reports or construction investment techno-economic reports. The competence to appraise total construction investment must comply with the Law on Construction and the Decree detailing a number of provisions on management of construction investment projects.

2. Contents of appraisal of total construction investment by specialized construction agencies as referred to at Point g, Clause 2, Article 58 of the Law on Construction, which was amended and supplemented under Clause 15, Article 1 of the Law Amending and Supplementing a Number of Articles of the Law on Construction, include:

a/ Completeness and validity of a dossier for appraisal of total construction investment; legal grounds for determination of total construction investment;

b/ Conformity of total construction investment with approved preliminary total construction investment; and method of determining total construction investment;

c/ Conformity of the cost items constituting total construction investment specified in Article 5 of this Decree with contents and requirements of a project;

d/ Compliance with regulations on application of or reference to construction norms, work construction prices and other necessary instruments issued or announced by competent state agencies, and application of or reference to data on costs of similar projects or works for determining total construction investment.

3. Contents of appraisal of total construction investment by agencies or organizations/individuals assigned by investment deciders to take charge of appraisal under Point a, Clause 3, Article 56 and Point d, Clause 1, Article 57 of the Law on Construction, which was amended and supplemented under Clauses 13 and 14, Article 1 of the Law Amending and Supplementing a Number of Articles of the Law on Construction, include:

a/ Completeness and validity of a dossier for appraisal of total construction investment; examination of the consultant’s verification of total construction investment (if any);

b/ Completion and supplementation of the dossier for appraisal of total construction investment based on recommendations (if any) of the specialized construction agency as mentioned in Clause 2 of this Article and explanations;

c/ Conformity and adequacy of the volume determined or scale, capacity or service capacity calculated in total construction investment with the project’s base design;

d/ Whether total construction investment is correctly and adequately determined according to regulations as well as design requirements, construction conditions, market price level and project implementation plan;

dd/ Analysis of causes of any increase or decrease in, and evaluation of investment efficiency of the project based on, the value of total construction investment determined after the appraisal.

4. For projects using state capital other than public investment funds other than those specified at Point c, Clause 1, Article 58 of the Law on Construction, which was amended and supplemented under Clause 14, Article 1 of the Law Amending and Supplementing a Number of Articles of the Law on Construction, investment deciders shall appraise the contents specified in Clauses 2 and 3 of this Article.

5. For projects requiring only construction investment techno-economic reports, investment deciders shall appraise the contents specified in Clauses 3 and 4, Article 13 of this Decree.

6. Verification serving the appraisal of total construction investment must comply with the provisions on verification serving project appraisal of the Decree detailing a number of provisions on management of construction investment projects.

7. Expenses for organizations and individuals engaged in appraisal shall be covered by charges and fees for appraisal of construction investment feasibility study reports or construction investment techno-economic reports.

8. The Ministry of Construction shall provide expenses for appraisal and verification of construction investment feasibility study reports or construction investment techno-economic reports. The Ministry of Finance shall provide charge for appraisal of construction investment projects.

Article 8. Approval of total construction investment

1. Approval of total construction investment constitutes a content of construction investment decisions. The competence to decide on construction investment must comply with Article 60 of the Law on Construction, which was amended and supplemented under Clause 17, Article 1 of the Law Amending and Supplementing a Number of Articles of the Law on Construction.

2. The approved total construction investment is the maximum amount for implementation of a construction investment project.

Article 9. Adjustment of total construction investment

1. The approved total construction investment may be adjusted under Clause 5, Article 134 of the Construction Law and Point dd, Clause 18, Article 1 of the Law Amending and Supplementing a Number of Articles of the Law on Construction.

2. The adjusted total construction investment includes the unadjusted total construction investment amount and adjusted total construction investment amount. Contents related to the adjusted total construction investment amount shall be appraised under Article 7 of this Decree. The competence to appraise and approve the adjusted total construction investment amount must comply with the provisions on the competence to appraise and approve adjusted projects of the Decree detailing a number of provisions on management of construction investment projects.

Article 10. Appraisal and approval of project preparation costs

1. Project preparation costs include costs for performance of the following jobs: construction survey; formulation and appraisal of construction investment prefeasibility study reports, and approval of investment policy (if any); formulation and appraisal of construction investment feasibility study reports or construction investment techno-economic reports, and other relevant necessary jobs.

2. Agencies or organizations assigned to carry out project preparation or project owners (if available) shall organize the formulation, appraisal and approval of project preparation cost estimates specified Clause 1 of this Article, except the cases specified in Clauses 3 and 4 of this Article.

3. For national important projects using public investment funds, the formulation, appraisal and approval of project preparation cost estimates specified Clause 1 of this Article must comply with the law on public investment.

4. The competence to appraise and approve estimates of costs for hiring foreign consultants to perform the jobs specified in Clause 1 of this Article must comply with Clause 4, Article 32 of this Decree.

5. Project preparation cost estimates specified in Clause 1 of this Article shall, after being approved, be included in total construction investment.

Chapter III

CONSTRUCTION COST ESTIMATES

Section 1

WORK CONSTRUCTION COST ESTIMATES

Article 11. Items of work construction cost estimates

1. Work construction cost estimates mean all necessary costs estimated for construction of work(s) according to construction designs to be implemented following base designs, or working drawing designs for projects requiring only construction investment techno-economic reports.

2. Items of work construction cost estimates include construction cost, equipment cost, project management expense, construction investment consultancy expense, other costs, and contingency amounts. These items are specified at Points b, c, d, dd, e and g, Clause 2, Article 5 of this Decree, except construction investment consultancy expense and other costs calculated for the whole project.

3. For a project involving different works, its owner shall determine the project’s total cost estimates so as to manage construction investment costs in case of necessity. Total cost estimates cover work construction cost estimates, consultancy expense, other costs, and contingency amounts calculated for the whole project.

Article 12. Determination of work construction cost estimates

1. Work construction cost estimates shall be determined on the basis of volumes calculated according to construction designs to be implemented following base designs, or working drawing designs for projects requiring only construction investment techno-economic reports, technical instructions, job requirements, implementation plans for works, construction conditions, construction methods, construction norms and prices applicable to works, construction price indexes, and other relevant regulations as suitable to specific conditions of works. Items of work construction cost estimates shall be determined under Clauses 2 thru 7 of this Article.

2. Construction costs, including direct costs, indirect costs, presumed taxable income and value-added tax, shall be determined as follows:

a/ Direct costs (including material cost, labor cost, and construction machinery and equipment cost) shall be determined on the basis of volumes and detailed construction unit prices or volumes and general construction prices of groups or types of construction jobs, structure units or work parts.

In case direct costs are determined on the basis of volumes and detailed construction unit prices, volumes shall be determined according to construction jobs and activities, and detailed construction unit prices shall be determined under Clause 2, Article 24 of this Decree.

In case direct costs are determined on the basis of volumes and general construction prices of groups or types of construction jobs, structure units or work parts, volumes shall be determined in conformity with groups or types of construction jobs, structure units or work parts, and general construction prices of groups or types of construction jobs, structure units or work parts shall be determined under Clause 3, Article 24 of this Decree.

b/ Indirect costs include overhead costs, cost of makeshift houses for worker accommodations and construction administration, and cost of a number of jobs of which volume cannot be determined according to designs. Indirect costs shall be determined in percentage (%) under regulations;

c/ Presumed taxable income shall be determined in percentage (%);

d/ Value-added tax shall be determined under regulations.

3. Equipment cost shall be determined as follows:

a/ Equipment procurement cost shall be determined on the basis of volume, quantity and type of equipment according to designs (technological and construction designs), and an approved list of equipment of the project and purchase prices of relevant equipment;

b/ Equipment processing and manufacturing cost (if any) shall be determined by estimation method on the basis of volume and quantity of equipment that need to be processed and manufactured and relevant processing and manufacturing unit prices; under processing and manufacturing contracts, price quotes issued by manufacturers or suppliers, or on the basis of processing and manufacturing prices of similar equipment of implemented works;

c/ Other costs included in equipment costs specified at Point c, Clause 2, Article 5 of this Decree shall be determined by estimation method or based on cost norms issued by competent state agencies.

4. Project management expenses shall be determined under Article 30 of this Decree.

5. Construction investment consultancy expenses shall be determined under Article 31 of this Decree.

6. Other costs shall be determined on the basis of cost norms issued by competent state agencies, or by estimation method.

7. Contingency amounts, including contingency amount for additional volumes and jobs and contingency amount for inflation, shall be determined in percentage (%) of the total cost items specified in Clauses 2 thru 6 of this Article. Particularly, percentage (%) of contingency amount for inflation shall be determined on the basis of the work construction period under the project implementation plan and construction price index as suitable to types of construction works, with domestic and international price fluctuations taken into account.

Article 13. Verification and appraisal of work construction cost estimates

1. The appraisal of work construction cost estimates shall be carried out together with appraisal of construction designing steps to be implemented following base designs in accordance with the Decree detailing a number of provisions on management of construction investment projects.

2. The competence to appraise work construction cost estimates must comply with the Law on Construction and the Decree detailing a number of provisions on management of construction investment projects.

3. Contents of appraisal of work construction cost estimates by specialized construction agencies as referred to at Point d, Clause 2, Article 83a of the Law on Construction, which was added under Clause 26, Article 1 of the Law Amending and Supplementing a Number of Articles of the Law on Construction, include:

a/ Completeness and validity of a dossier for appraisal of work construction cost estimates; legal grounds for determination of work construction cost estimates;

b/ Conformity of work construction cost estimates with approved total construction investment; and method of determination of work construction cost estimates;

c/ Conformity of items of work construction cost estimates specified in Article 11 of this Decree with contents and requirements of a project;

d/ Compliance with regulations on application of or reference to construction norms, work construction prices and other necessary instruments issued or announced by competent state agencies; and application of or reference to data on costs of similar works and other necessary instruments for determining work construction cost estimates;

dd/ Lists of new cost estimate norms or adjusted cost estimate norms (if any) and methods of determination of norms; list of norms for which survey is required in the course of construction.

4. Contents of appraisal of work construction cost estimates by project owners as referred to at Point c, Clause 1, Article 83 of the Law on Construction, which was amended and supplemented under Clause 25, Article 1 of the Law Amending and Supplementing a Number of Articles of the Law on Construction, include:

a/ Completeness of a dossier for appraisal of work construction cost estimates; examination of results of consultants’ verification of work construction cost estimates (if any);

b/ Completion and supplementation of a dossier for appraisal of work construction cost estimates (if any) based on recommendations of a specialized construction agency for work construction cost estimates subject to appraisal by specialized construction agencies as mentioned in Clause 3 of this Article (if any) and explanations;

c/ Adequacy and conformity of the volume of construction jobs determined, type and quantity of equipment calculated in work construction cost estimates with designs;

d/ Whether work construction cost estimates are correctly and adequately determined under regulations and conformable with value of total construction investment, technical requirements, construction technologies, construction conditions, construction-oriented methods, work construction schedule and average market prices;

dd/ Analysis and evaluation of levels and causes of any increase or decrease in cost items compared to value of work construction cost estimates to be appraised;

e/ For projects using state capital other than public investment funds other than those subject to appraisal by specialized construction agencies, their owners shall appraise the contents specified in Clause 3 of this Article and at Points a, b, c, d and dd of this Clause.

5. Contents of appraisal of work construction cost estimates of construction works of PPP projects:

a/ For construction works of component PPP projects using public investment funds, specialized construction agencies shall appraise the contents specified in Clause 3 of this Article, while project owners shall appraise the contents specified in Clause 4 of this Article and the contents stated in PPP project contracts;

b/ For construction works of PPP projects not using public investment funds, project owners shall appraise the contents specified in Clauses 3 and 4 of this Article and the contents stated in PPP project contracts.

6. Project owners shall appraise cost estimates of preparatory jobs for making construction designs to be implemented following base designs and expenses calculated for whole projects. In case these cost estimates have been approved in total construction investment, project owners shall consider and decide on re-determination thereof when necessary. In case of hiring foreign consultants, the competence to appraise and approve cost estimates for hiring foreign consultants must comply with Clause 4, Article 32 of this Decree.

7. The verification serving appraisal of work construction cost estimates must comply with the Decree detailing a number of provisions on management of construction investment projects.

8. Expenses for organizations and individuals engaged in appraisal shall be covered by charges and expenses for appraisal of construction cost estimates.

9. The Ministry of Construction shall specify expenses for verification of construction cost estimates. The Ministry of Finance shall provide charges for appraisal of construction cost estimates.

Article 14. Approval of work construction cost estimates

1. The competence to approve work construction cost estimates must comply with Article 82 of the Law on Construction, which was amended and supplemented under Clauses 24 and 25, Article 1 of the Law Amending and Supplementing a Number of Articles of the Law on Construction.

2. Project owners shall approve cost estimates of preparatory jobs for making construction designs to be implemented following base designs and expenses calculated for whole projects.

3. Decisions on approval of work construction cost estimates and cost estimates specified in Clause 2 of this Article shall be sent to investment deciders.

Article 15. Adjustment of work construction cost estimates

1. Approved work construction cost estimates may be adjusted under Clause 4, Article 135 of the Law on Construction.

2. Adjusted work construction cost estimates include unadjusted work construction cost estimate amounts and adjusted work construction cost estimate amounts. Items related to adjusted work construction cost estimate amounts shall be appraised under Article 13 of this Decree

3. The competence to appraise and approve adjusted work construction cost estimates must comply with the provisions on the competence to appraise and approve adjusted construction designs to be implemented following base designs of the Decree detailing a number of provisions on management of construction investment projects.

4. In case adjusted work construction cost estimates exceed approved cost estimates but do not exceed approved total investment, the project owner shall make and report such adjustment to the investment decider before approving it.

5. In case an adjustment of cost estimates does not lead to an excess of approved cost estimates but results in a change in the structure of cost items in total construction investment, the project owner shall make, approve and report such adjustment to the investment decider and take responsibility for the adjustment.

Section 2

COST ESTIMATES OF CONSTRUCTION BIDDING PACKAGES

Article 16. General provisions on cost estimates of construction bidding packages

1. Cost estimates of a construction bidding package (below referred to as bidding package cost estimates) mean all necessary costs estimated for performance of such bidding package under a contractor selection plan before the contractor selection is organized.

2. Bidding package cost estimates shall be determined for:

a/ Construction bidding packages;

b/ Equipment procurement bidding packages;

c/ Equipment installation bidding packages;

d/ Construction investment consultancy bidding packages;

dd/ Mixed bidding packages.

Article 17. Determination of bidding package cost estimates

1. Bidding package cost estimates shall be determined on the basis of cost items of each bidding package in conformity with its design, scope, nature, characteristics and specific conditions.

2. For projects using front-end engineering designs (FEED) to perform engineering-procurement-construction (EPC) contracts, bidding package cost estimates shall be determined on the basis of cost items of bidding packages which are determined on the basis of FEED.

3. For projects or works for which investment deciders allow the implementation of construction designs following base designs for each construction bidding package or each stage of the project implementation plan, bidding package cost estimates shall be determined on the basis of cost items of relevant bidding packages and construction designs. Cost items of bidding package estimates shall be determined as cost items of work construction cost estimates specified in Article 12 of this Decree as suitable to the scope, nature, characteristics and specific conditions of each bidding package.

4. For projects for which work construction cost estimates have been approved, their owners shall determine bidding package cost estimates on the basis of cost items of bidding packages stated in approved work construction cost estimates, if necessary.

5. Contingency amounts in bidding package cost estimates shall be determined as suitable to forms of contracts applicable to bidding packages as stated in contractor selection plans.

Article 18. Verification, appraisal and approval of bidding package cost estimates

1. Bidding package cost estimates specified in Clauses 2 and 3, Article 17 of this Decree shall be verified or appraised as the work construction cost estimates specified in Article 13 of this Decree.

2. Project owners shall approve the bidding package cost estimates specified in Clauses 2, 3 and 4, Article 17 of this Decree in order to replace prices of bidding packages stated in contractor selection plans in accordance with the bidding law.

3. Project owners shall appraise and approve the bidding package cost estimates specified at Point d, Clause 2, Article 16 of this Decree. In case of hiring foreign consultants, the competence to appraise and approve foreign consultancy bidding package cost estimates must comply with Clause 4, Article 32 of this Decree.

4. Depending on characteristics and nature of bidding packages, items of the bidding package cost estimates specified in Clauses 2 and 3, Article 17 of this Decree shall be adjusted as the work construction cost estimates specified in Article 15 of this Decree.

Article 19. Prices of construction bidding packages

1. Price of a construction bidding package means the value of such bidding package approved in a contractor selection plan for use as a basis for contractor selection. Such price is inclusive of all necessary costs correctly and fully calculated for the execution of the bidding package, including also contingency amounts, charges, fees and taxes.

2. Prices of bidding packages shall be updated before the bid-opening date in accordance with the bidding law, if necessary.

Chapter IV

CONSTRUCTION NORMS, WORK CONSTRUCTION PRICES AND CONSTRUCTION PRICE INDEXES

Section 1

CONSTRUCTION NORMS

 Article 20. System of construction norms

1. Construction norms include techno-economic norms and cost norms. Techno-economic norms include basic norms and cost estimate norms.

2. Basic norms, including material use norm, labor productivity norm, and construction machinery and equipment productivity norm, shall be determined on the basis of technical requirements and construction regulations or standards, and used for determining or adjusting cost estimate norms.

3. Cost estimate norms

a/ Cost estimate norms means necessary levels of materials, labor and construction machinery and equipment used or consumed to complete a construction job volume unit which is determined on the basis of technical requirements, construction conditions and methods;

b/ Cost estimate norms shall be applied or referred to in order to make construction cost estimates and used as a basis for determining work construction prices, or determining and managing construction investment costs.

4. Cost norms include norms calculated in percentage (%) and norms calculated in value. Cost norms shall be used as a basis for determining work construction prices and cost estimates of certain jobs and costs in construction investment, including indirect costs, presumed taxable income, project management expenses, construction investment consultancy expenses, and other costs.

5. Cost estimate norms of special construction jobs of sectors or localities are norms applicable to jobs not yet specified in the system of construction norms issued by the Ministry of Construction and are only applied to construction works managed by sectors or localities.

6. The Ministry of Construction shall formulate and issue construction norms for common application nationwide. Ministries managing specialized construction works shall formulate and issue cost estimate norms applicable to particular construction jobs of their sectors. Provincial-level People’s Committees shall formulate and issue cost estimate norms for particular construction jobs of their localities.

7. Ministries managing specialized construction works and provincial-level People’s Committees shall make plans and formulate the cost estimate norms specified in Clause 5 of this Article, and send them to the Ministry of Construction for collecting opinions on methods and grounds for formulating norms and conformity of results of calculation of used or consumed items before issuing norms.

8. The application of and reference to the system of construction norms must comply with Clause 3, Article 136 of the Law on Construction, which was amended and supplemented under Clause 51, Article 1 of the Law Amending and Supplementing a Number of Articles of the Law on Construction.

9. Construction norms specified in this Article shall be managed with codes provided by the Minister of Construction.

Article 21. Determination of new cost estimate norms or adjustment of existing cost estimate norms applicable to works

1. New cost estimate norms of works shall be determined for construction jobs that have not yet been specified or have been specified while new construction technologies or construction methods or conditions not yet included in the system of construction norms issued by competent state agencies are used.

2. Cost estimate norms shall be adjusted for construction jobs specified in the system of construction norms issued by competent state agencies which remain unconformable with designs and technical requirements, construction conditions and methods of works.

3. The determination of new cost estimate norms and adjustment of existing cost estimate norms must comply with regulations of the Minister of Construction.

4. In the course of making construction cost estimates, new cost estimate norms and adjusted cost estimate norms specified in Clauses 1 and 2 of this Article shall be determined and managed as follows:

a/ Organizations or individuals making construction cost estimates shall make lists of new cost estimate norms and existing cost estimate norms to be adjusted to suit special requirements of works and determine norm-based use or consumption levels in conformity with designs, technical requirements, construction conditions and expected construction methods for use as a basis for the formulation of unit prices and determination of construction cost estimates;

b/ Specialized construction agencies shall appraise relevant norms specified at Point dd, Clause 3, Article 13 of this Decree;

c/ Project owners shall consider and decide on use of adjusted cost estimate norms and new cost estimate norms for works as a basis for determining work construction prices.

5. In the course of construction, project owners shall organize surveys to determine new cost estimate norms and adjusted cost estimate norms specified in Clause 4 of this Article as follows:

a/ Correcting contents of norms (including applicable regulations, job items, used or consumed items, units of calculation, norm values) based on survey and collection of data from the practical construction process;

b/ Sending norm determination results to specialized construction agencies for review and improvement of the system of construction norms specified in Article 20 of this Decree and subsequent updating to databases specified in Article 28 of this Decree.

6. When requested by project owners, the Ministry of Construction shall guide and give opinions on new cost estimate norms while norm-issuing agencies shall guide and give opinions on adjusted cost estimate norms specified in Clauses 4 and 5 of this Article.

7. Project owners may hire cost management consultancy organizations that fully satisfy the capacity conditions specified in the Decree detailing a number of provisions on management of construction investment projects to determine and verify the norms specified in Clause 5 of this Article.

Article 22. Review and updating of construction norms promulgated by competent state management agencies

1. The Ministry of Construction, ministries managing specialized construction works and provincial-level People’s Committees shall review, guide the application of, and refer to, promulgated or announced construction norms according to their competence before the effective date of this Decree on the following principles:

a/ Completing the review of norms and annulling norms that are no longer suitable, and promulgating norms not required to be adjusted before June 30, 2021;

b/ Organizing surveys and determining norms required to be adjusted or supplemented and promulgating them before December 31, 2021;

c/ During the period of organizing the review, survey and adjustment of norms, guiding the application of and reference to norms they have announced or promulgated according to their competence and other necessary instruments for formulation and management of construction investment costs.

2. Construction norms promulgated by the Ministry of Construction, ministries managing specialized construction works or provincial-level People’s Committees shall be reviewed and updated every 3 years from the date they are promulgated or earlier when necessary.

3. The Ministry of Construction shall organize and urge the review and updating of all construction norms and promulgate regulations and guidelines for review and updating of construction norms.

4. Ministries managing specialized construction works and provincial-level People’s Committees shall review, update and issue cost estimate norms specified in Clause 6, Article 20 as follows:

a/ Determining the list of, and making plans to review, annual norms and sending them to the Ministry of Construction for coordinated monitoring and inspection in the course of implementation;

b/ Assigning their attached specialized construction agencies to carry out the review or hiring organizations and individuals that fully satisfy capacity conditions for operation and practice as specified in the Decree detailing a number of provisions on management of construction investment projects to review and determine new norms and adjusted norms for submission to competent authorities for promulgation under regulations;

c/ Deciding on promulgation of norms after consulting the Ministry of Construction as specified in Clause 7, Article 20 of this Decree and sending them to the Ministry of Construction for summarization and updating to the database.

5. Specialized construction agencies shall, as delegated, summarize results of formulation of the norms specified in Clauses 4 and 5, Article 21 of this Decree and norms specified in Clause 6 of this Article and send them to the Ministry of Construction (for new cost estimate norms) or norm-promulgating agencies (for adjusted cost estimate norms) to serve the review, consideration and decision on updating of the system of norms.

6. Organizations and individuals are encouraged to self-organize the determination of new cost estimate norms and adjusted cost estimate norms and send results to specialized construction agencies to serve state management.

Article 23. Funds for review, updating, formulation and adjustment of construction norms

1. Funds for review and updating of construction norms by the Ministry of Construction, ministries managing specialized construction works or provincial-level People’s Committees include funds for planning and review organization; survey, determination and appraisal; and updating of new norms and adjusted norms. These funds shall be annually allocated from the state budget.

2. Funds for formulation of new norms and adjustment of norms specified in Clauses 4 and 5, Article 21 of this Decree shall be included in a project’s construction investment costs.

Section 2

WORK CONSTRUCTION PRICES AND CONSTRUCTION PRICE INDEXES

Article 24. Work construction prices

1. Work construction prices include detailed construction unit prices and general construction prices used as a basis for the determination of total construction investment and construction cost estimates.

a/ Detailed construction unit prices shall be determined for construction jobs;

b/ General construction prices shall be determined for different groups and types of construction jobs, structure units or work items.

2. Detailed construction unit prices of a work shall be determined on the basis of construction norms, prices of supplies, materials and building components, labor cost, machine shift and construction equipment costs, and other necessary costs that match market prices in the work construction area at the time of determination and must comply with other relevant regulations or based on work construction unit prices announced by provincial-level People’s Committees, or on the basis of market prices or similar prices of built works.

3. General construction prices of a work shall be determined on the basis of detailed construction unit prices for a unit of calculation of construction jobs, structure units or work items or according to prices announced by competent state agencies, or on the basis of market prices or similar prices of built works.

Article 25. Construction investment ratio

1. Construction investment ratio is the necessary cost for a unit of calculation by area, volume, length or capacity or service capacity of a work according to the design, which may be used as a basis for determination of preliminary total construction investment and total construction investment.

2. Construction investment ratio includes construction costs; equipment costs; project management expenses; construction investment consultancy expenses; other cost items and value-added tax for above-mentioned costs/expenses. Construction investment ratio does not include contingency amounts and costs for performance of a number of jobs to meet specific requirements of a project or work.

Article 26. Management of work construction prices and construction investment ratio

1. The Ministry of Construction shall guide methods of determining work construction prices and construction investment ratio and periodically announce general construction prices and construction investment ratio.

2. Provincial-level People’s Committees shall announce work construction unit prices to be applied in their localities; and delegate or authorize provincial-level Departments of Construction to announce information on construction prices in their localities in accordance with Points a and b of this Clause as follows:

a/ Prices of construction materials and work equipment shall be announced on a quarterly basis or earlier when necessary;

b/ Unit labor, construction machinery and equipment shift costs and expenses for hiring construction machinery and equipment shall be announced on an annual basis or earlier when necessary.

3. Project owners shall use the work construction prices specified in Clauses 1 and 2 of this Article as a basis for determining total construction investment and construction cost estimates and managing construction investment costs, or organize the determination of work construction prices in conformity with technical requirements, construction conditions, construction methods and specific implementation plans of works.

4. Project owners may hire construction investment cost management consultants that fully satisfy capacity conditions for operation and practice as specified in the Decree detailing a number of provisions on management of construction investment projects to perform jobs or job items related to the determination and verification of work construction prices specified in Clause 3 of this Article.

5. Funds for collection of data, determination and announcement of work construction prices, and provision of information on prices and construction investment ratio specified in Clauses 1 and 2 of this Article shall be annually allocated from the state budget.

Article 27. Construction price indexes

1. Construction price indexes are criteria showing chronological changes in construction prices and serving as a basis for determination and adjustment of preliminary total construction investment, total construction investment, construction cost estimates, prices of construction bidding packages, and prices of construction contracts, conversion of work construction investment funds, and management of construction investment costs.

2. Construction price indexes include construction price indexes based on work types, cost structure (including price index for construction, price index for equipment and price index for other costs), and cost items (including price index for work construction materials, labor cost index, and construction machinery and equipment cost index), and price indexes for main materials.

3. The formulation and announcement of construction price indexes are specified as follows:

a/ The Ministry of Construction shall guide methods of determination of construction price indexes; and determine and announce national construction price indexes on an annual basis;

b/ Provincial-level Departments of Construction shall organize determination of construction price indexes to be applied in their localities by methods guided by the Ministry of Construction (including all the price indexes specified in Clause 2 of this Article) for use as a basis for provincial-level People’s Committees to announce or delegate or authorize provincial-level Departments of Construction to announce on a quarterly basis and on an annual basis or earlier when necessary; and send them to the Ministry of Construction for monitoring and management.

4. In case construction price indexes are used to adjust construction contract prices, for works not included in the list of construction price indexes announced by the Ministry of Construction or provincial-level People’s Committees, project owners shall organize the determination of price indexes according to methods guided by the Ministry of Construction, and send them to the Ministry of Construction (for works to be built along lines in 2 or more provincial-level administrative units) or to provincial-level People’s Committees (for works to be built in a provincial-level administrative unit) for the latter to give opinions on suitability of methods of determination of construction price indexes, and correctness and rationality of the determination of price indexes.

5. Project owners may hire cost management consultants that fully satisfy capacity conditions for operation and practice as specified in the Decree detailing a number of provisions on management of construction investment projects to calculate construction price indexes specified in Clause 4 of this Article.

6. Expenses for collection of data, and determination and announcement of construction price indexes specified in Clause 3 of this Article shall be annually allocated from the state budget.

Section 3

DATABASE ON CONSTRUCTION NORMS, WORK CONSTRUCTION PRICES AND CONSTRUCTION PRICE INDEXES

Article 28. Database system on construction norms, work construction prices and construction price indexes

1. The database system on construction norms, work construction prices and construction price indexes (below referred to as the database system) constitutes part of the national information and database system on construction activities under the Construction Law, including:

a/ Information and data on construction norms, work construction prices, construction investment ratio and construction price indexes promulgated or announced by competent state agencies;

b/ Database on construction investment projects and construction contracts collected through investigations and surveys or provided by organizations and individuals under the mechanism for coordination and information sharing and the periodical statistical reporting regime as provided by law;

c/ Database on prices of construction services, construction products, and construction materials and equipment, and other relevant information provided by organizations and individuals engaged in construction activities or collected through investigations and surveys.

2. The Ministry of Construction shall establish, manage and operate the database system nationwide, and act as the focal point for connecting database systems of ministries managing specialized construction works and localities; and provide information and data in the database system to serve state management work and at the request of organizations and individuals to formulate and manage construction investment costs in accordance with law.

3. Ministries managing specialized construction works and provincial-level People’s Committees shall establish, manage and operate the database system to serve the state management of construction investment costs in their sectors and localities.

4. Principles of establishing and managing the database system:

a/ The database system must ensure synchronous connection and compliance with law; promptly serve state management and meet of socio-economic development requirements;

b/ Information and data to be updated to the database system shall be checked, reviewed, evaluated and classified as appropriate;

c/ The collection or addition of information and data must ensure that it does not lead to overlap of tasks; there must be close coordination in the collection of information and data; and it is required to make the fullest use of available information and data sources;

d/ Information and data already checked, processed and updated under regulations in the database system are as legally valid as written records and documents;

dd/ Agencies, organizations and individuals shall take legal responsibility for information and data they have provided and updated to the database system.

Article 29. Management of the database system

1. The Ministry of Construction shall establish, manage, operate and comprehensively control the database system nationwide, specifically as follows:

a/ To formulate a regulation on management, exploitation and use of the database system; to grant and manage accounts for login to the database system; to control contents updated, adjusted and posted to the database system;

b/ To guide contents and methods of establishing the database (including information and data collection, synthesis, processing, updating and storage);

c/ To guide the exploitation and use of the database system;

d/ To build a complete code system and application software system to manage the database system.

2. Ministries managing specialized construction works shall summarize and provide cost estimate norms for specific construction jobs of their sectors; and work construction prices and prices of building materials, labor, and construction machinery and equipment of their sectors, and send them to the Ministry of Construction for updating to the database system.

3. Provincial-level People’s Committees shall summarize and provide cost estimate norms for specific construction jobs in their localities; and work construction prices, prices of building materials, labor and construction machinery and equipment, and construction price indexes in their localities and send them to the Ministry of Construction for updating to the database system.

4. Investment deciders for projects using public investment funds or state capital other than public investment funds shall direct project owners to send information and data related to construction investment costs of projects under their management to the Ministry of Construction for updating to the database system.

5. Funds for the establishment, management and operation of the database system and the collection, synthesis, processing and updating of information shall be annually allocated from the state budget and other lawfully mobilized funding sources.

Chapter V

PROJECT MANAGEMENT EXPENSES AND CONSTRUCTION INVESTMENT CONSULTANCY EXPENSES

Article 30. Project management expenses

1. Project management expenses shall be used to manage the performance of and to perform the following jobs:

a/ To manage the performance of the following jobs: supervision of construction survey; selection of work architectural designs or selection of work architectural design plans; ground clearance compensation, support and resettlement work falling under the responsibility of project owners; formulation and verification of construction investment feasibility study reports or construction investment techno-economic reports; formulation and verification of construction designs to be implemented following base designs and construction cost estimates; selection of contractors in construction activities; management of quality, volume, progress, construction costs and construction contracts; work information system management; information and data collection and provision serving construction investment cost management at the request of competent state agencies; assurance of occupational safety and environmental sanitation of works; determination of new cost estimate norms and adjustment of cost estimate norms for works; determination of work construction prices and work construction price indexes; examination of quality of materials, components, construction products and equipment installed in works; inspection of quality of work parts, work items or the whole works and specialized construction testing as required; control of construction investment costs; formulation of preliminary environmental impact assessment reports and environmental impact assessment reports, environmental monitoring and supervision in the course of construction in accordance with the law on environmental protection; conversion of work construction investment capital after a work is completed, tested for acceptance, handed over and put into use; pre-acceptance test, payment and liquidation of contracts; payment and account-finalization of work construction investment capital; investment monitoring and evaluation; pre-acceptance test and handover of works; commencement of construction and inauguration (if any), promotion and advertising, and management of performance of other necessary jobs to serve project management;

b/ To perform the following jobs: investment monitoring and evaluation; appraisal of construction designs implemented following base designs and appraisal of construction cost estimates; determination of cost estimates of construction bidding packages (in case work construction cost estimates have been approved), and other necessary jobs falling under project owners’ responsibility.

2. Project management expenses include salaries of project managers; wages for contractual employees; salary-based allowances; bonuses; collective welfare; contributions (social insurance, health insurance and unemployment insurance premiums; trade union dues, and other deductions as specified by law for persons salaried by projects); expenses for science and technology application and capacity building training for project managers; payment of public service charges; expenses for supplies and stationery; public information and communication; and organization of relevant conferences; work-trip allowances; expenses for hiring, repair and procurement of assets serving project management; other expenses and contingency amounts.

3. Project management expense is the maximum expense for management of a project in accordance with approved time and scope of jobs of the project, which shall be determined in percentage (%) or by estimation as suitable to the form of project management, project implementation duration, and scope and characteristics of project management jobs. Project management expenses shall be managed on the basis of cost estimates annually determined in conformity with project management tasks and jobs performed and relevant regimes and policies. Project management expenses may only be adjusted when there is a change in the scope of project management jobs or, project implementation schedule, or in case of adjustment of projects.

4. In case of hiring project management consultants, project management consultancy expenses shall be determined by estimation based on contents and volumes of project management jobs as agreed upon by project owners and consultants in project management consultancy contracts.

5. In case general contractors performing EPC contracts perform a number of project management jobs under the responsibility of project owners, they may be entitled to part of project management expenses corresponding to the scope and volume of project management jobs assigned by project owners and agreed upon in general contractor contracts.

6. Total project management expenses for jobs performed by project owners and project management expenses for jobs performed by project management consultants or general contractors as specified in Clauses 4 and 5 of this Article must not exceed project management expenses determined and approved in accordance with law.

Article 31. Construction investment consultancy expenses

1. Construction investment consultancy jobs include:

a/ Formulation of tasks, construction survey technical plans and designing tasks; performance and supervision of construction survey; making of construction investment prefeasibility study reports (if any), reports on investment policy proposal (if any), construction investment feasibility study reports or construction investment techno-economic reports;

b/ Verification of construction investment prefeasibility study reports (if any), construction investment feasibility study reports or construction investment techno-economic reports; verification of technological designs of projects (if any); verification of ground clearance compensation, support and resettlement plans; contests for architectural plan selection; work construction designs; and verification of work construction designs and construction cost estimates;

c/ Formulation and appraisal of dossiers of invitation for expression of interest, dossiers of invitation for prequalification, bidding dossiers and requirement dossiers, and evaluation of dossiers of expression of interest, prequalification participation dossiers, bid dossiers and dossiers of proposals to select contractors in construction activities; appraisal of contractor selection results in construction activities; construction supervision and equipment installation supervision;

d/ Formulation and verification of construction norms, work construction prices and work construction price indexes; traffic safety verification; and application of building information model (BIM);

dd/ Project management consultancy (in case of hiring consultants); specialized construction testing; inspection of quality of construction materials, components and products and equipment installed in works at the request of project owners (if any); inspection of quality of work parts, work items or the whole works (if any); and supervision and evaluation of work construction investment projects (in case of hiring consultants);

e/ Making of preliminary environmental impact assessment reports and environmental impact assessment reports, environmental monitoring and supervision in the course of construction in accordance with the law on environmental protection;

g/ Conversion of work construction investment capital after works are completed, tested for acceptance, handed over and put into use (if any);

h/ Other related consultancy jobs.

2. Construction investment consultancy expenses include expenses for consultants (salaries, salary-based allowances, bonuses, collective welfare, social insurance, health insurance and unemployment insurance premiums, trade union dues, and other deductions as specified by law for individual consultants); expenses for science and technology application, management of information systems of works; payments for public service charges, supplies and stationery, and information and communication; expenses for hiring, repair and procurement of assets serving consultancy (if any); management expenses of consultancy organizations; other expenses; presumed taxable incomes, value-added tax, and contingency amounts. Particularly, expenses for construction survey and specialized construction testing include the expense items specified in Clause 2, Article 12 of this Decree and other related expenses (if any).

3. Construction investment consultancy expenses shall be determined in percentage (%) norms issued by the Ministry of Construction or by estimation based on scope and volume of to-be-performed consultancy jobs, bidding package implementation plans and the State’s regimes and policies.

4. Approved construction investment consultancy expenses are maximum expenses for construction investment consultancy jobs and may only be adjusted upon a change in the scope, or conditions and schedule of performance, of these jobs. Construction investment consultancy expenses shall be managed through construction consultancy contracts.

5. In case owners or management units of construction investment projects fully satisfy law-specified capacity conditions to perform a number of construction investment consultancy jobs, expenses for performance of such activities may be added to project management expenses.

6. Expenses for hiring foreign consultants to perform a number of types of consultancy jobs must comply with Article 32 of this Decree.

Article 32. Expenses for hiring foreign consultants

1. Investment deciders shall decide on hiring of foreign consultants in accordance with the bidding law.

2. Expenses for hiring foreign consultants shall be determined in conformity with the type of consultancy jobs on the basis of the number and qualification of consultancy experts, working duration of experts, wages of experts applied by the country and the region where they are expected to be hired, and other necessary expenses to complete consultancy jobs.

3. Expenses for hiring foreign consultants shall be determined on the basis of cost estimates or the database on expenses for hiring foreign consultants of similar works and projects in Vietnam. Cost estimates for hiring foreign consultants means all necessary expenses estimated for completing the hired construction consultancy services, including expenses for experts, management expenses, other related expenses, presumed taxable incomes, contingency amounts, and payable tax amounts as specified by law.

4. Cost estimates for hiring foreign consultants shall be appraised by specialized agencies attached to investment deciders and submitted to investment deciders for approval. For a project in which investment is decided by the Prime Minister, the superior management agency of the project owner shall appraise and approve its cost estimates for hiring foreign consultants.

5. Methods of determining expenses for hiring foreign consultants must comply with the Minister of Construction’s regulations.

Chapter VI

PAYMENT AND LIQUIDATION OF CONSTRUCTION CONTRACTS AND PAYMENT AND SETTLEMENT OF CONSTRUCTION INVESTMENT FUNDS

Article 33. Payment and liquidation of construction contracts

The payment and liquidation of construction contracts must comply with the Decree providing in detail construction contracts.

Article 34. Payment of construction investment funds

1. Payment and time limit for payment of construction investment funds:

a/ For projects using public investment funds, the law on public investment shall apply;

b/ For projects using state capital other than public investment funds and PPP projects, relevant laws shall apply.

2. Project owners or their lawful representatives shall take responsibility for the value requested for payment in payment request dossiers under regulations; investment fund-paying agencies are not required to take responsibility for the accuracy of such value. In the process of making payment, if detecting errors in payment request dossiers, investment fund-paying agencies shall notify such in writing to project owners or their lawful representatives for supplementing and completing the dossiers.

3. Investment fund-paying agencies and project owners are prohibited from setting illegal requirements in payment of construction investment funds.

Article 35. Settlement of construction investment funds

1. The settlement of construction investment funds for construction investment projects shall be carried out after such projects are completed, handed over and put into use or permanently terminated after competent authorities issue documents on stoppage or permitting termination of such projects.

2. To-be-settled investment funds of a project must be within its total construction investment amount approved or adjusted in accordance with law.

3. To-be-settled investment funds of a project are all lawful expenses spent during construction investment to put the project’s works into operation or use. Lawful expenses cover all expense items spent within the scope of the project according to its approved designs and cost estimates and construction contracts signed in accordance with law, including also approved adjustments and additions. Particularly, PPP projects must comply with the law on investment in the form of PPP.

4. Contractors shall make dossiers for liquidation of contracts signed with project owners under regulations on construction contracts as a basis for settlement of investment funds.

5. Project owners shall settle construction investment funds within approved total investment amounts of their projects; and make dossiers for settlement of construction investment funds and conversion of construction investment funds for submission to investment deciders for approval within 9 months after pre-acceptance test records of the projects’ works are signed and the works are handed over and put into operation or use. When it is necessary to immediately settle construction investment funds of independent work items or works under a project with different works completed, handed over and put into operation or use, project owners shall report such to investment deciders for consideration and decision.

6. Agencies in charge of verifying and approving final accounts of construction investment funds shall verify and approve such final accounts within 9 months after receiving a complete dossier for settlement under regulations.

7. Within 6 months after obtaining a decision approving final accounts of its/his/her completed project, the project owner shall settle all liabilities and the project’s account at the investment fund-paying agency. In case a completed project has its final account approved but has not received sufficient investment funds, the project owner shall report such to the investment decider and related agencies for the latter to allocate sufficient funds for settlement of liabilities and the project’s account under regulations.

8. For construction investment projects using public investment funds, after the end of a fiscal year, their owners shall settle the use of investment funds in such fiscal year under the Ministry of Finance’s regulations.

9. Project owners that delay the settlement under Clause 5 of this Article shall be handled under the law on sanctioning of administrative violations in construction investment activities.

10. Competence to approve final accounts of investment funds:

a/ For national important projects and other important projects in which investment is decided by the Prime Minister, superior management agencies of project owners shall approve final accounts of component projects using public investment funds and component projects using state capital other than public investment funds;

b/ For other projects, investment deciders are competent to approve or may authorize others to approve final accounts of projects upon completion.

c/ For PPP projects, the law on investment in the form of PPP shall apply.

Chapter VII

RIGHTS, OBLIGATIONS AND RESPONSIBILITIES OF INVESTMENT DECIDERS, PROJECT OWNERS AND CONSTRUCTION CONTRACTORS IN MANAGEMENT OF CONSTRUCTION INVESTMENT COSTS

Article 36. Rights and responsibilities of investment deciders

1. To exercise the rights and perform the responsibilities of investment deciders as specified in Article 72 of the Law on Construction and Clause 22, Article 1 of the Law Amending and Supplementing a Number of Articles of the Law on Construction, and have the competence provided in this Decree and relevant laws.

2. To decide on prices of bidding packages in contractor selection plans, and on types and forms of contract.

Article 37. Rights and obligations of project owners

1. To exercise the rights and perform the obligations of project owners as specified in Article 68 of the Law on Construction, and have the competence specified in this Decree and relevant laws.

2. To approve proposals of engineering consultants or construction contractors concerning changes in supplies, construction materials, construction methods and technical requirements provided that such changes meet technical, aesthetic, quality, schedule and safety and environmental protection requirements as agreed upon in signed construction contracts in accordance with the law on construction contracts and objectives of projects.

3. To strictly manage and properly use funds allocated for projects; to control construction investment expenses so that they do not exceed the total construction investment amount in accordance with regulations, ensuring progress and efficiency of projects.

4. To perform several construction investment consultancy jobs when fully meeting law-specified capacity conditions.

5. To provide information and data of projects at the request of state management agencies; to coordinate with, or collect information on expense management at the request of, state management agencies.

6. To make advance payment and payment for, and liquidate, contracts signed with contractors under contractual terms.

7. To buy insurance for works for which insurance is required or authorize contractors to buy insurance via construction contracts.

8. To pay fines from project management expenses when being sanctioned for administrative violations in construction investment activities.

Article 38. Rights and obligations of consultancy contractors performing construction investment cost management jobs

1. Consultancy contractors have the rights and obligations stated in consultancy contracts for performance of construction investment cost management jobs specified in the Decree detailing a number of provisions on management of construction investment projects and relevant laws.

2. To request project owners to provide information and documents related to their assigned consultancy tasks.

3. To take responsibility for contents, quality and progress of consultancy jobs they perform; to provide information and data on cost management of projects at the request of state management agencies and project owners.

4. To be entitled to protection of intellectual property rights for their consultancy products in accordance with law.

5. To refuse to comply with illegal requests of project owners.

6. To compensate for damage caused by their failure to comply with the law on management of construction investment costs and damage caused to project owners for their breach of contracts.

Article 39. Rights and obligations of construction contractors

1. Construction contractors have the rights and obligations specified in construction contracts and other relevant laws.

2. To decide on cost estimate norms, work construction prices and other relevant costs when determining bids for participation in bidding;

3. To propose to and agree with project owners on construction norms and work construction prices for arising jobs as stated in construction contracts, provided that they comply with regulations on management of construction investment costs and construction contracts.

4. To coordinate with project owners in conducting surveys to determine adjusted norms and new norms (if any) in the course of construction as specified at Point a, Clause 5, Article 21 of this Decree.

5. To provide information and data of projects at the request of state management agencies; to coordinate with, or collect information and data on construction investment costs at the request of, state management agencies.

6. To compensate for damage caused by their failure to comply with the law on management of construction investment costs and damage caused to project owners for their breach of contracts.

Chapter VIII

STATE MANAGEMENT OF CONSTRUCTION INVESTMENT COSTS

Article 40. The Ministry of Construction

1. To perform the unified state management of construction investment costs.

2. To guide the contents and methods of determination, management, and control of work construction investment costs, including preliminary total construction investment, total construction investment, construction cost estimates, construction norms, work construction prices, work construction investment ratios, construction price indexes, unit labor costs, prices of construction machine shifts and construction equipment, measurement of construction volumes, conversion of work construction investment funds, and construction investment consultancy expenses.

3. To issue construction norms; and publicize work construction investment ratios and general construction prices; national construction price indexes, shrinkage norms and basic data for calculating machine shift costs. To regularly review norms and summarize the results of review for adjustment and supplementation of norms for issuance according to regulations.

4. To assume the prime responsibility for building, guiding and operating a system of databases on construction norms, work construction prices, and construction price indexes.

5. To inspect and examine the implementation of regulations on management of construction investment costs.

Article 41. The Ministry of Planning and Investment

1. To assume the prime responsibility for, and coordinate with related agencies in, appraising funding sources of and fund allocation capacity for construction investment projects using public investment funds; to summarize and submit to the Government and Prime Minister for promulgation national medium-term and annual public investment plans.

2.  To supervise and assess the investment of, and examine and inspect projects using public investment funds in accordance with law.

Article 42. The Ministry of Finance

1. To prescribe the management and use of revenues from project consultancy and management activities of owners and management units of projects using public investment funds.

2. To inspect and examine the payment and settlement of construction investment funds of completed works or projects.

Article 43. Ministries managing specialized construction works and provincial-level People’s Committees

1. Ministries managing specialized construction works shall:

a/ Based on the Ministry of Construction-guided methods of formulating construction norms, formulate and issue construction norms applicable to specialized particular construction works;

b/ Periodically review the construction norms they have issued and report newly issued and adjusted norms to the Ministry of Construction for monitoring and management under regulations.

2. The Ministry of National Defense shall prescribe methods of determining cost estimates for deactivating bombs, mines and explosives after reaching agreement with the Ministry of Construction.

3. Provincial-level People’s Committees shall:

a/ Guide the formulation and management of construction investment costs; and examine the implementation of regulations on management of construction investment costs in their localities;

b/ Based on the Ministry of Construction-guided methods of formulating construction norms, formulate and issue construction norms applicable to particular construction works of their localities.

c/ Periodically review the construction norms they have issued and report newly issued and adjusted norms to the Ministry of Construction for monitoring and management under regulations;

d/ Publicize work construction unit prices of their localities; publicize or delegate or authorize provincial-level Departments of Construction to publicize construction price indexes; delegate or authorize provincial-level Departments of Construction to publicize prices of construction materials and work construction machines, unit labor costs, prices of construction machine shift and construction equipment, and rates for hiring construction machine and equipment;

dd/ Allocate annual budgets for construction, and issue and publicize information and data prescribed at Point b of this Clause.

Chapter IX

IMPLEMENTATION PROVISIONS

Article 44. Transitional provisions

1. For construction investment projects which have been submitted for appraisal before January 1, 2021, in accordance with the 2014 Law on Construction but total investment appraisal results are not available before this Decree takes effects, the appraisal shall be further carried out in accordance with the 2014 Law on Construction and its guiding documents while construction investment cost management activities must comply with this Decree.

2. For construction investment projects for which total investment appraisal results have become available but not yet approved before the effective date of this Decree, re-appraisal is not required but upcoming construction investment cost management activities must comply with this Decree.

3. For construction investment projects which have been approved before the effective date of this Decree but no jobs in the stage of project implementation have been performed (for projects requiring selection of contractors, this means bidding dossiers or dossiers of requirements are not yet issued), upcoming construction investment cost management activities must comply with this Decree.

4. For construction investment projects which have been approved before the effective date of this Decree and under which one or more than one job in the stage of the project implementation stage has been or is being carried out, the application of regulations of construction investment cost management for the jobs which have not been carried out is as follows:

a/ The appraisal contents and competence to appraise and approve construction investment costs must comply with this Decree and decrees detailing a number of contents on management of construction investment projects;

b/ The determination and management of construction investment costs (other than those prescribed at Point a of this Clause) must comply with the law on management of construction investment costs applicable to the projects;

c/ The transition must apply and refer to the construction norms specified in Clause 5 of this Article.

5. Construction norms systems already issued and publicized by competent agencies shall be applied and referred to for determining construction investment costs in accordance with the law on management of construction investment costs applicable to the projects until the construction norms systems specified at Points a and b, Clause 1, Article 22 of this Decree are issued and take effect.

6. The systems of work construction prices and construction price indexes already publicized by competent agencies before the effective date of this Decree shall be referred to, and used for determining construction investment costs until the systems of work construction prices and construction price indexes are publicized under Articles 26 and 27 of this Decree. Provincial-level People’s Committees shall update and guide the use of work construction unit prices when the systems of norms specified at Points a and b, Clause 1, Article 22 of this Decree are issued by competent agencies.

7. Methods of determining construction investment costs issued before the effective date of this Decree shall be further used to determine construction investment costs of projects for which project preparation jobs are being carried out and the projects specified in Clauses 1, 2, and 3 of this Article until the methods specified in Clause 2, Article 40 of this Decree take effect.

8. After the systems of construction norms, construction prices, and methods of determining construction investment costs are issued and publicized by competent agencies, and takes effect under this Decree, the updating of construction investment costs shall be as follows:

a/ The total construction investment amounts which have been appraised or approved are not subject to re-appraisal or re-approval. Project owners shall determine construction cost estimates according to the issued and publicized systems of construction norms, construction prices, and methods of determining construction investment costs under regulations;

b/ Construction cost estimates which have been appraised or approved  are not subject to re-appraisal or re-approval.

c/ For bidding packages of which bidding dossiers or dossiers of requirements are not yet issued before the systems of construction norms, construction prices, methods for determining construction investment costs are issued, publicized and take effect, project owners shall update the bidding package estimates for re-determining the bidding package prices in the approved contractor selection plan, which serves as a basis for contractor selection in accordance with the bidding law;

d/ For bidding packages of which bidding dossiers or dossiers of requirements have been issued but the bidding packages have not yet been closed, project owners shall consider and decide the updating of the bidding package estimates for re-determining the bidding package prices serving contractor selection in accordance with the bidding law. In case the bidding packages have been closed, bidding dossiers, dossiers of requirements, bid dossiers, and dossiers of proposals without having to update the bidding package prices;

dd/ When necessary, investment deciders and project owners shall decide on the updating, appraisal, and approval of the total construction investment amounts specified at Point a of this Clause; and construction cost estimates specified at Point b of this Clause according to their competence;

e/ In case the updated and re-determined total construction investment amounts, construction cost estimates, and construction biding package prices specified at Points c, d, and dd of this Clause excess the approved total construction investment amounts and construction cost estimates, the appraisal and approval of the adjusted total construction investment amounts and construction cost estimates must comply with regulations.

Article 45. Organization of implementation

1. Ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of provincial-level People’s Committees, heads of political organizations, socio-political organizations and socio-political-professional organizations, and related organizations and individuals shall implement this Decree.

2. The Ministry of Construction shall assume the prime responsibility for, and coordinate with related ministries and sectors in, guiding the implementation of this Decree.

Article 46. Effect

This Decree takes effect on the date of its signing and replaces the Government’s Decree No. 68/2019/ND-CP of August 14, 2019, on the management of construction investment costs.-

On behalf of the Government
Prime Minister
NGUYEN XUAN PHUC