Circular No. 02/2023/TT-BXD guiding certain contents regarding construction contracts

CIRCULAR

GUIDELINES ON CERTAIN ASPECTS OF CONSTRUCTION CONTRACTS

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Pursuant to the Law on Construction dated June 18, 2014; the Law Amending and Supplementing Certain Provisions of the Law on Construction dated June 17, 2020;

Pursuant to Decree No. 52/2022/NĐ-CP on the functions, tasks, powers, and organizational structure of the Ministry of Construction dated 08 the 8 year 2022 of the Government stipulating GUIDELINES ON CERTAIN ASPECTS OF CONSTRUCTION CONTRACTS.;

Pursuant to Decree No. 37/2015/ND-CP dated April 22, 2015 of the Government detailing construction contracts;

Pursuant to Decree No. 50/2021/ND-CP dated April 1, 2021 amending and supplementing certain provisions of Decree No. 37/2015/ND-CP dated April 22, 2015 of the Government detailing construction contracts;

Article 1. Amending and supplementing certain articles of Circular No. 11/2021/TT-BXD dated August 31, 2021, issued by the Minister of Construction guiding certain contents on determining and managing construction investment costs

The Minister of Construction issues this Circular hThis Circular provides detailed guidelines on certain aspects of construction contracts; publishes and guides the use of model construction works contracts, model construction consultancy contracts, and model Design-Buy-Supply-Construct (EPC) project contracts.

Article 1. Scope of application

1. This Circular applies to organizations and individuals involved in establishing and managing the implementation of construction contracts for investment projects using public funds, state funds outside public investment, and construction contracts between project enterprises and contractors implementing tender packages under public-private partnership investment projects.

Article 2. Applicability

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

2. For construction contracts under projects utilizing official development assistance funds or preferential loans arising from international treaties to which Vietnam is a party, if there are different provisions from those stipulated in this Circular, such contracts shall be implemented according to the provisions of those international treaties.

Payment, interim payment, and interim payment documentation for construction contracts

Article 3. 1. The payment of construction contracts shall be carried out in accordance with Article 19 of Decree No. 37/2015/NĐ-CP.

2. In cases where large components, semi-finished products, or construction materials that must be stored seasonally are temporarily advanced for production and implementation in accordance with Clause 7, Article 18 of Decree No. 37/2015/NĐ-CP, the interim advance application form must list the itemized catalog, unit prices, and total value of each type of material, component, or semi-finished product. When making payments, the corresponding completed volume value accepted upon inspection must be deducted from the previously advanced amount according to the contract terms.

3. Interim payments made in accordance with Clause 4, Article 19 of Decree No. 37/2015/NĐ-CP shall be based on specific conditions of each interim payment to determine the interim payment value and security measures for interim payments, ensuring efficiency and preventing capital loss. Some specific cases are as follows:

a) For adjustable unit price contracts, when it is time to make payments but there is no data to adjust the unit price or contract price, the unit price in the contract shall be used for interim payments.

b) For products, work items, or tasks that are still under construction and have not been completed as required by the contract, the degree of completion for each specific case and the detailed unit price of the product, work item, or task in the contract shall be used to make interim payments.

4. For products, work items, or tasks that have not been completed due to various reasons, including the termination of the contract or one of the parties failing to accept the product, the responsibility and obligations of each relevant subject must be clearly determined before making payments.

5. The interim payment documentation includes: Inspection Record of Volume or Confirmation Record of Volume (if not yet meeting the conditions for inspection), Calculation Table of Value of New Payments (increase or decrease), Calculation Table of Interim Payment Value, and Request for Interim Payment.

5. The provisional payment file includes: The Quantity Acceptance Certificate or the Quantity Confirmation Certificate (if the conditions for acceptance have not yet been met), the Calculation Table of the Value of Additional or Reduced Payments, the Provisional Payment Value Calculation Table, and the Provisional Payment Request.

Article 4. Adjustment of Work Volume in Construction Contracts

1. The adjustment of work volume in construction contracts shall be carried out in accordance with the provisions of Article 37 of Decree No. 37/2015/NĐ-CP amended and supplemented by Clause 13, Article 1 of Decree No. 50/2021/NĐ-CP.

2. The adjustment of work volume among members of a joint bidding consortium that does not change the construction contract price shall be decided by the investor based on the agreement and consensus of the consortium members, their capacity and experience, ensuring safety, quality, efficiency, and progress of the contract.

Article 5. Adjustment of Contract Implementation Schedule in Construction Contracts

1. The adjustment of contract implementation schedule in construction contracts shall be carried out in accordance with the provisions of Article 39 of Decree No. 37/2015/NĐ-CP.

2. When adjusting the contract implementation schedule as stipulated in point a, Clause 2, Article 39 of Decree No. 37/2015/NĐ-CP, the Tenderer and Bidder shall have the responsibility to assess the impact of force majeure events on the contract implementation schedule to determine and decide on appropriate adjustments.

3. In cases where work is temporarily suspended at the request of the competent state agency as stipulated in point d, Clause 2, Article 39 of Decree No. 37/2015/NĐ-CP, the following actions shall be taken:

a) The Tenderer and Bidder shall base their assessment of the impact of the temporary suspension requested by the competent state agency on the contract implementation schedule to determine and agree on adjustments to the contract implementation schedule.

b) If additional costs arise due to extended contract implementation time, the Tenderer and Bidder shall base their determination and agreement on reasonable cost items arising from the event leading to the temporary suspension of the construction contract on the content of the contract and guidance from the competent state agency.

Article 6. Adjustment of Unit Price and Contract Price in Construction Contracts

1. The adjustment of unit price in construction contracts shall be carried out in accordance with the provisions of Article 38 of Decree No. 37/2015/NĐ-CP amended and supplemented by Clause 14, Article 1 of Decree No. 50/2021/NĐ-CP.

2. When adjusting the contract price in construction contracts leads to the need for contract amendments or supplements, a supplementary contract annex must be signed as the basis for adjusting the contract price. The Investor shall be responsible for approving or submitting for approval the revised budget estimate according to the relevant laws on construction project cost management and construction contracts to serve as the basis for signing supplementary contract annexes.

3. Methods for Adjusting the Contract Price in Construction Contracts

a) The methods for adjusting the contract price in construction contracts shall be implemented in accordance with the guidelines set forth in Appendix I attached hereto. The application of these adjustment methods must be consistent with the nature of the work, type of contract price, currency of payment, and must be agreed upon in the contract.

b) For construction consulting contracts paid on a time basis (monthly, weekly, daily, hourly), the adjustment of the remuneration for experts shall be made according to the formula for adjusting a single labor cost factor specified in Section I of Appendix I attached hereto.

Article 7. Guidelines for Using and Applying Model Construction Contracts

1. The model construction contract published along with this Circular is provided for organizations and individuals to refer to and apply in establishing and managing the implementation of construction tender packages, ensuring compliance with the content of construction contracts as stipulated in Clause 1, Article 141 of the Construction Law No. 50/2014/QH13.

2. The model construction contract published along with this Circular is a contract between the investor and the contractor. In cases where the tenderer is a general contractor or main contractor, the parties should study and apply the necessary contents of this model contract to establish and manage the contract.

3. The model construction contract published along with this Circular includes:

a) The model construction consulting contract in Appendix II attached hereto, applicable to contracts for feasibility studies, construction surveys, design, and construction supervision.

b) The model construction execution contract in Appendix III attached hereto.

c) The model EPC contract in Appendix IV of this Circular, applicable to turnkey contracts. In cases where fixed unit price contracts, adjustable unit price contracts, or combined price contracts are applied, the parties shall base their modifications and supplements to the EPC model contract terms on the relevant laws and this Circular to establish the contract.

4. For simple small-scale contracts, investment consulting contracts, and other mixed contracts, the parties may refer to and apply the model construction contracts published along with this Circular to adjust, modify, and supplement the contract terms to establish the contract.

5. When using the model construction contracts published along with this Circular to negotiate and sign construction contracts, the parties shall base their actions on the specific requirements and conditions of the tender package and project, the provisions of Decree No. 37/2015/NĐ-CP amended and supplemented by Decree No. 50/2021/NĐ-CP, other relevant laws, and the guidance provided in this Circular. The contract content must specifically agree on the following matters:

a) Specific provisions regarding payment deadlines, contract performance guarantee period, response time for documents, contract termination time, and similar situations.

b) In cases where the contractor is a joint venture, the performance guarantee and advance payment guarantee must be agreed upon in accordance with the law.

c) Specific provisions regarding the type of currency and payment method in the contract must not conflict with the requirements in the tender documents and the foreign exchange regulations.

d) In cases where the contract is a variable unit price contract, the method for adjusting the contract price, data sources, and pricing bases for contract adjustments must be agreed upon without conflicting with the tender documents and construction contract laws.

đ) Depending on the nature and conditions of the tender package, the contract content should be adjusted and supplemented accordingly.

Article 8. Transitional Provisions

1. Construction contracts signed and being implemented before the effective date of this Circular shall be implemented in accordance with the provisions of construction contracts prior to the effective date of this Circular.

2. Construction contracts that are currently under negotiation and have not yet been signed shall report to the authorized investment decision-making authority for examination and decision on the principle of ensuring the quality, progress, effectiveness of the construction investment project and without harming the rights and legitimate interests of the parties if they contain any provisions inconsistent with the provisions of this Circular.

3. The contents of construction contracts in tender documents and request for proposal documents that have been approved but not yet issued must be adjusted to comply with the provisions of this Circular. In cases where tender documents and request for proposal documents have already been issued, if the contents related to the contract need to be adjusted, all bidders who have purchased such documents must be notified to adjust the relevant bidding documents and proposal documents. If the tender has already closed, the provisions of Clause 2 of Article 2 of this Circular shall apply.

Article 9. Effective Date

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

2. This Circular replaces Circular No. 07/2016/TT-BXD dated March 10, 2016, guiding the adjustment of construction contract prices issued by the Minister of Construction; Circular No. 08/2016/TT-BXD dated March 10, 2016, guiding certain contents regarding construction consultancy contracts issued by the Minister of Construction; Circular No. 09/2016/TT-BXD dated March 10, 2016, guiding construction works execution contracts issued by the Minister of Construction; and Circular No. 30/2016/TT-BXD dated December 30, 2016, guiding design-supply technology equipment and construction works execution contracts issued by the Minister of Construction./.