Circular No. 04/2010/TT-BXD guiding the preparation and management of construction investment costs

CIRCULAR

Guidelines for Establishing and Managing Construction Investment Costs

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

Based on Decree No. 112/2009/NĐ-CP dated December 14, 2009 of the Government on managing construction investment costs,

The Ministry of Construction provides guidance on certain contents of Decree No. 112/2009/NĐ-CP dated December 14, 2009 of the Government on managing construction investment costs (hereinafter referred to as Decree No. 112/2009/NĐ-CP) as follows:

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

Article 1. This Circular guides the establishment and management of construction investment costs, including: total investment cost for construction projects (referred to as total investment cost), project budget estimates (project budget), construction norms, and construction prices of projects using thirty percent or more state capital, including: state budget capital, official development assistance (ODA) capital, state credit investment development capital, state-guaranteed credit capital, and other state investment capital.

Article 2. For projects using ODA capital, if international treaties to which Vietnam is a member have provisions on managing construction investment costs that differ from those stipulated in this Circular, such provisions shall be implemented according to the provisions of those international treaties.

Article 2. Applicability

Article 1. Organizations and individuals related to the establishment and management of construction investment costs, inspection, examination, auditing, and settlement of investment capital for construction projects using thirty percent or more state capital.

Article 2. It is encouraged for organizations and individuals related to the establishment and management of construction investment costs for projects using less than thirty percent state capital to apply this Circular.

Article 3. Principles for Establishing and Managing Construction Investment Costs

The principles for establishing and managing construction investment costs are stipulated in Article 3 of Decree No. 112/2009/NĐ-CP, wherein when implementing Clause 6 of this Article for inspection, examination, and auditing of construction investment costs, it must ensure consistency in principles, methods, and specific contents regarding the establishment and management of total investment costs, project budgets, construction norms, and construction prices, which have been decided by the investment decision-maker and the investor according to the provisions of Decree No. 112/2009/NĐ-CP and the specific contents of this Circular.

Chapter II

ESTABLISHING CONSTRUCTION INVESTMENT COSTS

Section 1

ESTABLISHING TOTAL INVESTMENT COST

Article 4. Contents of Total Investment Cost

Clause 1. Total investment cost is the estimated cost for implementing an investment construction project, calculated and determined during the project feasibility study phase in accordance with the project content and preliminary design; for cases where only an economic and technical report is prepared, the total investment cost simultaneously serves as the project budget estimate, determined in accordance with the content of the economic and technical report and construction drawings.

Clause 2. Total investment cost is one of the bases for evaluating economic efficiency and selecting investment options; it is the basis for the investor to establish plans and manage capital when implementing construction investment projects.

Clause 3. Specific items of costs within the total investment cost are stipulated in Clause 3 of Article 4 of Decree No. 112/2009/NĐ-CP as follows:

Clause 3.1. Construction costs include: demolition and dismantling costs of existing buildings; land leveling and site preparation costs; construction costs of main structures, temporary structures, and auxiliary structures serving construction; costs of temporary housing at the construction site for living and construction management.

Clause 3.2. Equipment costs include: procurement costs of technological equipment (including equipment requiring production or processing); training and technology transfer costs; installation, testing, and calibration costs of equipment; transportation, insurance, taxes, fees, and other related costs.

Clause 3.3. Compensation, support, and resettlement costs include: compensation costs for houses, structures, crops, and other compensation costs; support payments when the state acquires land; costs associated with resettlement related to land acquisition and clearance for the project; organization costs for compensation, support, and resettlement; land use costs during construction; costs for infrastructure already invested.

Clause 3.4. Project management costs: These are necessary costs for the investor to organize the management of project implementation tasks from the preparatory stage, execution stage, to completion, acceptance, handover, and operation of the project, including:

- Costs for organizing the preparation of investment reports, organizing the preparation of project proposals or economic and technical reports;

- Costs for organizing architectural design competitions or selection of architectural design schemes;

- Costs for organizing the implementation of compensation, support, and resettlement tasks under the responsibility of the investor;

- Costs for organizing the review of investment project proposals or economic and technical reports;

- Costs for organizing the preparation, review, or verification, approval of technical designs, construction drawings, and project budgets;

- Costs for organizing the selection of contractors in construction activities;

- Costs for organizing quality, quantity, schedule, and construction cost management;

- Costs for organizing safety and environmental protection of the project;

- Costs for organizing the establishment of construction norms and unit prices;

- Costs for organizing material quality inspections and project quality certifications according to the investor's requirements;

- Costs for organizing certification of structural load-bearing capacity and quality compliance of the project;

- Costs for organizing contract acceptance, payment, and final settlement; investment capital payment and final settlement;

- Costs for organizing project supervision and evaluation;

- Costs for organizing project acceptance and handover;

- Costs for groundbreaking, inauguration, and promotional activities;

- Costs for organizing other management tasks.

Clause 3.5. Investment construction consulting costs include:

- Costs for preparing construction survey tasks;

- Construction survey costs;

- Costs for preparing investment reports, project proposals, or economic and technical reports;

- Costs for reviewing the effectiveness and feasibility of projects;

- Costs for architectural design competitions;

- Construction design costs;

- Technical design review costs, construction drawing design review costs, total investment ceiling review costs, project budget costs;

- Costs for preparing request documents, prequalification invitation documents, tender invitation documents, and costs for analyzing and evaluating proposal documents, prequalification submission documents, tender submission documents to select contractors in construction activities;

- Construction site survey supervision costs, construction supervision costs, equipment installation supervision costs;

- Environmental impact assessment report preparation costs;

- Construction norm establishment costs, unit price establishment costs for construction projects;

- Construction project investment cost control costs;

- Construction project investment cost management costs: total investment ceiling, project budget, construction norms, unit prices for construction projects, contracts in construction activities, etc.;

- Project management consulting costs (in cases where consulting services are hired);

- Specialized testing costs;

- Material quality inspection costs, project quality certification costs according to the investor's requirements;

- Costs for certifying sufficient load-bearing safety conditions and certifying compliance with project quality standards;

- Project supervision and evaluation costs for construction investment projects (in cases where consulting services are hired);

- Costs to convert construction project investment costs to the time of handover and commencement of operation;

- Other advisory work implementation costs;

3.6. Other costs: costs not included in the contents specified in points 3.1, 3.2, 3.3, 3.4, and 3.5 above but necessary for implementing construction investment projects, including:

- Demining and explosive clearance costs;

- Construction insurance costs;

- Costs for relocating construction equipment and labor forces to the construction site;

- International quality inspection and deformation monitoring costs;

- Traffic safety assurance costs serving construction works;

- Infrastructure restoration costs affected during construction;

- Audit, verification, and final account approval costs for investment capital;

- Scientific research and technology development costs related to the project; initial working capital for construction projects aimed at business purposes, interest on loans during the construction period; costs for the unloaded and loaded trial run process before handover, excluding the value of recovered products;

- Various fees and charges as prescribed;

- Some other cost items;

3.7. Contingency costs include: contingency costs for unforeseen work volume factors when preparing the project and contingency costs for inflation factors during the project implementation period;

- Contingency costs for unforeseen work volume factors are calculated as a percentage (%) of the total construction costs, equipment costs, compensation and resettlement costs, project management costs, investment consulting costs, and other costs;

- Contingency costs for inflation factors are calculated based on the project implementation duration (measured in years), annual capital allocation progress of the project, and the construction price index;

4. For projects using ODA funds, in addition to the cost items calculated in the total investment ceiling mentioned above, additional necessary cost items are supplemented in accordance with the nature and characteristics of construction investment projects funded from this source, as stipulated in relevant current legal regulations.

Article 5. Method for Establishing Total Investment Ceiling

1. The methods for establishing total investment ceiling specified in Clause 1, Article 5 of Decree No. 112/2009/ND-CP shall be detailed in Appendix 1 of this Circular. The investor and the consultancy for preparing the investment project must select an appropriate method for establishing the total investment ceiling that suits the characteristics and requirements of the project.

2. In cases where the investor does not have sufficient basis to determine the project management cost due to insufficient conditions to establish the total investment ceiling but needs to implement preparatory works for the project, the investor shall prepare a budget estimate for these tasks to forecast costs and proceed with their implementation. These costs will be included in the project management cost of the total investment ceiling.

3. Certain items of costs within the scope of project management costs, investment consulting costs, and other project costs which have not been regulated or cannot be calculated immediately shall be supplemented and estimated to be included in the total investment ceiling.

4. The construction price index used to calculate the contingency cost for inflation factor in the total investment ceiling shall be determined by averaging the construction price indices of at least the three most recent years, suitable to the type of construction project, according to the construction region, and must take into account the potential fluctuations of cost and price factors in the region and internationally.

Section 2

ESTIMATING THE PROJECT BUDGET

Article 6. Contents of Project Budget Estimate

1. The project budget estimate is calculated and determined based on specific construction projects, based on the volume of work, technical design, or construction drawings, the tasks to be performed for the project, sub-projects, and the construction cost norms and construction prices.

2. The project budget estimate serves as the basis for determining the tender price, construction price, and is the foundation for negotiating and signing contracts, and making payments to contractors in cases of direct assignment.

3. The specific contents of the cost items in the project budget estimate are stipulated in Clause 3, Article 8 of Decree No. 112/2009/ND-CP as follows:

3.1. Construction Costs: These are determined for the project, sub-project, component, part, and work of the main project, auxiliary project, temporary construction project, and temporary housing for living and managing construction.

Temporary housing costs at the site for living and managing construction include costs for building temporary housing at the site, renting houses, or travel expenses serving the living and management of construction by the contractor during the construction process.

Construction costs include: direct costs, common costs, pre-tax income, and value-added tax.

3.1.1. Direct Costs include: material costs (including materials provided by the investor), labor costs, machinery operation costs, and other direct costs. Other direct costs are expenses for necessary works directly serving construction such as moving labor within the construction site, labor safety, environmental protection for workers and the surrounding environment, material testing by the contractor, and non-routine water pumping and dredging costs not determinable from the design.

3.1.2. Common Costs include: enterprise management costs, production management costs at the site, worker service costs, construction site service costs, and other related costs.

3.1.3. Pre-Tax Income: This is the projected profit of the construction enterprise included in the construction project budget estimate.

3.1.4. Value-Added Tax: This is the tax payable according to state regulations and is calculated on the total value of the cost items listed in Sections 3.1.1, 3.1.2, and 3.1.3 above.

3.2. Equipment Costs are calculated for the project, sub-project including: procurement costs for technological equipment (including equipment requiring manufacturing or processing); training and technology transfer costs; installation and testing costs, calibration costs for equipment, and other related costs. Procurement costs include: purchase price (including design and supervision fees), transportation costs from port or place of purchase to the project site, storage costs at Vietnamese ports (for imported equipment), storage and maintenance costs at the site warehouse, taxes, and insurance costs for construction equipment.

3.3. Project Management Costs include: cost items as prescribed in Point 3.4, Clause 3 of this Circular.

3.4. Investment Consulting Costs include: cost items as prescribed in Point 3.5, Clause 3 of this Circular.

For projects with multiple constructions, the investment consulting costs in the project budget estimate do not include: feasibility study report preparation costs, project preparation costs or economic-technical report preparation costs; effectiveness and feasibility review costs; project management consulting costs.

3.5. Other Costs include: cost items as prescribed in Point 3.6, Clause 3 of this Circular.

For projects with multiple constructions, other costs in the project budget estimate do not include: mine clearance and explosive removal costs, auditing, review, and approval of final accounts costs; scientific and technological research costs related to the project; initial working capital for business-oriented construction projects, interest during construction period; costs for trial run without load and with load before handover (excluding recoverable product values), fees, and charges.

3.6. Contingency Costs include: costs for unforeseen work volume factors and costs for inflation factors during the construction period.

4. For projects with multiple construction works, the investor may determine the total project budget estimate to serve cost management purposes. The total project budget estimate is determined by summing up the cost estimates of each construction work and related costs within the project.

5. For projects using ODA funds, the project budget may be determined based on the budgets of international tender packages, domestic tender packages, and parts of work not subject to tendering. Depending on the requirements and scope of the tender, the package budgets may only include construction costs or may also include equipment costs and other costs allocated to each package as specified in Clause 1, Clause 5 Article 7, Point 3 Article 16, Clause 1 Article 17, and Appendix 6 of this Circular.

Article 7. Method for Establishing Project Budgets

1. Determining construction costs

Construction costs may be determined according to individual cost items or consolidated cost items through one of the methods set forth in Points 1.1, 1.2, 1.3, and 1.4 below. The consultant responsible for establishing the project budget shall select a method appropriate to the characteristics and requirements of the project and shall be accountable to the project sponsor regarding the rationality and accuracy of the selected budget establishment method. The project sponsor shall decide on the method for establishing the budget based on the specific characteristics, nature, and conditions of the project.

1.1. Calculating Based on Volume and Construction Cost Unit Price

1.1.1. Direct costs such as material costs, labor costs, and machinery operation costs are determined based on volume and construction cost unit price or the total construction cost unit price of the project. The volumes of construction works are determined from technical design drawings or construction drawings, tasks that must be performed for the project, and sub-projects consistent with the list and content of construction works in the construction cost unit price and the total construction cost unit price of the project.

The construction cost unit price and the total construction cost unit price of the project are stipulated in Article 10 of this Circular.

Other direct costs are calculated as a percentage (%) of the total material costs, labor costs, and machinery operation costs, depending on the characteristics and nature of each type of project as guided in Table 3.7 of Appendix 3 of this Circular.

For projects using ODA funds and subject to international tendering, other direct costs are established as a separate item under construction costs and are determined either by budget or by rate standards, depending on the specific characteristics of each project and the requirements of international tendering organization.

1.1.2. Common costs are calculated as a percentage (%) of direct costs or as a percentage (%) of labor costs in the budget as prescribed for each type of project as guided in Table 3.8 of Appendix 3 of this Circular.

In cases where it is necessary for the contractor to organize the extraction and production of sand and gravel materials to serve the construction of the project, common costs included in the material price are calculated at a ratio of 2.5% of labor costs and machinery operation costs.

For projects using ODA funds and subject to international tendering, common costs are determined either by rate standards or by budget or according to international practices.

1.1.3. Pre-tax income is calculated as a percentage (%) of direct costs and common costs as prescribed for each type of project as guided in Table 3.8 of Appendix 3 of this Circular.

In cases where it is necessary to organize the extraction and production of sand and gravel materials to serve the construction of the project, pre-tax income included in the material price is calculated at a ratio of 3% of direct costs and common costs.

1.1.4. Value-added tax for construction work is applied according to current regulations.

1.1.5. Costs for temporary housing and site management at the construction site are calculated at a ratio of 2% of the total direct costs, common costs, and pre-tax income for projects along a route such as power transmission lines, postal communication lines, roads, canals, pipelines, and other linear construction projects, and at a ratio of 1% for other projects.

For special cases (such as large-scale, complex projects, projects outside islands, projects using ODA funds and subject to international tendering), if the cost item for temporary housing and site management at the construction site calculated according to the above ratio is inappropriate, the project sponsor shall establish and approve the budget for these costs based on actual conditions.

In the case of tendering, this cost item must be included in the tender package price and bid price.

1.2. Calculating Based on Material, Labor, and Machinery Consumption Volumes and Corresponding Price Lists

1.2.1. Direct costs such as material costs, labor costs, and machinery operation costs may be determined based on material, labor, and machinery consumption volumes and corresponding price lists. The total consumption volumes of various materials, labor, and machinery are determined based on the consumption of materials, labor, and machinery for each volume of construction work of the project and sub-project.

Guidance on determining corresponding price lists for material prices, labor costs, and machinery operation costs is provided in Article 11 of this Circular.

1.2.2. Determination of other direct costs, common costs, pre-tax income, value-added tax, and costs for temporary housing and site management at the construction site follows the guidance provided in Point 1.1 of this Article.

1.3. Calculating Based on Similar Economic and Technical Indicators of Completed and Ongoing Projects

Construction costs for auxiliary projects, temporary projects serving construction, and simple common projects may be determined based on the construction costs of similar completed and ongoing projects and adjusted according to the location of construction and the time of budget preparation.

Projects with similar economic and technical indicators are construction projects of the same type, level, scale, production capacity of equipment chains, and technology (for production projects).

1.4. Calculating Based on the Unit Cost of Construction in the Investment Capital Unit Cost of the Project

Construction costs for projects mentioned in Point 1.3 above may also be determined based on area or usage capacity and the unit cost of construction in the investment capital unit cost of the project.

The methods for determining construction costs at points 1.1, 1.2, 1.3, and 1.4 above are specifically guided in Appendix 3 of this Circular. For auxiliary works, temporary construction works, temporary housing on site for living and construction management, and other simple and common works, the construction costs of these works may be determined based on proportional cost norms.

2. Determination of equipment costs

2.1. Equipment procurement costs are determined according to one of the following methods:

- For equipment whose price has been determined, it can be calculated based on the quantity and type of each piece of equipment or the entire production line and the price per ton, per unit, or the entire production line of equipment.

- For equipment whose price has not yet been determined, it can be estimated based on the quotation from the supplier, manufacturer, or the price of similar equipment on the market at the time of calculation or of ongoing projects with similar equipment.

For technological equipment that needs to be produced or processed, this cost is determined based on the volume of equipment required to be produced or processed and the production or processing price per ton (or per unit) suitable for the nature and type of equipment according to the signed production or processing contract, or based on the processing quotation of the selected manufacturer or the production or processing price of similar equipment of ongoing projects.

2.2. Training and technology transfer costs are determined by preparing a budget or estimation depending on the specific requirements of each project.

2.3. Installation costs and testing/calibration costs are determined by preparing a budget similar to the construction cost budget.

In cases where equipment has been selected through bidding, the equipment cost includes the bid price and other costs listed in the contract according to the contents mentioned above.

3. Determination of project management costs

Project management costs are determined based on referring to the proportional cost norms published by the Ministry of Construction or by preparing a budget.

4. Determination of investment consulting costs

Investment consulting costs are determined based on referring to the proportional cost norms published by the Ministry of Construction or by preparing a budget according to the guidance of the Ministry of Construction.

In cases where foreign consulting services must be hired to perform certain tasks in the project, the consulting costs are prepared according to the current regulations suitable for the use of consulting services for the project or the value of the signed consulting contract to include in the budget.

5. Determination of other costs

Other costs are determined by preparing a budget or based on proportional cost norms according to the guidance of the Ministry of Construction and relevant ministries and sectors.

For some specialized construction projects with special cost factors, projects using ODA funds, if there are other related costs, these costs are supplemented. The investor decides and is responsible for their decision.

Some costs that cannot be immediately calculated are estimated and included in the project budget.

6. Determination of contingency costs

- Contingency costs for unexpected work volumes are calculated as a percentage (%) of the total construction costs, equipment costs, project management costs, investment consulting costs, and other costs.

- Contingency costs for inflation are calculated based on the construction period (in months, quarters, years) and the appropriate construction price index according to the type of construction and region.

The construction price index used to calculate the contingency costs for inflation in the project budget is determined as specified in Clause 4 of Article 5 of this Circular.

The methods for determining equipment costs, project management costs, investment consulting costs, other costs, and contingency costs mentioned in Clauses 2, 3, 4, 5, and 6 of this Article and the compilation of the construction project budget are specifically guided in Appendix 2 of this Circular.

Section 3

ESTABLISHING CONSTRUCTION COST NORMS AND PROJECT PRICES

Article 8. Construction Norm System

1. Construction norms include economic-technical norms and cost ratio norms.

2. Economic-technical norms are the necessary consumption levels of materials, labor, and construction machinery to complete a unit volume of construction work.

Economic-technical norms include: construction project budget norms for building works, installation, surveying, repair, material testing, structural components, and other construction norms.

3. Cost ratio norms are used to determine the costs of certain types of work in construction activities including: project management cost norms, investment consulting cost norms, general costs, pre-tax income, temporary site housing costs for living and construction management, and other cost ratio norms.

Article 9. Method of Establishing Construction Norms

1. Economic-technical norms are established according to the following procedure:

- Listing construction works or structures of the project, reflecting technical requirements, conditions, main construction methods, and determining appropriate units of measurement.

- Determining the components of work from start to completion, consistent with technical requirements, conditions, construction methods, and the scope of work implementation.

- Calculating material, labor, and construction machinery consumption.

- Establishing detailed norms based on the comprehensive calculation of material, labor, and construction machinery consumption.

The method of establishing economic-technical norms is specifically guided in Appendix 5 of this Circular.

2. Cost ratio norms are implemented according to the guidance of the Ministry of Construction.

Article 10. Construction Project Price System and Construction Project Price Index

1. The construction project price system includes: unit prices of construction projects and composite construction prices used to establish and adjust construction costs within the total investment limit and project estimates.

2. Unit prices of construction projects are comprehensive economic-technical indicators, including all direct costs of materials, labor, and construction machinery to complete a unit volume of construction work of a specific construction project.

3. Composite construction prices are comprehensive economic-technical indicators including all necessary costs to complete a group of construction works, a unit structure, or part of a project.

4. Construction project price index reflects the degree of fluctuation in construction prices over time and serves as the basis for determining and adjusting the total investment limit, project estimates, construction contract prices, and managing construction investment costs.

The construction project price index includes: construction project price index, construction project price index by cost structure (including construction work price index, equipment price index, other cost price index), construction project price index by cost factors (including construction material price index, construction labor price index, construction machinery price index), and major construction material price index.

Article 11. Method of Establishing Construction Project Prices

1. Method of Establishing Unit Prices of Construction Projects

1.1. Unit prices of construction projects are established based on selecting prices of common construction works formed in the local market where the project is being constructed; referring to published unit prices of construction projects; using unit prices of ongoing and completed construction projects; and the construction project budget norms and related cost factors.

1.2. The method of establishing unit prices of construction projects based on construction project budget norms and related cost factors at market prices is guided in Appendix 6 of this Circular.

2. Method of Establishing Composite Construction Prices of Projects

2.1. Composite construction prices of projects are established based on groups of construction works, structural units, and parts of projects using unit prices of construction projects determined according to the guidance provided in Clause 1 of this Article.

2.2. The method of establishing composite construction prices of projects is guided in Appendix 6 of this Circular.

3. The method of determining the construction project price index is carried out according to the guidance of the Ministry of Construction.

Chapter III

MANAGEMENT OF CONSTRUCTION INVESTMENT COSTS

Section 1

TOTAL INVESTMENT LIMIT MANAGEMENT

Article 12. Examination and Approval of the Total Investment Ceiling for Construction Projects

1. When preparing an investment project for construction or an economic-technical report for cases where an investment project is not required to be prepared, the investor must determine the total investment ceiling to calculate the effectiveness of the construction investment. The total investment ceiling recorded in the investment decision approved by the investment decision-maker is the maximum cost that the investor is permitted to use for investing in the construction project and serves as the basis for planning and managing capital during the implementation of the construction investment.

2. The content and authority for examining the total investment ceiling are stipulated in Article 6 of Decree No. 112/2009/NĐ-CP.

The investment decision-maker assigns the lead unit to organize the examination of the total investment ceiling before approval.

3. In cases where organizations or individuals with sufficient qualifications and expertise are hired to review the total investment ceiling, the content of the review is the same as the examination content; the review costs are determined based on the cost rate norms or by preparing a budget estimate according to the guidelines of the Ministry of Construction.

4. The results of the examination or review of the total investment ceiling shall be conducted in accordance with the guidance provided in Appendix No. 7 of this Circular.

Article 13. Adjustment of the Total Investment Ceiling

1. The total investment ceiling may be adjusted in any of the following cases:

- Impact of earthquakes, typhoons, floods, tidal waves, fires, enemy attacks, or other force majeure events;

- The appearance of factors that bring higher efficiency to the project;

- Changes in the construction master plan directly affecting the location, scale, or objectives of the project;

2. The content and authority for examining and approving the adjusted total investment ceiling are stipulated in Clauses 2 and 3 of Article 7 of Decree No. 112/2009/NĐ-CP.

In cases where the structure of cost items within the total investment ceiling is changed, including using contingency funds for adjustment without exceeding the approved total investment ceiling, the investor has the right to decide on the adjustment; if it exceeds the approved total investment ceiling, the investor must report to the investment decision-maker for consideration and decision.

3. The adjusted total investment ceiling is determined by adding (or subtracting) the additional total investment ceiling from the previously approved total investment ceiling. The value of the additional total investment ceiling is determined as a separate cost item and must be examined by an organization or reviewed before the decision to approve.

Section 2

MANAGEMENT OF CONSTRUCTION BUDGETS

Article 14. Examination and Approval of Construction Budgets

1. The content and authority for examining and approving construction budgets are stipulated in Article 10 of Decree No. 112/2009/NĐ-CP.

2. The investor organizes the examination of construction budgets. In cases where organizations or individuals with sufficient qualifications and expertise are hired to review the construction budget, the content of the review is the same as the examination content of the investor; the review costs are determined based on the cost rate norms or by preparing a budget estimate according to the guidelines of the Ministry of Construction.

3. The results of the examination or review of construction budgets shall be conducted in accordance with the guidance provided in Appendix No. 7 of this Circular.

Article 15. Adjustment of Construction Budgets

1. The construction budget may be adjusted in any of the following cases:

- Cases stipulated in Clause 1 of Article 13 of this Circular;

- Cases permitted to change or supplement designs without contradicting the basic design or change the cost structure in the budget but not exceeding the approved total investment ceiling, including contingency costs.

2. The adjusted construction budget is determined by adding (or subtracting) the supplementary construction budget from the previously approved construction budget.

3. The investor is responsible for organizing the examination or review and approval of the adjusted construction budget.

4. The adjusted construction budget serves as the basis for adjusting contract prices, tender package prices, and the total investment ceiling.

The method for determining the supplementary construction budget is guided in Appendix No. 4 of this Circular.

Section 3

MANAGEMENT OF CONSTRUCTION COST NORMS AND PRICES FOR CONSTRUCTION PROJECTS

Article 16. Management of Construction Norms

1. Ministry of Construction

The Ministry of Construction shall uniformly manage state affairs concerning construction project investment costs, publish construction norms for relevant agencies, organizations, and individuals to refer to and use in establishing and managing construction project investment costs.

2. Ministries and Provincial People's Committees

Ministries and Provincial People's Committees shall organize the establishment and publication of construction norms for specific construction tasks not included in the system of construction norms published by the Ministry of Construction, based on the method of establishing construction norms as guided in Appendix No. 5 of this Circular, and regularly send them to the Ministry of Construction for monitoring and management annually.

3. Project Investors, Contractors, and Consulting Organizations

3.1. Project investors, contractors, and consulting organizations shall adjust existing published construction norms that are not suitable with construction methods, conditions, and technical requirements of projects, establish new construction norms not covered in the system of published norms as stipulated in Clause 1 of this Article, or apply similar construction norms currently used in other projects, based on the method of establishing construction norms as guided in Appendix No. 5 of this Circular.

3.2. Project investors may hire consulting organizations with sufficient qualifications and expertise to prepare, adjust, and review these construction norms, and such consulting organizations shall be responsible for the rationality and accuracy of the norms they implement.

3.3. Project investors decide on the application and utilization of published or adjusted construction norms, or newly established norms for preparing and managing construction project investment costs.

3.4. In cases where adjusted or newly established norms are used to set unit prices in tender packages funded by state budget using direct award procedures, the project investor must report to the investment decision-maker for consideration and decision. For construction projects under investment projects decided by the Prime Minister, the Minister of the relevant sector and the Chairman of the Provincial People's Committee shall make the decision. Documentation for approving adjusted or newly established norms shall follow the guidance provided in Appendix No. 8 of this Circular.

For international tender packages funded by ODA, if foreign construction norms are applied for certain specific construction tasks to set unit prices and project budgets, these norms must comply with the technical requirements, construction methods, and construction conditions of the project and must be approved by the project investor beforehand.

Article 17. Management of Construction Project Costs

1. Ministry of Construction

The Ministry of Construction shall guide the method of establishing and publishing construction price indices and capital investment rates for construction projects for relevant agencies, organizations, and individuals to refer to and use in preparing and managing construction project investment costs.

2. Provincial People's Committees

Provincial People's Committees shall instruct and assign the Department of Construction to lead and coordinate with relevant Departments based on the guidance of this Circular and local price fluctuations to timely determine and publish the system of construction project prices, material prices, labor prices, machinery and equipment rental prices commonly used as a reference basis for preparing and managing construction project investment costs.

3. Project Investors and Consulting Organizations

Project investors and consulting organizations shall establish construction project unit prices and comprehensive construction prices based on the technical requirements, construction conditions, and specific construction methods of the project and the method of establishing construction project unit prices and comprehensive construction prices as guided in Appendix No. 6 of this Circular to serve as the basis for determining total investment amounts and project budgets.

Project investors may hire qualified and experienced consulting organizations to perform tasks related to establishing or reviewing construction project unit prices and comprehensive construction prices, and construction price indices for projects according to the construction price index establishment method published by the Ministry of Construction. Consulting organizations shall be responsible before the project investor and the law for ensuring the rationality and accuracy of the construction project unit prices, comprehensive construction prices, and construction price indices they establish.

For construction project unit prices in international tender package budgets, project investors have the responsibility to check or hire qualified and experienced consultants to review the rationality and accuracy of these unit prices before their use.

4Contractors

Contractors shall manage construction project prices as prescribed in Article 27 of Decree No. 112/2009/NĐ-CP.

Chapter IV

IMPLEMENTING PROVISIONS

Article 18. Transitional Provisions

Implementation of the preparation and management of construction project investment costs during the transitional period as stipulated in Article 34 of Decree No. 112/2009/NĐ-CP.

Article 19. Effective Date

1. This Circular takes effect from July 15, 2010, and replaces Circular No. 05/2007/TT-BXD dated July 25, 2007, of the Ministry of Construction on guiding the preparation and management of construction project investment costs, and Circular No. 18/2008/TT-BXD dated October 6, 2008, of the Ministry of Construction on supplementing some methods for determining construction costs in project budgets to Circular No. 05/2007/TT-BXD dated July 25, 2007, of the Ministry of Construction.

2. In the course of implementation, if there are difficulties, organizations and individuals shall send their opinions to the Ministry of Construction for consideration and resolution./.