Circular No. 05/2016/TT-BXD guiding the determination of labor unit prices in construction investment cost management

CIRCULAR

Guidelines for determining unit prices of labor in cost management of construction investment projects

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Pursuant to Decree No. 62/2013/NĐ-CP dated June 25, 2013 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Construction;

Pursuant to Decree No. 32/2015/NĐ-CP dated March 25, 2015 of the Government on cost management of construction investment projects;

Considering the proposal of the Director of the Construction Economy Department and the Director of the Construction Economics Institute;

The Minister of Construction issues this Circular guiding the determination of unit prices of labor in cost management of construction investment projects.

Article 1. Scope of Regulation

This Circular guides the determination of unit prices of labor for managing costs of construction investment projects including: total investment amount, construction budget estimate, tender package budget estimate, construction price, contract price, construction price index.

Article 2. Applicability

1. Agencies, organizations, and individuals related to cost management of construction investment projects funded by state budget, non-budget state capital, and public-private partnership (PPP) projects shall apply the provisions of this Circular.

2. It is encouraged that agencies, organizations, and individuals related to cost management of construction investment projects funded by other sources apply the provisions of this Circular.

Article 3. Principles for Determining and Adjusting Unit Prices of Labor

1. Unit prices of labor determined according to the guidelines of this Circular shall comply with the following principles:

a) In line with the skill level of workers according to the wage grade in the system of construction project budget norms.

b) In line with the average construction labor wage rate (including factors compensating for living expenses) in the local labor market, but not lower than the minimum regional wage set by the Government.

c) In line with the characteristics and nature of construction work.

d) Meeting the requirements for paying certain expenses under the responsibility of employees as prescribed (social insurance, health insurance, unemployment insurance).

2. Construction labor unit prices shall be adjusted when there is a fluctuation in the average construction labor wage rate in the labor market.

Article 4. Determination of Unit Prices of Labor

The unit price of labor for construction production workers is determined according to the following formula:

Where:

: bid price after corrections and adjustments, minus any discount (if applicable) of the lowest bidder among those detailed financial evaluations;_NC: unit price of labor calculated for one day's work based on the worker's wage grade,

-_NC: basic monthly wage rate used to determine the unit price of labor for one day's work based on the worker's wage grade, including allowances according to the characteristics and nature of construction production and taking into account market factors, and employee insurance payments as prescribed (social insurance, health insurance, unemployment insurance). The basic monthly wage rate is published in Table 1 of Appendix 1 of this Circular for reference.

- Central agencies of political-social organizations;_CB: wage coefficient according to the worker's wage grade published in Appendix 2 attached to this Circular.

- t: 26 working days in a month.

State-owned enterprises that have been assigned by the Ministry of Agriculture and Rural Development to conduct offshore wind power project surveys before the effective date of this Circular shall continue to implement according to the assigned documents; any new matters arising after the effective date of this Circular shall be implemented in accordance with the provisions of this Circular.

1. Provincial People's Committees directly under the Central Government shall direct the Construction Departments to lead and coordinate with relevant agencies to investigate, survey, determine, and publish construction labor unit prices as the basis for establishing and managing construction investment costs within their jurisdiction, based on the guidelines of this Circular.

2. Where the average construction labor unit price in the local market exceeds the construction labor unit price determined based on the highest basic monthly wage rate published in Appendix 1 multiplied by the wage grade coefficient of Appendix 2 of this Circular divided by 26, the Provincial People's Committee shall reach agreement with the Ministry of Construction before publication.

3. The basic monthly wage rate (L_NC) published in Appendix 1 of this Circular will be adjusted by the Ministry of Construction when the average construction labor wage rate in the market fluctuates by more than 10%.

Article 6. Transitional Provisions

1. For unit prices of labor included in approved total investment amounts and construction budgets prior to the effective date of this Circular, the investor shall decide on the application according to the provisions of this Circular. For construction contracts signed prior to the effective date of this Circular, implementation shall follow the terms of the signed contract.

2. For some construction investment projects currently applying special wage levels and certain allowances permitted by authorized bodies, such applications shall continue until the completion of the investment and the project's operation begins.

Article 7. Effective Date

1. This Circular takes effect from May 1, 2016, and replaces Circular No. 01/2015/TT-BXD dated March 20, 2015, issued by the Ministry of Construction, guiding the determination of unit prices of labor in cost management of construction investment projects.

2. Any difficulties encountered during implementation should be reported to the Ministry of Construction for consideration and resolution./.