Circular No. 06/2007/TT-BXD guiding construction contracts

CIRCULAR

Guidelines for Contracts in Construction Activities

Pursuant to Decree No. 36/2003/NĐ-CP dated April 4, 2003 of the Government on the functions, tasks, powers, and organizational structure of the Ministry of Construction;

Pursuant to Decree No. 99/2007/NĐ-CP dated June 13, 2007 of the Government on Management of Construction Project Investment Costs.

The Ministry of Construction provides specific guidelines for contracts in construction activities as follows:

PART I. GENERAL PROVISIONS

1. Contracts in Construction Activities

1.1. Contracts in construction activities are civil contracts. A contract in construction activities (hereinafter referred to as a construction contract) is a written agreement between the tendering party and the contractor regarding the establishment, modification, or termination of rights and obligations of the parties to perform one, several, or all works within construction activities. A construction contract is a legal document binding the rights and obligations of the parties involved in the contract; disputes among the parties involved in the contract shall be resolved based on the signed and effective contract; disputes not agreed upon in the contract shall be resolved based on relevant legal provisions.

1.2. The tendering party is the project owner or general contractor or main contractor.

1.3. The contractor is the general contractor or main contractor when the tendering party is the project owner; it is a subcontractor when the tendering party is the general contractor or main contractor.

2. Scope and Applicability

2.1. Scope of Application

Construction works, tenders belonging to construction investment projects using state funds including: state budget funds (including official development assistance abbreviated as ODA); state-guaranteed credit; state investment development credit; other state investment funds.

For types of Build-Operate-Transfer (BOT) contracts, Build-Transfer-Operate (BTO) contracts, and Build-Transfer (BT) contracts, during the process of construction investment projects, project owners should study and apply or adapt according to the guidelines set forth in this Circular depending on their level of capital contribution.

For contracts implementing projects using ODA funds, if international treaties signed by competent authorities of the Socialist Republic of Vietnam have different provisions from those stipulated in this Circular, such provisions shall be implemented according to the provisions of the international treaty.

2.2. Applicability

This Circular applies to tendering parties and contractors, whether organizations or individuals, both domestic and foreign, who have the necessary qualifications and capabilities to participate in signing contracts for construction activities in Vietnam.

It is encouraged that organizations and individuals related to construction activity contracts of construction investment projects using other sources of funding apply the provisions of this Circular.

3. Principles for Signing Construction Contracts

3.1. Contracts shall be signed on the principles of voluntariness, equality, good faith, cooperation, honesty, compliance with laws, social morals, and agreements must be recorded in the contract.

3.2. A construction contract can only be signed after the tendering party has completed the selection of contractors in accordance with regulations and the parties involved have concluded contract negotiations.

3.3. Depending on the complexity of the contract, the parties involved may apply the provisions of this Circular to draft, negotiate, and sign the contract. For simple works or small-scale tenders, all contract-related contents can be directly recorded in the contract. For complex projects or large-scale tenders, contract contents can be separated into general conditions and specific conditions (specific terms) of the contract.

General conditions of the contract are documents stipulating basic rights, obligations, and relationships among the parties to the contract.

Specific conditions of the contract are documents detailing and supplementing certain provisions of the general conditions applicable to the contract.

3.4. The contract price (the price at which the contract is signed) shall not exceed the bid price (for tendering cases), nor shall it exceed the approved project budget estimate (for direct assignment cases), except for additional quantities outside the scope of the project that are permitted by the Competent Authority.

3.5. The investor or the investor's representative may enter into a contract with one or more main contractors to perform the work. In cases where the investor enters into contracts with multiple main contractors, the contents of these contracts must ensure consistency and synchronization during the implementation of the works to guarantee the project's progress and quality.

3.6. The main contractor may enter into contracts with one or several sub-contractors, but such sub-contractors must be approved by the investor, and the sub-contracts must be consistent and synchronized with the contract signed between the main contractor and the investor. The main contractor is responsible to the investor for the progress and quality of the contracted works, including those performed by sub-contractors.

3.7. In cases where the contractor is a joint venture, the members of the joint venture must have a joint venture agreement, and all participating members must sign the contract; if the members of the joint venture agree to authorize the lead contractor to directly sign the contract with the tenderer, then the lead contractor signs the contract with the tenderer.

3.8. The tenderer and the contractor may appoint representatives to negotiate, sign, and implement the contract.

- Representatives negotiating the contract on behalf of the parties must have full authority to make decisions and be responsible for their decisions during the negotiation process. If there are matters requiring approval from the Competent Authority, these matters must be recorded in the negotiation minutes.

- Representatives signing and implementing the contract on behalf of the parties must have full authority to make decisions and be responsible for their decisions during the implementation process. If there are matters requiring approval from the Competent Authority, these matters must be recorded in the contract.

4. Types of Contracts in Construction Activities

Depending on the scale, nature, implementation conditions of the investment construction project, types of work, and relationships among the parties, contracts in construction activities can have various types with different contents.

4.1. Construction Consulting Contract

This is a construction contract to perform one, some, or all consulting works in construction activities such as: developing construction planning; developing investment construction project proposals; conducting construction surveys; designing construction projects; selecting contractors; supervising construction works; managing construction investment projects; reviewing designs, total estimates, budgets, and other related consulting activities.

A construction consulting contract that implements all design works of the project is a design general contracting contract.

4.2. Supply of Construction Materials and Equipment Contract

This is a construction contract to supply materials and equipment within the production line installed in the construction project according to the technological design for the construction investment project.

4.3. Construction Execution Contract

This is a construction contract to execute construction works, project components, or parts of construction work according to the construction design.

A construction contract that implements all construction execution works of the project is a construction general contracting contract.

A contract that implements all design and construction execution works of the project is a design and construction general contracting contract.

4.4. Design-Supply-Construction Contract (abbreviated in English as EPC)

The EPC contract is a construction contract to implement all works from design, supply of materials and equipment to construction execution of the project, project components.

4.5. Turnkey Contract

This is a construction contract to implement all works from project development, design, supply of materials and equipment to construction execution of the project.

5. Management of Contract Implementation

The tenderer and the contractor, within the scope of their rights and obligations, are responsible for establishing plans and organizational measures suitable for the content of the signed contract to achieve the agreements in the contract. The management of contract implementation by the parties involved includes: quality and progress management of the work; quantity and contract price management; labor safety, environmental hygiene, and fire prevention management; change and adjustment management of the contract, and other contents specified in the construction contract to achieve the purpose of the signed contract.

The supervision of contract implementation is carried out in accordance with Clause 1, Article 59 of the Bidding Law.

PART II. DOCUMENTS AND CONTENT OF CONSTRUCTION CONTRACTS

1. DOCUMENTS OF THE CONSTRUCTION CONTRACT

The documents of the construction contract include the construction contract, accompanying documents, and additional documents during the implementation of the contract (hereinafter referred to as accompanying documents of the contract).

The accompanying documents of the contract are an inseparable part of the construction contract. Depending on the scale, nature of the work, the accompanying documents of the construction contract may include all or part of the following documents:

1.1. Bid award notice or tender designation document;

1.2. Contract conditions (general and specific conditions of the contract);

1.3. Tenderer's proposal;

1.4. Technical instructions and reference conditions;

1.5. Design drawings;

1.6. Written amendments and supplements, negotiation minutes of the contract;

1.7. Performance guarantee, advance payment bond, and other types of bonds if applicable;

1.8. Other related documents.

Depending on each specific contract, the parties to the contract agree on the priority order when applying the contract documents if there are conflicting provisions among these documents.

2. CONTENT OF THE CONSTRUCTION CONTRACT

Depending on the scale, characteristics, nature of each project, each package, each work, and each specific type of construction contract, the construction contract may include all or part of the following basic contents: Information about the contract and the parties signing the contract; Definitions and interpretations; Law and language used for the contract; Type of payment currency; Volume of work; Construction contract price; Advance payment under the construction contract; Payment of the construction contract; Adjustment of the construction contract price; Progress and completion deadlines; Performance guarantee of the construction contract; General rights and obligations of the contractor; General rights and obligations of the employer; Subcontractors designated by the investor (if any); Quality management of construction works; Acceptance of completed works; Insurance and warranty of the works; Environmental protection, labor safety, and fire prevention; Electricity, water, and site security; Liability for errors; Suspension and termination of the contract by the employer and the contractor; Risks and responsibilities; Force majeure; Rewards and penalties for breach of contract; Resolution of disputes under the construction contract; Settlement of the construction contract; Liquidation of the construction contract.

2.1. INFORMATION ABOUT THE CONTRACT AND THE PARTIES SIGNING THE CONTRACT

The contract must fully record general information about the contract and information about the parties signing the contract.

2.1.1. General information about the contract includes: Contract number, tender package name, project name, and bases for concluding the contract;

2.1.2. Information about the parties signing the contract includes: Trading name of the party signing the contract; Representatives of the parties; Business registration address or transaction address; Tax code, business registration certificate, account number; Telephone, fax, email; Power of attorney (if signed by proxy); Contract signing date; Other related information.

2.2. DEFINITIONS AND INTERPRETATIONS

Some terms need to be defined for application in the contract to avoid being understood differently, facilitate drafting, negotiation, and implementation of the contract, which may include definitions of the following terms: contract; contractual agreement; acceptance letter; bid letter; characteristic-standard-technical description; drawing; tender submission; appendix to the tender submission; forecast table and labor cost (if any); party and parties; investor; contractor; consultant; representative of the investor; representative of the contractor; subcontractor, ...

In cases where these terms have different meanings when used in specific articles, clauses, or conditions, they must be interpreted in those articles, clauses, or conditions.

2.3. LAW AND LANGUAGE USED FOR THE CONTRACT

2.3.1. Applicable law: The contract is regulated by the legal system of the Socialist Republic of Vietnam. For projects using ODA funds, it shall be implemented according to point 2.1 of Part I of this Circular.

2.3.2. Language used for the contract: The language used for the contract is Vietnamese. In cases where the contract involves foreign participation, the language used is Vietnamese and English.

2.4. TYPE OF PAYMENT CURRENCY

The contract must clearly specify the currency used for payment. Multiple currencies can be used in the same contract based on the principle of payment in the bidding currency consistent with the tender invitation or request for proposal. Payment methods may include bank transfer, cash, electronic transfer, etc., but must be specifically stipulated in the contract.

2.5. VOLUME OF WORK

The contract must clearly describe the volume and scope of work to be performed. The volume and scope of work are determined based on the request for proposal from the investor (employer) or tender invitation and minutes clarifying the investor's requirements (employer, if any), and relevant negotiation minutes between the parties.

2.6. PRICE OF THE CONSTRUCTION CONTRACT

The contract price is the amount of funds the employer commits to pay the contractor to perform the work volume according to the quality, progress, and other requirements specified in the construction contract.

The parties must clearly record the content of the contract price in the contract, including tax and fee items and the responsibilities of the parties in fulfilling their tax and fee payment obligations.

The parties base on the tender invitation, tender submission, and contract negotiation results to determine the contract price. The contract price has the following forms:

2.6.1. Lump-sum contract price (lump-sum form and percentage form prescribed in the Bidding Law): This is the construction contract price that does not change throughout the contract implementation period for works within the scope of the signed contract, except for cases permitted to adjust as stipulated in the contract (if any).

The lump-sum contract price applies to projects or packages with clearly defined volumes, quality, and implementation time, or in some cases where the volume cannot be determined and the contractor has sufficient capacity, experience, and data to calculate and determine the lump-sum price and accept the risks related to determining the lump-sum price.

All types of construction contracts may apply fixed-price contracts when the conditions for determining the contract price before signing are met, including the form of contract price determined according to a percentage (%) of the value of the works or the volume of consulting services.

2.6.2. Fixed unit price contract: is a construction contract price determined based on provisional quantities of work and fixed unit prices for each item in the contract, which remain unchanged throughout the execution of the contract, except for adjustments permitted under the contract (if any), as provided in the Law on Bidding.

The fixed unit price contract applies to projects or packages that do not have sufficient conditions to accurately determine the quantity of work but have sufficient conditions to determine the actual unit prices for performing the work and the contractor has the necessary capacity, experience, and documentation to calculate and determine the fixed construction unit prices and related risks. The fixed unit price does not change throughout the execution of the contract, except for adjustments expressly allowed in the contract.

The fixed unit price can be a full unit price for construction works, or hourly labor unit prices (monthly, weekly, daily, or hourly) for certain consulting tasks.

2.6.3. Adjustable price contract: is a construction contract where the quantity of work and unit prices for work in the contract are permitted to be adjusted in cases specified in the construction contract.

The adjustable price contract applies to projects or packages where at the time of signing the construction contract, there are insufficient conditions to accurately determine the quantity of work to be performed or cost factors to determine the actual unit prices for performing the work.

The adjustable price contract (at the time of signing, the contract price is only provisional) will be adjusted when sufficient conditions to determine the quantity and actual unit prices for performing the work as stipulated in the contract are met.

2.6.4. Combined price contract: is a contract price determined according to the forms prescribed in points 2.6.1, 2.6.2, and 2.6.3 above.

The combined price contract applies to large-scale projects or packages with complex technical requirements and long implementation periods. The tenderer and contractor shall base their agreement and determination of the types of work to be applied under fixed-price contracts, fixed unit price contracts, or adjustable price contracts on the types of work in the contract.

2.7. Advance payment for construction contracts

Advance payment is a sum of money advanced by the tenderer to the contractor to commence the performance of the work under the contract.

Advance funding for construction investment projects must be stipulated in the construction contract and implemented immediately after the contract becomes effective and after the tenderer has received the performance guarantee (in cases where a performance guarantee is required according to point 2.11). The construction contract must specify the amount of advance payment, the timing of advance payment, the number of advance payments, and the recovery of advance payments. The amount of advance payment is as follows:

- For consulting contracts, the minimum advance payment is 25% of the contract price;

- For construction contracts, the minimum advance payment is 10% of the contract price for contracts valued over 50 billion VND; 15% for contracts valued between 10 billion VND and 50 billion VND, and 20% for contracts valued below 10 billion VND;

- For supply contracts, the minimum advance payment is not less than 10% of the contract price depending on the value of the contract;

- For contracts executed under the EPC form, advance funding for equipment purchases is based on the supply schedule in the contract; for other tasks such as design and construction, the minimum advance payment is 15% of the value of those tasks in the contract.

- For land clearance work carried out according to the land clearance plan;

The advance payment is gradually recovered through subsequent payments, with the recovery of advance payment starting from the first payment and ending when the total amount paid reaches 80% of the contract value. For land clearance work, the recovery of advance payment ends after the completion of the land clearance work.

The tenderer and contractor agree on the advance payment and recovery plan to produce prefabricated components or semi-finished products of significant value to ensure construction or purchase certain materials that need to be stored seasonally.

Depending on the scale and nature of the work in the contract, the contractor may propose a lower advance payment than the prescribed advance payment.

2.8. Payment of construction contracts

2.8.1. Payment of the contract must be consistent with the type of contract, the contract price, and the conditions agreed upon by the parties to the contract. The number of payments, payment stages, payment times, and payment conditions must be clearly stated in the contract. và điều kiện thanh toán phải được ghi rõ trong hợp đồng. ||| and the payment conditions must be clearly stated in the contract.

2.8.2. Payment of fixed-price contracts: payment is made according to a percentage (%) of the contract price or the value of the project, sub-project, or completed work volume corresponding to the payment stages recorded in the contract after the payment documents have been reviewed and confirmed by the tenderer. The contractor is paid the entire contract price signed with the tenderer and any price adjustment amounts (if any) after completing the contract and receiving acceptance.

2.8.3. Payment of fixed unit price contracts: payment is made based on the quantities of completed work (including any additional quantities (if any) accepted during the payment period and the corresponding unit prices for those items recorded in the contract or supplementary agreements to the contract.

2.8.4. Payment under the contract for the adjusted price contract: payment shall be made based on the quantity of work completed (including any additional quantities, if any, accepted during the payment period) at the adjusted unit prices as stipulated in the contract. In cases where the conditions for adjusting the unit price have not been met by the payment period, the provisional unit price agreed upon at the time of signing the contract shall be used for interim payments, and the payment value shall be adjusted according to the actual adjusted unit price as provided in the contract.

2.8.5. Payment under the contract for the combined price contract: payment shall be carried out in accordance with the provisions set forth in points 2.8.2, 2.8.3, and 2.8.4 above.

2.8.6. Depending on the scale and nature of the tender package, construction project, or sub-project; type of contract and contract price, the parties may agree to make a single payment or multiple payments. In cases of multiple payments, the contract must clearly specify the payment schedule (which can be based on time, percentage (%) or quantity completed) and the payment amounts for each payment period (payment milestones). Payments must comply with these payment schedules; in cases where the actual progress of the work is slower than the payment schedule, the tendering party may agree or determine revised payment amounts taking into account the scope and degree to which the actual progress of the work is slower than the progress specified in the contract.

2.8.7. Payment documents for construction contracts

The procedures, documents, and necessary certifications in the payment documents must be clearly recorded in the contract (including forms). The payment documents are prepared by the contractor in accordance with the forms prescribed in the contract. The contents of the payment documents include the main documents:

- Payment documents for lump sum contract price:

+ Acceptance certificate (quality and quantity acceptance certificate): Depending on the payment stage, it may include one or more types of project, sub-project, or completed work volume acceptance certificates for the payment stage, confirmed by representatives of the tendering party or the consultant (if any) and the contractor's representative, without requiring detailed confirmation of the completed volume. Completion documents of works accepted during the payment stage (if any);

+ Table determining the value of the completed work volume according to the contract (Appendix No. 2);

+ Table determining the value of the work volume outside the contract with confirmation from representatives of the tendering party or the consultant (if any) and the contractor's representative (Appendix No. 4);

+ Table proposing the payment value (Appendix No. 1) must show the following contents: Value of the completed work volume according to the contract, value of the work volumes outside the contract (if any), discount on advance payment, payment value after offsetting the above amounts.

- Payment documents for fixed unit price contract:

+ Completion documents of works accepted during the payment stage; Quantity acceptance certificate (quality and quantity acceptance certificate) corresponding to the works signed in the contract for the payment stage, confirmed by representatives of the tendering party or the consultant (if any) and the contractor's representative;

+ Table determining the value of the completed work volume according to the contract (Appendix No. 2);

+ Table determining the value of the work volume outside the contract (Appendix No. 4);

+ Table determining the adjusted unit price according to the contract (if any) (Appendix No. 3) with confirmation from representatives of the tendering party or the consultant (if any) and the contractor's representative;

+ Table proposing the payment value (Appendix No. 1) must show the following contents: Value of the completed work volume according to the contract, value of the work volumes outside the contract, discount on advance payment, payment value after offsetting the above amounts.

- Payment documents for adjustable price contract:

+ Completion documents of works accepted during the payment stage; Quantity acceptance certificate (quality and quantity acceptance certificate) corresponding to the works signed in the contract for the payment stage, confirmed by representatives of the tendering party or the consultant (if any) and the contractor's representative;

+ Table determining the adjusted unit price according to the contract (Appendix No. 3) with confirmation from representatives of the tendering party or the consultant (if any) and the contractor's representative;

+ Table determining the value of the completed work volume according to the contract (Appendix No. 2);

+ Table proposing the payment value (Appendix No. 1) must show the following contents: Value of the completed work volume according to the contract, discount on advance payment, payment value after offsetting the above amounts.

- Payment documents for combined price contract: Implemented according to the corresponding payment document regulations for each type of contract price mentioned above.

2.8.8. Payment deadline

In the contract, the parties must specify the payment deadline for the tendering party to pay the contractor after receiving complete and valid payment documents as stipulated in the contract, but not exceeding ten working days.

For construction projects funded by state budget, within three working days from the date of receipt of complete and valid payment request documents from the contractor, the project owner must complete all procedures and transfer the payment request to the funding or lending agency. Within the year of completion of construction or the year of putting the project into use, the project owner must pay the contractor the value of the completed work minus the amount retained for warranty of the project as stipulated.

2.8.9. Late payment

In the contract, the parties must specifically provide for financial compensation for late payments corresponding to different levels of delay; the compensation level for each level of delay is different, but the initial compensation level must not be less than the interest rate specified by commercial banks for each period.

2.8.10. Retained payment

In the contract, the parties must specifically provide for the payment of retained funds when the contractor fulfills their obligations as stipulated in the contract, such as remaining amounts from previous interim payments or any unpaid payments by the tendering party, including retention money for project warranty (if any).

2.9. Adjustment of Construction Contract Prices

2.9.1. The adjustment of contract prices must be recorded in the contract and be consistent with the tender documents, bid documents, and the results of contract negotiations. In the contract, the parties shall clearly define the circumstances under which the contract may be adjusted, the methods, procedures, and scope of price adjustments.

2.9.2. The contract price may be adjusted in any of the following cases:

- Supplementing work outside the scope defined in the signed contract;

- When signing the contract, using provisional unit prices for works or volumes of work where, at the time of signing the contract, the tenderer and contractor do not have sufficient conditions to accurately determine the unit price and agree to adjust it when such conditions are met;

- When the volume of additional work exceeds 20% of the corresponding volume of work that the contractor must perform according to the contract, then the unit price of the additional work should be reviewed;

- Unit prices that the tenderer and contractor agree to review and adjust after a certain period from the start of contract implementation;

- In cases where there is significant fluctuation in fuel, material, and equipment prices mentioned in the contract, directly affecting the implementation of the contract, or when the State changes relevant policies, a report must be submitted to the authorized person for consideration and decision;

- Due to force majeure events stipulated in the contract;

- Price escalation clauses specified in the contract. The bases for calculating price escalation are determined 28 days before the contractor submits the payment application;

2.9.3. Methods for Adjusting Contract Prices

When adjusting contract prices, the quantity of work for payment shall be based on the completed and accepted work volume, and the payment unit price for the work shall be determined according to the terms of the contract, such as re-determining the unit price or adjusting the unit price in the contract according to the adjustment factor. One or a combination of the following methods can be referred to for adjusting contract prices:

- Using construction price indices published by the Ministry of Construction, consulting organizations, and the General Statistics Office;

- Direct offset calculation method;

- Formula for determining the adjustment factor as set out in Appendix No. 5 attached to this Circular.

2.10. Progress and Completion Time

2.10.1. In the contract, the parties must clearly record the start and end times of the contract.

2.10.2The contractor is responsible for preparing a detailed schedule to submit to the tenderer for approval as the basis for implementing the contract.

2.10.3. The parties involved in the contract must specifically define situations and handling measures that may extend the completion time, beyond these situations, the parties may not unilaterally extend the completion time.

2.10.4. The parties must agree specifically on the extent and manner of dealing with losses due to delays caused by either party.

2.11. Ensuring the Implementation of Construction Contracts

2.11.1. Ensuring the Implementation of Construction Contracts refers to the contractor's implementation of one of the measures of deposit, guarantee, or submission of a letter of guarantee to ensure responsibility for the implementation of the construction contract of the winning bidder within the specified time according to the tender documents.

2.11.2. The contractor must implement the measure to ensure the implementation of the construction contract before the construction contract becomes effective, except in the field of tendering for consultancy services and self-execution.

2.11.3. The value of the guarantee to ensure the implementation of the construction contract is specified in the tender documents and is a maximum of 10% of the construction contract price; in cases where high risks need to be prevented, the value of the guarantee to ensure the implementation of the construction contract must be higher but not exceeding 30% of the construction contract price and must be approved by the authorized person.

2.11.4. The validity period of the guarantee to ensure the implementation of the construction contract must be extended until the warranty obligation is transferred, if applicable.

2.11.5. The contractor may not reclaim the guarantee to ensure the implementation of the construction contract in the event of refusal to implement the construction contract after the contract becomes effective.

2.12. Common Rights and Obligations of the Contractor

Depending on the scale and nature of the work, the parties must specifically define the general responsibilities of the contractor in the contract, such as:

2.12.1. Representative of the Contractor

The contractor may designate their representative and authorize them to perform certain tasks, but this must be clearly specified in the Contract.

If the representative of the contractor is not specifically recorded in the Contract, then before the commencement date, the contractor must submit to the tenderer the name and detailed information about the representative, as well as their authority and responsibilities for review and approval. Without prior consent from the tenderer, the contractor may not dismiss the representative or appoint another person to replace them.

2.12.2. Main Personnel of the Contractor

The contract must specifically define issues related to the main personnel of the contractor assigned and used for the work, such as:

- Main personnel of the contractor at the construction site and at the contractor's office;

- Reports on the main personnel and equipment of the contractor;

- Supervision by the tenderer of the main personnel of the contractor.

2.12.3. Additionally, the contract must also specify the common rights and obligations of the contractor regarding:

- Subcontractors (if any);

- Assignment of subcontractor contract benefits;

- Issues related to cooperation between the parties concerning the implementation of the contract;

- Mark positioning;

- Safety regulations;

- Site conditions data;

- Rights to access and means of transportation;

- Responsibility for structures and residents;

- Access to the site;

- Transportation of goods;

- Main equipment of the contractor;

- Equipment and materials provided by the tenderer;

- Progress reports;

- Provision and use of documents;

- Late drawings or instructions;

- The contractor's use of tenderer's documents;

- Confidential details;

- Joint liability and several liability;

- The contractor's movement of forces out of the site after project acceptance.

- Other related issues (antiquities, etc.);

2.13. Common Rights and Obligations of the Tenderer

The contract must specify the common rights and obligations of the tenderer regarding:

2.13.1. Main personnel of the tenderer;

2.13.2. Financial arrangement responsibilities of the tenderer;

2.13.3. The tenderer's use of contractor's documents;

2.13.4. Complaints of the tenderer.

In cases where the tendering party hires organizations or individuals with sufficient capacity to provide consulting services for the tendering party to effectively perform the tasks, the contract must specify issues related to the consultant such as:

- The duties and authorities of the consultant;

- The delegation of authority of the consultant;

- The guidance of the consultant;

- The replacement of the consultant;

- The decisions made by the consultant.

2.14. Subcontractors designated by the project owner (if any)

In cases where certain parts of the work can be carried out by a subcontractor designated by the investor to achieve the final goal of the work, but only with the consent of the main contractor, the contract must specify issues related to the designated subcontractor such as:

2.14.1. Definition of the designated subcontractor;

2.14.2. The right of opposition of the main contractor against the designated subcontractor;

2.14.3. Payment to the designated subcontractor.

2.15. Quality management of construction projects

Quality management of construction projects must comply with the State's regulations on quality management of construction projects. The contract must specifically stipulate matters concerning quality management, including: Quality management by the contractor (the receiving party); Quality management by the investor (the tendering party) and the consultant (including survey consultants, design consultants, supervision consultants, and other relevant consultants).

2.16. Acceptance of completed works

The contract must specify the responsibilities and obligations of the parties regarding the acceptance of the entire project, partial works, and those parts that need to be accepted before transferring to another part of the work, which includes the following main contents:

- Contents of the works to be accepted (partial acceptance, full acceptance of the work);

- Personnel participating in the acceptance, the person signing the acceptance certificate;

- Forms of acceptance certificates for each type of acceptance, including evaluations of the results of the accepted work;

- Works to be measured for payment, measurement methods;

2.17. Insurance and warranty of construction projects

2.17.1. The contract must specify the responsibilities of the parties regarding insurance, including the main contents such as: Insured objects; Insurance amount; Insurance period.

2.17.2. Construction project insurance and assets belonging to the tendering party will be purchased by the tendering party. If the insurance premium has been included in the bid price, then the contractor shall purchase the insurance.

2.17.3. The contractor must purchase necessary insurances to ensure their own activities in accordance with the law.

2.17.4. The tendering party and the contractor must agree and stipulate in the contract the conditions for warranty, warranty period, and the responsibilities of the parties for the warranty of construction projects. The warranty content shall be implemented according to the regulations on quality management of construction projects.

2.18. Environmental protection, labor safety, and fire prevention

The contract must clearly define the requirements, responsibilities, and obligations of each party regarding environmental protection, labor safety, and fire prevention during the implementation of the work.

The content of environmental protection and labor safety shall comply with the State's regulations on project investment construction management.

2.19. Electricity, water, and site security

The contract must clearly define the rights and obligations of each party regarding the provision and payment for electricity, water, and site security.

2.20. Responsibility for errors

The contract must clearly define the responsibilities of the parties for errors during the implementation of the work such as:

- Completion of unfinished works and repair of errors and damages;

- Costs for repairing errors;

- Time to report errors;

- Unrepairable errors;

- Relocation of erroneous work off-site;

- Additional inspections after repairs;

- Causes of errors;

- Unfulfilled obligations under the contract.

2.21. Suspension and termination of the contract by the tendering party and the contractor

In construction contracts, the tendering party and the contractor must agree and specify in detail about: situations allowing suspension and termination of the contract, the right to suspend and terminate the contract by each party; procedures for suspending and terminating the construction contract by each party; Determination of the value of the contract at the time of termination; Settlement responsibilities of the parties after termination of the contract.

2.21.1. The tendering party and the contractor have the right to suspend the construction contract in the following cases:

- Due to the fault of the tendering party or the contractor;

- Force majeure cases;

- Other cases agreed upon by the parties.

In these cases, each party has the right to suspend the contract, but must notify the other party in writing a certain period of time agreed upon by both parties and discuss solutions to continue implementing the signed construction contract properly.

The duration of suspension and compensation for losses due to suspension of the construction contract shall be agreed upon by both parties in the contract.

2.21.2. Termination of the construction contract by the tendering party and the contractor:

- Each party has the right to terminate the contract without compensating for losses when the other party breaches the contract to the extent that it must be terminated as agreed upon by the parties in the contract or as provided by law;

- In cases where one party unilaterally terminates the construction contract without the fault of the other party, the party terminating the contract must compensate the other party for losses;

- Before terminating the construction contract, the parties must notify the other party in advance a certain period of time agreed upon by both parties; if not notified and causing loss to the other party, the party terminating the contract must compensate the other party for losses;

- When the contract is terminated, the contract becomes ineffective from the date of termination and the parties must return to each other any related property or money.

2.22. Risks and responsibilities of the parties

The contract must specifically stipulate the responsibilities of the tendering and contracting parties regarding risks such as: Compensation for losses caused by each party to the other; Handling of risks when they occur for each party.

2.23. Force majeure

In the contract, the parties must specifically provide for: Cases considered force majeure such as earthquakes, typhoons, floods, landslides, tornadoes, tsunamis; war or the threat of war; Handling of force majeure.

2.24. Reward, penalty for breach of contract

The reward for the contract and the penalty for breach of contract must be recorded in the contract. However, the reward amount shall not exceed twelve percent (12%) of the value of the part of the contract that generates profit, and the penalty amount shall not exceed twelve percent (12%) of the value of the breached contract. The source of the reward funds shall be drawn from the profit generated by early delivery of the project with quality assurance for use and exploitation, or from reasonable cost savings to fulfill the contract.

2.25. Resolution of construction contract disputes

In case of disputes arising from construction contracts, the parties have the responsibility to negotiate and resolve them. If no agreement is reached between the parties, the dispute resolution shall be carried out through mediation, arbitration, or court proceedings in accordance with the provisions of the law.

2.26. Settlement of construction contracts

The contract must specify the procedures, formalities, deadlines for submitting settlement statements, but not exceeding thirty (30) days, the contents of the settlement statement file, and accompanying forms (if any) for the settlement of the contract. The settlement statement file is prepared by the contractor in accordance with each specific type of contract based on existing documentation (acceptance certificates, payment files for different stages), only compiling summary tables, and preparing new documentation where it does not exist. The main contents of the file include:

- Completion documents (for construction works contracts) confirmed by all parties;

- Certificates of quantity acceptance for completed work;

- Certificates confirming additional work quantities;

- Certificates of construction survey results acceptance;

- Certificates of construction design acceptance;

- Handover certificates for works put into use;

- Determination of the settlement value of the contract confirmed by all parties;

- Other related documents.

2.27. Termination of construction contracts

Immediately after the contractor has fulfilled its obligations under the contract, the participating parties proceed to terminate the contract and cease its effectiveness as well as any related obligations.

The termination of the contract must be completed within forty-five (45) days from the date when the participating parties complete their obligations under the contract.

2.28. Effectiveness of the contract

The construction contract becomes effective from the date the participating parties sign the contract, except in cases where the parties have agreed otherwise.

PART III. IMPLEMENTATION ORGANIZATION

1. This Circular takes effect fifteen (15) days from the date of publication in the Official Gazette and replaces Circular No. 02/2005/TT-BXD dated February 25, 2005, of the Ministry of Construction guiding contracts in construction activities.

2. Ministers of Ministries, Heads of agencies at the ministerial level, Chairmen of People's Committees of provinces and centrally-run cities, Boards of Directors of State-owned Corporations, Economic Groups, and Heads of relevant units are responsible for implementing this Circular.

3. During implementation, if there are difficulties, they are requested to report promptly to the Ministry of Construction for study and resolution.