Circular No. 112/2000/TT-BNN-XDCB guiding the preparation and adjustment of budget estimates for construction projects under the management of the Ministry of Agriculture and Rural Development.

CIRCULAR

||| Guidelines for preparing and adjusting budgets for construction works

||| under the management of the Ministry of Agriculture and Rural Development

||| Pursuant to Circular No. 02/2000/TT-BXD dated May 19, 2000 of the Ministry of Construction on guidelines for adjusting construction project budgets.

||| Pursuant to the agreement document No. 1929/BXD-VKT dated October 19, 2000 of the Ministry of Construction regarding the agreement on guidelines for preparing and adjusting budgets for construction works under the management of the Ministry of Agriculture and Rural Development.

||| The Ministry of Agriculture and Rural Development provides specific guidelines for preparing and adjusting certain budget items for construction works under its management as follows:

I. SCOPE OF APPLICATION

||| This Circular guides the adjustment of construction work budget costs for labor and machinery, and the cost of surveying water conservancy projects within the scope managed by the Ministry of Agriculture and Rural Development, based on Circular No. 02/2000/TT-BXD dated May 19, 2000 of the Ministry of Construction. Specifically, items I.1.c, I.1.d (under labor costs) and item I.3. (under general costs, pre-tax income and value-added tax) only guide the basis for preparing construction project budgets and do not fall within the scope of budget adjustments.

||| II. ADJUSTMENT OF THE BUDGET ESTIMATE FOR CONSTRUCTION INSTALLATION

||| In addition to the general provisions implemented according to the guidelines in Circular No. 02/2000/TT-BXD dated May 19, 2000 of the Ministry of Construction, this Circular further guides the adjustment of the estimated cost for construction installation of construction works applying certain specialized norms and unit prices issued by the Ministry of Agriculture and Rural Development.

||| 1. Adjustment of labor costs:

||| a- Labor costs in the current unit price for construction works of provinces and centrally governed cities (hereinafter referred to as local unit prices) shall be adjusted with factor K_NC||| = 1.25 times.

||| b- Labor costs in the budget estimate norms and unit prices for drilling and grouting works of water conservancy projects, as stipulated in Decision No. 220/1998/QĐ/BNN-XDCB dated December 30, 1998 issued by the Ministry of Agriculture and Rural Development, shall be calculated with the adjustment factor: K_NC||| = 1.25 times.

||| c- For construction works whose budgets are prepared based on local unit prices and those issued by the Ministry, if they enjoy additional benefits and policies as prescribed by the competent authority, or if they receive higher allowances than those included in the local unit price sets, such additional benefits and allowances shall be added to the labor costs according to the guidelines attached to Circular No. 02/2000/TT-BXD dated May 19, 2000 of the Ministry of Construction.

||| d- For construction works and tasks that enjoy wage groups I, II, III, IV under Wage Scale A6 - Construction Works, issued pursuant to Decree No. 26/CP dated May 23, 1993 of the Government, when preparing the budget for labor costs, the wage scale specified in the unit price set shall be applied.

||| Specifically, for workers engaged in some sections of water conservancy projects, the application shall follow the agreement document No. 915/LĐTBXH-TL dated March 31, 2000 of the Ministry of Labor, Invalids and Social Affairs as follows:

2. Adjustment of machinery costs::

||| a- Machinery costs in the budget estimate for construction installation of construction works prepared based on local unit prices shall be adjusted with factor K_MTC||| = 1.04 times.

||| b- Machinery costs in the budget estimate for specialized machines and equipment at Decision No. 27/1999/QĐ/BNN-ĐTXD dated February 3, 1999 concerning the issuance of budget estimate rates for specialized machines and equipment and productivity norms for Beaver300Cv, Beaver600Cv, Beaver1600Cv, Beaver3800Cv dredgers, shall be calculated with the following adjustment factors:

0.65 cubic meter capacity bucket excavator³June 2024; ||| 1.25³                   ||| Adjustment factor          1.04 times

||| Dredger type HB with capacity ||| 300cv                                  ------                ||| 1.05 times

||| Dredger type HF900 ||| 1.04 times

||| Dredger type Beaver 300cv ||| 3800Cv        ||| 1.03 times

||| c- Machinery costs for specialized works at Decision No. 220/1998/QĐ/BNN-XDCB dated December 30, 1998 concerning budget estimate norms and unit prices for drilling and grouting works of water conservancy projects, shall be calculated with the adjustment factor: K=1.04 times

||| 3. General costs, pre-tax income and value-added tax

||| a- General costs and pre-tax income, according to Appendix 2 of Circular No. 09/2000/TT-BXD dated July 17, 2000 of the Ministry of Construction. Value-added tax shall be implemented according to current regulations.

||| b- In cases where construction works or installation tasks use compulsory labor, they shall be implemented according to Circular No. 181/1999/TT/BNN-XDCB dated December 30, 1999 of the Ministry of Agriculture and Rural Development, which has been agreed upon by the Ministry of Construction in document No. 3174/BXD-VKT dated December 6, 1999; wherein it is stipulated:     

||| General costs: 15% of labor costs;

||| Pre-tax income: ||| 3.5% of direct costs and general costs;

||| Value-added tax shall not be levied on the volume of construction works for maintenance, repair, and construction of water conservancy projects carried out using people's contributions or humanitarian aid funds, including cases where the State provides financial support not exceeding 30% of the total actual expenditure for the project (according to the agreement document No. 7285 TCT/NV7 dated December 16, 1999 of the General Tax Department - Ministry of Finance).

||| III. ADJUSTMENT OF OTHER COSTS IN THE TOTAL PROJECT BUDGET

||| 1. Adjustment of the budget estimate for construction survey costs:

||| The budget estimate for construction survey costs before tax shall be determined based on the construction survey budget norms issued by Decision No. 177/BXD-VKT dated July 17, 1995 and the guidance circular No. 22/BXD-VKT dated July 17, 1995 of the Ministry of Construction, adjusted with factor K_KS||| = 1.08 times.

The unit price for water conservancy project surveys, issued pursuant to Decision No. 2705 NN-ĐTXD/QĐ dated October 18, 1997 of the Ministry of Agriculture and Rural Development, shall be adjusted with a factor K = 1.08; this adjustment factor shall only apply until December 31, 2000. The establishment of new unit prices for application from January 1, 2001 shall be based on Circular No. 07/2000/TT-BXD dated July 12, 2000 of the Ministry of Construction regarding guidance on establishing unit prices for surveys and managing survey costs._KSAdjustments to consulting fees and construction costs; design costs for construction projects; management costs of the project management board:

Shall be implemented according to the guidelines in Circular No. 02/2000/TT-BXD dated May 19, 2000 of the Ministry of Construction.

IV.1. Cases where budget adjustments are not allowed under this Circular:

IV. IMPLEMENTATION

1. Projects implemented in 2000 using the "turnkey contract" bidding method.

2. Volumes of work completed after January 1, 2000 and have been accepted and paid, or have been settled.

3. Designated volumes or contracts executed under adjustable-price contracts with construction periods less than 12 months (for loan-funded contracts: ADB, WB... with specific regulations) and were carried out since 1999, the remaining volume transferred to 2000 will also not be subject to price adjustment.

4. For international bidding projects within the country, and projects being constructed by foreign contractors in Vietnam.

IV.2. Cases where budget adjustments are allowed under this Circular and the method of calculating budget price adjustments:

1. Cases where budget adjustments are allowed:

Designated tender volumes or contracts executed under adjustable-price contracts with construction periods over 12 months remaining from the previous year, transferred to 2000, or decided upon through tendering (or designation) in the first quarter of 2000, shall only be adjusted for volumes executed from the 13th month onwards (for loan-funded contracts: ADB, WB... the allowable period for price adjustment is stipulated in the tender decision and contract).

For construction works or items that have received investment approval decisions approving total budgets or budgets but have not yet or are currently organizing tenders or designations, the investor must adjust the total budget or budget according to the guidelines of this Circular and resubmit for approval by the investment approval authority.

2. Method of calculating budget price adjustments:

In cases where designated tender prices or bid prices do not have detailed unit prices, they shall be converted from local unit prices (or project unit prices) to winning bid unit prices (with attached supplementary guidance in this Circular).

In cases where designated tender prices or bid prices have detailed unit prices, they shall be calculated directly as prescribed in the Circular.

3. When submitting adjusted budget estimates or adjusted designated tender prices, additional winning bid prices as prescribed above, the approved budget estimates, tender designation decisions and winning bid decisions with attached prices, acceptance certificates, payment records for each period, quantities requiring price adjustment, and confirmation opinions from the State Treasury on payment results must be included.

IV.3. Effective date:

The adjustment of construction project budgets according to the guidelines of this Circular shall uniformly apply throughout the Agriculture and Rural Development sector from January 1, 2000.

Upon receipt of this Circular, investors, project management boards, and consulting units are required to immediately review volumes of work within the scope that can be adjusted and categorize them into two types:

Type that does not increase the total approved budget value when adjusted.

Type that increases the total budget and exceeds the 2000 investment capital. In such cases, investors, project management boards, and consulting units must report the consolidated situation to the Ministry, along with proposed measures. After approval, the Ministry will permit the implementation of adjustment procedures for specific entities.

During implementation, if any issues arise, investors, project management boards, and units are requested to submit written feedback to the Ministry of Agriculture and Rural Development for consideration and resolution./.

During the implementation process, if any issues arise, it is recommended that the investors, Project Management Board, and relevant units submit written feedback to the Ministry of Agriculture and Rural Development for consideration and resolution./.