Circular No. 13/2019/TT-BXD on the management of investment construction costs for construction projects under the National Target Program for Sustainable Poverty Reduction and the National Target Program for New Rural Development.

CIRCULAR

Regulations on the management of investment construction costs for construction projects under the National Target Program for Sustainable Poverty Reduction and the National Target Program for New Rural Development

National Target Program on Sustainable Poverty Reduction, National Target Program on New Rural Development

Pursuant to Decree No. 81/2017/NĐ-CP dated July 17, 2017 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Construction;

Pursuant to Decree No. 68/2019/NĐ-CP dated August 14, 2019 of the Government on the management of construction investment costs;

Pursuant to Decree No. 161/2016/NĐ-CP dated December 2, 2016 of the Government on special mechanisms in investment and construction management for certain projects under national target programs during the period of 2016-2020;

At the proposal of the Director of the Construction Economy Department,

The Minister of Construction hereby promulgates this Circular regulating the management of investment construction costs for construction projects under the National Target Program for Sustainable Poverty Reduction and the National Target Program for New Rural Development.

Article 1. Scope of Regulation

This Circular guides the determination and management of investment construction costs for construction projects under the National Target Program for Sustainable Poverty Reduction and the National Target Program for New Rural Development; small-scale projects with uncomplicated technology only require the preparation of an Economic and Technical Report or Construction Project File.

Article 2. Applicability

Agencies, organizations, and individuals related to the determination and management of investment construction costs for construction projects under the National Target Program for Sustainable Poverty Reduction and the National Target Program for New Rural Development.

Article 3. Principles of Management and Determination of Investment Construction Costs

1. Management of investment construction costs for projects under the National Target Program for Sustainable Poverty Reduction and the National Target Program for New Rural Development must ensure the investment objectives, project effectiveness approved, implementation scale, and local budget.

2. Principles and methods for determining investment construction costs must comply with regulations on managing investment construction costs and be consistent with the special mechanisms of the National Target Program for Sustainable Poverty Reduction and the National Target Program for New Rural Development.

3. Investment construction costs must be accurately calculated for each project, construction work, construction tender package, in accordance with design requirements, technical guidelines, construction conditions, and project implementation plans. Design and construction activities must comply with construction standards and regulations. Community participation in construction investment and supervision is encouraged; priority should be given to using standard designs, typical designs, local materials, labor, and machinery; ensuring transparency, economy, efficiency, and maximizing funds for construction.

Article 4. Project Budget Estimate

The construction project estimate includes: construction costs, equipment costs, project management costs, investment consulting costs, other costs, and contingency costs.

1. Construction Costs

a) Construction costs in the construction project estimate are established for main works, auxiliary works, temporary works serving construction, or parts, sections, tasks of the project. Construction costs for projects, components, parts, include direct costs, indirect costs, pre-tax income, and value-added tax. Construction costs are determined according to the Circular guiding the determination and management of investment construction costs issued by the Minister of Construction.

b) The investor bases the nature and special conditions of the project, the system of norms already issued, and the method of establishing unit prices for construction projects or applying the system of unit prices for construction issued by the competent authority as the basis for determining construction costs and managing investment construction costs for projects.

c) For quantities done by the people using local labor and materials, the quantities of components of projects funded by community contributions shall not include general enterprise management costs, production management and operation costs at the construction site in indirect costs; pre-tax income and value-added tax in the estimate.

2. Equipment Costs

Equipment costs are determined according to the Circular guiding the determination and management of investment construction costs issued by the Minister of Construction.

3. Project Management Costs

Project management costs are determined as 2.763% of construction costs and equipment costs (excluding value-added tax) in the approved Economic and Technical Report or Construction Project File. In cases where projects are constructed on the sea, on islands, along the border line, or in communes with extremely difficult socio-economic conditions (coastal areas and islands; border communes, safe zones; extremely difficult villages), according to the Government's regulations, it is determined by multiplying the ratio by a factor of 1.35.

4. Investment Consulting Costs

a) Construction survey costs (if applicable)

Construction survey costs for preparing the Economic and Technical Report or Construction Project File are determined by preparing an estimate according to the guidance in the Appendix of the Circular guiding the determination and management of investment construction costs issued by the Minister of Construction.

b) Costs for preparing the Economic and Technical Report or Construction Project File

Costs for preparing the Economic and Technical Report or Construction Project File are determined as 2.5% of construction costs and equipment costs (excluding value-added tax) based on the calculated volume from design drawings, investment capital per unit, or cost data from similar ongoing or completed projects.

If the Economic and Technical Report or Construction Project File uses typical designs, standard designs issued by authorized agencies or repeated designs, the costs for preparing the Economic and Technical Report or Construction Project File are calculated at the above rate multiplied by a correction factor of 0.8.

c) Costs for preparing tender documents, evaluating tender bids for construction and purchasing materials and equipment

The bidding document preparation costs and tender evaluation costs for construction works shall be determined at 0.346% of the construction cost (excluding value-added tax) in the project's construction work bid budget. The bidding document preparation costs and tender evaluation costs for procurement of materials and equipment shall be determined at 0.261% of the material and equipment cost (excluding value-added tax) in the project's material and equipment bid budget. Among these, the bidding document preparation cost accounts for 45%, while the tender evaluation cost accounts for 55%.

d) Construction supervision costs and installation supervision costs for equipment

The construction supervision cost is determined at 2.566% of the construction cost (excluding value-added tax) in the project's construction work bid budget. The installation supervision cost for equipment is determined at 0.677% of the equipment cost (excluding value-added tax) in the project's equipment bid budget. In cases where construction projects are located on the sea, on islands, along the land border, or in communes with extremely difficult socio-economic conditions as defined by the Government, the above percentages shall be multiplied by a factor of 1.2.

e) Where the application of the investment and construction consulting cost standards set forth above is not appropriate, the cost shall be determined by preparing a budget in accordance with the prescribed regulations.

5. Other costs shall be determined based on the percentage standards as directed by the competent authority or by preparing a budget or contract value in compliance with the law. In cases where certain other costs cannot yet meet the conditions to be determined, they shall be estimated in the construction project budget.

Contingency reserve

The contingency reserve includes the reserve for additional work volume factors and the reserve for price escalation during the construction period. The determination of the contingency reserve shall be carried out in accordance with the Circular guiding the determination and management of construction investment costs issued by the Minister of Construction.

7. In cases where compensation, support, and resettlement costs are required, such costs shall be added to the construction project budget.

The construction project budget shall be prepared as an appendix attached hereto.

Article 5. Review of the Construction Project Budget

For construction projects under the special mechanism of the National Target Program on Sustainable Poverty Reduction, the review of the construction project budget shall be conducted in accordance with the provisions of Decree No. 161/2016/NĐ-CP. For other projects, the management of construction investment costs shall be implemented in accordance with the relevant regulations.

Article 6. Adjustment of the Construction Project Budget and Bid Package Price

The adjustment of the construction project budget and bid package price shall be carried out in accordance with the Circular guiding the determination and management of construction investment costs issued by the Minister of Construction.

Article 7. Transitional Provisions

The determination and management of construction investment costs during the transitional period shall be governed by Clause 1 and Clause 2 of Article 36 of Decree No. 68/2019/NĐ-CP dated August 14, 2019 of the Government on the management of construction investment costs and related Circulars. For tasks and bid packages that have been implemented and contracts signed, the provisions of the signed contracts shall apply.

Article 8. Effective Date

1. This Circular takes effect from February 15, 2020.

2. During the implementation process, if there are any difficulties, agencies, organizations, and individuals should send their opinions to the Ministry of Construction for study and resolution./.