Circular No. 14/2019/TT-BXD guides the determination and management of construction price indices.

CIRCULAR

Guidelines for determining and THE HEAD OF THE MINISTRY’S OFFICE, THE HEAD OF THE MINISTRY’S INSPECTION DEPARTMENT, THE HEADS OF THE DEPARTMENTS, THE DIRECTOR OF THE VIETNAM CIVIL AVIATION ADMINISTRATION, THE CHIEF EXECUTIVE OFFICER OF THE VIETNAM AIRPORTS CORPORATION - CPTP, AND THE HEADS OF THE AUTHORITIES, ORGANIZATIONS, AND INDIVIDUALS CONCERNED ARE RESPONSIBLE FOR IMPLEMENTING THIS CIRCULAR./. construction price indices

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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;

At the proposal of the Director of the Institute of Construction Economics and the Director of the Department of Construction Economics;

The Minister of Construction issues this Circular guiding the determination and management of construction price indices.

PART I
GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

Article 1. Scope of application: This Circular guides the determination and management of construction price indices to determine, adjust total investment amounts, construction project budgets, bidding prices for construction contracts, construction contract prices, conversion of construction investment capital, and management of construction investment costs.

第二条 组织和实施奖励工作的支出水平，如政府第152/2025/NĐ-CP号决定关于分级授权和奖励领域的分权规定

a) Agencies, organizations, and individuals related to the determination and management of construction price indices for construction projects funded by state budget funds, state funds outside the budget, and public-private partnership (PPP) construction projects.

b) Organizations and individuals may apply the provisions of this Circular to determine and manage construction price indices for projects funded by other sources.

Article 2. Classification of construction price indices

1. Construction price indices include:

a) Construction price indices by type of project reflect the degree of fluctuation in construction prices for that type of project over time.

b) Construction price indices by cost structure include: construction price index reflecting the degree of fluctuation in construction costs of the project over time; equipment price index reflecting the degree of fluctuation in equipment costs of the project over time; other cost price index reflecting the degree of fluctuation in certain types of costs such as project management, investment consulting for construction projects, and other costs of the project over time.

c) Construction price indices by cost factors include: construction material price index reflecting the degree of fluctuation in construction material costs of the project over time; labor price index reflecting the degree of fluctuation in labor costs of the project over time; machinery and equipment price index reflecting the degree of fluctuation in machinery and equipment costs for construction work of the project over time.

d) Construction price indices by major construction materials reflect the fluctuations in prices of major construction materials over time.

2. For specific construction projects, the calculation of all or some of the aforementioned construction price indices depends on the purpose and requirements of construction investment cost management.

Article 3. Principles for determining and managing construction price indices

1. Construction price indices must objectively reflect the fluctuations in market prices for construction at localities.

2. The determination and publication of construction price indices must be timely and consistent with regulations on construction investment cost management.

3. When determining construction price indices for publication, it is necessary to select a representative list and quantity of projects for calculation.

4. Construction price indices are calculated as an average over the selected period of time, excluding certain expenses such as compensation, support, and resettlement, interest during construction, and initial working capital for production and business operations. The unit of measurement for construction price indices is percentage (%).

5. The cost structure used to calculate construction price indices must be consistent with the cost structure stipulated in construction investment cost management regulations, compiled from statistical data, and remain fixed until there is a change in the base period.

6. The management and use of construction price indices must comply with relevant regulations on construction investment cost management.

7. During the process of determining price indices, specialized agencies in construction need to review and evaluate the calculated price indices against information about regional and nearby locality price indices to ensure that the indices align with regional market trends and do not differ significantly between localities.

Chapter II
DETERMINATION OF CONSTRUCTION PRICE INDICES

Article 4. Procedure for determining construction price indices

1. Determining the calculation time points including the base period and comparison period.

2. Establishing a list of construction price indices to be determined and selecting input factors.

3. Collecting, processing data and information for calculation.

4. Determining construction price indices.

Article 5. Time Points for determining construction price indices

1. The time points for determining construction price indices for provincial People's Committees to announce include:

1. The base year is 2020. The Ministry of Construction will stipulate the time point when changing the base year for localities to adjust accordingly.

b) The comparison periods are months, quarters, and years when announcing construction price indices compared to the base year.

2. In cases where construction price indices are determined for specific projects, the project investors must base their selection of the base period and comparison period on the progress and conditions of implementing the work.

Article 6. Determination ofa) Managing, using, and operating technical equipment in accordance with Articles 10, 11, and 12 of Decree No. 135/2021/NĐ-CP dated December 31, 2021, issued by the Government, stipulating the list, management, and use of technical equipment, and the procedures for collecting and using data obtained from technical equipment provided by individuals or organizations for detecting administrative violations (hereinafter referred to as Decree No. 135/2021/NĐ-CP);the list of types of works and selection of cost input factors 1. The selection of the number and list of types of works according to the type of work for announcement shall be based on management requirements, regulations on project management, construction investment cost management, and characteristics of the type of work in the locality. Provincial People's Committees shall refer to the List of Types of Works in Appendix 3 attached to this Circular to select and determine the list of types of works for announcing construction price indices for the locality.

2. When determining construction price indices for a type of work, representative works for that type of work must be selected. The number of representative works for each type of work is determined depending on the specific conditions of each locality but must not be less than three works. Representative works are those commonly invested in within the type of work being constructed in the locality.

3. In cases where construction price indices are determined for a specific work, that work itself is considered the representative work.

4. Representative cost input factors are costs related to types of materials, labor, and construction machinery mainly used for the work or type of work. The selection of types of materials, labor, and construction machinery mainly used for calculating construction price indices is determined according to the principle that the costs for these types of materials, labor, and construction machinery must account for a large proportion (over 80%) of the total costs for materials, labor, and construction machinery corresponding to the work.

Article 7. Collection and Processing of Data and Information for Calculation

1. Requirements for collecting data and information to determine cost structure:

a) Data on construction investment costs such as total investment amount, construction budget, final settlement of investment capital for completed works (if available), which have been approved including detailed cost items.

b) Regulations, policies, and rules on managing construction investment costs, using labor, materials, machines, and equipment for construction, and other related costs at the calculation time point.

2. Requirements for market price information of input factors:

a) Construction material prices: Construction material prices are determined according to the Circular guiding the determination and management of construction investment costs issued by the Ministry of Construction. The list of materials included in the calculation of construction price indices must be consistent regarding type, specifications, and brand. For construction price indices determined for specific works, construction material prices are based on the announced prices of the locality. If the locality has not announced prices, construction material prices are collected from the market but must ensure consistency with the construction area, type, specifications, and brand of materials used for the work and the requirements for determining construction material prices according to the Circular guiding the determination and management of construction investment costs issued by the Ministry of Construction.

b) Construction labor prices are determined according to the unit price of construction labor announced by the provincial People's Committee. If the provincial People's Committee has not announced prices, they shall refer to the method for determining construction labor prices guided by the Ministry of Construction.

c) Prices of machine shifts and construction equipment are determined according to the prices of machine shifts and rental prices of construction equipment announced by the provincial People's Committee. If the provincial People's Committee has not announced prices, they shall refer to the method for determining prices of machine shifts and construction equipment guided by the Ministry of Construction. The list of construction equipment included in the calculation of construction price indices must be consistent regarding type, capacity, and origin.

3. Processing data for calculating construction price indices:

a) For data and information to determine cost structure: Processing of collected data and information includes reviewing, checking, and adjusting data and information and the budget cost structure. Data on the budget cost structure need to be converted according to the budget structure specified at the base period. Data on total investment amount, construction budget, and final settlement of investment capital for completed works (if available) must be converted to the price level at the base period.

b) For information on prices of input factors: Collected data and information on prices of input factors need to be checked, reviewed, and adjusted specifically: Prices of various types of construction materials are checked for consistency in type, specifications, and brand. Prices of various types of construction labor are checked for consistency with the type and skill level of workers performing the work. Prices of machine shifts for various types of construction equipment are checked for consistency in type, capacity, and origin of the equipment.

b) With respect to information on the prices of input factors: the data and figures collected regarding the prices of input factors must be checked, reviewed, and adjusted, specifically: The prices of various types of construction materials inputs shall be verified for the suitability of their type, specifications, and labels. The prices of various types of construction labor inputs shall be verified for their appropriateness with the type and skill level of workers performing the work. The prices of machine shifts of various types of construction machinery and equipment inputs shall be verified for the suitability of their type, capacity, and origin.

Article 8. Method for Determining Construction Price Index

1. The construction price index is calculated using the weighted arithmetic mean method between the price fluctuation levels (construction price index) of representative input factors selected with corresponding weights. The calculation of the construction price index is carried out according to the guidance set forth in Appendix 1 attached hereto.

2. Based on the characteristics of the local construction market, the People's Committee of the province decides on the calculation of the provincial-wide construction price index or calculates the construction price index for each area within the province's territory and aggregates them to obtain the provincial-wide construction price index. The division of areas for calculating the construction price index is decided by the provinces and cities based on administrative boundaries and local construction market characteristics or according to the regional minimum wage level zones prescribed by the Government.

3. The regional construction price index is calculated using the weighted arithmetic mean method between the construction price indices of each centrally governed city in the region with corresponding weights.

4. The national construction price index is calculated using the weighted arithmetic mean method between the construction price indices of each region with corresponding weights.

5. The construction price index for specific projects is determined based on the cost structure of the project, prices (or price indices) of input factors suitable to the conditions of work implementation and the construction area.

6. The cost structure for determining the price index as the basis for adjusting contract prices is based on the price structure in the contract. In cases where there is insufficient detail to determine the cost structure according to the price in the contract, it is determined according to the approved tender budget or project budget.

Chapter III
MANAGEMENT OF CONSTRUCTION PRICE INDEX

Article 9. Management of the determination of the construction price index

1. The Ministry of Construction determines the regional (inter-provincial) price index and the national price index.

2. The provincial People's Committee assigns specialized agencies in construction to organize the determination of various types of construction price indices as stipulated in Clause 1, Article 2 of this Circular.

3. The determination and agreement on the construction price index for projects not included in the list published by the Ministry of Construction or the provincial People's Committee shall be implemented in accordance with Clause 4, Article 18 of Decree No. 68/2019/NĐ-CP dated August 14, 2019 of the Government.

Article 10. ISSUANCE specialized agency under the People's Committee of the province/city.construction price index

1. Authority and frequency of issuance and publication of the construction price index:

a) The regional construction price index and the national construction price index are issued quarterly and annually according to Table 1.1 of Appendix 4 of this Circular.

b) Various types of construction price indices as stipulated in Clause 1, Article 2 of this Circular are published monthly, quarterly, and annually according to Tables 1.2, 1.3, 1.4, and 1.5 of Appendix 4 of this Circular.

2. Issuance and publication time:

a) For construction price indices published monthly: the publication is carried out in the third week of the following month.

b) For construction price indices issued and published quarterly: the publication is carried out in the third week of the first month of the following quarter.

c) For construction price indices issued and published annually: the publication is carried out in the third week of the first month of the following year.

3. Issuance and publication of the construction price index:

a) Construction price indices issued by the Ministry of Construction must be published on the Ministry of Construction's website within the latest two days from the date of the issuance decision;

b) Construction price indices published by the provincial People's Committee must be published on the website of the local construction management agency within the latest two days from the date of the publication decision.

Chapter IV
IMPLEMENTATION

Article 11Responsibilities of the Ministry of Construction

1. Guide, inspect, and urge localities to organize the determination and publication of construction price indices in accordance with this Circular.

2. Organize training and provide guidance on the business of determining and managing construction price indices.

3. Organize the storage of information on construction price indices of centrally governed cities to serve management, control, and create a transparent market.

4. Issue regional (inter-provincial) construction price indices and national construction price indices.

Article 12. Responsibilities of the People's Committee at the provincial level

1. Direct the organization and implementation of the provisions of this Circular and allocate regular funding from the state budget to organize the determination and publication of construction price indices in the province or city.

2. Assign specialized agencies in construction to organize the implementation of the following tasks:

a) Take the lead and coordinate with relevant units based on the guidance of this Circular and the situation of construction price fluctuations in the locality to organize the determination of construction price indices as the basis for the provincial People's Committee to publish. If necessary, they may hire consulting organizations with sufficient capacity as prescribed to determine the construction price index. Consulting organizations must bear responsibility under the law for the quality of the products provided.

b) Organize the continuous monitoring of information on construction market prices in the locality; update, store, and send to the Ministry of Construction information on construction market prices in the locality on a monthly basis.

3. Publish construction price indices periodically monthly, quarterly, and annually, while sending to the Ministry of Construction for tracking and management. The publication time of construction price indices as prescribed in this Circular starts from January 2021. To implement the conversion of construction price index values when changing the base period, in 2021, construction price indices will be published according to project types, cost structures, and cost factors with the base year 2020 as prescribed in this Circular and the previously chosen base year according to Circular No. 06/2016/TT-BXD dated March 10, 2016 of the Ministry of Construction. The method for converting construction price index values when changing the base period is prescribed in Appendix 2 of this Circular.

Article 1Responsibilities of the Project Owner3Responsibilities of the Project Owner

The organization determining the construction price index in accordance with Clause 3 of Article 9 of this Circular shall ensure objectivity, accuracy, and compliance with management requirements and shall be responsible for its application. If necessary, it may engage a consulting organization with the required qualifications to determine the construction price index. The consulting organization determining the construction price index shall be responsible before the investor and the law for ensuring the accuracy and reasonableness of the construction price indices it determines.

Article 14Transitional Provisions

1. The transitional provisions for determining and using the construction price index shall be implemented in accordance with Article 36 of Decree No. 68/2019/NĐ-CP dated August 14, 2019 of the Government on managing investment construction costs.

2. During the period when the cost structure has not yet been determined according to the selected reference point as prescribed in this Circular, the specialized agency in charge of construction shall continue to calculate and announce the construction price indices according to the method stipulated in Circular No. 06/2016/TT-BXD dated March 10, 2016 of the Ministry of Construction, submitting them to the People's Committee of the province for issuance until the end of 2020.

Article 15. Implementation Provisions

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

2. The contents related to the construction price index specified in Articles 20, 21, 22, 23, and 24 of Circular No. 06/2016/TT-BXD dated March 10, 2016 of the Ministry of Construction on Guidelines for Determining and Managing Investment Construction Costs shall cease to be effective from the date this Circular takes effect.