Circular No. 167/1998/TT-BGTVT guiding the adjustment of project estimates for construction works under the Ministry of Transport

CIRCULAR

Guidelines for adjusting the budget estimate of construction works under the Ministry of Transport

(applicable to Circular guiding number 08/1997/TT-BXD)

dated December 5, 1997 of the Ministry of Construction

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Pursuant to Directive No. 05/1998/CT-TTg dated January 22, 1998 of the Prime Minister on strengthening investment and construction management;

Based on Circular No. 08/1997/TT-BXD dated December 5, 1997 of the Ministry of Construction guiding the adjustment of construction project budget estimates;

The Ministry of Transport hereby guides the adjustment of budget estimates for construction works using state funds under the management of the Ministry of Transport as follows :

I - OBJECTS AND LEVEL OF ADJUSTMENT OF BUDGET ESTIMATES :

In accordance with Circular No. 08/1997/TT-BXD dated December 5, 1997 of the Ministry of Construction guiding the adjustment of construction project budget estimates, specifically:

1.1 - Objects:

* Only adjust two components in direct costs: labor costs and machinery costs. Therefore, for simplicity in this guidance document, the term "unit price" mentioned herein only includes two components of direct costs in the unit price: labor costs and machinery costs.

*Common costs, taxes, and interest: apply the correct ratio specified in Appendix II of Circular No. 08/1997/TT-BXD after adjusting the direct costs portion.

1.2 - Level of Adjustment:

+ Increase labor costs in direct costs by 1.2 times.

+ Increase machinery costs in direct costs by 1.15 times.

Note:

Direct costs include all allowances, bonuses, and other policies permitted by the State.

II - SCOPE AND CONDITIONS FOR APPLICATION OF ADJUSTMENTS:

The level of adjustment mentioned above shall be applied to adjust the budget estimates of construction projects using state funds within the scope and satisfying the following conditions:

2.1 - Quantities of construction work carried out from January 1, 1997, belonging to projects that have not been settled and implemented according to contracts with price adjustments for all tendering methods (open tendering, restricted tendering, direct assignment).

2.2 - Project budgets or packages must have detailed analysis of each cost component of labor costs and machinery costs in direct costs.

2.3 - Unit prices subject to adjustment:

a - Detailed unit prices established based on local construction unit prices issued.

b - Detailed unit prices composed of:

- Labor consumption norms multiplied by the wage rate according to the A6 wage scale issued by the State (labor costs).

- Machinery consumption norms multiplied by the machinery rental rates issued by the State pursuant to Decision No. 57/BXD-VKT dated March 30, 1994 (machinery costs).

III - METHODS OF PRICE ADJUSTMENT:

3.1 - For projects or packages assigned directly or awarded directly: (Payment according to approved construction budget estimate).

a - Must eliminate discrepancies already adjusted differently from the adjustment levels specified at point (I) regarding labor costs, machinery costs, common costs, taxes, and interest in the previously approved construction budget estimate to bring it back to the original budget estimate figures before adjustment.

b - Then proceed to adjust strictly according to the levels specified at point (I) above and recalculate to determine the new contract price after adjustment (G_GT).

c - From which the difference value (m_CL) between the contract price after adjustment compared to the approved construction budget estimate (G_DTXL).

Granite, gabbro, decorative stone..._CL = ½ ^­G_GT^đc ¾ G_DTXL½

3.2 - For tendered projects (paid according to the winning bid unit price).

The winning bid unit price is the unit price self-balanced by the bidder to meet the requirements of the tender documents and comply with the current market price and regulatory framework of the State at the time of opening bids ¾ Thus, there may be higher or lower unit prices compared to the State's unit price for the same type of work.

Therefore, the method of adjusting the winning bid unit price is conducted as follows:

a - On the basis of maintaining the structure of the unit price established by the bidder (without changing the essence of the bidding price of the bidder):

* If structured as described in (2.3a) above, must review and adjust to the current local construction unit price at the time of opening bids.

* If the unit price structure is as described in (2.3b), must replace correspondingly - With current national norms or project-specific norms approved by the competent authority - With wages according to the A6 wage scale issued by the State pursuant to Decree No. 05/CP dated January 26, 1994 (A6 wage scale) - With machinery rental rates in construction issued by the Ministry of Construction pursuant to Decision No. 57/BXD-VKT dated March 30, 1994 (machinery rental rates 57/BXD-VKT).₆ b - After replacing correspondingly with national norms and State-issued prices as specified in point (3.2a) above, recalculate to determine the new unit price (called DG₆c - Compare the result of the recalculated unit price after replacement (DG

) with the bidder's winning bid unit price (DG_NN).

+ If the unit price of item (i) after replacement is less than the bidder's winning bid unit price (DG_NNNNi_No.) :

< DG_TTi ), this winning bid unit price will not be further adjusted._{+ If the unit price of item (j) after replacement is greater than the bidder's winning bid unit price (DG}NNj

> DG_TTj ), it will be adjusted according to the subsequent guidance method (at point 3.2d)._{d - Method of adjusting the winning bid unit price:}Assuming adjustment of the winning bid unit price for item j (DG

), the steps are as follows:

* Review and eliminate all parts adjusted differently from the levels specified at point (I) above regarding labor costs and machinery costs in the bidder's winning bid unit price, bringing it back to the unadjusted unit price (DGj)._TTj ), it will be adjusted according to the subsequent guidance method (at point 3.2d)._{d - Method of adjusting the winning bid unit price:}* Then proceed to adjust according to the levels specified at point (I) and recalculate to determine the new winning bid unit price after adjustment (DG

* If the unit price after adjustment (DG

) is lower than the winning bid unit price (DG_{d - Method of adjusting the winning bid unit price:} ).

DG_{d - Method of adjusting the winning bid unit price:}Approve and retain the bidder's winning bid unit price as the official unit price for payment._{d - Method of adjusting the winning bid unit price:}) :

IV - IMPLEMENTATION ORGANIZATION:_{d - Method of adjusting the winning bid unit price:}^đc ), this winning bid unit price will not be further adjusted._{d - Method of adjusting the winning bid unit price:}

Based on the guidelines in this circular, the Project Owner shall audit the budget estimates and detailed unit prices to ensure they are accurate, complete, and correct within the scope and conditions of adjustment and adjustment methods to proceed with adjustments suitable to the specific realities of each project.

4.1 - In cases where the total construction value of the project (sum of construction values of all packages) after adjustment does not exceed the construction portion of the approved total investment amount:

Pursuant to the guidance provided in this Circular, the Investor shall review the detailed budget estimate and unit prices to ensure they are accurate, complete, and correct within the scope and conditions for adjustment, and the methods of adjustment to suit the actual circumstances of each specific project.

4.1 - In the case where the Total Construction Value of the Project (the sum of construction values of all contracts) after adjustment does not exceed the construction portion of the Approved Total Investment Amount:

Permitting the Investor to approve the implementation of settlement and final account for the project and be responsible before the Ministry for the results of their adjustments.

This approval document shall have the same effect as the approval document.

4.2 - In cases where the total construction value of the project (sum of the construction values of all contracts) exceeds the approved total investment amount after adjustment:

The Investor must establish procedures to submit for approval along with a detailed explanatory report and calculation justification for the Ministry's review and decision.

4.3 - For projects or contracts implemented under the "Turnkey Contract" method:

Based on the proposal from the Investor, the Ministry will consider and resolve each specific project according to the circumstances and difficulties encountered during construction.

4.4 - For projects funded by foreign loans, it is necessary to compare with the terms of the Contract and the approved Tender Documents, which include specific provisions on price escalation or adjusted work items, to proceed with price adjustments for quantities performed by domestic contractors who won the bids, ensuring compliance with this guidance document.

4.5 - For important projects permitted to construct - individual unit prices for the project or those allowed by competent authorities, additional allowances, and special policies included in the wage rate:

The Investor must establish procedures to submit to the Ministry for review if there is a need to adjust and apply them. (Because the calculation result after adjusting the price according to the object and level specified in point (I) above exceeds the approved construction budget estimate value).

4.6 - Other issues not mentioned in this guidance document shall be applied in accordance with Circular No. 08/1997/TT-BXD dated December 5, 1997, issued by the Ministry of Construction, "guiding the adjustment of construction project budgets."

During the implementation of this document, if there are any difficulties or inconsistencies, please report in writing to the Ministry (through the Directorate of Investment and Construction Quality Control) for consideration and resolution./.