Circular No. 17/2000/TT-BXD guiding the classification of materials included in direct costs in construction project budgets

CIRCULAR

GUIDELINES FOR CLASSIFYING MATERIALS AS DIRECT COSTS IN THE BUDGET ESTIMATE FOR CONSTRUCTION PROJECTS

To manage uniformly and strictly construction costs for projects under investment and construction programs funded by state budget, state-guaranteed credit, state development credit, and state-owned enterprise development capital as stipulated in Articles 10, 11, and 12 issued with Decree No. 52/1999/NĐ-CP dated July 8, 1999 of the Government;

Implementing the State management functions on construction as prescribed in Decree No. 15/CP dated March 4, 1994 of the Government;

The Ministry of Construction provides guidelines for classifying materials as direct costs in the budget estimate for construction projects as follows:

I. GENERAL PROVISIONS

1- Material costs (including main materials and auxiliary materials) in the unit price of basic construction project estimates constitute part of the investment cost of the project. Due to the specific characteristics of construction products, the determination of materials to be included as direct costs in the construction project budget estimate must be uniformly defined and consistent with the product's technical features, technological requirements, and construction process.

2- Material losses include losses of main materials, auxiliary materials, material turnover for components, semi-finished products, and other materials for a determined unit of construction product based on established norms and economic-technical indicators, which must be appropriate to the technology and actual construction conditions.

3- Materials specified in this Circular and those already specified in current basic construction project estimation norms and specialized estimation norms agreed upon by the Ministry of Construction shall be considered as materials and included in the direct costs in the construction project budget estimate.

4- All projects under investment and construction programs funded by state budget, state-guaranteed credit, state development credit, and state-owned enterprise development capital when preparing total project budgets and component project budgets must comply with the provisions of this Circular.

II. REGULATIONS ON MATERIALS TO BE INCLUDED AS DIRECT COSTS IN THE BUDGET ESTIMATE FOR CONSTRUCTION PROJECTS

1. Regulations on types of materials to be included as direct costs in the construction project budget estimate.

1.1. Common building materials

Types of common building materials such as lime, sand, cement, bricks, stones, and other components forming a unit of construction product, as specified in current basic construction project estimation norms and specialized estimation norms agreed upon by the Ministry of Construction, shall be considered as building materials and included in the direct costs in the construction project budget estimate.

1.2. Certain special types of materials are specified as follows:

1.2.1. Pipe materials

Plastic pipes, ordinary concrete pipes, and accompanying pipe accessories, regardless of whether they are domestically produced or imported, and irrespective of their size (pipe diameter, pipe length), shall all be considered as materials and included in the direct costs in the construction project budget estimate.

Cast iron pipes including gray cast iron, ductile cast iron, steel pipes, and accompanying accessories, whether domestically produced or imported, shall be considered as materials and included in the direct costs of construction project budget estimates according to the following regulations:

- Pipes and accessories with diameters less than 600mm, oil and gas pipelines and accessories with diameters less than 400mm.

- Pipes and accessories with diameters greater than 600mm, oil and gas pipelines and accessories with diameters greater than 400mm shall be equated to pipes and accessories with diameters of 600mm (for water pipelines) and 400mm (for oil and gas pipelines) for inclusion in the direct costs of the construction project budget estimate.

The value difference between pipes and accessories with diameters greater than 600mm compared to pipes and accessories with diameters of 600mm (for water pipelines) and greater than 400mm compared to pipes with diameters of 400mm (for oil and gas pipelines) shall be calculated after the pre-tax value of the construction project budget estimate in the consolidated budget estimate table.

Reinforced concrete pressure water pipes of various types and accompanying accessories, whether domestically produced or imported, shall be considered as materials and included in the direct costs of construction project budget estimates according to the following regulations:

- Pipes and accessories with diameters less than 800mm;

- Pipes and accessories with diameters greater than 800mm shall be equated to pipes and accessories with diameters of 800mm for inclusion in the direct costs of the construction project budget estimate;

- The value difference between pipes and accessories with diameters greater than 800mm and pipes and accessories with diameters of 800mm shall be calculated after the pre-tax value of the construction project budget estimate in the consolidated budget estimate table (as attached to this Circular).

1.2.2. Steel structures

Steel structures including frames, trusses, and other fabricated structures installed at the construction site shall be considered as materials and included in the direct costs of the construction project budget estimate;

Steel structures (for a single component) that have been fabricated into complete industrial products weighing less than 15 tons shall be considered as materials and included in the direct costs in the construction project budget estimate;

Steel structures weighing more than 15 tons shall be equated to steel structures weighing 15 tons for inclusion in the direct costs of the construction project budget estimate. The value difference between steel structures weighing more than 15 tons and those weighing 15 tons shall be calculated after the pre-tax value of the construction project budget estimate in the consolidated budget estimate table.

1.2.3. Prefabricated concrete components

All types of prefabricated concrete components shall be included in the direct costs in the construction project budget estimate, including the following types:

- Square and round reinforced concrete piles of various types.

- Pipe piles with diameters less than 600mm.

- Various types of panels and prefabricated slabs.

- Various types of columns, beams, and girders.

- Bridge girders:

Bridge girders with spans less than 25 meters and pipe piles with diameters less than 600mm shall be considered as materials and included in the direct costs in the construction project budget estimate; bridge girders with spans greater than 25 meters and pipe piles with diameters greater than 600mm shall be equated to bridge girders with spans of 25 meters and pipe diameters of 600mm for inclusion in the direct costs of the construction project budget estimate.

The difference value between beam bridges with spans greater than 25m and beam bridges with spans equal to 25m and pipe piles with a diameter of 600mm shall be included in the construction cost estimate before tax in the consolidated construction cost estimate table.

1.24. Electrical materials and communication materials

Domestic-produced or imported electrical materials and communication materials shall be considered as materials and included in the direct costs of the construction cost estimate as follows:

1.2.41. Network connection materials and accessories

- Various types of push buttons (including information and power).

- Various types of contact relays (including information and power).

- Various types of low-voltage circuit breakers (including information and power).

- Various types of switches and plugs (including information and power).

- Various types of sockets, card locks, light dimmers (including information and power).

- Automatic transfer switches (ATS).

- Street lighting cut-off meters, photovoltaic cells.

- Various types of low-voltage insulators.

- Various types of high-voltage insulators.

- High and low voltage cables, optical fibers, and various types of communication wires.

- Various types of electromagnetic wires.

- Various types of computer network cables.

- Various types of lighting fixtures, chandeliers, signal lights.

- Various types of electricity metering devices (including information and power).

- Various types of household electrical panels (excluding complete electrical panels in synchronized equipment).

- Various types of light bulbs (fluorescent lamps, incandescent lamps, halogen lamps...).

- Various types of general-purpose electrical wires.

- Fire protection accessories (smoke detectors, fire extinguishers).

- And other types of materials.

1.2.4.2. Electrical accessories

- Circuit breakers with current less than 1000A.

- Soft starters with current less than 1000A.

- Various types of electrical panel enclosures.

- Various types of hooks.

- Various types of hanging locks, mooring locks, supporting locks.

- Various types of double clamps, connecting clamps, branch clamps.

- Various types of connectors, wire connectors, connector heads.

- Various types of vibration dampers, compensators.

- Various types of single and double brackets.

- Various types of arc suppression rings.

- Cable junction boxes, cable head boxes, cable end covers, wiring junction boxes, wiring racks (high and low voltage).

- Various types of cable conduits, cable protectors.

- Household electric fans (excluding desk fans).

- Various types of copper and aluminum busbars.

- Various types of copper terminals.

- Various types of current switches.

- Copper, aluminum, zinc-coated steel pipes and accessories for air conditioners.

- Central air conditioning ducts.

- Various types of protective steel cages.

- Soviet-made batteries or equivalent in structure and material.

- And other types of materials.

1.2.5. Sanitary materials and accessories

Domestic-produced or imported sanitary materials and accessories shall be considered as materials and included in the direct costs of the construction cost estimate including:

- Various types of washbasins.

- Various types of bathtubs and accessories (excluding shower stalls with glass enclosures).

- Various types of squatting toilets and seated toilets.

- Various types of urinals for men and women.

- Various types of faucets.

- Various types of showerheads.

- Various types of hot water tanks.

- Various types of trash receptacles.

- Inspection pipes.

- Mirrors and accompanying accessories (soap dispensers, towel racks, coat hooks).

- Toilet flush valves.

- Water storage tanks of various capacities.

- Drying cabinets.

- Various types of plastic water pipes, galvanized steel pipes, and accompanying parts.

- Flow meters.

- Pressure gauges.

- Pipe end caps.

- Various types of gate valves, air release valves, float valves.

- Air conditioning protective cages.

- And other types of materials.

2. Provisions on prices of various materials

The prices of materials specified from Clause 1.1 to 1.2 shall be included in the direct costs of the construction cost estimate according to the following regulations:

2.1. Common materials included in direct costs shall be priced based on the price notification of the local Department of Finance Price and Construction; materials not listed in the price notification shall be priced according to market prices at the time of calculation.

2.2. Imported materials from abroad when included in direct costs shall be priced based on import prices including purchase price, transportation costs from port or place of purchase to the project site, warehousing and storage fees at Vietnamese ports, on-site warehouse storage and maintenance costs, taxes, and insurance. Import material prices shall be converted to Vietnamese Dong according to the prevailing exchange rate at the time of import.

III. IMPLEMENTATION

This Circular is uniformly applicable nationwide and takes effect from January 1, 2001. Previous provisions contrary to this Circular are hereby abolished.

For construction projects using special materials carried over from the previous year to 2001, the project owner and contractor shall determine the quantity of work completed by December 31, 2000 and the remaining quantity to be completed from January 1, 2001 to adjust the construction cost estimate according to the following principles:

+ For the quantity of work completed by December 31, 2000, the special materials specified in this Circular shall not be adjusted;

+ For the quantity of work to be completed from January 1, 2001, the special materials specified in this Circular shall be adjusted;

During implementation, if there are any difficulties or inconsistencies, please report them to the Ministry of Construction for research and resolution.

ANNEX

CONSTRUCTION

ITEM OF CONSTRUCTION WORK

Of which

Qj: Quantity of work item j

Djvl, Djnc, Djm: Material cost, labor cost, machinery cost in the unit price of construction work item j

Djvlvt, Djvlc: Price of special material item j with corresponding specifications

F1: The additional allowances (if any) calculated based on the minimum wage that have not been included or are insufficient in the construction unit price.

F2: The additional allowances (if any) calculated based on the minimum wage that have not been included or are insufficient in the construction unit price.

h1n: The coefficient representing the relationship between labor costs in the unit price compared to the minimum wage for the nth wage group.

Group I : h11 = 2.342

Group II : h11 = 2.493

Group III : h11 = 2.638

Group IV : h11 = 2.796

h2n: The coefficient representing the relationship between labor costs in the unit price compared to the rank-based wage for the nth wage group.

Group I : h11 = 1.378

Group II : h11 = 1.370

Group III : h11 = 1.363

Group IV : h11 = 1.357

P: The general cost standard (%) as prescribed.

TL: The taxable income rate (%) as prescribed.

gXL: The pre-tax estimated construction and installation value.

GXL: The post-tax estimated construction and installation value.

CLvl: The difference in common materials (if any).

TXLGTGT: The value-added tax rate specified for construction and installation work.

VAT: The total output value-added tax amount (including input value-added tax paid when purchasing various types of materials, fuels, energy... and the portion of value-added tax that the construction enterprise must pay).