Decision No. 501/BXD-VKT on the issuance of regulations regarding costs for appraisal and investment advisory services, construction

Pursuant to …;

Regarding the issuance of regulations on costs for review and investment consulting services

_____________________________

THE MINISTER OF CONSTRUCTION

Pursuant to the Government Decree No. 15/CP dated May 2, 1993, stipulating the tasks, powers, and responsibilities of State management by Ministries and ministerial-level agencies.

Pursuant to the Government Decree No. 15/CP dated March 4, 1994, stipulating the functions, tasks, powers, and organizational structure of the Ministry of Construction.

Pursuant to the Government Decree No. 42/CP dated July 16, 1996, promulgating the Charter for Investment Management and Construction;

At the proposal of the Director of the Institute of Construction Economics,

Pursuant to …;

Article 1. This Decision hereby promulgates the regulations on costs for review and investment consulting services, replacing the "Regulations on Consulting Service Costs" issued pursuant to Decision No. 21-BXD/VKT dated June 10, 1995 of the Ministry of Construction.

Article 2This Decision shall take effect nationwide from October 1, 1996.

Article 3. The Ministries, ministerial-level agencies, agencies under the Government, People's Committees of provinces and centrally governed cities are responsible for organizing the implementation of this Decision.

REGULATIONS

COSTS FOR REVIEW AND INVESTMENT CONSULTING SERVICES
(Pursuant to Decision No. 501-BXD/VKT dated September 18, 1996 of the Minister of Construction)

Part 1:

GENERAL PROVISIONS

1- The costs for review and investment consulting services (hereinafter referred to as review and consulting services) specified in this document are included in the total budget estimate and represent the maximum amount to be spent on these activities. For consulting service costs, they serve as the basis for tendering and selecting consultants. The project sponsor is responsible for managing and using these funds to pay for review and consulting services for investment and construction projects in accordance with current regulations.

2- All entities utilizing state capital for review and consulting services must comply with the provisions of this document. Specifically, the regulations on costs for reviewing feasibility study reports and technical design reviews also apply to investment projects funded by other economic sectors, but not exceeding 70% of the levels prescribed in this document. Costs for review and consulting services for foreign-funded investment projects are regulated separately.

3- This document specifies costs for the following review and consulting services:

3.1- Preparation of preliminary feasibility study reports.

3.2- Preparation of feasibility study reports.

3.3- Review of feasibility study reports.

3.4- Review of technical design.

3.5- Review of general estimates.

3.6- Preparation of tender documents and analysis of tender submissions for construction works.

3.7- Review of tender documents, evaluation criteria for tender submissions, list of bidders, and tender results for construction works (hereinafter referred to as review of tender documents and tender results for construction works).

3.8- Preparation of tender documents and analysis of tender submissions for procurement of materials and equipment.

3.9- Review of tender documents, evaluation criteria for tender submissions, list of bidders, and tender results for procurement of materials and equipment (hereinafter referred to as review of tender documents and tender results for procurement of materials and equipment).

3.10- Supervision of construction and installation of equipment.

Other consulting service costs such as surveying, designing, project management, legal advice on construction and economic contracts, preparation of unit prices for individual projects, etc., are regulated in Points 9 and 10 of this document.

In cases where it is necessary to hire foreign organizations or experts, the relevant current regulations of the State must be followed.

4- The contents of the review and consulting services listed in Point 3 must comply with the following regulations:

- For services 3.1, 3.2, and 3.3, follow the current regulations of the Ministry of Planning and Investment regarding "Guidelines for Project Feasibility Studies and Investment Decisions."

- For services 3.4 and 3.5, follow the current regulations on "Charter for the Preparation, Review, and Approval of Construction Project Designs" and "Guidelines for the Preparation and Management of Construction Prices for Investment Projects" issued by the Ministry of Construction;

- For services 3.6, 3.7, 3.8, and 3.9, follow the regulations in the Tendering Charter issued together with Resolution No. 43/CP dated July 16, 1996 of the Government;

- For construction supervision and equipment installation services (3.10), the content and requirements of this work include: monitoring, inspecting, determining quantities and quality of works during construction to ensure that the project is carried out according to approved technical designs and current technical procedures and norms applicable to similar types of projects; conducting partial acceptance inspections during construction and final acceptance upon completion (in accordance with the Quality Management Regulations for Construction Projects issued by the Ministry of Construction). Any organization undertaking this work must bear responsibility for it in accordance with the law.

5- Management and use of costs for review and consulting services

a) For preparatory work on preliminary feasibility studies, feasibility studies, preparation of tender documents and analysis of tender submissions for construction works and procurement of materials and equipment, and supervision of construction and installation of equipment performed by consulting organizations, the consulting organization must prepare a budget for the cost of performing the work they undertake and submit it in their tender documents so that the project sponsor can use it as a basis for selecting the consultant and signing a contract to perform the work. The contract price must not exceed the costs prescribed in this document.

b) For the review of feasibility study reports, technical design reviews, general estimate reviews, review of tender documents and tender results for construction works, and review of tender documents and tender results for procurement of materials and equipment:

- These review services are all conducted by competent authorities (specialized bodies) and may utilize consulting organizations or experts in the required fields, as stipulated in Article 16, Point 3, and Article 27 of the Investment Management and Construction Charter issued together with Government Decree No. 42/CP dated July 16, 1996; Articles 42 and 43 of the Tendering Charter issued together with Government Decree No. 43/CP dated July 16, 1996, and Point 2, Section XII of the Circular jointly issued by the Ministry of Construction, the Ministry of Planning and Investment, and the Ministry of Finance guiding the implementation of the Investment Management and Construction Charter issued under Government Decree No. 42/CP.

- The competent authority shall prepare a budget for the costs of the main work to be carried out (the budget prepared according to the guidelines attached to this document), and at the same time agree with the investor on selecting consulting organizations (if used) that have the capacity to review the work to be reviewed as required by the competent authority. The total cost for the review by the competent authority and the verification by the consulting organization shall not exceed the limit specified in Part II of this document.

- The budget prepared by the competent authority shall be sent to the investor for submission to the competent authority for approval (the approving authority for the project, technical design, general estimate, bidding results...). For the budget for the cost of reviewing feasibility reports; reviewing tender documents and tender results for construction works and procurement of materials and equipment under Group A projects, it shall be approved by the Prime Minister, the Ministry in charge of the sector, or the Chairman of the People's Committee of the province or centrally governed city, or the competent authority. The investor is responsible for transferring funds according to the approved budget to the competent authority to carry out the assigned tasks. The competent authority must record and monitor separately the income and expenditure for the review tasks according to the accounting system currently in use; and settle the costs used with the investor and be subject to financial inspection and supervision by the competent financial authority.

c) In cases where the investor or the Project Management Board has the capacity and is permitted by the direct superior authority to organize the implementation of certain consultancy works themselves; then the investor or the Project Management Board shall be entitled to the costs for implementing these works according to the budget prepared and approved by the superior authority but not exceeding 70% of the cost level stipulated in this document for the corresponding consultancy work.

d) The cost items for consultancy works performed by consulting organizations (including inspection) include: labor costs, materials, machinery and equipment, management costs, interest and taxes as prescribed.

6- For construction works permitted to establish a State Acceptance Council to accept the works: the permanent office of the State Acceptance Council shall prepare a budget for this purpose and send it to the investor for submission to the competent authority for approval. The management and use of the fees for the State Acceptance Council shall be implemented as prescribed in point 5, sub-section b of this document.

7- The costs for review and consultancy works mentioned in point 3 above are stipulated in Part II of this document; the cost levels are defined according to groups, scale of construction works, and calculated as a percentage suitable to the following values:

- Cost of preparing a pre-feasibility study report (3.1): calculated as a percentage of the value of construction and equipment in the approved pre-feasibility report;

- Cost of preparing a feasibility study report (3.2); reviewing a feasibility study report (3.3): calculated as a percentage of the value of construction and equipment in the approved feasibility report;

- Costs for the following works: Technical design review (3.4); general estimate review (3.5); preparation of tender documents and analysis and evaluation of tender documents for construction works (3.6); review of tender documents and tender results for construction works (3.7); construction supervision and installation of equipment (3.10): calculated as a percentage of the construction value in the approved general estimate;

- Cost of preparing tender documents and analysis and evaluation of tender documents for procurement of equipment (3.8); review of tender documents and tender results for procurement of materials and equipment (3.9): calculated as a percentage of the value of materials and equipment in the approved general estimate;

When determining the costs for review and consultancy, if there are no approved values as mentioned above, the investor and the parties may agree on provisional values until the approved values are determined, at which point the review and consultancy costs will be officially determined based on the approved values. During the period when the official costs have not been determined, the investor is only allowed to temporarily advance up to 80% of the provisional value to the parties performing the work. For consultancy work involving the selection of consultants through tendering, the consultancy costs for this work shall be implemented based on the tendered price.

8- When it is necessary to determine the costs for review and consultancy within the limits specified in the tables in Part II of this document, interpolation methods shall be used.

9- In cases where the provisions of this document cannot be applied to determine the costs for review and consultancy for a particular work, the requesting authority shall prepare a document to send to the Ministry of Construction to reach an agreement on the solution.

10- The costs for construction consultancy works such as:

- Construction survey costs: Calculated according to the regulations in the standard for construction survey estimates attached to Decision No. 177-BXD/VKT dated July 17, 1995 of Circular No. 22-BXD/VKT dated July 17, 1995 guiding the establishment and management of construction survey prices by the Ministry of Construction.

- Construction design costs: Calculated according to the regulations in the construction design price table issued pursuant to Decision No. 179-BXD/VKT dated July 17, 1995 of the Ministry of Construction.

- Project management costs: Calculated according to Circular No. 18-BXD/VKT dated June 10, 1995 of the Ministry of Construction guiding the implementation of project management forms for investment and construction.

11- The consultancy works for investment and construction not specified in this document include:

- Legal advice on construction and economic contracts;

- Establishing unit prices for construction works requiring separate unit prices;

- Quality inspection of construction works;

- Evaluating assets and equipment as products of construction for capital contribution when establishing investment projects;

- Preparing tender documents for consultancy and evaluating tender documents for consultancy.

- Other consultancy works.

For the above works, the consultancy costs shall be determined based on the preparation of a cost budget, submitted to the competent authority for approval, and agreed upon by the Ministry of Construction for budgets of 100 million dong or more.

12- This regulation shall serve as the basis for preparing cost budgets or signing economic contracts for review and consultancy works for investment and construction from October 1, 1996.

Part II:

TABLE OF REVIEW AND CONSULTANCY COSTS FOR INVESTMENT AND CONSTRUCTION

A. COSTS CALCULATED AS A PERCENTAGE OF THE VALUE OF CONSTRUCTION AND EQUIPMENT

Table 1

 

Note Table 1:

1- Classify projects:

- Group I: Mining works, mechanical works, chemical works, metallurgical works, construction materials works, light industry works, food processing works, fuel storage facilities, power plants.

- Group II: Transportation works, water conservancy works, water supply and drainage works, telecommunications works, postal works, power transmission lines and substations, river and sea ports, fisheries works, agriculture works, forestry works, airports (runways, aprons), oil pipeline routes.

- Group III: Medical works, cultural works, commercial works, educational works, broadcasting and television works, sports works, office buildings, tourism works, research works, civil construction works.

2- The minimum cost for reviewing the feasibility study report shall not be less than 1 million VND, and the maximum cost shall not exceed 100 million VND.

B. COST CALCULATED AS A PERCENTAGE OF THE VALUE OF CONSTRUCTION WORKS

Table 2

 

Note Table 2:

1. Classification of projects I, II, III: (as specified in Table 1).

2. The minimum cost for reviewing technical and economic justification and total estimate shall not be less than 1 million VND, and the maximum cost shall not exceed 250 million VND.

C. COST CALCULATED AS A PERCENTAGE OF THE VALUE OF EQUIPMENT WORKS

Table 3

 

Note Table 3:

1. Classification of projects I, II, III: (as specified in Table 1).

2. The minimum cost for reviewing tender documentation and procurement auction results for materials and equipment shall not be less than 500,000 VND, and the maximum cost shall not exceed 30 million VND.

 

ANNEX

GUIDELINES FOR ESTIMATING COSTS FOR FUNCTIONAL AUTHORITIES TO PERFORM REVIEW TASKS