Circular No. 51/2001/TT-BNN-XDCB guiding the preparation and adjustment of project budgets for construction works under the Agriculture and Rural Development sector.

CIRCULAR

OF THE MINISTRY OF AGRICULTURE AND RURAL DEVELOPMENT DECREE NO. 51/2001/TT-BNN-XDCB
DATE OF ISSUE: MAY 3, 2001 GUIDELINES FOR PREPARATION AND ADJUSTMENT
OF ESTIMATES FOR CONSTRUCTION PROJECTS BELONGING TO
THE AGRICULTURE AND RURAL DEVELOPMENT SECTOR

Pursuant to Circular No. 03/2001/TT-BXD dated February 13, 2001 of the Ministry of Construction on guidelines for adjusting construction project estimates.

Pursuant to the draft agreement of the Ministry of Construction No. 627/BXD-VKT dated April 19, 2001, on guidelines for preparing and adjusting estimates for construction projects belonging to the Agriculture and Rural Development sector.

The Ministry of Agriculture and Rural Development hereby provides specific guidelines for preparing and adjusting certain items in the estimates for construction projects belonging to the Agriculture and Rural Development sector as follows:

I. SCOPE OF APPLICATION:

This circular guides the adjustment of labor cost and construction machinery cost estimates for construction projects belonging to the Agriculture and Rural Development sector based on Circular No. 03/2001/TT-BXD dated February 13, 2001 of the Ministry of Construction.

In addition to the general provisions implemented according to the guidelines in Circular No. 03/2001/TT-BXD dated February 13, 2001 of the Ministry of Construction, this circular only provides additional guidance on adjusting the estimated costs of construction works for construction projects belonging to the Agriculture and Rural Development sector that apply certain specialized norms and unit prices issued by the Ministry of Agriculture and Rural Development (except for the unit price for drilling grout injection to reinforce dike quality, issued under Decision No. 13/2001/QĐ/BNN-PCLB dated February 20, 2001 of the Ministry of Agriculture and Rural Development, which shall not be adjusted).

II. ADJUSTMENT OF ESTIMATED COSTS FOR CONSTRUCTION WORKS:

1. Adjustment of labor costs:

a. Labor costs in the current construction unit prices of provinces and centrally governed cities shall be adjusted with factor K_NC= 1.46 times.

b. Labor costs in the estimate norms and unit prices for drilling grout injection to handle water conservancy projects, as stipulated in Decision No. 220/1998/QĐ/BNN-XDCB dated December 30, 1998, issued by the Ministry of Agriculture and Rural Development, shall be calculated with adjustment factor: K_NC= 1.46 times.

2. Adjustment of machinery costs:

a. Labor costs in the current construction unit prices of provinces and centrally governed cities shall be adjusted with factor K_NC = 1.7 times.

b. Estimated costs for specialized construction machinery at Decision No. 27/1999/QĐ/BNN-ĐTXD dated February 3, 1999 of the Ministry of Agriculture and Rural Development, shall be adjusted with the following factors:

- Excavator with capacity 0.65m³ June 2024; 0.95m³ adjustment factor 1.06 times

- Excavator with capacity 1.25m³ ---- 1.05 times

- Mud suction boat type HB power Ê 300hp ---- 1.07 times

- Mud suction boat type HF 900 ---- 1.06 times

- Mud suction boat type Beaver 300hpJune 2024;600hp ---- 1.05 times

- Mud suction boat type Beaver 1600hpJune 2024;3800hp ---- 1.04 times

c. Costs for construction machinery in the estimate norms and unit prices for drilling grout injection to handle water conservancy projects, as stipulated in Decision No. 220/1998/QĐ/BNN-XDCB dated December 30, 1998, issued by the Ministry of Agriculture and Rural Development, shall be adjusted with factor K_NC = 1.07 times.

3. Common expenses, pre-tax income, and value-added tax:

Common expenses and pre-tax income shall be carried out according to Appendix 2 of Circular No. 09/2000/TT-BXD dated July 17, 2000 of the Ministry of Construction. Value-added tax shall be implemented according to current regulations.

III. ADJUSTMENT OF OTHER COSTS IN THE TOTAL ESTIMATE
CONSTRUCTION WORK

Adjustment of construction survey costs, investment consulting and construction costs; design costs for construction projects; management board costs...

Shall be carried out according to the guidelines in Circular No. 03/2001/TT-BXD dated February 13, 2001 of the Ministry of Construction.

IV. IMPLEMENTATION ORGANIZATION:

IV.1. Cases where adjustments to the estimate are not allowed under this Circular:

1. Investment projects implemented from the beginning of 2001 that have been approved through tender results under the "turnkey contract" method.

2. Work volumes completed after January 1, 2001 that have been accepted and paid, or have been settled.

3. Work volumes designated or tender packages implemented under adjustable-price contracts with construction periods less than 12 months (for loan-funded packages: ADB, WB... special provisions apply) and were implemented in 2000, the remaining volume carried over to 2001 shall also not be adjusted.

4. For international bidding projects within the country, projects being constructed by foreign contractors in Vietnam.

IV.2. Cases where adjustments to the estimate are allowed under this Circular and methods for calculating adjusted estimates:

1. Cases where adjustments to the estimate are allowed:

- Work volumes designated or tender packages implemented under adjustable-price contracts with construction periods over 12 months shall only be adjusted for work volumes starting from the 13th month. This provision applies to the remaining volume from the previous year carried over to 2001 and all tender packages decided upon (or designated) in 2001 (for loan-funded packages: ADB, WB... the time allowed for price adjustment is specified separately in the Agreement).

- For construction projects or project components that have been approved for total estimates or estimates but have not yet or are currently organizing tenders or designations, the investor must adjust the total estimates or estimates according to the guidelines of this Circular and resubmit them for approval by the approving authority.

2. Methods for calculating adjusted estimates:

- In cases where the designated bid price or tender bid price does not have detailed unit prices, it shall be converted from the local unit price (or project price) corresponding to the winning bid price (see the attached appendix for guidance).

- In cases where the designated bid price or tender bid price has detailed unit prices, it shall be calculated directly as prescribed in the Circular.

3. When submitting adjusted estimates or adjusted designated bid prices, supplementary winning bid prices according to the above provisions, it is necessary to attach the approved estimates, designation decisions and winning bids with prices, acceptance and payment records for each period, quantities requiring price adjustment, and simultaneously provide the National Treasury's confirmation of payment results. specifies the tender award and acceptance accompanied by the price, the minutes of inspection, payments in installments, quantities requiring price adjustment, and simultaneously includes the confirmation opinion of the State Treasury on the payment results.

IV.3. EFFECTIVE DATE:

This Circular shall be uniformly applied throughout the Agriculture and Rural Development sector from January 1, 2001, replacing Circular No. 112/2000/TT-BNN-XDCB dated November 6, 2000 issued by the Ministry of Agriculture and Rural Development.

Upon receipt of this Circular, investors, project management boards, and consulting units are required to immediately review work volumes within the scope that can be adjusted and categorize them into two types:

Type 1: Adjustments that do not increase the total approved estimate value.

Type 2: When adjusting increases the total budget estimate and exceeds the investment capital for the year 2001. In this case, the investor and the project management board together with the Consulting Unit report to the Ministry, accompanied by measures for handling. After the proposal is approved, the Ministry permits the implementation of procedures to adjust for each specific object.

During the implementation process, if there are difficulties, the investors, Project Management Board, and units are requested to send feedback documents to the Ministry of Agriculture and Rural Development for consideration and resolution.

ANNEX

GUIDELINES FOR CALCULATING THE CONVERSION FROM LOCAL UNIT PRICE (OR PROJECT UNIT PRICE)
TO BIDDING UNIT PRICE
Example applied to bidding unit price without detailed item prices for water conservancy projects
(Attached to Circular No. 51/TT/BNN-XDCB dated May 3, 2001 of the Ministry of Agriculture and Rural Development)

Compensation costs: Labor: 29,314 x 25% = 7,329 VND; Machinery: 16,016 x 4% = 641 VND

Total compensation: 7,329 + 641 = 7,970 VND

Note: Column 2 is the type of work included in the converted bidding unit price corresponding to the local unit price.

Column 4 Code corresponding in the local unit price.

Columns 5, 6, 7 values in the local unit price.

Columns 8, 9, 10: Unit price calculated with the combined coefficient (K1, K2, K3, K4, K5) at the time of bidding according to regulations:

For quantities won before 1998, the coefficient K is calculated as follows:

K1 = Material coefficient = 1.055 x 1.05/1.09 (1.055 is the pre-tax income rate of 5.5%, 1.05 is VAT of 5%, 1.09 is previous tax).
previously mentioned).

K2 = Labor construction coefficient = 1.055 x 1.64 x 1.05/1.09 (1.64 is the general cost for labor construction of 64%. Other coefficients are similar).
above mentioned).

K3 = Machinery coefficient = 1.055 x 1.05/1.09. Similar coefficients as above.

K4 = Labor excavation coefficient = 1.51 x 1.05 x 1.05/1.11 (1.51 is the general cost for labor excavation of 51%, 1.11 is previous tax 11%, other coefficients are similar).
11%, other coefficients as mentioned above).

K5 = Machinery excavation coefficient = 1.05 x 1.05/1.08 (1.08 is previous tax of 8%, other coefficients are similar).

For quantities won from 1999 onwards, the calculation is as above but without the reduction coefficients 1.09; 1.11; 1.08.

In cases where, at the time of winning the bid, according to the local unit price, material costs, labor coefficients, and allowances are included in the unit price, the calculation method is applied as above, ensuring compliance with regulations.