On March 3, 2023, the Ministry of Construction issued Circular No. 02/2023/TT-BXD ("Circular 02") guiding some contents of construction contracts.
Circular 02 has some adjustments as follows:
1. 03 new samples of construction contracts applicable from 20/04/2023
a. Circular 02 provides 03 new samples of construction contracts, including:
- Construction consulting contract: used for consulting contracts regarding feasibility study, construction surveying, construction design and construction supervision.
- Construction performance contract.
- Contract of engineering – procurement of materials, equipment – construction of works (referred to as "EPC contract"): used for lump-sum
b. Application scope of the samples: applicable for construction contracts between investors and contractors.
In case the contractor is the general contractor, or main contractor, the parties shall consider applying the necessary contents of the sample contracts to establish and manage the performance of the contract.
For small and simple contracts (having bid packages of providing non-consulting services and procurement with a bid value of within VND 10 billion; and bid packages of works and mixed packages with a bid value of within VND 20 billion) [1], and other types of construction consulting contracts and mixed contracts, the parties can refer to and apply the samples to establish the contracts.
c. Investors and contractors are not required to apply the construction contract samples
Investors and contractors could apply and seek for the sample contracts in the process of establishing and managing contract performance for construction packages.
However, in the construction contract, the following contents must be specified:
- Payment term, contract performance duration, response period, contract termination time and similar cases;
- In the case of a joint venture contractor, an agreement on the contract performance and the guarantee of advance money as prescribed is required;
- The currency and form of payment in the contract are consistent with the requirements in the bidding dossier and the law on foreign exchange;
- For adjustable unit price-based contracts: it is required an agreement on the price adjustment method, the source of price data and the price basis for the adjustment to comply with the bidding dossier and the law on construction contracts.
2. Instructions on the determination of temporary payment value for cases where the contract is not eligible for payment
a. For adjustable unit price-based contracts, if the data for adjusting the unit price or contract price has yet available at the payment time, the current unit price in the contract shall be used to make temporary payment;
b. For products, works and assignments that are under construction or have yet been completed in accordance with the requirements of the contract, the temporary payment shall be made based on the completion extent in specific cases and detailed unit price of the products, work and assignment in the contract.
3. Implementation plan of construction contracts that are signed or in the conclusion process before the effective date of Circular 02
a. Construction contracts that have been signed and being executed before the effective date of Circular 02 shall comply with the previous regulations.
b. Construction contracts that are in the negotiation process and has yet been signed but have contents inconsistent with Circular 02, must be reported to the competent person to decide on investment upon the principle of ensuring the legitimate interests of the parties.
c. The contents of contracts in bidding dossiers and request dossiers approved but not yet issued must be adjusted according to Circular 02. In case of issuance, all contractors who have purchased documents must be notified. Any subject matter of the construction contract as set out in the invitation to bid, request for proposals approved but unreleased, must be adjusted appropriately if found contrary to this Decree. Any change to the construction contract as set out in the invitation to bid, request for proposals approved and released must be notified to all the bidders (who already buy the invitation to bidand request for proposals) for adjustment. If the bid is closed, provision set out in point b above shall be executed.
Circular 02 shall take effect from 20/04/2023 and replace 04 previous Circulars related to construction contracts, including: Circular 07/2016/TT-BXD stipulating the adjustment of construction contract prices, Circular 08/2016/TT-BXD guiding on construction consultancy contracts, Circular 09/2016/TT-BXD instructing on construction contracts and Circular 30/2016/TT-BXD on EPC contracts.
[1] Article 1.2 of Decree 50/2021/ND-CP; Article 63 of Decree 63/2014/ND-CP.
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