Construction Contracts Are Guided By Circular 02/2023/TT-BXD In Various Areas.

On March 3, 2023, the Ministry of Construction issued Circular 02/2023/TT-BXD, which provided guidance on a number of topics related to construction contracts.

- Regulation's scope: This Circular provides detailed instructions on a number of topics related to construction contracts, as well as announces and guides the use of the form of a construction contract, a construction consultancy contract, and the contract form Engineering-Procurement-Construction Works. (hereinafter referred to as EPC). (Article 1);

- Subjects to which this Circular is applicable: This Circular is applicable to organizations and individuals engaged in the establishment and management of construction contract performance under construction investment projects funded with public investment capital, public investment by a foreign state, and a construction contract between a project enterprise and construction contractors implementing bid packages under an investment project using the public-private partnership model; (Clause 1, Article 2)

The primary contents are as follows:  

- Guidelines for payment, temporary payment and dossiers of temporary payment of construction contracts (Article 3). 

Summary: 

+ Payment for construction contracts shall comply with the provisions of Article 19 of Decree No. 37/2015/ND-CP.

+ In case of the production of highly valuable components and semi-finished products, construction materials that must be stored seasonally are advanced to comply with the provisions of Clause 7 of Article 18 of Decree No. 37/2015/ND-CP. The advance dossier shall list the list, unit price, and total value of each type of material, component, and semi-finished product. Upon making a payment, the completed volume's worth must be subtracted in proportion to the amount that was advanced in accordance with the terms of the contract.

+ The temporary payment, in accordance with Clause 4 and Article 19 of Decree No. 37/2015/ND-CP, shall base the amount of the temporary payment and the temporary payment's security measures on the particular circumstances of each temporary payment. Maintaining efficiency and preventing capital loss via interim payments.

+ Responsibility must be clearly specified for goods, jobs, and projects that have not been finished as a result of reasons such as contract cancellation or one of the contracting parties not assuming ownership of the product. Prior to completing the payment, each pertinent entity's duties and obligations must be satisfied.

+ The following items are included in temporary payment dossiers: Minutes of acceptance of volume or minutes of confirmation of volume (if not yet eligible for acceptance); Worksheet of arising payment value (increase or decrease), worksheet of temporary payment value, and the debit note for the temporary payment.

- Guidelines for modifying workload in construction contracts (Article 4), specifically:

+ The adjustment of the work volume in the construction contract shall comply with the provisions of Article 37 of the Decree No. 37/2015/ND-CP as amended and supplemented in Clause 13, Article 1 of the Decree No. 50/2021/ND. - CP.

+ If the adjustment of work volume between members of the contractor consortium had no impact on the construction contract price, the investor shall decide on the basis of the agreement and agreement of the members of the consortium and their capacities and experiences, ensuring the contract's safety, quality, efficiency, and advancement.

- Guidelines for adjustment of construction contract performance schedule (Article 5).

- Guidelines for adjusting unit prices and construction contract prices (Article 6). Specifically:

+ The adjustment of construction contract unit prices shall comply with the provisions of Article 38 of Decree No. 37/2015/ND-CP as amended and supplemented in Clause 14, Article 1 of Decree No. 50/2021/ND-CP.

+ The contract appendix must be signed as the foundation for the contract price adjustment when the construction contract price adjustment results in the contract adjustment or supplementation. In line with the law on the management of construction investment costs and the construction contract as the foundation for signing the appendix contract addition, it is the investor's responsibility to approve or submit for approval the modified and arising cost estimate.

+ Method of adjusting construction contract prices: follow the instructions in Appendix I to Circular 02/2023/TT-BXD dated 03/03/2023.

- Instructions on the use and application of the construction contract form (Article 7). The contract form attached to this circular includes:

+ Form of construction consultancy contract (Appendix II);

+ Form of construction contract (Appendix III);

+ Form of EPC contract (Appendix IV);

+ For small-scale simple contracts, other types of construction investment consulting contracts, and other mixed contracts, the parties should refer to and apply the construction contract templates issued together with this circular.

- Effectiveness: Circular 02/2023/TT-BXD dated 03/03/2023 takes effect from 20/04/2023  and supersedes Circular 07/2016/TT-BXD dated 10/3/2016; Circular 08/2016/TT-BXD dated 10/3/2016; Circular 09/2016/TT-BXD dated March 10, 2016 and Circular 30/2016/TT-BXD dated December 30, 2016.

- Appendixes attached to Circular 02/2023/TT-BXD:

+ Appendix I: Method of adjusting contract price;

+ Appendix II: Form of construction consultancy contract;

+ Appendix III: Form of construction contract;

+ Appendix IV: EPC contract form. 

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