THE MINISTRY OF CONSTRUCTION
Circular No. 07/2016/TT-BXD dated March 10, 2016 of the Ministry of Construction guiding the adjustment of construction contract prices
Pursuant to June 18, 2014 Construction Law No. 50/2014/QH13;
Pursuant to the Government s Decree No. 62/2013/ND-CP of June 25, 2013, defining the functions, tasks, powers and organization structure of the Ministry of Construction;
Pursuant to the Government’s Decree No. 37/2015/ND-CP of April 22, 2015, providing in detail construction contracts;
At the proposal of the Director of the Department of Construction Economics;
The Minister of Construction promulgates the Circular guiding the adjustment of construction contract prices.
Article 1. Scope of regulation and subjects of application
1. This Circular guides the adjustment of construction contract prices, covering: principles of price adjustment, cases eligible for price adjustment, order and procedures for, and contents and methods of, adjusting construction contract prices.
2. This Circular applies to organizations and individuals involved in the establishment and management of the performance of construction contracts under the following construction investment projects (including also construction contracts between investors implementing BOT, BTO, BT or PPP projects and contractors performing bidding packages under these projects):
a/ Construction investment projects of state agencies, political organizations, socio-political organizations, socio-political-professional organizations, socio-professional organizations, social organizations, people’s armed forces units and public non-business units;
b/ Construction investment projects of state enterprises;
c/ Construction investment projects not mentioned at Points a and b of this Clause, of which the state capital or state enterprise capital accounts for at least 30%, or less than 30% of the total investment amount of the projects but exceeds VND 500 billion.
Organizations and individuals involved in the establishment and management of construction contracts under construction investment projects funded with other capital sources are encouraged to apply the provisions of this Circular.
3. For construction contracts under projects funded with the official development assistance (ODA), in case relevant treaties to which the Socialist Republic of Vietnam is a contracting party and which contain provisions different from those of this Circular, such treaties shall prevail.
Article 2. Principles of adjustment of construction contract prices
1. Construction contract price adjustment shall only be made during the period of contract performance, including also extended periods as agreed upon in the contract.
2. In case a post-adjustment contract price (covering also additional work volumes reasonably arising outside the signed contract) does not exceed the approved bidding package price (including also the contingency of such bidding package), the project owner may decide on the adjustment. In case it exceeds the approved bidding package price, the adjustment shall be approved by a person competent to decide on the investment.
3. When signing the contract’s annexes, the parties should clearly identify additional work volumes and applicable unit prices. The additional work volumes shall be agreed upon by the parties before performing the contract.
4. For additional work volumes arising due to the contractor’s subjective fault, the contract value corresponding to the advance payment level exceeding the minimum advance level (specified in Clause 5, Article 18 of Decree No. 37/2015/ND-CP) may not be adjusted in price from the time of advance payment.
5. Those of the compensation responsibility of insurers are not subject to contract price adjustment under this Circular.
6. The contract price adjustment shall be agreed upon by the parties and specified in the contract regarding cases eligible for price adjustment; adjustment procedures, order, time, scope and conditions; and methods and grounds for contract price adjustment. The methods for contract price adjustment must conform to contract price types and characteristics of contractual works. Other adjustments (if any) agreed upon by the parties in the contract must not contravene the provisions of this Circular and other relevant legal documents on construction contracts.
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