Vietnam: How are cost items in a construction estimate determined?

According to Article 9 of Decree No. 68/2019/NĐ-CP of Vietnam’s Government, cost items in a construction estimate are determined as follows:

- Construction costs include direct costs of materials, manpower and building equipment determined according to the quantity of construction works measured and calculated according to the engineering design, construction drawing, technical specifications, required tasks of the construction, construction prices, indirect costs, preliminary taxable income, VAT determined according to the cost norms imposed by competent authorities or according to the estimate;

- Equipment costs include cost of purchase of building equipment determined according to the quantity, types of equipment of equipment system derived from the construction and technology design, and corresponding purchase prices; cost of management of building equipment purchase by contractors; cost of purchase of software copyrights used for building equipment and technological equipment of a project (if any); cost of training and technology transfers; cost of processing and manufacturing of nonstandard equipment (if any); cost of installation, testing, calibration; cost of testing equipment according to technical requirements and regulations specified in contracts; cost of transport, insurance; taxes and other relevant charges determined according to the estimates or the cost norms imposed by competent authorities ;

- Project management costs are determined as prescribed in Clause 3 Article 21 of this Decree;

- Construction consultancy costs are determined as prescribed in Clause 3 Article 23 of this Decree;

- Other costs shall be determined by the percentage (%) or estimate or cost estimate of similar projects or works;

- Cost contingency for additional quantity of works is expressed as a percentage (%) of total amount of the costs mentioned in Points a, b, c, d, dd Clause 2 of this Article. Contingency for cost escalation is determined according to the duration of project execution, project execution plan, and construction price indexes with due account taken of domestic and international price fluctuation.

View more details at Decree No. 68/2019/NĐ-CP of Vietnam’s Government, effective from October 01, 2019.

Thu Ba

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