What are principles of calculation of on-demand service costs for information technology services covered by state budget capital in Vietnam?

1. What are principles of calculation of on-demand service costs for information technology services covered by state budget capital in Vietnam?

Pursuant to Article 3 of Circular 12/2020/TT-BTTTT stipulating principles of calculation of on-demand service costs for information technology services covered by state budget capital as follows:

1. Ensure the right objectives and effectiveness of the outsourcing for on-demand services.

2. Make sure the calculation of correct and sufficient costs necessary to hire on-demand services.

3. The costs of outsourcing for on-demand services must match the payment balances in the beginning or end of the computation period. Depending on conditions for and capability of budget balancing and distribution, agencies or organizations hiring on-demand services can select the approach to determining service costs included in total costs and expenses for outsourcing for on-demand services according to specific requirements set out in this Circular.

4. Provide instructions about approaches or methods for calculation of costs of outsourcing for on-demand services in accordance with regulations hereof for the purposes of making a cost estimate of on-demand services and determining tender prices of on-demand services and term of payment.   In case where the cost estimate, payment term and time of payment for outsourced on-demand services have been approved under the guidance in this Circular, but in the process of selecting a contractor, there are factors that lead to any change in the payment period/installment or time, agencies or organizations hiring on-demand services and contractors may negotiate to redefine the payment period/installment or time, but must ensure that service rental cost:

a) does not exceed the bid price (the service rental determined after correction of error or deviation, minus discounted prices (if any));   

b) does not exceed the estimated cost or bid price when it is calculated according to the same method as used for calculating the service cost on the basis of the negotiated payment term and time.  

2. What is cost of outsourcing for information technology services not available in the market in Vietnam?

According to Clause 1, Article 2 of Circular 12/2020/TT-BTTTT, the definition of cost of outsourcing for information technology services not available in the market is as follows:

1. Cost of outsourcing for information technology services not available in the market (hereinafter referred to as on-demand services) refers to all necessary costs and expenses for hiring information technology services during the hiring period, including the following cost components: service costs; service administrative and overhead costs; service maintenance costs and other costs related to the provision of services.

3. What are construction and development cost for information technology service formation in Vietnam?

According to Clause 2, Article 2 of Circular 12/2020/TT-BTTTT, construction and development cost for information technology service formation are defined as follows:

2. Construction and development cost for service formation refers to total estimated cost necessary for forming an on-demand service, including costs spent on setting up, expansion or upgradation of the technical infrastructure, software and database system (e.g. construction; IT equipment procurement; equipment installation; software installation; equipment and software testing and calibration).

4. What are information technology service administrative and overhead cost in Vietnam?

According to Clause 3, Article 2 of Circular 12/2020/TT-BTTTT, information technology service administrative and overhead cost are defined as follows:

3. Service administrative and overhead cost refers to all of the costs and expenses necessary to ensure that on-demand services are run or operated in a smooth and flowing manner without any interruption during the renting period.

5. What is information technology service maintenance cost in Vietnam? 

According to Clause 4, Article 2 of Circular 12/2020/TT-BTTTT, the definition of information technology service maintenance cost is as follows:

4. Service maintenance cost refers to total costs necessary for hardware maintenance, software and database maintenance, retention and update to ensure that the entire system of on-demand services is operated in a smooth, flowing and uninterrupted manner during the lease term (including the modification of software for fixing of errors, improvement of performance or attributes or functions of the software, or for the optimized operation of the software in an operating environment based on the system reconfiguration to restore it to the original condition; excluding new setting, expansion or upgradation of the software system).

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