How is the Construction Contract Price Based on Cost Plus Fee Regulated?
How are construction contract costs determined according to cost-plus fees? Which document regulates this issue? Awaiting your response.
The construction contract price based on cost-plus fee is stipulated at Point a, Clause 5, Article 1, Decree No. 50/2021/ND-CP, specifically:
The contract price based on cost-plus fee is a contract price that has not yet been determined at the time of contract signing, with the parties only agreeing on the management costs, general costs, and profits due to insufficient basis to determine the scope of work and direct costs to perform the contractual work.
The management costs, general costs, and profits are agreed upon by the parties based on a percentage (%) or a specific value on the actual, reasonable, and necessary direct costs to perform the contractual work as confirmed by the parties;
The management costs, general costs, and profits are fixed or variable (increase, decrease with or without maximum and minimum limits) depending on the actual direct costs as agreed upon by the parties in the contract to ensure the rights of the parties.
Sincerely.
