06 methods for determining cost estimate of IT application projects in Vietnam

According to Circular No. 04/2020/TT-BTTTT of the Ministry of Information and Communications of Vietnam, methods for determining cost estimate of IT application projects funded by state budget for development investment expenditures are specified as follows:

1. Determination of construction costs

Construction costs are determined by estimation based on the norms provided in Section 1 of Appendix 02 enclosed herewith.

2. Determination of equipment costs include:

- Equipment costs;

- Costs of equipment installation, software setup, testing and calibration/modification of equipment and software;

- Costs of database building, data standardization and conversion serving data entry tasks, and inputting of data into the database;

- Costs of training in use of equipment/software and costs of training provided for system administrators and operators (if any);

- Costs of equipment transport and insurance (if any), taxes and fees related to the procurement of equipment are determined by estimation if they are not included in equipment procurement costs;

- Costs of use, assistance, management or operation of the project’s products or work items before they are accepted and transferred (if any) are determined by estimation.

3. Determination of project management costs

Project management costs are determined on the basis of cost norms expressed in percentage or by cost estimation (if project management consultants are employed) in conformity with duration and scale of the project, and characteristics of the project management tasks as prescribed in Section 3 of Appendix 02 enclosed herewith.

4. Determination of investment consultancy costs

- Investment consultancy costs are determined on the basis of cost norms expressed in percentage adopted by the Ministry of Information and Communications or by cost estimation based on the scope and quantity of consulting works, and the plan for performing the contract package as prescribed in Section 4 of Appendix 02 enclosed herewith;

- Costs of investment consultancy works performed before the cost estimate is prepared shall be determined by values of the concluded consulting service contracts in accordance with state regulations.

5. Determination of other costs

Other costs include costs which are not specified in Clause 1 through 4 of this Article and are determined on the basis of cost norms expressed in percentage adopted by the Ministry of Information and Communications, or by a regulatory authority, or by cost estimation as prescribed in Section 5 of Appendix 02 enclosed herewith.

6. Determination of cost contingency

- Cost contingency for additional quantity of works is expressed as a percentage (%) of total amount of construction costs, equipment costs, project management costs, investment consultancy costs and other costs;

- Contingency for cost escalation is determined according to the duration of investment in the project (expressed in months, quarters and years).

- Cost contingency shall be determined according to provisions in Section 6 of Appendix 02 enclosed herewith.

View details at Circular No. 04/2020/TT-BTTTT of the Ministry of Information and Communications of Vietnam, effective from April 09, 2020.

Le Hai

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