Vietnam: ODA project must be submitted to the competent authority before adjusting its contract

Specifically, according to Article 10 of the Circular No. 39/2015/TT-BNNPTNT of the Ministry of Agriculture and Rural Development of Vietnam, the investor and contractor shall adjust the price and volume of the contract according to the provisions of Article 93 of Decree No. 63/2014/NĐ-CP, Decree No. Nghị định 37/2015/NĐ-CP, provisions of the Sponsor and the following regulations:

+ The contract price adjustment must be agreed by the parties and specified in the contract on the cases in which the contract price can be adjusted, the order, scope, method and basis for the adjustment of the contract price. The method of adjusting the contract price must be suitable to the type of contract and the nature of the work in the contract. The contract price adjustment applies only during the signed contract performance period (excluding the warranty period). Do not adjust the contract price in case of contract extension due to subjective reasons caused by the contractor.

+ For the type of contract under the fixed unit price when there is a arising volume or other risks (if any) compared to the signed contract, the investor is allowed to make payment within the reserve for the volume of production or risks of the bidding package and at the same time take responsibility for their decisions;

+ For the type of contract under the unit price which is adjusted when there is a change (increase) in the unit price compared to the signed contract (price slippage) or risk factors, arising volume may occur during the performance of the contract, the investor pay to the contractor according to the provisions of the signed contract and within the provision for risk factors and price slippage of the bidding package, and is responsible for the decision of the contractor.

- In case the actual volume of work performed differs by more than 20% of the corresponding work volume (according to the work code) stated in the contract or the arising volume has no unit price in the contract, the investor and the contractor agrees to determine the new unit price according to the principle of agreement in the contract on the unit price for the arising volume (applicable only to the volume difference of more than 20%) but not exceeding the unit price calculated according to norms and regulations of the State at the time of implementation, the volume generated is equal to and less than 20% using the unit price in the contract.

- The investor shall report to the person competent to decide on investment for consideration and decision before signing to amend and supplement the contract in the following cases:

+ The adjusted contract price (including adjustment of work volume, adjustment of unit price, adjustment of price) exceeds the price of the bidding package or the estimate of the bidding package (including the contingencies of the bidding package);

+ Adjust progress at technical stops for important items in the bidding package;

+ Adjustment of contract extension.

Note: For ODA projects, the investor and the project owner shall submit to the competent authority for consideration and approval of the adjustment before consulting the donor according to regulations.

View more details at the Circular No. 39/2015/TT-BNNPTNT of the Ministry of Agriculture and Rural Development of Vietnam, effective from December 10, 2015.

Le Vy

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