Classification of construction contract depending on nature, types of construction contracts in Vietnam

What is construction contract?

Pursuant to the provisions of Decree 37/2015/ND-CP, construction contract is a civil contract negotiated in writing between the employer and contractor for execution of a part or whole of the construction investment activity.

Classification of construction contract depending on nature, types of construction contracts in Vietnam (Internet image)

Classification of construction contract depending on nature, types of construction contracts in Vietnam

Pursuant to the provisions of Clause 1, Article 3 of Decree 37/2015/ND-CP and Clause 2, Article 1 of Decree 50/2021/ND-CP, depending on nature, types of construction contracts in Vietnam are as follows:

(1) Construction consultant contract (or contract for consultancy) is a type of contract for performance of part or whole of the consulting task in activities of investment and construction;

(2) Work construction contract (or construction contract) is a type of contract for the performance of construction of the works, work items or part of construction work by design; General construction contract is a type of contract for the performance of all of the works of an investment project;

(3) Contract for procurement of materials and equipment that is a contract for procurement materials and equipment to be installed in construction works according to the technological design; general contract for procurement of materials and equipment that is a contract for procurement of materials and equipment for all works of a construction project.

(4) Engineering and Construction contract (or EC contract) is a type of contract for the engineering and construction of the works, work items; General EC contract is a type of contract for the engineering and construction of all of the works of an investment project;

(5) Contract for engineering and procurement of materials and equipment (Engineering – Procurement abbreviated as EP in English) that is a contract for engineering and for procurement of materials and equipment to be installed in construction works according to the technological design;

General contract for engineering and for procurement of materials and equipment that is a contract for engineering and for procurement of materials and equipment for all works of a construction project.

(6) Contract for procurement of materials and equipment and construction of works (Procurement - Construction abbreviated as PC in English) that is a contract for procurement of materials and equipment and construction of works and work items;

General contract for procurement of materials and equipment and construction of works and work items that is a contract for procurement of materials and equipment and construction of all works of a construction project.

(7) Contract for engineering - procurement of materials and equipment - construction of works (Engineering - Procurement - Construction abbreviated as EPC in English) that is a contract for implementation of all work ranging from engineering and procurement of materials and equipment to construction of works and work items and test run, commissioning and transfer to the awarding party; EPC general contract that is a contract for engineering - procurement of materials and equipment - construction of all works of a construction project.

An EPC contract is prioritized for a project that is complex, requires high technology and strictly complies with the uniformity and consistency between the phases ranging from the design to supply of equipment phase, execution of construction of works and training in technology transfer. Before making a decision to apply an EPC contract, the investment decision maker shall assess the requirements concerning technology, shortening of the duration of the project, the uniformity between the phases of design and supply of equipment, execution of construction of works and training in operation and transfer of the works with a view to satisfying the project's approved objectives and requirements and ensuring the feasibility of applying the EPC contract type as compared to other contract types.

(8) Turnkey contract is a type of contract for the performance of all the tasks from project establishment, engineering, procurement and construction of the works of an investment project;

(9) Contract for supply of human force, working machinery and equipment is a type of contract for the supply of human force, working machinery, equipment and other necessary vehicles for serving the construction of the works, work items, packages or construction work as designed;

(10) Simple and small-scale construction contract that is a construction contract for the performance of a contract package with a value not exceeding the limit on a small-scale contract package in accordance with regulations of law on bidding. The contents of the contractual work are of a simple technical nature and easy to be conducted.

(11) Other types of construction contract

Mai Thanh Loi

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE