Newest regulations on contract documents signed with contractor in Vietnam

Newest regulations on contract documents signed with contractor in Vietnam (Image from the Internet)

1. Newest regulations on contract documents signed with contractor in Vietnam

The contract documents signed with contractor in Vietnam as stipulated in Article 65 of the Bidding Law 2023 are as follows:

- The contract documents signed with contractor include the following documents:

+ Contract document;

+ Contract appendices including detailed lists of the work scope, pricing schedules, execution timeline (if any);

+ Decision approving the selection result of the contractor.

- In addition to the documents stipulated in Clause 1, Article 65 of the Bidding Law 2023, depending on the scale and nature of the package, the contract dossier may include one or more of the following documents:

+ Contract completion report;

+ Contract negotiation report (if any);

+ Agreement documents among parties on contract conditions, including general conditions, specific conditions;

+ Bidding dossier, proposal dossier, and documents clarifying the bidding dossier, proposal dossier of the selected contractor;

+ Bidding documents, requirement dossier, and amendments, supplements to bidding documents, requirement dossier;

+ Other related documents.

2. Types of contract documents signed with contractor in Vietnam

The types of contract documents signed with contractor in Vietnam as per Article 64 of the Bidding Law 2023 are as follows:

- Lump Sum Contract:

+ A lump sum contract is applicable for packages where at the time of contractor selection, the work scope, technical requirements, and execution timeline are clearly defined, with little possibility of change in volume, technical requirements, unforeseen conditions; for packages not clearly defining volume, unit price but parties can manage risks, changes or define the characteristics, features of the output, including EPC contract and turnkey contract;

+ Applying a lump sum contract, the package price for bidding evaluation includes contingency costs for risk factors of work volume and price escalations that may occur during contract execution corresponding to the risk management responsibilities assigned to the contractor in the package. The bidding price must include all costs for the risk factors of work volume and price escalations that may arise during contract execution corresponding to the contractor's responsibilities in executing the package;

+ The contract price remains unchanged throughout the contract duration for work scope, technical requirements, and conditions stipulated in the contract, except in cases of force majeure and changes in required work scope leading to contract price changes;

+ Payment is made according to the percentage of the contract price or the price of work, construction items, work volume corresponding to the payment period agreed upon in the contract, without requiring detailed completed work volume confirmation.

- Fixed Unit Price Contract:

+ A fixed unit price contract is applicable for packages where the nature of work is clearly defined at contractor selection time but the exact number, volume of actual work to be completed is not determined. The initial contract price is based on quantity, work volume, unit price in the contract, and contingency costs for potentially arising quantities and volumes as determined by law;

+ The fixed unit price contract has constant unit prices throughout the contract duration for all work contents. The contractor is paid based on the quantity, work volume accepted and the fixed unit price stated in the contract.

- Adjustable Unit Price Contract:

+ An adjustable unit price contract is applied to packages with long execution times and price fluctuation risks for input costs affecting contract execution if fixed unit prices are applied. The adjustable unit price contract allows price and contract price adjustments based on agreements in the contract for all work contents. The initial contract price is based on necessary quantities, work volumes with base unit prices per contract, contingency costs for potential quantity, volume increase, and contingency price escalation. The contract must state the method for calculating price escalation and contingency costs as prescribed by law.

+ The contractor is paid based on the quantity, work volume accepted and contract unit price, or adjusted unit price (if applicable).

- Time-Based Contract:

A time-based contract can be applied in emergency situations; for repair, maintenance of works, machinery, equipment; consulting services when it is difficult to determine the scope and service execution time. The contract price is calculated based on the unit price per time unit, agreed-upon wage rates per hour, day, week, or month stated in the contract, and reasonable reimbursable incurred costs.

- Cost-Plus Contract:

A cost-plus contract is applied to work, services where at contractor selection time, there is insufficient basis to determine the work scope and essential needs of input factors and costs for performing the contract’s projected work. At the contract signing time, parties agree on management costs, general costs, profit, cost calculation method based on direct costs, and methods determining direct costs serving as a basis for cost computation and other contents to execute the contract.

- Output-Based Contract:

An output-based contract is applied to work, services where payment is based on the contract's execution results accepted in terms of quality, quantity, and other factors. The contract must clearly specify the specific requirements for output quantity and quality, measures for checking, evaluating, determining the satisfaction level regarding output quality, deduction regulations in payment, price adjustment regulations (if applicable), and other contents to execute the contract.

- Percentage-Based Contract:

A percentage-based contract can only be applied to construction insurance packages where the contract value is accurately determined based on the actual work value accepted.

- Mixed Contract:

A mixed contract combines the contents of the types of contracts specified in Clauses 1, 2, 3, 4, 5, 6, and 7 of Article 64 of the Bidding Law 2023. A mixed contract must clearly specify the work scope applicable to each corresponding contract type and any related additional, adjusted contents when applying multiple contract types simultaneously to a single work content or service. The payment for a mixed contract must comply with payment regulations for each contract type for the executed work scope.

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