What is construction contract package estimates? Determination of contract estimates in Vietnam

What is construction contract package estimates? Determination of contract estimates in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. What is construction contract package estimates?

According to Article 16 of Decree 10/2021/ND-CP, construction contract package estimates (hereinafter referred to as “contract estimates”) are all costs necessary for executing contract package, determined for each contract package and satisfactory to contractor selection plans prior to organizing contractor selection.

Contract estimates are determined for following contract packages:

- Construction contract package;

- Equipment procurement contract package;

- Equipment installation contract package;

- Construction investment consultancy contract package;

- Mixed contract package.

2. Determination of contract estimates in Vietnam

Determination of contract estimates according to Article 17 of Decree 10/2021/ND-CP is as follows:

- Contract estimates are determined on the basis of costs of each contract package and satisfactory to design, scope, nature, characteristic and specific conditions of contract package.

- For front end engineering design (FEED) projects for implementation of engineering, procurement and construction (EPC) contracts, contract estimates are determined on the basis of costs within contract package determined on the basis of FEED design.

- For projects and constructions permitted by investment deciders to implement construction design after fundamental design according to each construction contract package and each project execution phase, contract estimates are determined on the basis of costs within scope of respective contract package and construction design.

Costs within contract estimates are determined similar to costs under construction estimates under Article 12 of Decree 10/2021/ND-CP satisfactory to scope, nature, characteristics and specific conditions of each contract package.

- For projects with approved construction estimates, investors shall determine contract estimates on the basis of costs within scope of contract package under approved construction estimates if necessary.

- Backup costs in contract estimates conform to form of contracts in contract package specified under contractor selection plans.

3. Examination, appraisal and approval of contract estimates in Vietnam

According to Article 18 of Decree 10/2021/ND-CP, the examination, appraisal and approval of contract estimates are as follows:

- Examination and appraisal of contract estimates under Clauses 2 and 3 Article 17 of Decree 10/2021/ND-CP shall be implemented similar to construction estimates specified under Article 13 of Decree 10/2021/ND-CP.

- Investors shall approve contract estimates under Clauses 2, 3, and 4 Article 17 of Decree 10/2021/ND-CP to replace contract package prices under contractor selection plans according to bidding laws.

- Investors shall appraise and approve contract estimates under Point d Clause 2 Article 16 of Decree 10/2021/ND-CP. In case foreign consultants are hired, entitlement for appraisal and approval of estimates for contracts foreign consultants shall conform to Clause 4 Article 32 of Decree 10/2021/ND-CP.

- Depending on characteristics of contract package, revision of costs under contract estimates specified under Clauses 2 and 3 Article 17 of Decree 10/2021/ND-CP shall be implemented similar to revision of construction estimates under Article 15 of Decree 10/2021/ND-CP.

4. Construction contract package price in Vietnam

Article 19 of Decree 10/2021/ND-CP stipulat the construction contract package price as follows:

- Construction contract package price refers to price of construction contract package approved under contractor selection plans serving as the basis for selecting contractors.

Contract package price includes all adequate costs necessary to execute construction contracts, including backup costs, fees, charges, and taxes.

- Contract package price shall be updated on bid opening day according to bidding law if necessary.

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