DECREE

AMENDING AND SUPPLEMENTING A NUMBER OF ARTICLES OF GOVERNMENT’S DECREE NO. 48/2010/ND-CP DATED MAY 07, 2010, ON CONTRACTS IN CONSTRUCTION ACTIVITIES

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the June 14, 2005 Civil Code;

Pursuant to the November 26, 2003 Construction Law;

Pursuant to the November 29, 2005 Bidding Law;

Pursuant to the June 19, 2009 Law Amending and Supplementing a Number of Articles of the Laws Concerning Capital Construction Investment;

At the proposal of the Minister of Construction;

The Government promulgates Decree amending and supplementing a number of articles of Government’s Decree No. 48/2010/ND-CP dated May 07, 2010, on contracts in construction activities,

Article 1. To amend and supplement a number of articles of Government’s Decree No. 48/2010/ND-CP dated May 07, 2010, on contracts in construction activities as follows:

1. To supplement Clause 8 to Article 4 as follows:

“Article 4. Principles of signing construction contracts

8. A construction contract shall be signed only after the principal has had capital plan to pay for the contractor according to the payment progress of contract, unless works are build under urgent orders.”

2. To amend and supplement Clause 6 to Article 15 as follows:

“ Article 15. Prices of construction contracts and conditions for application

6. Conditions for application of contractual prices are prescribed as follows:

a) For lump-sum contracts: Price of bidding package, contractual price must be included full relevant risky elements such as slippage in price during performing contract and parties must take responsibility for their risks related to contractual price.

Price of lump-sum contract is only applied to bidding packages which have been eligible for clarifying volume, quality, progress, and unit price for performing works at time of -select-ing contractors and negotiation for signing contract, or in some cases fail to clarify volume and unit price (such as: EC, EP and EPC contracts, and turnkey contracts) but the contractor has full capacity and experiences to calculate, determine the price of lump-sum contract.  

b) For contracts under a fixed unit price: Unit price for works under contract must be included full relevant risky elements such as slippage in price during performing contract and parties must take responsibility for their risks related to unit price to perform works.

Contractual price under a fixed unit price is only applied to bidding packages which have been eligible for clarifying quality, progress, and unit price for performing works at time of -select-ing contractors and negotiation for signing contract, but the work volume has not yet been determined exactly.

c) For contracts under an adjustable unit-price: To apply to bidding packages which have not yet been eligible for clarifying volume and elements of price slippage in unit price for performing the contractual works at time of -select-ing contractors and negotiation for signing contract.

d) Contractual price under duration and percentage (%) is applied to contracts with the work of construction investment advisory (except for construction survey) and insurance operation in construction.”

3. To amend and supplement Clause 7 of Article 16 as follows:

"Article 16. Security for construction contract performance and guarantee for contract advance payment

7. Guarantee for contract advance payment

a) Before the principal makes a contract advance payment to the contractor, the contractor shall pay to the principal a guarantee for the contract advance payment of a value equal to the advance amount. In case the contractor is a partnership of contractors, each partner shall pay to the principal a guarantee for contract advance payment of a value equal to the advance amount paid to it, unless partners agreed to let the head of partnership to pay guarantee for the contract advance payment to the principal.

b) The validity time of guarantee for the contract advance payment must be prolonged until the principal has withdrawn the advance payment amount. The value of the guarantee for contract payment advance shall be subtracted equal to the value of reduced advance amount upon each payment as agreed upon by the contracting parties.”

4. To supplement point d to Clause 4 Article 17 as follows:

"Article 17. Construction contract advance payment

d) For contracts under an adjustable unit-price: Do not adjust unit price for work volume in contract corresponding to the contractual advance payment amounts.”

Article 2. Effect

1. This Decree takes effect on February 01, 2014. Construction contracts which have been signed and performed before the effective day of this Decree shall not be required to perform in accordance with provisions in this Decree.

2. Ministers, Heads of ministerial-level agencies, Heads of Governmental agencies, the chairpersons of the People’s Committees of central-affiliated cities and provinces shall implement this Decree.