To amend the detailed regulations on construction contracts

Published on 07 - 04 - 2021

On 01/4/2021, the Government has just issued the Decree No. 50/2021 / ND-CP amending and supplementing a number of articles of the Government's Decree No. 37/2015 / ND-CP dated April 22, 2015 detailing the regulations on construction contracts.

In particular, the Decree amends and supplements many provisions related to contracts for design, procurement of materials and equipment and engineering procurement and construction (EPC). According to the Decree, EPC contracts are prioritized for the projects that are complex, with high-tech requirements and adhering to the consistency from the design stage to the supply of equipment, construction, training and technology transfer. Before deciding to apply the EPC contract type, the investment decider is responsible for organizing the evaluation of technical and technological requirements, shortening the project's execution time and the consistency from the design stage, supply of equipment, construction of the work to the operation training and work transfer to meet the objectives and requirements of the approved project and ensure the feasibility of applying this type of EPC contract as compared to other types of contracts.

In the Decree No. 50/2021 / ND-CP, the regulation at Point b, Clause 2, Article 38 of the Decree No. 37/2015 / ND-CP is amended and supplemented as follows: In case the actual work volume increases or reduces by more than 20% of the corresponding workload stated in the contract, at the same time changing over 0.25% of the contract value and more than 1% of the unit price of such work or the arising volume without unit price in the contract, the parties agree to determine the new unit price according to the principle agreed in the contract on the unit price for these volumes for payment.

In case the actually performed work volume increases by more than 20% of the corresponding workload stated in the contract, the new unit price is only applied to the actually performed volume in excess of 120% of the volume stated in the contract.

In case the actual work volume reduces more than 20% of the corresponding workload stated in the contract, the new unit price is applied to the entire volume of actually completed and accepted work.

To amend and supplement Point a, Clause 3, Article 38 as follows: Methods of contract price adjustment include: direct clearing method and adjustment method by adjustment formula as specified at Point b of this Clause. The application of the price adjustment method must be suitable to the nature of the work, type of contract price, payment currency and agreed upon by the parties in the contract. The price index for construction contract price adjustment using the adjustment formula at Point b, Clause 3 of this Article is the construction price index.

The Decree has transition guidance. In particular, for construction contracts that are under negotiation and have not been signed, if their contents are not consistent with the provisions of this Decree, report to the persons competent to decide on investment for consideration and decision, which is based on the principle of ensuring the quality, progress and effectiveness of the project and not affecting the legitimate rights and interests of parties ...

This Decree takes effect from the date of its signing.

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