Văn bản hợp nhất 02/VBHN-BXD ngày 17/05/2021 hợp nhất Nghị định hướng dẫn về hợp đồng xây dựng do Bộ Xây dựng ban hành

DECREE

ELABORATION OF CONSTRUCTION CONTRACTS

The Government’s Decree No. 37/2015/ND-CP dated April 22, 2015 on elaboration of construction contracts, which has been effective since June 15, 2015, is amended by:

The Government’s Decree No. 50/2021/ND-CP dated April 01, 2021 on amendments to the Government’s Decree No. 37/2015/ND-CP dated April 22, 2015 on elaboration of construction contracts, which has been effective since April 01, 2021.

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

Pursuant to the Law on Construction dated June 18, 2014;

At the request of the Minister of Construction [1],

The Government hereby promulgates a Decree on elaboration of construction contracts.

Chapter I

GENERAL

Article 1. Scope and regulated entities

1. This Decree elaborates construction contracts.

2. [2] This Decree applies to organizations and individuals (hereinafter referred to as “entities”) involved in formulation and management of the performance of construction contracts belonging to construction projects funded by public investment capital, state capital other than state investment capital, and construction contracts between PPP project enterprises and construction contractors performing contract packages belonging to investment projects in the public-private partnership form (hereinafter referred to as “PPP projects”).

Regarding projects funded by other capital, entities shall refer to the regulations laid down in this Decree to formulate and manage construction contracts.

3. Regarding construction contracts belonging to projects funded by official development assistance (ODA), if an international treaty to which Vietnam is a signatory contains regulations different from those set out in this Decree, the regulations of such international treaty shall apply.

Article 2. Definitions

For the purposes of this Decree, the terms below shall be construed as follows:

1. “construction contract” means a civil contract negotiated in writing between the party awarding the contract and the party receiving the contract to do the work in part or in whole in construction and investment activities.

2. “party awarding a contract” (hereinafter referred to as “the awarding party”) means an investor or the representative of an investor or a general contractor or a head contractor.

3. “party receiving a contract” (hereinafter referred to as “the receiving party”) means a general contractor or head contractor if the awarding party is an investor; means a sub-contractor if the awarding party is a general contractor or head contractor. The receiving party may be a partnership of contractors.

4. “general conditions” of a construction contract means a document attached to the contract providing for basics rights, obligations and relationships of parties to the construction contract.

5. “specific conditions” of a construction contract means a document attached to the contract elaborating or supplementing several regulations of the general conditions of the construction contract.

6. “appendix” to a construction contract means a document attached to the contract so as to elaborate, clarify, amend or supplement several terms of construction contract.

7. “working day” in this Decree means any calendar day except any Sunday, public holiday or Tet holiday as stipulated by the law.

8. “technical instructions” means a collection of technical requirements based on technical regulations and standards applied to construction works and design of construction works so as provide instructions and regulations on materials, products and equipment used for works of construction packages and tasks of construction, supervision and commissioning of construction works.

9. “FEED” means a front-end engineering design that is developed in conformity with international practice as the basis for development of a detailed design.

10. “scope of work” is defined in Clause 1 Article 12 of this Decree.

11. “head contractor” means a contractor that directly signs a construction contract with the construction investor.

12. “sub-contractor” means a contractor that signs a construction contract with the head contractor or general contractor.

13. “foreign contractor” means an organization established under foreign law or an individual holding foreign nationality that is involved in the signing and management of the performance of a construction contract in Vietnam. A foreign contractor may be a head contractor, general contractor or sub-contractor.

Article 3. Types of construction contracts

1. Depending on the nature and contents of the work, types of construction contracts are as follows:

a) Construction consultancy contract (hereinafter referred to as “consultancy contract”) that is a contract for implementation of one, some or all of the consultancy work in construction and investment activities;

b) Contract for execution of construction of works (hereinafter referred to as “execution contract”) that is a contract for execution of construction of the works, work items or part of construction work according to the design for construction of the works; and general contract for execution of construction of works for implementation of all works of a construction project;

c) [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;

d) Contract for engineering and construction of works (Engineering – Construction abbreviated as EC in English) that is a contract for engineering and construction of works or work items; general contract for engineering and construction of works that is a contract for engineering and construction of all works of a construction project;

dd)[4] 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.

e)[5] 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;

g)[6] 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.

h) Turnkey contract that is a construction contract for implementation of the following work: formulation of the project, design, supply of technological equipment and execution of construction of works of a construction project;

i) Contract for supply of human resources, machinery and equipment for execution that is contract for supply of engineers and workers (hereinafter collectively referred to as “human resources”), construction machinery and equipment, and other necessary means in order to serve the construction of the works, work items, contract packages or construction work according to the construction design;

i1)[7] 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.

k) Other types of construction contracts.

2. Depending on the contract price, types of construction contracts are as follows:

a) Lump sum contract;

b) Fixed unit price contract;

c) Adjusted unit price contract;

d) Time-based contract;

d1)[8] Cost-plus fee contract;

d2)[9] Other construction contracts.

D)[10] Combined price contract that is a construction contract using a combination of the contract prices prescribed in Points a through d2 of this Clause.

3. Depending on the relationship of the parties involved, types of construction contracts are as follows:

a) Head contract which is a construction contract signed between the investor and the head contractor or general contractor.

b) Sub-contract which is a construction contract signed between the head contractor or general contractor and a sub-contractor.

c) Internal fixed rate contract which is a contract between the awarding party and the receiving party that is affiliated to an agency or organization.

d) Construction contract involving foreign elements which is a construction contract signed between a foreign contractor and a domestic contractor or domestic investor.

Article 4. Principles of signing construction contracts

The signing of construction contracts must adhere to the principles set out in Clause 2 Article 138 of the Law on Construction No. 50/2014/QH13 and the following principles:

1. At the time of signing a contract, the receiving party must satisfy all conditions regarding capacity for practice and operation in accordance with regulations of law on construction. Regarding partnership contractors, the division of the volume of work quantity under the partnership agreement must be relevant to the operation capacity of each member in the partnership. Regarding foreign head contractors, an undertaking to hire domestic sub-contractor to perform the work under a contract must be included when such sub-contractors meet the requirements of the contract package.

2. The investor or their representative is entitled to sign a contract with one or more head contractors to perform the work. If the investor signs contracts with multiple head contractors, the contents of such contracts must ensure consistency and comprehensiveness during performance of the work under the contracts to meet the schedule and ensure quality and investment efficiency of the construction project.

3. A general contractor or head contractor is entitled to sign contracts with one or more sub-contractors that must be approved by the investor. These sub-contracts must be consistent and comprehensive with the head contract signed with the investor. The general contractor or head contractor shall be responsible to the investor for schedule and quality of the undertaken work including the work performed by the sub-contractors.

4. The contract signing price shall not exceed the winning bid price or the result of negotiation of the construction contract, except for the volume of the extra-contractual work permitted by the person that has the power to make the investment decision (hereinafter referred to as “the investment decision maker”).

5. [11] Before concluding an EPC contract, the parties must agree upon the following main contents:

a) The scope of work expected to be performed under the EPC contract;

b) The construction location, the direction and route of the construction works, their type and grade; the scale and capacity of and plan for the products to be selected, and the capacity for exploitation and use of the works;

c) Information concerning documents, data and figures on natural conditions, engineering geology, hydro-geology and hydrology of the area where the works are expected to be built;

d) Requirements concerning construction engineering design and several initial design parameters;

dd) Plans for technology, engineering, equipment and commerce; origin of equipment and products; solutions for connecting technology to current technical systems (if any);

e) Plan to connect technical infrastructure both inside and outside of the works; fire safety solutions within the scope of the EPC contract package;

g) Construction-related solutions and primary materials to be used;

h) Requirements concerning management of quality of the construction works, and testing, commissioning, warranty and maintenance thereof.

i) Solutions to architecture, construction site, cross sections and vertical sections of the works, dimensions and main structure of the construction works within the scope of the EPC contract package;

k) Lists and levels of application of technical regulations and standards to be used during design, supply of equipment and execution of construction of works;

l) Technical instructions on supplies, equipment and technical services; processes for operating part or whole of the works within the scope of the EPC contract package;

m) Environmental protection and fire safety requirements, and other issues;

n) Requirements relating to procedures for approval; the number of documents and deadlines for submission thereof to the awarding party;

o) Schedule and milestones for implementing and completing the essential work, work items and the entire works to be put into operation and use;

p) Responsibilities delegated to the awarding party and receiving party for electricity and water supply, information and communications, internal roads and other services available on site, and for processing of interfaces between contract packages in the same construction project.

Article 5. Principles of performing construction contracts

Upon performance of a construction contract, the parties to the contract must adhere to the principles set out in Clause 3 Article 138 of the Law on Construction No. 50/2014/QH13.

Article 6. Effect and legality of construction contracts

1. A construction contract becomes legally effective if the following conditions are met:

a) Signatories have sufficient legal capacity;

b) The signing principles set out in Article 4 hereof are adhered to;

c) The form of the contract is in writing and the contract is signed by the authorized representatives of the parties to the contract. If either party to the contract is an organization, such party must sign and affix seal as prescribed by law.

2. The effective date of the construction contract is the date on which it is signed (bears a seal, if any) or another specific date as agreed upon by the parties in the contract and the awarding party has received a performance security from the receiving party (if the contract contains provisions on performance security).

3. Legality of the construction contract:

a) The effective construction contract is the foremost legal basis for the obligations of the awarding party, the receiving party and relevant parties to perform it;

b) The effective construction contract is the foremost legal basis for resolution of any dispute between the parties. If the parties to the contract have yet to agree upon the method for dispute resolution, the dispute shall be resolved in accordance with relevant regulations of law;

c) Regulatory bodies and agencies that control and allocate capital and grant loans, carry out inspections and audits, other relevant agencies shall, according to the contents of the legally effective construction contract, exercise their functions and tasks as prescribed without violating the legitimate rights and interests of the parties to the contract.

Article 7. Management of performance of construction contracts

1. Within their rights and obligations, the parties should formulate a plan and measures for organization of performance in conformity with the contents of the signed construction contract to reach the agreements set out in the contract.

2. Depending on the type of the construction contract, the management of performance of construction contracts shall include:

a) Management of the contract performance schedule;

b) Quality management;

c) Management of volume and price of the contract;

d) Management of occupational safety, environmental protection and fire safety;

dd) Management of adjustment of the contract and other contents of the contract.

3. Both awarding contract and receiving contract must appoint and notify the other party of its representative to manage performance of the construction contract. The parties’ representatives must hold full powers to make decisions and be responsible for their decisions within their powers specified in the contract.

4. All proposals, requests and feedback from the parties during the management of performance of the construction contract shall be made in writing. The contents of the written proposals and requests shall contain the grounds, bases and efficiency (if any) of such proposals and requests, and the deadline for giving response as agreed upon in the contract. Upon receipt of a proposal or request from one party, the other party must give a written response to the approval or disapproval by the deadline as agreed upon in the contract within seven (07) working days from the receipt of such proposal or request unless agreed upon by the parties. By the aforementioned deadline, if the party that receives proposal or request fails to respond to it without a legitimate reason, thereby causing damage to the other party, it shall take full responsibility and pay compensation for any damage (if any).

5. Any proposal or request from the parties during the management of performance of the construction contract shall be sent to the correct transaction address or the address as agreed upon by the parties in the contract.

6. For any matter that is not prescribed in this Decree, the parties shall rely on relevant regulations of law for performance.

7. [12] Regarding an EPC contract:

a) Before procuring materials and equipment for the EPC contract, the receiving party shall lay down requirements pertaining to technical specifications, technology and origin and submit them to the awarding party for approval prior to the procurement if agreed upon by the parties in the contract. The approval by the awarding party does not reduce the receiving party’s responsibility for procuring materials and equipment for the EPC contract. If the parties do not specify any agreement in the EPC contract, the receiving party shall comply with the approved design documentation and technical specifications, technology and origin coming with the materials and technological equipment in the EPC contract.

b) The receiving party may directly procure or hire a sub-contractor to procure materials and equipment for the EPC contract.

Chapter II

SPECIFIC PROVISIONS

Section 1. INFORMATION ABOUT, BASES FOR SIGNING, CONTENTS, DOCUMENTS, APPLICABLE LAW AND LANGUAGE USED IN CONSTRUCTION CONTRACTS

Article 8. Information about construction contracts

Information about a construction contract must be specified in the contract, including:

1. Contract type and number, name of contract package, project name, construction site and bases for signing the contract;

2. Transaction name of the parties to the contract, representatives of the parties, registered business address or transaction address, tax identification number, business registration certificate, account number, phone number, fax number, email, time and location of signing the contract and other relevant information.

3. In the event that the receiving party is a partnership of contractors, information about the members of the partnership must be sufficiently specified as prescribed in Clause 2 of this Article, clearly stating the leading member of the partnership.

Article 9. Bases for signing construction contracts

1. The bases for signing a construction contract shall be composed of the requirements pertaining to the work to be done as agreed upon by the parties, the result of contractor selection, result of negotiation and completion of the contract and relevant applicable legal bases.

2. As for an EPC, EC or EP contract, in addition to the bases specified in Clause 1 of this Article, a feasibility study report for construction or an approved FEED is also required.

3. As for a turnkey contract, in addition to the bases specified in Clause 1 of this Article, the project performance duties, investment guidelines and approved feasibility study report for construction are also required.

Article 10. Contents of construction contracts, construction contract documentation and order of priority of construction contract documentation

Contents of construction contracts, construction contract documentation and order of priority of documents enclosed with a construction contract shall comply with Articles 141 and 142 of the Law on Construction No. 50/2014/QH13.

Article 11. Applicable law and language used in construction contracts

1. Construction contracts must apply the legal system of the Socialist Republic of Viet Nam and comply and comply with the regulations laid down in this Decree.

2. The language used in construction contracts is Vietnamese.

3. As for a construction contract involving foreign elements, the language used is Vietnamese and a foreign language as agreed upon by the parties; in case no agreement on this is reached, English shall be used.

Section 2. CONTENTS AND VOLUME OF WORK, QUALITY REQUIREMENTS AND PERFORMANCE SCHEDULE

Article 12. Contents and volume of work specified in construction contracts

1. Contents and volume of work specified in a construction contract refer to the contents and volume of work signed by the awarding party and the receiving party within the scope of the work specified in the contract and clearly agreed upon by the parties in the contract. The scope of work shall be determined on the basis of the bidding documents, request for proposals or proposals, minutes of negotiation and relevant legal documents. Depending on the specific type of the construction contract, the scope of work shall be determined as follows:

a) Regarding a construction consultancy contract: formulation of planning; setting up of an investment construction project; design; survey; project management; management of construction contract performance; construction supervision; verification of design, cost estimates and other consultancy work in construction and investment activities;

b) Regarding an execution contract: supply of building materials, human resources, machinery and equipment for construction and execution of construction of works according to the approved design documentation.

c) Regarding a contract for supply of technological equipment: supply of equipment; instructions on installation, use, testing, operation, training and technology transfer (if any) according to the approved design documentation.

d) Regarding an EPC contract: design, supply of materials and equipment and execution of construction of works; training, instructions on operation, maintenance and repair; technology transfer; off-load and on-load testing; other work according to the approved design documentation.

dd) Regarding a turnkey contract: setting up of a construction project; design; supply of equipment and execution of construction of works; training, instructions on operation, maintenance and repair; technology transfer; off-load and on-load testing; transfer of works that are ready for operation to the awarding party and other work according to the approved design documentation.

2. The adjustment of volume of work specified in contracts shall be made as set out in Article 37 of this Decree.

Article 13. Requirements pertaining to quality of product and commissioning and transfer of products of construction contracts

1. Requirements pertaining to quality of products of a construction contract:

a) The product quality must meet the requirements of the contract, comply with and meet the quality requirements according to regulations of law. The parties to the contract must agree upon regulations and standards (national standards and regulations), technical instructions applied to products of the construction contract.

b) Regarding imported equipment and goods, in addition to the regulations mentioned in Point a of this Clause, regulations on origin must be applied.

2. Commissioning and transfer of products that are completed work:

a) Agreements on the procedures for commissioning and transfer by the parties to the contract must conform to regulations of the law on management of quality of construction works.

b) Work to be commissioned and transferred; bases for commissioning and transfer; procedures and time of commissioning and transfer of products that are completed work; personnel involved in commissioning and transfer; forms used for commissioning and transfer; regulations on signatories, records and documents on commissioning and transfer must conform to regulations of law and be agreed upon by the parties to the contract.

c) Only products that meet the quality requirements prescribed in Clause 1 of this Article are commissioned and transferred.

d) As for the work required to be commissioned before moving on to other work, the receiving party must notify the awarding party in advance to carry out commissioning in conformity with regulations of the law on management of quality of construction works.

dd) As for faulty products (which fail to meet the requirements of the contract), they must be remedied or eliminated otherwise. The party at fault must incur all costs in connection with the repair and re-inspection, and other relevant costs in connection with the rectification of the fault as well as the contract performance schedule.

Article 14. Time and schedule for performing construction contracts

1. The time for performing a contract begins from its effective date to the date on which the parties have fulfilled their obligations under the signed contract.

2. The receiving party shall prepare a detailed schedule for performing the contract and submit it to the awarding party for approval as a basis for performance.

3. The contract performance schedule must present the completion milestones and handover of the work and major products.

4. Regarding execution contracts of large-scale and long-lasting contract packages, an execution schedule may be prepared for each phase.

5. Regarding an EP contract, the schedule for equipment supply must present the milestones for transfer of equipment, including regulations on quantity and categories of equipment for each phase of transfer.

6. Regarding an EPC contract or turn-key contract, in addition to the execution schedule prepared for each phase, a schedule for each type of work (setting up of the project, design, supply of equipment and execution of construction) must be prepared.

7. It is encouraged to accelerate the contract performance schedule on the basis of ensuring quality of products of the contract. If the acceleration brings more efficiency to the project, the receiving party may be considered to earn a bonus as agreed in the contract.

8. Adjustment of the schedule of the contract shall be made as set out in Article 39 of this Decree.

Section 3. CONTRACT PRICE, ADVANCE PAYMENT, PAYMENT, SETTLEMENT AND LIQUIDATION OF CONSTRUCTION CONTRACTS

Article 15. Construction contract price and conditions for application thereof

1. Construction contract price means an amount which the awarding party undertakes to pay to the receiving party to perform the work in accordance with the requirements pertaining to the volume, quality, schedule, payment conditions, contract advance and other requirements agreed upon in the contract.

2. Costs, taxes and charges (if any) included or not included in the contract price must be specified in a construction contract; the adjusted construction contract price must be relevant to the contract type and form of contract price, and must be agreed upon by the parties in the contract.

As for a construction contract under which payment in multiple currencies is agreed upon by the parties, the contract price in proportion to each currency must be specified.

3. Forms of construction contract prices are as follows:

a) Lump sum contract price is the contract price that remains unchanged during the performance of the contract with respect to the volume of work within the scope of the signed contract, except force majeure events and change of the scope of work to be carried out.

b) Price of a fixed unit price contract is determined on the basis of the fixed unit price of each work multiplied by the respective volume of work. Fixed unit price is a unit price that remains unchanged during the performance of the contract, except for force majeure events.

c) Price of an adjusted unit price contract is determined on the basis of the unit price adjusted due to the slippage according to the agreements in the contract and multiplied by the respective volume of work. The method of adjusting unit price due to the slippage shall comply with Clauses 3 and 4 Article 38 of this Decree.

d) The time-based contract price is determined on the basis of remuneration for experts, costs other than the remuneration and working time (volume) calculated by month, week, day and hour.

- Remuneration for an expert is the costs for the expert determined on the basis of the salary rate applied to the expert and related costs as agreed upon by the parties in the contract multiplied by the actual working time (on a monthly, weekly, daily and hourly basis).

- Costs for an expert other than the remuneration include travel costs, working office and other reasonable costs.

d1)[13] Cost-plus fee contract price is the contract price whose value has yet to be determined at the time of signing the contract, and the parties only agree upon the administrative costs, general costs and profits since there are insufficient grounds for determining the scope of work and direct costs to carry out the work specified in the contract.

The parties shall agree upon the level of administrative costs, general costs and profits to be expressed as a ratio (%) or as a specific value on the basis of the actual, reasonable and valid costs to carry out the work specified in the contract;

The level of the administrative costs, general costs and profits may be fixed or variable (increased or decreased within a range or without limits) depending on the actual level of direct costs agreed upon by the parties in the contract in order to protect their interests.

dd) Price of a combined price contract is the contract price that is used in combination with the types of contract prices mentioned in Points a through d of this Clause in conformity with the features of each type of work specified in the contract.

4. A contract construction price shall be determined on the basis of the winning bid price or the result of negotiation of the construction contract between the parties.

5. Conditions for application of types of construction contract prices are as follows:

a) Regarding a lump sum contract:

The price of a lump sum contract shall be applied to the contract packages which at the time of contractor selection and negotiation of the contract have satisfied the conditions for determining the volume and unit price for carrying out the work in accordance with the requirements of the construction contract or in some cases where the volume and unit price have yet to be determined (such as EC, EP, PC, EPC and turnkey contracts) but the parties to the contract have sufficient capacity and experience to calculate and determine the price of the lump sum contract.

Upon application of the price of the lump sum contract, it is required to consider the risk factors in relation to the contract price such as volume and slippage risks which may be posed to the price of the contract package or the contract during the performance of the contract, and each party must assume responsibility for its own risks.

b) Regarding a fixed unit price contract:

The price of a fixed unit price contract shall be applied to the contract packages which at the time of contractor selection and negotiation of the contract have satisfied the conditions for determining the volume and unit price for carrying out the work in accordance with the requirements of the construction contract but the volume of work has not been accurately determined. In such a case, it is required to consider the risk factors in relation to the contract price such as slippage risks which may be posed to the unit price for the contractual work during the performance of the contract, and each party must assume responsibility for its own risks. Then, the parties shall estimate the cost contingency for the slippage and volume risk factors posed to the contract package price and contract price.

c) Regarding an adjusted unit price contract: The price of an adjusted unit price contract shall be applied to the contract packages at the time of contractor selection and negotiation of the contract when the parties to the contract have yet to satisfy the conditions for determining the volume, unit price and risk factors in relation to the contract price such as the slippage risk during the performance of the contract. Then, the parties shall estimate the cost contingency for the slippage and volume risk factors which may be posed to the contract package price and contract price.

d) Price of a time-based contract is normally applied to certain construction contracts involving consultancy work in construction and investment activities. A construction consultancy contract may apply all types of contract prices prescribed in this Decree.

d1)[14] Regarding a cost-plus fee contract

Price of a cost-plus fee contract price only applies to the contract packages at the time of signing the contract when the parties have insufficient grounds for determining the scope of work and necessity of using materials, labor, construction machinery and equipment to carry out the intended work specified in the contract.

Article 16. Construction contract performance security

1. Construction contract performance security means a receiving party adopting one of the methods of leaving a deposit, depositing funds into escrow accounts or providing security to secure the fulfillment of its obligations during performance of the contract; the method of providing security is encouraged.

2. The contract performance security must be submitted to the awarding party before the effective date of the contract according to the agreement between the parties on the value, currency and method of the security; must be submitted using the form accepted by the awarding party and remain valid until the receiving party has fulfilled its obligations specified in the contract or after the awarding party has received the warranty bond with respect to contracts involving the execution of construction of works and supply of equipment. Regarding construction consultancy contracts, internal fixed rate contracts or construction contracts of target programs performed by households, and construction contracts in the form of self-performance, a contract performance security is not required.

3. If the receiving party is a partnership contractor, every member must submit a contract performance security to the awarding party and the level of security must be in proportion to the value of the contract performed by each member. If the partnership has agreed that the leading contractor of the partnership shall submit the contract performance security, such leading contractor shall submit the security to the awarding party and every member shall submit a contract performance security to the leading contractor in proportion to the value of the contract performed by it.

4. The value of the contract performance security and method of security shall be specified in the bidding documents or request for proposals. The level of contract performance security is between 2% and 10% of the construction contract price; if it is needed to prevent high risks, the value of the contract performance security may be higher but must not exceed 30% of the contract price and must be approved by the investment decision maker.

5. The receiving party is not permitted to reclaim its contract performance security in case of refusal to perform the contract after its effective date and in case of other violations set out in the contract.

6. The awarding party must return the contract performance security to the receiving party after the latter has fulfilled all of its contractual obligations or has switched to fulfilling the warranty obligations and the awarding party has received the warranty security for the contracts involving execution of construction of works and supply of equipment.

Article 17. Construction contract payment security

1. Construction contract payment security means an awarding party taking measures to prove its ability to fulfill its payment obligations under the construction contract signed with the receiving party in such forms as approved capital provision plan, bank or credit institution guarantee, credit agreement or loan agreement with a financial institution.

2. Before signing a construction contract, the awarding party must provide payment security in conformity with the payment schedule agreed upon in the contract. The awarding party is prohibited from signing the construction contract without a capital plan to make payment in line with the payment terms set forth in the contract, except for the construction works built under emergency orders.

Article 18. Construction contract advance

1. Construction contract advance means an interest free amount advanced by the awarding party to the receiving party to make necessary preparations before carrying out the contractual work.

2. The contract advance payment shall be made only after the effective date of the construction contract. For an execution contract, a land clearance plan must be included as agreed upon in the contract and at the same time the awarding party has received the advance payment security (if any) in proportion to the value of each currency agreed upon by the parties.

3. The advances, advancing time and recovery of the advances must be specifically agreed upon by the parties in the contract. The advances and the number of advance payments for the construction contract must be specified in the bidding documents, request for proposals or draft construction contract sent to the receiving party as the basis for calculation of the bid price and proposed price.

4. Contract advance payment security:

a) For a construction contract with a contract advance value higher than 01 billion dong, before the awarding party makes a contract advance payment to the receiving party, the receiving party must submit to the awarding an advance payment security with a value and currency equivalent to the contract advance. Regarding construction contracts with a contract advance value from 01 billion dong or less and construction contracts in the form of self-performance including the contracts performed by residential communities under the target programs, contract advance payment security is not mandatory.

a1)[15] Regarding a simple and small-scale construction contract, the investor shall consider and decide to provide a contract advance payment security which is suitable for the nature of the contractual work and reduces unnecessary procedures.

b) If the receiving party is a partnership of contractors, every member must submit a contract advance payment security with a value equivalent to the advance paid to each member, except for the case where the members in the partnership agree that the leading contractor of the partnership submits the contract advance payment security to the awarding party.

c) The effective period of the contract advance payment security must be prolonged until the awarding party has recovered all advances. The value of the contract advance payment security shall be decreased in proportion to the value of the recovered advance upon each payment made by the parties.

5. The contract advance shall not exceed 50% of the contract value at the time of signing (including provisions if any), special cases shall be subject to approval by the Minister, Chairman/Chairwoman of a provincial People’s Committee; President of the Board of Members, President of the Board of Directors of a Group or Corporation if the investment decision maker is the Prime Minister; the minimum advance is prescribed as follows:

a) Regarding a consultancy contract:

- 15% of the contract price for a contract worth more than 10 billion dong.

- 20% of the contract price for a contract worth up to 10 billion dong.

b) For an execution contract:

- 10% of the contract price for a contract worth more than 50 billion dong.

- 15% of the contract price for a contract worth from 10 billion dong to 50 billion dong.

- 20% of the contract price for a contract worth less than 10 billion dong.

c) For a contract for supply of technological equipment, an EC, EP, PC or EPC contract, a turnkey contract or any other construction contract: 10% of the contract price.

d) In the event that the parties agree upon an advance higher than the minimum advance mentioned in Points a, b and c of this Clause, the contract value in proportion to the contract advance exceeding the minimum advance shall not be adjusted in price from the time of advance payment.

dd) Advances shall be gradually recovered via payments. The amount recovered upon each payment shall be agreed upon by the two parties in the contract but must ensure that the advance is fully recovered when 80% of the contract value is paid.

5a. [16] Regarding a simple and small-scale construction contract, the awarding party and receiving party shall consider and agree upon whether to make an advance payment as requested by the awarding party in a manner that satisfies the requirements of the contract package and reduces unnecessary procedures.

6. The receiving party must use the contract advance for intended purposes and objects and in an effective manner. It is prohibited to make an advance if it is not used for intended purpose under the signed construction contract or not used at all.

7. In the case of production of structural components or semi-finished products with a high value or materials that have to be reserved depending on the season, the receiving party and awarding party shall agree upon an advance payment plan and the advances to make sure that the contract is performed on schedule.

Article 19. Construction contract payment

1. The construction contract payment shall be conformable with the type of contract, contract price and the conditions set out in the contract signed by the parties. When the payment is made under the contract, the parties are not required to sign any appendix to the contract, except where any work is added to the contract.

2. The parties shall agree upon the number of payments, stages of payment, date of payment, payment period, payment documentation and payment conditions.

3. The awarding party shall fully pay (100% of) the value of each payment to the receiving party minus the advance and the warranty costs under the contract, unless otherwise agreed upon by the parties.

4. If the two parties are incapable of making a payment under the contract during the payment period (there is no data for price adjustment or there is insufficient time to determine product quality, etc.), provisional payment may be made. When the parties are capable of determining the payment value, the awarding party must make the payment to the receiving party as prescribed in Clause 3 of this Article.

5. Regarding a lump sum contract, the payment equals a percentage of the contract price or price of construction works price, work items and volume of work corresponding to the payment stage as agreed upon by the parties in the contract. Confirmation of detailed volume of the work completed is not required when the payment is made.

6. Regarding a fixed unit price contract or adjusted unit price contract, the payment shall be made on the basis of the actual volume of completed work (including increased or decreased volume, if any) commissioned for each payment and the unit price in the contract or the adjusted unit price as agreed upon in the contract.

7. For a time based contract, the payment shall be made as follows:

a) Costs paid to experts shall be determined on the basis of the salary rate applied to the expert and related costs as agreed upon by the parties in the contract multiplied by the actual working time commissioned (on a monthly, weekly, daily and hourly basis).

b) Costs other than remuneration for experts shall be paid adopting the payment method set forth in the contract.

8. Regarding a combined price contract, the payment shall be made corresponding to the regulations on payment of construction contracts specified in Clauses 5, 6 and 7 of this Article.

9. The payment of the volume of extra-contractual work for which a unit price has yet to be specified in the contract shall be made according to the agreements in the contract or additional agreements on which the parties had reached prior to the performance and in conformity with relevant regulations of law.

10. The payment period shall be agreed upon by the parties in the contract in conformity with the scale and nature of each contract. The payment period shall not exceed 14 working days from the date on which the awarding party receives sufficient and valid payment documentation according to the agreements in the contract. To be specific:

a) Within seven (07) working days from the receipt of the sufficient and valid payment documents of the receiving party, the awarding party must complete procedures and transfer the payment request to the bank or the State Treasury in charge of payment.

b) Within seven (07) working days from the receipt of the sufficient and valid payment documentation of the awarding party, the bank or the State Treasury in charge of payment shall fully transfer the value of such payment to the receiving party.

c) For construction contracts belonging to construction projects funded by ODA or loans from foreign credit institutions, the payment period shall comply with the international party. Upon negotiating the payment period, the parties shall rely on the regulations of the international treaty and investment capital payment procedures prescribed by law in order to reach an agreement in the contract.

11. The awarding party’s failure to make payment in full or on schedule as agreed upon in the contracts to the receiving party is prohibited.

Article 20. Construction contract payment documentation

1. Contract payment documentation shall be prepared by the receiving party in conformity with each type of contract, contract price and agreements in the contract. Payment documentation (including templates) must be clearly specified in the construction contract and certified by the awarding party. The construction contract payment documentation is composed of the following main documents:

a) Regarding a lump sum contract:

- A record on commissioning of the volume of work completed during the payment stage certified by the representative of the awarding party or the consultancy (if any) and representative of the receiving party. This commissioning record serves as the certification of completion of works or work items and volume of work in conformity with the scope of work to be performed under the contract (in conformity with the scope of work to be performed according to the design regarding an execution contract; in conformity with the consultancy duties to be performed regarding a consultancy contract) without necessarily certifying the detailed volume of work completed;

- A sheet showing the value of the contents of extra-contractual work (if any) with certification by the representative of the awarding party or the consultancy (if any) and representative of the receiving party;

- A payment request from the receiving party specifying the following contents: the value of the volume of work completed under the contract, the value of the volume of extra-contractual work (if any), deduction of advances, value requested to be paid during the period after these items have been offset with certification by the representatives of the awarding party and the receiving party.

b) Regarding a fixed unit price contract:

- A record on commissioning of the actual volume of work completed (increased or reduced as compared to the volume specified in the contract) during the payment stage certified by the representative of the awarding party or the consultancy (if any) and representative of the receiving party;

- A sheet showing the value of the work for which a unit price has yet to be specified in the contract (if any), stating the volume and unit price for such work with certification by the representative of the awarding party or the consultancy (if any) and representative of the receiving party;

- A payment request from the receiving party specifying the following contents: the value of the volume of work completed under the contract, the value of the volume of extra-contractual work (if any), deduction of advances, value requested to be paid during the period after these items have been offset with certification by the representatives of the awarding party and the receiving party.

c) Regarding an adjusted unit price contract:

- A record on commissioning of the actual volume of work completed (increased or reduced as compared to the volume specified in the contract) during the payment stage certified by the representative of the awarding party or the consultancy (if any) and representative of the receiving party;

- A sheet showing the unit price adjusted due to slippage (hereinafter referred to as payment unit price) according to the agreements in the contract certified by the representative of the awarding party or the consultancy (if any) and representative of the receiving party;

- A sheet showing the value of the work for which a unit price has yet to be specified in the contract (if any), stating the volume and unit price for such work with certification by the representative of the awarding party or the consultancy (if any) and representative of the receiving party;

- A payment request from the receiving party specifying the following contents: the value of the volume of work completed under the contract, the value of the volume of extra-contractual work (if any), deduction of advances, value requested to be paid during the period after these amounts have been offset with certification by the representatives of the awarding party and the receiving party.

d) Regarding a time-based contract:

- A record on commissioning of the actual working time or timesheet (on a monthly, weekly, daily or hourly basis) corresponding to the results of performance during the payment stage certified by the representative of the awarding party or the consultancy (if any) and representative of the receiving party; If during performance there is extra-contractual work requiring additional experts for whom remuneration has not been specified in the contract, the parties shall agree upon the remuneration prior to performance. In such as case, the payment documentation must contain a sheet showing the value of the contents of extra-contractual work (if any) to be performed under the contract and be certified by the representatives of the awarding party or the consultancy (if any) and the receiving party;

- A payment request from the receiving party specifying the following contents: the value of the volume of work completed under the contract, the value of the volume of extra-contractual work (if any), deduction of advances, value requested to be paid during the period after these amounts have been offset with certification by the representatives of the awarding party and the receiving party.

dd) Regarding a construction contract involving supply of equipment, the volume of the completed work may be determined based on the invoices, bills of lading, commissioning record, equipment transfer record and other relevant documents.

e) Regarding a construction contract involving consultancy work for which it is difficult to determine the actual volume of completed work (the volume is only relative), such volume shall be determined based on the documents or products completed by the receiving party and certified by the awarding party in line with the payment period agreed upon in the contract.

2. Regarding a combined price contract, the payment documentation for each type of contractual work shall be prepared in accordance with the corresponding regulations set out in Clause 1 of this Article.

3. Upon agreeing upon the contract payment documentation, the parties shall, according to the contract’s scale and nature and sources of capital for the contract, agree upon the documents necessarily included in the documentation to become the main documents specified in Clause 1 of this Article.

4. For a construction contract funded by ODA or loans from a foreign credit institution, the payment documentation shall comply with the international party in addition to the main documents specified in Clause 1 of this Article.

5. The awarding party, organizations and individuals related to contract payment are prohibited from laying down the payment documentation requirements that are contrary to the agreements in the contract and the regulations in this Decree with a view to prevention of the payment made according to the agreements in the legally effective contract.

Article 21. Currency and methods of construction contract payment

1. The currency used for construction contract payment shall be Vietnamese dong; if a foreign currency is to be used, the parties shall reach an agreement to use the foreign currency provided that the agreement is not contrary to regulations of law on foreign exchange.

2. For a construction contract involving any work that requires payment to be made in a different currency, the parties shall clearly agree thereupon in the contract but ensure that the currency for payment conforms to the requirements set out in the bidding documents or request for proposals.

3. Payment may be made in cash, by bank transfer and by any other method as agreed upon by the parties in accordance with regulations of law and the method used must be specified in the contract.

Article 22. Construction contract settlement

1. Settlement of a construction contract means the determination of the total final value of the construction contract which the awarding party is responsible for paying to the receiving party when the receiving party has completed all work as agreed upon in the contract.

2. The contract settlement documentation shall be prepared by the receiving party in conformity with each type of contract and contract price. Contents of the settlement documentation must be conformable with the agreements in the contract. The following is required:

a) A record on commissioning of the completion of all contractual and extra-contractual work.

b) A sheet showing contract settlement value (hereinafter referred to as “A-B settlement”) in which the following must be stated: value of work completed under the contract; value of volume of extra-contractual work (if any), the amount paid or temporarily paid and remaining value payable by the awarding party to the receiving party.

c) An as-built dossier, construction diary for a contract covering execution of construction.

d) Other documents as agreed upon in the contract.

3. [17] The time limit for construction contract settlement shall comply with Clause 2 Article 147 of the Law on Construction No. 50/2014/QH13 amended by Point c Clause 64 Article 1 of the Law No. 62/2020/QH14 on amendments to the Law on Construction.

Article 23. Liquidation of construction contracts [18]

The liquidation of construction contracts shall comply with Clause 3 Article 147 of the Law on Construction No. 50/2014/QH13 and Clause 4 Article 147 of the Law on Construction No. 50/2014/QH13 amended by Point c Clause 64 Article 1 of the Law No. 62/2020/QH14 on amendments to the Law on Construction.

Section 4. RIGHTS AND OBLIGATIONS OF PARTIES TO CONSTRUCTION CONTRACTS

Article 24. General rights and obligations of awarding parties and receiving parties

1. Rights and obligations of the parties to a construction contract shall be agreed upon by the parties in the contract provided that they are not contrary to regulations of law.

2. Either the awarding party or the receiving party must notify the other party in writing of rights and responsibilities of representatives for management of contract performance. When either party changes its representative for management of contract performance, a written notice must be given to the other party. If the receiving party changes its representative to manage contract performance or its key personnel, such change must be approved by the awarding party.

3. If the receiving party is a Group or Corporation, when performing a construction contract, it may directly assign work to its member units but must ensure openness, transparency and suitability for qualifications of each member, and the assignment must be approved in advance by the awarding party.

4. Depending on each specific type of construction contract, rights and obligations of the awarding and receiving parties are also specified in Articles 25 through 34 of this Decree.

Article 25. Rights and obligations of parties awarding consultancy contracts

1. Every party awarding a consultancy contract has the right to:

a) Own and use consultancy products under the contract.

b) Refuse to commission consultancy products that fail to satisfy quality requirements under the contract;

c) Inspect quality of the work carried out by the receiving party without hindrance to its normal operation.

d) Other rights prescribed by law.

2. Every party awarding a consultancy contract has the obligation to:

a) Provide the receiving party with information about the work requirements, documents, payment security and means necessary to perform the work (if any) as agreed upon in the contract.

b) Ensure the copyright of any consultancy product having copyright under the contract.

c) Handle propositions of the receiving party within its power during execution of the contract on schedule as agreed upon by the parties in the contract.

d) Make full payment to the receiving party according to the payment schedule agreed upon in the contract.

dd) Other obligations prescribed by law.

Article 26. Rights and obligations of parties receiving consultancy contracts

1. Every party receiving a consultancy contract has the right to:

a) Request the awarding party to provide information and documents (if any) relating to the consultancy duties and working equipment as agreed upon in the contract.

b) Propose changes to conditions for provision of consultancy services for the benefit of the awarding party or upon detection of any factor affecting the quality of consultancy products.

c) Refuse to perform unreasonable extra-contractual work and refuse to satisfy the illegal requirements imposed by the awarding party.

d) Ensure copyright in accordance with regulations of law (for the consultancy products having copyright).

dd) Other rights prescribed by law.

2. Every party receiving a consultancy contract has the obligation to:

a) Complete the work on schedule and according to quality requirements as agreed upon in the contract;.

b) For an engineering contract: participate in construction work commissioning together with the investor in accordance with regulations of the law on management of quality of construction works, supervise the author and respond to the contents related to the design documentation at the request of the awarding party.

c) Archive and return to the awarding party documents and working equipment provided by the awarding party under the contract after the work is completed (if any).

d) Immediately notify the awarding party of insufficient information and documents, and working equipment that fails to satisfy quality requirements to complete the work.

dd) Keep confidential information relating to consultancy services as prescribed in the contract or the law.

e) Other obligations prescribed by law.

Article 27. Rights and obligations of parties awarding execution contracts

1. Every party awarding an execution contract has the right to:

a) Suspend the execution of construction of works and request remedy of any consequence if the receiving party violates regulations on quality of works, occupational safety, environmental protection and fire safety;

b) Inspect quality of the work carried out and manufacturing and processing facilities of the receiving party without hindrance to normal operation of the receiving party;

c) Other rights prescribed by law.

2. Every party awarding an execution contract has the obligation to:

a) If the awarding party is an investor, the construction permit must be obtained as prescribed.

b) Transfer whole or part of the construction site to the receiving party for management and use in line with the schedule and agreements specified in the contract.

c) Appoint and notify the receiving party in writing of key personnel participating in management of contract performance.

d) Promptly provide design documentation, documents, means, machinery, equipment and materials (if any) as agreed upon in the contract and as prescribed by relevant regulations of law.

dd) Make full payment to the receiving party according to the payment schedule agreed upon in the contract.

e) Organize supervision of execution of works.

g) Inspect the implementation of measures to ensure occupational safety, environmental protection and fire safety by the receiving party.

h) Commission, pay and settle the contract on schedule as prescribed.

i) In case of hiring an entity to provide consultancy services, clearly prescribed duties and rights of the consultant during management of contract performance and notify the receiving party thereof.

k) Consider and promptly grant written approval for the receiving party’s proposals concerning engineering and construction during execution of construction of works.

l) Other obligations prescribed by law.

Article 28. Rights and obligations of parties receiving execution contracts

1. Every party receiving an execution contract has the right to:

a) Propose the volume of extra-contractual work to the awarding party; refuse to perform the extra-contractual work if the two parties have yet to reach an agreement thereon, and refuse to satisfy the illegal requirements imposed by the awarding party.

b) Change the construction measures after obtaining approval from the awarding party in order to accelerate the progress and ensure quality, safety and efficiency of the construction works on the basis of the signed contractual price.

c) Request the awarding party to pay loan interests due to late payment as agreed upon in the contract; claim compensation for any damage when the awarding party delays the transfer of construction site and any other damage caused by the fault of the awarding party.

d) Other rights prescribed by law.

2. Every party receiving an execution contract has the obligation to:

a) Provide human resources, materials, construction machinery and equipment, other related material conditions with adequate quantity and type under the contract; make shop drawings (if the receiving party makes the shop drawings) to perform the work under the signed contract.

b) Receive and manage the construction site, preserve the centerline, altitude and boundary markers of the construction works.

c) Execute the construction of works according to the design, technical instructions, regulations and standards in a manner that ensures quality, schedule, safety, environmental safety and fire safety.

d) Keep a construction diary.

dd) Test materials and verify construction equipment and product according to the State regulations on management of quality of construction works, technical instructions, construction standards and regulations;

e) Manage employees at the building site, ensure safety, security and order, and not affecting surrounding residential areas.

g) Prepare measures to organize the execution and as-built dossiers, and participate in work commissioning.

h) Take responsibility for quality of construction works as undertaken. Rectify errors of works for the work performed by the receiving party.

i) Cooperate with other contractors for joint execution of construction at the construction site.

k) Submit periodic reports to the awarding party on the execution schedule, human resources and main equipment for execution of construction of works.

l) Move materials, machinery, equipment and other assets out of the construction site within a defined time limit after the works have been commissioned or transferred or the contract is terminated according to Article 41 hereof, unless otherwise as agreed upon in the contract.

m) Return the site as agreed upon in the contract;.

n) Keep confidential information relating to the contract or as prescribed by the law.

o) Other obligations prescribed by law.

Article 29. Rights and obligations of parties awarding contracts for supply of technological equipment

1. Provide necessary information and documents and the site for equipment installation to the receiving party.

2. Cooperate with the receiving party during training, technology transfer and provision of instructions on installation, use and operation.

3. Refuse commissioning of technological equipment and be entitled not to receive technological equipment that is inconsistently with the agreements in the contract in terms of quantity, quality, type and origin.

4. If the awarding party produces a technological design for the receiving party, the awarding party must take full responsibility for quality and intellectual property right of this design.

5. Other rights and obligations prescribed by law.

Article 30. Rights and obligations of parties receiving contracts for supply of technological equipment

1. Transfer technological equipment to the awarding contract according to the agreements in the contract in terms of quantity, quality, place, time, method of packaging and storage, origin and other agreements in the contract.

2. Provide the awarding party with all necessary information about technological equipment; instructions on installation, use, operation, storage and maintenance of technological equipment; provide training to management officers and workers operating the works (if agreed upon in the contract).

3. Cooperate with the awarding party in testing technological equipment.

4. In the case of intellectual property for technological equipment:

a) Technological equipment provided by the receiving party must not violate the intellectual property right. The receiving party is not permitted to provide technological equipment that violates intellectual property rights. The receiving party shall take total responsibility if there is any dispute related to the intellectual property right for technological equipment provided;

b) If the technological equipment is manufactured according to the design or figures provided by the awarding party, the receiving party shall not be responsible for any complaint related to any violation of intellectual property rights arising from such technological equipment.

c) Either party shall be responsible for failure to immediately notify the other party of any complaint filed by a third party about the intellectual property right for technological equipment after such party knew or should have known the complaint.

5. Other rights and obligations prescribed by law.

Article 31. Rights and obligations of parties awarding EPC contracts

1. Every party awarding an EPC contract has the right to:

a) Refuse commissioning of products that fail to satisfy quality requirements under the contract; not to commission the technological equipment that is inconsistently with the agreements in the contract in terms of quantity, quality, type and origin and products that violate the intellectual property right.

b) Inspect the performance of work by the receiving party under the signed contract without hindrance to its normal operation.

c) Suspend the performance of work under the contract and request remedy of any consequence if it is found that the receiving party performing the work violates the contents in the signed contract or state regulations.

d) Request the receiving party to transfer documents relating to products of the contract under the signed contract.

dd) At the request of the receiving party, consider and approve the list of qualified sub-contractors that have not been included in the EPC contract.

e) Other rights prescribed by law.

2. Every party awarding an EPC contract has the obligation to:

a) Make full payment to the receiving party according to the payment schedule agreed upon in the contract.

b) Appoint and notify the receiving party in writing of key personnel participating in management of contract performance.

c) Provide the receiving party with information, documents and means necessary to perform the work (if agreed upon in the contract).

d)[19] For an EPC contract established by selecting an EPC contractor immediately after the fundamental design is approved: carry out commissioning, appraisal and approval or request a competent authority to promptly appraise and approve the designs implemented after the fundamental design has been approved by the investment decision maker in accordance with regulations of law, excluding the estimated costs of constructing works or work items covered by the EPC contract.

If the EPC contract is established by selecting an EPC contractor immediately after the FEED is approved: carry out commissioning, appraisal and approval or request a competent authority to promptly appraise and approve the designs implemented after the FEED has been approved by the investment decision maker in accordance with regulations of law, excluding the estimated costs of constructing works or work items covered by the EPC contract.

dd) Apply for a construction permit as prescribed; transfer a cleared site to the receiving party according to the contract performance schedule.

e) Supervise the performance of work under the signed contract; inspect the implementation of measures to ensure occupational safety, environmental protection and fire safety as prescribed.

g) Agree with the receiving party about the bidding documents for procurement of technological equipment (if agreed upon in the contract).

h) Commission, pay and settle the contract on schedule as prescribed.

i) Ensure the copyright of consultancy products under the contract.

k) Provide training to management officers and workers operating the works.

l) Other obligations prescribed by law.

Article 32. Rights and obligations of parties receiving EPC contracts

1. Every party receiving an EPC contract has the right to:

a) Request the awarding party to provide information, documents and working equipment (if agreed upon in the contract) relating to the contractual work under the sign contract.

b) Propose the volume of extra-contractual work to the awarding party; refuse to perform the extra-contractual work if the two parties have yet to reach an agreement thereon or refuse to satisfy the illegal requirements imposed by the awarding party.

c) Organize and manage performance of work under the signed contract.

d) Other rights prescribed by law.

2. Every party receiving an EPC contract has the obligation to:

a) Provide adequate human resources, materials, machinery and other necessary means to perform the work under the contract.

b) Receive, manage, store and transfer documents and means provided by the awarding party (if agreed upon in the contract).

c) Notify the awarding party of inadequate information and documents and unqualified working equipment which affect performance of work under the signed contract.

d) Keep confidential information relating to the contract as agreed upon in the contract or as prescribed by the law.

dd) Perform work under the contract in a manner that ensures safety, quality, schedule and other agreements in the contract.

e)[20] For an EPC contract established by selecting an EPC contractor immediately after the fundamental design is approved: produce the designs to be implemented after the fundamental design has been approved by the investment decision maker when approving the project in conformity with the approved fundamental design, excluding the estimated costs of constructing works or work items covered by the EPC contract.

If the EPC contract is established by selecting an EPC contractor immediately after the FEED is approved: produce the designs to be implemented after the FEED has been approved by the investment decision maker when approving the project in conformity with the approved FEED, excluding the estimated costs of constructing works or work items covered by the EPC contract.

g) Organize procurement, manufacturing and supply of technological equipment in a way that meets the requirements and schedule mentioned in the contract; select a sub-contractor (if any) via bidding or direct contracting and request the investor to grant approval therefor; approve and agree with the investor about contents of the bidding documents for procurement of technological equipment (if agreed upon in the contract).

h) Provide training to management officers and workers operating the works, and transfer technologies and accompanying technical services (if agreed upon in the contract).

i) Carry out testing, adjustment and overall trial operation of the works and transfer the completed works to the awarding party as agreed upon in the contract and as prescribed by the applicable law.

k) Ensure that the products provided by the receiving party do not violate the intellectual property rights as prescribed by law.

l) Transfer documents relating to products of the contract to the awarding party under the signed contract.

m) Other obligations prescribed by law.

Article 33. Rights and obligations of parties awarding turnkey contracts

In additions to the rights and obligations mentioned in Article 31 of this Decree, every party awarding a turnkey contract also has the obligation to commission the construction project to be submitted to a competent authority in accordance with regulations of law on construction and the investment decision maker for appraisal and approval or for appraisal and approval within power.

Article 34. Rights and obligations of parties receiving turnkey contracts

In additions to the rights and obligations mentioned in Article 32 of this Decree, every party receiving a turnkey contract also has the obligation to set up a construction project, participate in defending the project together with the awarding party before the investment decision maker and complete the project as requested by the awarding party in accordance with agreements in the contract.

Section 5. ADJUSTMENT OF CONSTRUCTION CONTRACTS

Article 35. Adjustment of construction contracts

1. The adjustment of a contract includes adjusting the volume, unit price, contract performance schedule, contract price and other contents (if any) as agreed upon by the parties in the contract.

2. [21] A construction contract shall be only adjusted in the cases specified in Clause 2 Article 143 of the Law on Construction No. 50/2014/QH13 and Clause 3 Article 143 of the Law on Construction No. 50/2014/QH13 amended by Point c Clause 64 Article 1 of the Law No. 62/2020/QH14 on amendments to the Law on Construction. Where the State changes a policy resulting in a direct effect on performance of the construction contract, the adjustment of the contract shall only apply to part of the work affected by such change and be made under the regulations of the authority promulgating such policy and providing guidelines for implementation thereof.

Article 36. Principles of adjusting construction contracts[22]

1. The adjustment of a construction contract shall only apply during the period of contract performance including the extended period in accordance with regulations of law.

2. For contract based on a fixed unit price or a contract unit price, the adjustment shall be only made in the cases specified in Points b, c and d Clause 2 Article 143 of the Law on Construction No. 50/2014/QH13.

3. For a lump sum contract, the contract shall be only adjusted in terms of the volume of additional work outside the scope of work under the signed contract (outside the scope of work to be performed according to the design or requirements in the bidding documents or request for proposals, for an execution contract and contract for equipment supply; outside the consultancy duties to be performed, for a consultancy contract) and in the cases specified in Points b, c and d Clause 2 Article 143 of the Law on Construction No. 50/2014/QH13.

4. If the adjusted contract price does not exceed the approved contract package price or estimated cost (including the cost contingency for such contract package), the investor is entitled to make an adjustment decision; if the approved contract package price or estimated cost is exceeded, the guidelines for adjusting the contract price must be approved by the investment decision maker or the Minister of the line ministry and the Chairman/Chairwoman of the provincial People’s Committee when assigned to execute an investment project in which investment is decided by the Prime Minister before the adjustment is made, and adequate capital must be provided to make payment to the awarding party as agreed upon in the contract. The adjustment of the estimated cost of construction, estimated cost of the contract package or contract package price shall be made in accordance with regulations of law on construction cost management and law on bidding.

Article 37. Adjustment of volume of work specified in construction contracts

1. The parties to a contract must specifically agree upon the cases of adjustment of the volume, scope and procedures for adjusting the volume.

2. The adjustment of the volume of work specified in a construction contract shall be made as follows:

a) For a lump sum contract: in the event that there is any reasonable additional work outside the scope of work under the signed contract (outside the scope of work to be performed according to the design, for an execution contract and contract for equipment supply; outside the consultancy duties to be performed, for a consultancy contract).

In this case, if the adjustment of the volume does not result in the approved contract package price being exceeded, the investor and contractor shall consider, agree and sign an appendix to the contract; if the adjustment results in the approved contract package price being exceeded, it must be considered and decided by the investment decision maker; in case of failure to reach an agreement, the volume of such additional work shall form a new contract package and the selection of contractor to perform this contract package shall comply with applicable regulations.

b) For a fixed unit price contract or an adjusted unit price contract: if the addition of volume of reasonable work for which a unit price has yet to be specified in the contract does not result in the approved contract package price being exceeded, the investor and contractor shall consider, agree and sign an appendix to the contract; if the addition results in the approved contract package price being exceeded, it must be considered and decided by the investment decision maker; the volume of work for which a unit price has been specified in the contract shall be determined according to the actual volume of the completed work commissioned (increased or decreased as compared to that specified in the signed contract).

3. [23] For the volume of the extra-contractual work for which a unit price or method of determining the unit price has yet to be set out in the contract, the parties to the contract shall agree upon the unit price or principles and method of determining the unit price to perform such work prior to performance.

Article 38. Adjustment of unit price and construction contract price

1. In a construction contract, the parties shall specifically agree upon the cases in which the adjustment of the unit price and construction contract price is permitted; procedures, scope, method and bases for adjusting the contract price; the method of adjusting the contract price must be conformable with the type of the contract price and the nature of work in the construction contract.

2. The adjustment of the contract unit price shall be made as follows:

a) The adjustment of the unit price for contract performance shall only apply to the adjusted unit price contract and time-based contract if the parties so agree in the contract.

b)[24] If the actual increased or decreased volume of work exceeds 20% of the corresponding volume of work specified in the contract and results in a change of over 0.25% of the contract value and over 1% of the unit price for such work or a unit price for the volume of additional work has yet to be specified in the contract, the parties shall agree to determine a new unit price according to the principles agreed upon in the contract with respect to the unit price for such volume so as to make a payment.

If the actual increased volume of work exceeds 20% of the corresponding volume of work specified in the contract, the new unit price shall only apply to the volume of work actually performed which exceeds 120% of the volume of work specified in the contract.

If the actual decreased volume of work exceeds 20% of the corresponding volume of work specified in the contract, the new unit price shall only apply to the entire volume of work actually completed and commissioned.

c) If the actual increased or decreased volume of work is less than or equal to 20% of the corresponding volume of work specified in the contract, the unit price specified in the contract shall apply, including the adjusted unit price according to the agreements (if any) in the contract so as to make a payment.

d) The adjustment of the contract unit price for the volume of work for which at the time of signing the contract the awarding party and receiving party agree to adjust the unit price shall be made according to Clause 3 of this Article and guidelines provided by the Ministry of Construction.

3. Method of adjusting the construction contract price:

a)[25] The methods of adjusting the contract price comprise direct offsetting method and method of applying the formula mentioned in Point b of this Clause. The method of adjusting the price shall be adopted in conformity with the nature of work, type of contract price and payment currency and be agreed upon by the parties in the contract. The price index for adjusting the construction contract price using the formula in Point b Clause 3 of this Article is the construction price index.

b) The input database for adjusting the price must be conformable with contents of the contractual work. The contract shall specify the use of sources of price information or sources of price index of competent authorities to adjust the contract price according to the formula below:

G_TT = G_HD x P_n

Where:

- “G_TT”: the payment price in proportion to the volume of completed work commissioned.

- “G_HD”: the contractual price in proportion to the volume of completed work commissioned.

- “P_n”: the adjustment coefficient (increased or decreased) intended for the payment of the contract regarding the volume of completed work commissioned during the “n” period.

4. The Ministry of Construction shall provide specific guidelines for adjusting construction contracts.

Article 39. Adjusting construction contract performance schedule

1. In a construction contract, the parties shall agree upon the cases in which the adjustment of schedule is permitted. If the duration of completion is later than the schedule prepared for the contract, the parties must clearly determine their responsibilities for any damage caused by the schedule delay.

2. The contract performance schedule shall be adjusted in the following cases:

a) Under the influence of an earthquake, storm, flood, tsunami, fire, conflict or another force majeure event.

b) Any change or adjustment to the project, scope of work, design or construction measures is made as requested by the awarding party, thereby affecting the contract performance schedule;

c) The transfer of the site is not made in accordance with the agreements in the contract, the contract has to be suspended due to the fault of the awarding party or the relevant procedures affect the contract performance schedule through no fault of the receiving party.

d) The performance of work is suspended as requested by the competent authority through no fault of the awarding party.

3. If the adjustment of the contract schedule does not extend the contract performance schedule (including the extension to the contract performance schedule permitted in the construction contract), the investor and contractor shall agree upon the adjustment. If the adjustment of the contract schedule extends the contract performance schedule, the investor must request the investment decision maker to consider making a decision.

Section 6. SUSPENSION, TERMINATION, BONUSES, AND PENALTIES FOR BREACHES OF CONSTRUCTION CONTRACTS

Article 40. Suspension of performance of work specified in construction contracts

1. The cases in which suspension of performance of work in the contract is permitted, the right to suspend performance of work; the suspension procedures, the compensation for damage caused by the suspension shall be agreed upon by the awarding party and receiving party in the construction contract.

2. The parties to the contract are entitled to suspend performance of a construction contract in the following cases:

a) The awarding party is entitled to suspend performance of the construction contract if the receiving party fails to satisfy requirements concerning quality, occupational safety and schedule under the signed contract.

b) The receiving party is entitled to suspend performance of the construction contract and extend the schedule when the awarding party violates agreements on payment such as failure to fully pay the receiving party the value for the payment stage agreed upon by the parties after 28 days from the payment deadline as prescribed in Clause 10 Article 19 of this Decree, unless otherwise agreed upon by the parties; no payment security for the volume of work to be performed is provided.

3. Before either party suspends performance of contractual work, it shall notify the other party in advance by giving 28 days’ notice specifying the reasons for suspension; the awarding party and receiving party shall carry out negotiations to continue to correctly implement the agreements under the signed contract, except force majeure events.

If the party suspending performance of the contract fails to give a notice or the reason for suspension is found unconformable with the contract, it shall compensate for any damage to the other party.

Article 41. Termination of construction contracts

1. The cases in which termination of the contract is permitted, the right to terminate the contract; the termination procedures, the compensation for damage caused by the termination shall be agreed upon by the parties in the construction contract and conform to the regulations laid down in this Decree and relevant regulations of law.

2. Each party has the right to terminate the contract without compensating for any damage in the cases specified in Clauses 7 and 8 of this Article.

3. If the contract performance has been suspended and the defaulting party fails to rectify its fault within fifty-six (56) days from the date of suspension as notified without any legitimate reason unless otherwise agreed upon the by parties, the suspending party is entitled to terminate the contract.

4. If either party unilaterally terminates the construction contract through no fault of the other party, the party unilaterally terminating the contract shall compensate for any damage to the other party.

5. Before either party terminates the contract, it shall give a written notice to the other party a certain period of time in advance as agreed upon in the contract but not less than twenty-eight (28) days unless otherwise agreed upon by the parties, specifying the reason for termination. If the party terminating the contract fails to give a notice resulting in any damage to the other party, the former shall compensate the latter.

6. The construction contract shall cease to have effect from the date of termination and the parties shall complete the contract liquidation procedures within a certain time limit as agreed upon in the contract but not exceeding fifty-six (56) days from the date on which the notice of contract termination is given unless otherwise agreed upon by the parties. Upon the expiry of the said time limit, if either party fails to follow the liquidation procedures, the other party has full powers to decide the liquidation.

7. The awarding party is entitled to terminate the contract in the following cases:

a) The receiving party is bankrupt or dissolved or transfers the construction contract to another person or organization without approval by the awarding party.

b) The receiving party refuses to perform work under the contract or fails to perform work under the contract for a period of fifty-six (56) straight days, resulting in violation of the performance schedule as agreed upon in the contract unless otherwise permitted by the awarding party.

8. The receiving party is entitled to terminate the contract in the following cases:

a) The awarding party is bankrupt or dissolved or transfers the construction contract to another person or organization without approval by the receiving party.

b) The work is suspended for more than 56 straight days due to the fault of the awarding party unless otherwise agreed upon by the parties.

c) The awarding party fails to make the payment to the receiving party after fifty-six (56) days from the receipt of the sufficient and valid payment documentation unless otherwise agreed upon by the parties.

9. Within two (02) working days from the date on which the construction contract is terminated, the receiving party must move all materials, employees, machinery, equipment and other assets under its ownership out of the construction site. If upon the expiry of the said time limit the receiving party has yet to make the move, the awarding party reserves the right to handle such assets unless otherwise agreed upon by the parties.

Article 42. Contractual bonuses and penalties for contractual breaches [26]

Contractual bonuses and penalties for contractual breaches shall comply with Clause 1 Article 146 of the Law on Construction No. 50/2014/QH13 and Clause 2 Article 146 of the Law on Construction No. 50/2014/QH13 amended by Point c Clause 64 Article 1 of the Law No. 62/2020/QH14 on amendments to the Law on Construction.

Article 43. Responsibilities for breaches of construction contracts

1. Responsibilities for breaches of construction contracts are specified in Clauses 3 through 7 Article 146 of the Law on Construction No. 50/2014/QH13, regulations of this Decree and relevant regulations of law.

2. If the awarding party fails to fails to make timely and adequate payment as agreed upon in the contract, it must compensate the receiving party at the interest rate charged on overdue debts announced by the commercial bank where the receiving opened its payment account corresponding to the late payment periods. The interest on overdue debts starts being chargeable from the first date of late payment up until the awarding party has made a full payment to the receiving party unless otherwise agreed upon by the parties.

Section 7. COMPLAINTS AND SETTLEMENT OF CONSTRUCTION CONTRACT DISPUTES

Article 44. Complaints during performance of construction contracts

1. For the purposes of this Decree, any complaint during performance of a construction contract means that either party detects that the other party has incorrectly fulfilled or failed to fulfill its obligations under the contract, then the former reserves the right to request the latter to correctly implement the contents of the signed contract. In such a case, the detecting party reserves the right to file a complaint against the other party about this matter.

2. When one party files a complaint against the other party, it must provide specific grounds and proof to clarify the complaint.

3. Within fifty-six (56) days from the date on which an issue arises that the other party has performed the contract inconsistently with the signed agreements, the detecting party shall immediately notify the other party thereof and file a complaint about this matter. Upon the expiry of the said time limit, if neither party files a complaint, the parties shall perform the contract in accordance with the signed agreements.

4. Within twenty-eight (28) days from the receipt of the complaint, the party receiving the complaint shall provide grounds and proof to prove such complaint is consistent with the signed contract. If the grounds and proof are unpersuasive and unreasonable, the intent of the complaint filed by the party receiving the complaint must be accepted. Upon the expiry of the said time limit, if the party receiving the complaint does not respond, it shall be deemed to have accepted the complaint filed by the detecting party.

5. Complaints filed by either party shall be sent to the correct transaction address or the address as agreed upon by the parties in the contract. Any complaint which is not handled by the parties to the contract shall be handled as prescribed in Article 45 hereof.

Article 45. Settlement of construction contract disputes

1. When settling disputes during performance of a construction contract, the parties must follow the principles and procedures prescribed in Clause 8 Article 146 of the Law on Construction No. 50/2014/QH13.

2. If the parties to the contract agree that the contract dispute is settled via conciliation by an organization or one or more expert individuals (hereinafter collectively referred to as the “dispute settlement committee”), the settlement via this committee shall be prescribed as follows:

a) The dispute settlement committee may be specified in the contract at the time of signing or established after the dispute arises. The number of members of the dispute settlement committee shall be agreed upon by the parties. Members of the dispute settlement committee are required to have expertise in the content of the matters under dispute, experience in dispute settlement and a good knowledge of regulations of law on construction contracts.

b) Within twenty-eight (28) days from the date on which the parties receive a conciliation conclusion from the dispute settlement committee, if either party does not accept such conclusion, it is entitled to raise an objection and the dispute shall then be settled by arbitration or a court as prescribed by law; if upon the expiry of the said time limit neither party objects to the conciliation conclusion, the parties are deemed to have agreed to the conclusion. In such a case, the parties must comply with the conciliation conclusion.

c) The costs paid to the dispute resolution committee shall be included in the contract price and incurred equally by both parties unless otherwise agreed upon by the parties.

3. The prescriptive period for filing a complaint to binding arbitration or to a court for settlement of a construction contract shall comply with relevant regulations of law.

Section 8. OTHER CONTENTS OF CONSTRUCTION CONTRACTS

Article 46. Insurance and warranty under construction contracts

1. Insurance

a) The investor shall buy insurance for the works during the construction period regarding the works that affect community safety or the environment and works applying sophisticated construction techniques and complicated conditions for execution of construction. If the insurance premium has been included in the contract price, the receiving party shall buy construction insurance as regulated.

b) Consultancy contractors shall buy professional indemnity insurance for construction consultants regarding construction survey or construction design of Grade II construction works or higher.

c) The receiving party shall buy different types of insurance (insurance for employees on the construction site, equipment insurance, third-party insurance, etc.) necessary for ensuring its operations according to regulations of law.

2. Warranty

a) The receiving authority shall provide warranty for works and equipment according to the agreements in the contract. The agreements on warranty period and level of warranty security reached by the parties to the contract must be conformable with regulations of law on construction.

b) Warranty security may be provided adopting the method of guarantee or another method agreed upon by the parties, but priority shall be given to the method of guarantee.

c) The receiving party is only permitted to return the work warranty security after the warranty period expires and the investor certifies the completion of warranty.

d) During the warranty period, the receiving party shall provide the warranty within twenty-one (21) days from the receipt of the notice of repair from the awarding party; if within the said time limit the receiving party fails to provide the warranty, the awarding party is entitled to use the warranty money to hire another entity to carry out the repair.

Article 47. Sub-contracts

1. A head contract may have multiple sub-contracts. When signing a sub-contract, the general contractor, head contractor or foreign contractor must comply with the following regulations:

a) Only qualified sub-contractors are permitted to sign the sub-contract.

b) Any foreign contractor performing a construction contract within Vietnam’s territory as a head contractor must hire domestic sub-contractors that meet requirements of the contract package and is permitted to sign sub-contracts only when domestic sub-contractors do not meet the requirements of the contract package. Materials and equipment temporarily imported for re-export must be specified in the contract on the principle that priority is given to the use of domestic materials and equipment that meet the requirements of the contract package.

c) Any sub-contractor not included in the list of sub-contractors attached to the contract must be approved by the investor.

d) The general contractor and head contractor must be responsible to the investor for the schedule, quality, occupational safety, environmental protection, mistakes and work performed by sub-contractors.

dd) The general contractor and head contractor are not permitted to hand over all their contractual work to a sub-contractor for performance.

2. Sub-contractors appointed by the investor (if any)

a) A sub-contractor appointed by the investor means a sub-contractor appointed by the investor for the head contractor or a sub-contractor employed by the general contractor to act as sub-contractor to perform some parts of the demanding job or when the head contractor or general contractor fails to meet the requirements concerning safety, quality and contract performance schedule as requested by the investor.

b) For a construction contract employing any sub-contractor appointed by the investor, the parties to the contract shall specifically agree upon the cases in which the investor is permitted to appoint a sub-contractor.

c) The head contractor or general contractor is entitled to refuse a sub-contractor appointed by the investor if the work being performed by the sub-contractor still correctly complies with the agreements in the contract or there are sufficient grounds for believing that the sub-contractor appointed by the investor fails to satisfy the contractual requirements.

3. The investor shall make payment directly to the sub-contractor on the basis of the payment proposal of the head contractor or general contractor unless otherwise agreed upon by the parties.

4. Sub-contractors have all rights and obligations of the receiving party in accordance with regulations of this Decree and other relevant regulations of law.

Article 48. Occupational safety, environmental protection and fire safety

1. Responsibilities of the parties for occupational safety must be agreed upon in the contract and are prescribed as follows:

a) The contractor for execution of construction of works (hereinafter referred to as “the construction contractor”) must adopt measures to ensure safety of people, machinery, equipment and works on the construction site, including neighboring works. If safety measures concern multiple parties, they must be agreed upon by such parties.

b) Safety measures and internal regulations on occupational safety must be made publicly available on the construction site; at dangerous positions on the construction site, there must be persons in charge of providing instructions and warnings for the purpose of accident prevention.

c) The construction contractor, the investor and other parties concerned shall regularly inspect and supervise the implementation of occupational safety regulations work on the construction site. Construction must be suspended if any violation of occupational safety regulations is found. Any person who fails to prevent a violation of the regulations on occupational safety under his/her management must take legal responsibility for the violation.

d) The construction contractor shall provide training and instructions on occupational safety regulations and disseminate them to its employees. As for some work subject to strict occupational safety requirements, employees performing such work must obtain a certificate of occupational safety training.

dd) The construction contractor shall provide adequate personal protective equipment to employees when employing them to work on the construction site.

e) If an occupational safety incident occurs, the construction contractor and the parties concerned shall handle it and notify the occupational safety authority as prescribed by law, take remedial actions and compensate for any damage caused by its failure to ensure occupational safety.

2. Responsibilities of the parties for environmental protection must be agreed upon in the contract and are prescribed as follows:

a) The construction contractor must take measures to protect the environment for employees on the construction site and ambient environment, including measures to control dust and noise and to clean the construction site; wastewater, solid waste and other types of waste must be collected and treated according to environmental technical regulations and standards on environment.

For construction works in urban areas, measures should be in place to cover such works and transport waste to the designated place.

b) During the transport of building materials and waste, measures to cover them must be taken to ensure environmental safety.

c) The construction contractor and investor shall inspect and supervise the protection of construction environment and are at the same time subject to inspection and supervision by the environment authority. If the construction contractor fails to comply with regulations on environmental protection, the investor and environment authority reserve the right to suspend construction and request the contractor to correctly implement environmental protection measures.

d) Any entity whose act harms the environment during the construction shall take legal responsibility and compensate for any damage caused by such act.

3. The parties to the construction contract must comply with applicable regulations on fire safety.

Article 49. Electricity, water and security on construction sites

The parties must agree in the contract upon their rights and obligations regarding the electricity and water supply, security on construction sites, and payment of costs thereof.

Article 50. Transport of technological equipment

1. The receiving party must notify the awarding party a certain period of time in advance of time of equipment delivery but not less than twenty-one (21) days.

2. The receiving party shall assume responsibility for packaging, handling, transporting, warehousing and storing equipment, unless otherwise agreed upon by the parties.

3. The receiving party must compensate the awarding party for any damage and costs incurred in connection with transport of equipment by the receiving party.

Article 51. Risks and force majeure

1. Risk refers to a danger which exert negative effects on performance of a construction contract in the future. In the construction contract, the parties must define their responsibilities for managing and dealing with risks; their responsibilities for rectifying consequences in the event of risk.

2. Force majeure refers to an event of risk which occurs objectively, is unforeseeable before signing a construction contract and is irremediable when it occurs even though all necessary measures are taken and all capabilities are employed such as a natural disaster, environmental emergency, conflict, conflagration and other irresistible factors.

3. When either party encounters a force majeure event, it must give a written notice to the other party as soon as practicable.

4. The parties must agree to deal with force majeure in the contract such as notice of force majeure; responsibilities of the parties for force majeure; termination and payment of the construction contract in the event of force majeure (if any).

Chapter III

IMPLEMENTATION CLAUSE

Article 53. Effect[27]

1. This Decree comes into force from June 15, 2015.

2. The Government’s Decree No. 48/2010/ND-CP dated May 07, 2010 and Decree No. 207/2013/ND-CP dated December 11, 2013 shall cease to have effect from the effective date of this Decree.

Article 53. Transitional clauses[28]

1. Any construction contract which has been signed and is being performed before the effective date of this Circular shall be performed in accordance with regulations on construction contracts before the effective date of this Decree.

2. Any construction contract which is under negotiation and have not been signed contains any content unconformable with regulations of this Decree, it must be reported to the investment decision maker for consideration and decision on the principle that quality, schedule and efficiency of the construction project are ensured and the lawful rights and interests of the parties are not infringed.

3. Any content regarding construction contracts in the approved but unreleased bidding documents or request for proposals which is unconformable with regulations of this Decree must be adjusted to make it conformable; if bidding documents or request for proposal has been released, any adjustment to the contents relating to construction contracts with a view to conformity with regulations of this Decree must be notified to all bidders that have bought the bidding documents or request for proposals; if the bid has closed, the regulations set out in Clause 2 of this Article shall be implemented.

Article 54. Implementation

1. Upon formulation, appraisal and approval of bidding documents or requests for proposal whose contents are related to construction contracts; upon negotiation, signing and management of performance of construction contracts, entities must comply with the regulations laid down in this Decree.

2. [29] The Ministry of Construction shall inspect and provide guidance on the implementation of regulations of law on construction contracts; provide guidance on adjusting construction contracts, methods of adjusting construction contract prices, types of construction contracts, forms of construction contracts; on EPC contract form; simple and small-scale construction contract form and other necessary contents of this Decree with a view to satisfaction of requirements for state management of construction works.

3. Organizations and individuals are encouraged to use the set of model contract conditions of the International Federation of Consulting Engineers (FIDIC) and model construction contracts to formulate and perform construction contracts. Upon using model construction contracts, the parties must consider adjusting their contents to make them conformable with regulations of Vietnamese law.

4. Ministers, heads of ministerial agencies, heads of Governmental agencies, Chairmen/Chairwomen of People’s Committees of provinces and central-affiliated cities, heads of political organizations, socio-political organizations, socio-occupational-political organizations, Presidents of Boards of Directors of Economic Groups and State Corporations and relevant entities are responsible for the implementation of this Decree./.

[1] The Government’s Decree No. 50/2021/ND-CP on amendments to the Government’s Decree No. 37/2015/ND-CP dated April 22, 2015 on elaboration of construction contracts, which has been effective since April 01, 2021, is promulgated pursuant to:

“The Law on Government Organization dated June 19, 2015;

The Law on the Law on Local Government Organization dated June 19, 2015;

The Law on Amendments to the Law on Government Organization and Law on Local Government Organization dated November 22, 2019;

The Law on Construction dated June 18, 2014; Law on Amendments to the Law on Construction dated June 17, 2020;

The Law on Public Investment dated June 13, 2019;

The Law on Public-Private Partnership Investment dated June 18, 2020;

The Law on Bidding dated November 26, 2013;

The Law on Management and Use of State Capital Invested in Manufacturing and Business Activities of Enterprises dated November 26, 2014;

The Law on Local Government Organization dated June 19, 2015 and the Law on Amendments to the Law on Government Organization and Law on Local Government Organization dated November 22, 2019;

At the request of the Minister of Construction;”

[2] This Clause is amended by Clause 1 Article 1 of the Government’s Decree No. 50/2021/ND-CP on amendments to the Government’s Decree No. 37/2015/ND-CP dated April 22, 2015 on elaboration of construction contracts, which has been effective since April 01, 2021.

[3] This Point is amended by Point a Clause 2 Article 1 of the Government’s Decree No. 50/2021/ND-CP on amendments to the Government’s Decree No. 37/2015/ND-CP dated April 22, 2015 on elaboration of construction contracts, which has been effective since April 01, 2021.

[4] This Point is amended by Point b Clause 2 Article 1 of the Government’s Decree No. 50/2021/ND-CP on amendments to the Government’s Decree No. 37/2015/ND-CP dated April 22, 2015 on elaboration of construction contracts, which has been effective since April 01, 2021.

[5] This Point is amended by Point c Clause 2 Article 1 of the Government’s Decree No. 50/2021/ND-CP on amendments to the Government’s Decree No. 37/2015/ND-CP dated April 22, 2015 on elaboration of construction contracts, which has been effective since April 01, 2021.

[6] This Point is amended by Point d Clause 2 Article 1 of the Government’s Decree No. 50/2021/ND-CP on amendments to the Government’s Decree No. 37/2015/ND-CP dated April 22, 2015 on elaboration of construction contracts, which has been effective since April 01, 2021.

[7] This Point is added by Point dd Clause 2 Article 1 of the Government’s Decree No. 50/2021/ND-CP on amendments to the Government’s Decree No. 37/2015/ND-CP dated April 22, 2015 on elaboration of construction contracts, which has been effective since April 01, 2021.

[8] This Point is added by Point e Clause 2 Article 1 of the Government’s Decree No. 50/2021/ND-CP on amendments to the Government’s Decree No. 37/2015/ND-CP dated April 22, 2015 on elaboration of construction contracts, which has been effective since April 01, 2021.

[9] This Point is added by Point e Clause 2 Article 1 of the Government’s Decree No. 50/2021/ND-CP on amendments to the Government’s Decree No. 37/2015/ND-CP dated April 22, 2015 on elaboration of construction contracts, which has been effective since April 01, 2021.

[10] This Point is amended by Point g Clause 2 Article 1 of the Government’s Decree No. 50/2021/ND-CP on amendments to the Government’s Decree No. 37/2015/ND-CP dated April 22, 2015 on elaboration of construction contracts, which has been effective since April 01, 2021.

[11] This Clause is added by Clause 3 Article 1 of the Government’s Decree No. 50/2021/ND-CP on amendments to the Government’s Decree No. 37/2015/ND-CP dated April 22, 2015 on elaboration of construction contracts, which has been effective since April 01, 2021.

[12] This Clause is added by Clause 4 Article 1 of the Government’s Decree No. 50/2021/ND-CP on amendments to the Government’s Decree No. 37/2015/ND-CP dated April 22, 2015 on elaboration of construction contracts, which has been effective since April 01, 2021.

[13] This Point is added by Point a Clause 5 Article 1 of the Government’s Decree No. 50/2021/ND-CP on amendments to the Government’s Decree No. 37/2015/ND-CP dated April 22, 2015 on elaboration of construction contracts, which has been effective since April 01, 2021.

[14] This Point is added by Point b Clause 5 Article 1 of the Government’s Decree No. 50/2021/ND-CP on amendments to the Government’s Decree No. 37/2015/ND-CP dated April 22, 2015 on elaboration of construction contracts, which has been effective since April 01, 2021.

[15] This Point is added by Point a Clause 6 Article 1 of the Government’s Decree No. 50/2021/ND-CP on amendments to the Government’s Decree No. 37/2015/ND-CP dated April 22, 2015 on elaboration of construction contracts, which has been effective since April 01, 2021.

[16] This Clause is added by Point b Clause 6 Article 1 of the Government’s Decree No. 50/2021/ND-CP on amendments to the Government’s Decree No. 37/2015/ND-CP dated April 22, 2015 on elaboration of construction contracts, which has been effective since April 01, 2021.

[17] This Clause is amended by Clause 7 Article 1 of the Government’s Decree No. 50/2021/ND-CP on amendments to the Government’s Decree No. 37/2015/ND-CP dated April 22, 2015 on elaboration of construction contracts, which has been effective since April 01, 2021.

[18] This Article is amended by Clause 8 Article 1 of the Government’s Decree No. 50/2021/ND-CP on amendments to the Government’s Decree No. 37/2015/ND-CP dated April 22, 2015 on elaboration of construction contracts, which has been effective since April 01, 2021.

[19] This Point is amended by Clause 9 Article 1 of the Government’s Decree No. 50/2021/ND-CP on amendments to the Government’s Decree No. 37/2015/ND-CP dated April 22, 2015 on elaboration of construction contracts, which has been effective since April 01, 2021.

[20] This Point is amended by Clause 10 Article 1 of the Government’s Decree No. 50/2021/ND-CP on amendments to the Government’s Decree No. 37/2015/ND-CP dated April 22, 2015 on elaboration of construction contracts, which has been effective since April 01, 2021.

[21] This Clause is amended by Clause 11 Article 1 of the Government’s Decree No. 50/2021/ND-CP on amendments to the Government’s Decree No. 37/2015/ND-CP dated April 22, 2015 on elaboration of construction contracts, which has been effective since April 01, 2021.

[22] This Article is amended by Clause 12 Article 1 of the Government’s Decree No. 50/2021/ND-CP on amendments to the Government’s Decree No. 37/2015/ND-CP dated April 22, 2015 on elaboration of construction contracts, which has been effective since April 01, 2021.

[23] This Clause is amended by Clause 13 Article 1 of the Government’s Decree No. 50/2021/ND-CP on amendments to the Government’s Decree No. 37/2015/ND-CP dated April 22, 2015 on elaboration of construction contracts, which has been effective since April 01, 2021.

[24] This Point is amended by Point a Clause 14 Article 1 of the Government’s Decree No. 50/2021/ND-CP on amendments to the Government’s Decree No. 37/2015/ND-CP dated April 22, 2015 on elaboration of construction contracts, which has been effective since April 01, 2021.

[25] This Point is amended by Point b Clause 14 Article 1 of the Government’s Decree No. 50/2021/ND-CP on amendments to the Government’s Decree No. 37/2015/ND-CP dated April 22, 2015 on elaboration of construction contracts, which has been effective since April 01, 2021.

[26] This Article is amended by Clause 15 Article 1 of the Government’s Decree No. 50/2021/ND-CP on amendments to the Government’s Decree No. 37/2015/ND-CP dated April 22, 2015 on elaboration of construction contracts, which has been effective since April 01, 2021.

[27] Article 3 of the Government’s Decree No. 50/2021/ND-CP on amendments to the Government’s Decree No. 37/2015/ND-CP dated April 22, 2015 on elaboration of construction contracts, which has been effective since April 01, 2021, stipulates that:

”Article 3. Effect and implementation

1. This Decree comes into force from the day on which it is signed.

2. Ministers, heads of ministerial agencies, heads of Governmental agencies, Chairmen/Chairwomen of People’s Committees of provinces and central-affiliated cities, heads of political organizations, socio-political organizations, socio-occupational-political organizations, Presidents of Boards of Directors of Economic Groups and State Corporations and relevant entities are responsible for the implementation of this Decree./.”

[28] Article 2 of the Government’s Decree No. 50/2021/ND-CP on amendments to the Government’s Decree No. 37/2015/ND-CP dated April 22, 2015 on elaboration of construction contracts, which has been effective since April 01, 2021, stipulates that:

“Article 2. Transitional clauses

1. Any construction contract which has been signed and is being performed before the effective date of this Circular shall be performed in accordance with regulations on construction contracts before the effective date of this Decree and contents of the signed contract.

2. Any construction contract which is under negotiation and have not been signed contains any content unconformable with regulations of this Decree, it must be reported to the investment decision maker for consideration and decision on the principle that quality, schedule and efficiency of the construction project are ensured and the lawful rights and interests of the parties are not infringed.

3. Any content regarding construction contracts in the approved but unreleased bidding documents or request for proposals which is unconformable with regulations of this Decree must be adjusted to make it conformable; if bidding documents or request for proposal has been released, any adjustment to the contents relating to construction contracts with a view to conformity with regulations of this Decree must be notified to all bidders that have bought the bidding documents or request for proposals; if the bid has closed, the regulations set out in Clause 2 of this Article shall be implemented.”

[29] This Clause is amended by Clause 16 Article 1 of the Government’s Decree No. 50/2021/ND-CP on amendments to the Government’s Decree No. 37/2015/ND-CP dated April 22, 2015 on elaboration of construction contracts, which has been effective since April 01, 2021.

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