CIRCULAR

GUIDING THE FORMS OF MANAGING THE EXECUTION OF INVESTMENT AND CONSTRUCTION PROJECTS

To perform the function of State management in the construction branch according to the Government’s Decree No.15/CP of March 4, 1994 on the functions, tasks, powers and organizational structure of the Ministry of Construction;
In furtherance of the Regulation on Investment and Construction Management, promulgated together with the Government’s Decree No.52/1999/ND-CP of July 8, 1999 and Decree No.12/2000/ND-CP of May 5, 2000 amending and supplementing a number of articles of the Regulation on Investment and Construction Management, promulgated together with Decree No. 52/1999/ND-CP;
The Ministry of Construction hereby guides the forms of managing the execution of investment and construction projects, as follows:

I. GENERAL PRINCIPLES

1. Basing themselves on the scales and nature of projects and their own capabilities, investors shall opt for one of the following forms of managing the project execution:

1.1. Direct management of the project execution by the investors;

1.2. Management of the projects by the managers;

1.3. Turn-key;

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2. For projects funded by the State budget capital, the State’s investment credit capital, the State-guaranteed credit capital or State enterprises’ development investment capital, the investors shall have to submit to the persons competent to decide the investment the form of managing the project execution for decision. For projects funded by other capital sources, the investors shall decide by themselves the form of managing the project execution.

The expenses for the management of the investment and construction project execution shall comply with the provisions of the Ministry of Construction’s Circular No.09/2000/TT-BXD of July 17, 2000 and be incorporated in the projects’ total investment capital and total cost estimates.

3. Administrative and public-service agencies at the central and local levels (e.g. the ministries, the ministerial-level agencies, the agencies attached to the Government, the General Departments and Departments attached to the ministries, the political organizations, the socio-political organizations, the provincial people’s committees, the provincial/municipal services, the district people’s committees) shall only act as investors of projects for building material and technical foundations of their respective agencies.

For other projects, the investors must be those directly managing the exploitation and use thereof and having all responsibilities and powers of investors, as provided for in Article 14 of the Regulation on Investment and Construction Management, promulgated together with the Government’s Decree No.52/1999/ND-CP of July 8, 1999. In cases where a project’s investor is not identified yet, the person competent to decide the investment shall assign the specialized project management board to function as the investor (depending on the characteristics of each project).

II. THE FORM OF DIRECT MANAGEMENT OF THE PROJECT EXECUTION BY INVESTORS

The form of direct management of the project execution by investors shall apply to projects where investors have suitable professional capability and professional staff to organize the management of the project execution in the following cases:

1. Where the investors do not set up project management boards but use their existing apparatus on the part-time basis and appoint persons to take charge (on full-time or part-time basis) of the management of project execution.

1.1. This case shall apply to group-B and group-C projects where the investors have suitable specialized technical or financial management sections or departments for management of the project execution.

1.2. Professional and experience requirements that persons directly managing the project execution must satisfy:

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b/ Technical managers of the projects must possess degrees of intermediate or higher-level, and have professional skills up to the project’s requirements and at least two years of professional work.

c/ Economic-financial managers of the projects must have professional skills in economics, finance and accountancy, possess intermediate or higher-level degrees, and have at least two years of professional work.

d/ For projects in deep-lying and remote areas, the persons directly managing the execution thereof must possess intermediate or higher-level degrees, have professional skills up to the projects requirements and at least one year of professional work.

1.3. The investors shall issue decisions to assign tasks and delegate powers to departments, sections and individuals that are appointed to manage the project execution on the part-time or full-time basis.

2. In cases where investors set up their attached project management boards to manage the project execution:

2.1. This case shall apply to group-A projects; group-B or group-C projects with high technical requirements or where the investors concurrently manage many projects.

2.2. A project management board shall be set up under the investor’s decision and must ensure the following principles:

a/ The project management board shall be a unit attached to the investor. The tasks and powers of the project management board must conform to the investor’s responsibilities and powers prescribed in Article 14 of the Regulation on Investment and Construction Management, promulgated together with the Government’s Decree No.52/1999/ND-CP, the investor’s organization and operation statute and the relevant provisions of law.

b/ The organizational structure of the project management board shall be decided by the investor, ensuring the full professional and operational capability to perform the task of managing the project execution. The project management board shall be composed of its head, deputy heads and professional sections assisting the board’s head.

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d/ As soon as the project is completed and put to exploitation and use, and the project management board has discharged its assigned tasks, the investor shall issue a decision to dissolve or assign new tasks to the project management board.

2.3. Upon deciding or proposing the appointment of the project management board’s head and the persons in charge of technical, economic and financial matters of the project, the investor shall have to consider the working seniority and professional capabilities of such individuals according to the minimum requirements prescribed at Point 1.2, Section II of this Circular. Particularly for group-A projects, the project management board’s head and the persons in charge of technical, economic and financial matters of the project must possess degrees of the university or higher level, and have professional skills up to the project’s requirements and two years of professional work.

III. THE FORM OF MANAGING PROJECTS BY MANAGERS

The management of projects by managers is a form of managing the project execution by an independent legal person fully capable of managing the project. The project management by managers shall be carried out in two forms: the project management by consultants under contracts and the specialized project management boards.

1. Project management by consultants under contracts shall apply when:

1.1. The investors have not enough conditions to directly manage the project execution, they shall hire consultancy organizations capable of managing the project execution. Such consultancy organizations shall be called the project management consultants.

1.2. The project management consultancy organizations carry out the project management contents under the contracts already signed with the investors.

1.3. The investors shall carry out and decide the project execution management contents, for which no management consultants are hired, according to the investors’ tasks and powers provided for in the Regulation on Investment and Construction Management, promulgated together with the Government’s Decrees No.52/1999/ND-CP and No.12/2000/ND-CP.

2. Specialized project management boards:

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2.2. The organizational structure and tasks of the specialized project management board must ensure the following principles:

a/ The specialized project management boards shall be set up under decisions of the ministries or provincial-level People’s Committees, have full legal person status and be held responsible before law for their operations.

b/ A specialized project management board shall be composed of its director, deputy directors and an appropriate apparatus for management of an independent project.

c/ The specialized project management boards shall exercise the functions and perform the tasks of investors regarding the management of project execution from the date the projects are approved until they are handed over and put into exploitation and use.

In case of necessity, the specialized project management boards may be assigned to perform works involved in the investment preparation stage or other tasks of investors prescribed in Article 14 of the Regulation on Investment and Construction Management, promulgated together with the Government’s Decree No.52/1999/ND-CP.

2.3. Required professional qualifications of the specialized project management boards:

a/ The director must possess degree of university or higher-level, and have professional capability up to the requirements on the project execution management and experience in managing two projects or more.

b/ The heads of professional departments and sections must posses degrees of university or higher-level, and have professional capability up to the requirements of their assigned tasks.

c/ The specialized project management boards must have specialized technical, technological, economic and legal personnel fully capable of managing the execution of the assigned projects with high quality and efficiency.

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1. The form of turn-key shall apply when the investors are allowed to organize bidding to select the general contractor to take up an entire project from its survey, designing, procurement of supplies and equipment, construction and installation to its hand-over and commission.

For projects funded by capital sources specified in Articles 10 and 11 of the Regulation on Investment and Construction Management, promulgated together with the Government’s Decrees No.52/1999/ND-CP and No.12/2000/ND-CP, this form shall apply only to group-C projects. For other cases, the Prime Minister’s permission is required.

2. Project execution management responsibilities:

2.1. The investors shall have the responsibilities to:

a/ Fill in the procedures for submitting the project’s contents for approval;

b/ Organize bidding to select general contractor;

c/ Sign and perform contracts signed with the contractors;

d/ Organize the site clearance, so that the construction site shall be handed over to the contractors according to the schedule set in the contracts and the provisions of law;

e/ Ensure sufficient funds for payment according to plans and economic contracts;

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g/ Perform other tasks of investors prescribed in Article 14 of the Regulation on Investment and Construction Management, promulgated together with the Government’s Decree No.52/1999/ND-CP.

2.2. The contractors shall have the responsibilities to:

a/ Perform obligations under the contracts already signed with the investors;

b/ Be responsible before the investors and the law for the progress, quality, costs and other requirements of the projects strictly according to the already signed contracts.

c/ In cases where they subcontracts their contracted work to subcontractors, they shall have to fulfill the commitments already stated in their bids and the contracts signed between the general contractors and the investors.

d/ Be fully responsible for the project execution process until the projects are handed over to the investors for exploitation and operation;

e/ Effect the warranty of the projects and the insurance regimes according to the provisions of law.

V. THE FORM OF SELF-EXECUTION OF PROJECTS

1. The form of self-execution of projects shall apply only in the following cases where:

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1.2. The investors are fully capable of carrying out production and/or construction activities suitable to the requirements of the projects for planting, tending of planted trees, aquaculture (in agriculture, forestry, aquatic resources or industry), for plant varieties and domestic animal breeds, field reclamation and building up, or maintenance and regular repair of construction works and production equipment.

2. When applying the form of self-execution of projects (self-production, self-construction), the investors shall have to organize the strict supervision of the production and construction activities, and be held responsible before law for the quality and prices of products and construction works.

3. The investors may use their own managerial apparatus or attached project management boards to manage the project execution, and shall comply with law provisions on control of quality of products and construction works.

VI. EXAMINATION, INSPECTION AND HANDLING OF VIOLATIONS

1. Examination and inspection:

1.1. Construction management bodies of the ministries, branches and localities shall have to examine the organization of management of project execution according to the Regulation on Investment and Construction Management, promulgated together with the Government’s Decree No.52/1999/ND-CP of July 8, 1999, Decree No.12/2000/ND-CP of May 5, 2000 and the guidance in this Circular.

1.2. Construction inspectorates of all levels shall conduct the inspection of violations in the management of project execution under the competent authorities’ decisions.

The inspection must be conducted in compliance with the legislation on inspection. Upon the completion of an inspection, there must be a written conclusion. If any violation is detected, the inspectors shall have to propose the handling thereof according to law.

2. Handling of violations:

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VII. ORGANIZATION OF IMPLEMENTATION

1. Effect:

This Circular takes effect 15 days after its signing and replaces guiding contents on the forms of managing the execution of investment and construction projects in the Ministry of Construction’s Circular No.01/2000/TT-BXD of March 1, 2000.

2. Transitional settlement:

2.1. The forms of management of project execution which have already been decided by the competent authorities according to Decree No.42/CP of July 16, 1996 and Decree No.92/CP of August 23, 1997 shall continue to be applied according to the provisions of the said two decrees and the guidance in the Ministry of Construction’s Circular No.18/BXD-VKT of June 10, 1995 till the completion of projects.

2.2. The form of self-execution of projects which has already been decided by the competent authorities according to Decree No.52/1999/ND-CP but remains unimplemented till the effective date of Decree No.12/2000/ND-CP shall be applied in compliance with the provisions of Decree No.12/2000/ND-CP and the guidance in this Circular.

2.3. Other forms of project execution management shall comply with the provisions of the Government’s Decree No.52/1999/ND-CP and Decree No.12/2000/ND-CP as well as the guidance in this Circular.

3. The ministries, the ministerial-level agencies, the agencies attached to the Government, the People’s Committees of the provinces and centrally-run cities, the central bodies of mass organizations, the State corporations and the concerned organizations and individuals shall have to organize the project execution management according to the provisions of the Regulation on Investment and Construction Management, promulgated together with the Government’s Decree No.52/1999/ND-CP of July 8, 1999 and Decree No.12/2000/ND-CP of May 5, 2000 and the guidance in this Circular.

Any problems arising in the course of implementation should be reported to the Ministry of Construction for consideration and solution.

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MINISTER OF CONSTRUCTION




Nguyen Manh Kiem