Analysis of the types of construction contracts in Vietnam and the provisions of the principle Whale

Mondo Social Updated on 2024-01-31

Construction projects are usually large-scale projects, which combine many small projects;Correspondingly, the construction contract is not a large-scale construction contract can be fully covered, but also subdivided into many small types, such as: pre-construction consulting, engineering design and other businesses, construction of material procurement, equipment procurement and other businesses, manpower, material resources and other labor services, etc., may not be able to do all aspects in a large construction contract, need to sign a lot of small contracts to supplement.

At the same time, according to the habits of the construction unit and the difficulty coefficient and complexity of the project, some construction units will merge some of the above-mentioned businesses into a contract and perform them by a counterparty, so that it is more convenient to sign the contract in a "one-stop" styleThere are also some construction units that will separate the above-mentioned business in different contracts and be performed by different counterparties, so that they can choose the best among all walks of life and select the most suitable counterparty for the project.

This article summarizes and analyzes what kind of contracts should be signed for each of these sub-categories, what are the main points of these contracts, and what are the general principle requirements.

1. The construction consulting contract (referred to as the consulting contract) refers to the contract to carry out one, part or all of the consulting work in the construction investment activities

2. The project construction contract (hereinafter referred to as the construction contract) refers to the contract for the execution of the project construction, the project or the construction part according to the construction design of the projectThe construction general contractor contract refers to the construction contract for the execution of all works of the investment project;

3. The material and equipment procurement contract refers to the contract for the procurement of materials and equipment according to the technical design for installation on the construction siteThe general contractor contract for the procurement of materials and equipment refers to the contract for the procurement of materials and equipment for all works of the construction investment project;

4. The engineering design-construction contract (referred to as EC) is a contract for the execution of engineering and project design and construction;The engineering design and construction general contractor contract refers to the design and construction contract for all works of the construction investment project;

5. Engineering design-procurement of materials and equipment contract (EP) is a contract for the execution of design and procurement of materials and equipment for installation to the construction site according to the technical designThe general contractor contract for the design and procurement of materials and equipment refers to the contract for the design and procurement of materials and equipment for all projects of the construction investment project

6. Procurement of materials, equipment - construction contract (referred to as PC) is a contract for the procurement of materials, equipment and construction projects;The general contractor contract for the procurement of materials, equipment and construction refers to the contract for the procurement of materials, equipment and construction for all works of the construction investment project;

7. The design-procurement materials, equipment-construction contract (EPC) is a contract for the execution of work from design, procurement of materials and equipment to building construction, engineering projects and commissioning, acceptance, and handover to the contractorThe EPC General Contractor Contract is a contract for the design-procurement-procurement of materials, equipment-construction of all works for a construction investment project.

EPC contracts are preferentially applied to complex projects with high technical and technical requirements, and strict synchronization and uniformity from design to equipment**, construction and technology transfer training are strictly observed. Before deciding on the adoption of the EPC contract type, the investment decision-maker is responsible for organizing the assessment of technical and technical requirements, shortening the implementation time of the project, synchronizing from design, equipment**, construction to operational training, transferring the works to meet the objectives and requirements of the approved project compared to other types of contracts, and ensuring the feasibility of the EPC contract;

8. The general contracting contract refers to the construction contract for all the engineering planning, design, technical equipment and construction work of the construction investment project

9. Labor, machinery and construction equipment** contract refers to the construction contract that provides engineers, workers (collectively referred to as manpower), machinery, construction equipment and other necessary facilities according to the construction design;

10. A simple and small-scale construction contract refers to a construction contract that executes a bidding package, the value of which does not exceed the limit of the small-scale construction package stipulated in the Bidding Law, and the work within the scope of the contract has a simple and easy-to-execute technical nature

11. Other types of contracts.

In addition to complying with the second paragraph of Article 138 of the Construction Law No. 50 2014 QH13 and the provisions of the Contract Law on general contracts, the following principles should also be ensured:

1. When signing the contract, the contractor must have the practice ability and operation ability conditions stipulated in the construction law;In the case of joint venture contractors, the division of labor in the joint venture agreement must be consistent with the operating capacity of each member of the joint venture;In the case of foreign general contractors, there must be an undertaking to engage a domestic subcontractor to perform the expected subcontracted contract work when the domestic contractor meets the requirements of the tender package.

2. The investor or the investor's representative may enter into a contract with one or more general contractors to carry out the works. If an investor signs a contract with multiple general contractors, the content of the contract must ensure consistency and synchronization in the performance of the contract work, so as to ensure the progress, quality and investment efficiency of the construction investment project.

3. The general contractor and the main contractor may enter into contracts with one or more subcontractors, but these subcontractors must be approved by the investor, and these subcontracts must be consistent and synchronized with the contracts that the main contractor has signed with the investor. The general contractor and the main contractor must be accountable to the investor for the progress and quality of the contracted works, including those completed by subcontractors.

4. The signing of the contract shall not exceed the winning bid or the negotiation results of the construction contract, except for the quantity allowed by the investment decision-maker and generated outside the scope of the bidding package.

5. Before signing an EPC contract (i.e., the 7th type of contract mentioned above), both parties must clearly agree on the following main contents:

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

b) Construction site, construction route, construction type and grade;Scale, capacity, and selected product selection, development, and use capabilities;

c) Natural conditions, engineering geology, hydrogeology, hydrology and other documents and information of the project location;

d) Construction design requirements and some initial design parameters;

d) Technical, engineering, equipment and business plans;The country of origin of the equipment and products;Technological solutions for connecting and adapting existing technical systems, if any;

e)plan to connect the technical infrastructure inside and outside the project area;Fire and explosion prevention solutions within the scope of the EPC package;

g) Construction plan and main materials;

h) Requirements for quality management, engineering testing, commissioning, warranty and maintenance of construction projects;

i) Architectural, floor plan, section, correct construction surface, dimensions, solutions for the main structure of the construction works within the scope of the EPC package;

k) List and extent of application of technical regulations and standards used in design, equipment** and construction;

l) Technical guidance on materials, equipment and technical services;The operational flow of each part within the scope of the EPC package and the entire project;

m) Requirements for environmental protection, safety, fire and explosion protection, etc.;

n) Requirements relating to the approval process;The type of records, documents, and schedules that must be submitted to the contractor;

o) Implementation schedules and milestones for major works, construction projects and the commissioning and commissioning of the entire project;

p) Clarify the responsibilities between the principal and the contractor for the provision of electricity, water, communications, internal roads and other services available on the construction site and for the handling of the interface between the contractors in the same construction project.

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