Thông tư 11/2019/TT-BXD

CIRCULAR

GUIDELINES ON DETERMINATION OF COST PER SHIFT OF CONSTRUCTION MACHINERY AND EQUIPMENT

Pursuant to Law on Construction No. 50/2014/QH13 dated June 18, 2014;

Pursuant to Decree No.81/2017/ND-CP dated July 17, 2017 of the Government on functions, tasks, powers, and organizational structure of the Ministry of Construction;

Pursuant to Decree No. 68/2019/ND-CP dated August 14, 2019 of Government on management of construction expenditure;

At request of Director General of Department of Construction Economics;

Minister of Construction promulgates Circular providing guidelines on determination of cost per shift of construction machinery and equipment.

Article 1. Scope

This Circular provides guidelines on determination of cost per shift of construction machinery and equipment (hereinafter referred to as “machinery cost per shift”) serving as the basis for preparation and management of construction expenditure.

Article 2. Regulated entities

1. Agencies, organizations and individuals related to preparation and management of expenditure on construction of projects utilizing state budget funding, non-budget state capital and investment projects informs of public-private partnerships (PPP) as specified in Clause 1 Article 2 Decree No. 68/2019/ND-CP dated August 14, 2019 of Government on management of construction expenditure (hereinafter referred to as “Decree No. 68/2019/ND-CP”).

2. Agencies, organizations and individuals related to determination and management of expenditure on construction of projects utilizing other sources of funding are encouraged to adopt regulations prescribed in this Circular to determine construction expenditure serving as the basis for execution of financial obligations with the government.

Article 3. Rules of machinery cost per shift determination

1. Machinery cost per shift refers to average cost of construction machinery and equipment required for a shift as per the law.

2. Machinery cost per shift shall be determined depending on demands for management and use of construction machinery and equipment, cost norms for calculation of machinery cost per shift and base local costs.

3. Machinery cost per shift shall be determined in accordance with regulations and law on construction machinery and equipment and compatible with construction estimates.

4. Machinery cost per shift of specific construction shall be determined depending on construction machinery that is being or intended to be used and satisfactory to construction designs, methods, progress and base price of construction areas.

Article 4. Contents of machinery cost per shift

1. Machinery cost per shift includes the entire or some of the expenses namely depreciation, costs of repair, fuel, power, operators and other expenses.

2. Machinery cost per shift does not include cost of construction of cover structures for machinery, machinery foundation, electricity, water and compressed gas supply systems and other constructions serving installation and test operation of other machines namely cement mixers, asphalt mixer plants, mobile cranes and equivalent equipment. Separate estimates for such expenses shall be prepared depending on construction methods and accounted for in indirect costs of construction estimates.

3. Expenses included in machinery cost per shift shall be determined according to machines with the same technology, origin and basic technical criteria.

Article 5. Method of machinery cost per shift determination

1. Machinery cost per shift shall be determined in order below:

a) Prepare list of construction machinery and equipment;

b) Determine basic information and figures serving calculation and determination of machinery cost per shift;

c) Calculate and determine machinery cost per shift based on cost norms and basic data or machinery rental cost per shift.

2. Details of method of determining machinery cost per shift are specified under Annex No. 1 hereto.

3. Cost norms and basic data to determine machinery cost per shift are specified under Annex No. 2 hereto.

Article 6. Management of machinery cost per shift

1. Ministry of Construction shall provide guidelines on survey methods and issue cost norms and basic data to determine machinery cost per shift.

2. People’s Committees of provinces and central-affiliated cities (hereinafter referred to as “provincial People’s Committees”) shall assigned specialized construction agencies to depend on method of determining machinery cost per shift specified in this Circular to determine and request provincial People’s Committees to publicize on a quarterly/yearly basis or upon major price changes on construction market which will serve as the basis for determining costs of construction machinery to prepare, manage provincial construction expenditure and submit to Ministry of Construction for supervision and management.

3. Specialized construction agencies shall conduct or hire specialized competent consultants as per the law to conduct a part or the entire survey to collect data determining machinery cost per shift and survey on components of basic cost of machinery cost per shift. Expenditure on determining machinery cost per shift shall be allocated from budget for recurrent expenditure of ministries, provinces and central-affiliated cities.

4. Developers shall utilize machinery cost per shift that is publicized as the basis for determining construction expenditure. In case construction machinery and equipment are not included or unsatisfactory to use demands and construction conditions or in case an investment project is situated on 2 provinces and central-affiliated cities, developers shall determine machinery cost per shift according to rules and method specified in this Circular, request investors to consider and approve adoption thereof and submit to local specialized agencies and Ministry of Construction for implementation.

5. Consultant contractors preparing construction estimates are responsible for proposing machinery cost per shift that is not publicized or unsatisfactory to use demands and construction conditions to prepare estimates and ensure adequacy and accuracy of documents and reporting to developers.

6. Enterprises providing and leasing construction machinery and equipment in provinces, developers and awarded contractors in investment projects utilizing state capital, PPP projects in provinces are responsible for providing information on machinery cost per shift, machinery rent and information serving survey, determination and declaration of machinery cost per shift in provinces using schedules provided by specialized construction agencies.

Article 7. Transition

1. In case total construction investment and estimates are approved before the effective date hereof and construction agreements are not signed, investors shall decide to adjust machinery cost per shift in total construction investment and estimates to serve as the basis for determining contract package value according to machinery cost per shift publicized by provincial People’s Committees on the basis of ensuring project implementation progress and effectiveness.

2. With respect to contract package that has entered into construction agreements before the effective date hereof, comply with bidding documents, bid package and signed construction agreements

Article 8. Entry into force

1. This Circular comes into force from February 15, 2020.

2. Difficulties that arise during the implementation of this Circular should be reported to the Ministry for consideration./.

ANNEX NO. 1

METHOD OF DETERMINING CONSTRUCTION MACHINERY AND EQUIPMENT COST PER SHIFT
(Attached to Circular No. 11/2019/TT-BXD dated December 26, 2019 of Ministry of Construction)

Construction machinery and equipment cost per shift (hereinafter referred to as “machinery cost per shift”) refers to average cost of a working shift of construction machinery and equipment as per the law.

Machinery cost per shift includes the entire or some of the expenses namely depreciation, costs of repair, fuel, power, operators and other expenses and shall be determined as follows:

C_CM = C_KH + C_SC + C_NL + C_NC + C_CPK (1)

In which:

- C_CM: machinery cost per shift (VND/shift);

- C_KH: depreciation cost (VND/shift);

- C_SC: repair cost (VND/shift);

- C_NL: fuel and energy cost (VND/shift);

- C_NC: operator cost (VND/shift);

- C_CPK: other costs (VND/shift);

1. Determination of cost contents in machinery cost per shift

Costs included in machinery cost per shift shall be determined on the basis of cost norms of determining machinery cost per shift specified under Annex No. 2 hereto and base cost of fuel, power, personnel unit price and input value of machinery per shift in local areas. Types of machinery and equipment that are not specified under Annex No. 2 hereto shall be determined as per the law under Section 2 of this Annex.

1.1 Determination of depreciation cost

a) Due to being used, participation in manufacturing activities and natural influence, machines are wearing out and having their use values and prices reduced.

Machinery depreciation refers to calculation and systematic distribution of original costs of the machines in business and manufacturing costs during use process of the machines to recover machinery investment cost. Machinery depreciation shall be included in machinery cost per shift.

b) Depreciation cost in machinery cost per shift shall be determined as follows: 

 (2)

In which:

- C_KH: depreciation in machinery cost per shift (VND/shift);

- G: original machine cost before tax (VND);

- G_TH: salvage value (VND);

- D_KH: depreciation rate (%/year);

- N_CA: number of shifts of the machine in a year (shift/year).

c) Original machine cost:

- Original machine cost to determine machinery cost per shift shall be determined based on new machine cost, satisfactory to market base cost of the machine used for construction.

- Original cost of machine refers to the entire cost invested to purchase the machine by the time of getting the machine to be ready for use, including purchase price of the machine (cost of materials and components for replacement excluded), import duties (if any), expenditure on transportation, material handling, preservation, storage, installation (first time in a construction), technology exchange (if any), operation tests and other legitimate expenditure directly related to machine investment, VAT excluded.

- Original cost of a machine does not include expenditure as specified in Clause 2 Article 4 of this Circular and other expenditure namely: expenditure on second and onwards installation and deconstruction of cement mixers, asphalt mixer plants, mobile cranes, fixed cranes and equivalent construction machinery and equipment. Expenditure above is determined by preparing estimates and shall be accounted for in indirect cost of construction estimates.

- Original cost of a machine shall be determined depending on:

+ Survey on original cost of construction machinery of enterprises within the province operating in construction machinery and equipment, providing and leasing construction machinery and construction, enterprises owning construction machinery and equipment; price notice of providers, machinery procurement agreements and other relevant expenditure to bring the machine into operational readiness;

+ Consult original cost of machines that were and are being used in similar constructions and satisfactory to base market price at the time of determining machinery cost per shift;

+ Consult original cost of machines publicized in adjacent provinces or original cost for reference of Ministry of Construction under Annex 2 hereto.

d) Salvage value: refers to remaining value of the machine after its useful life, determined as follows:

- With respect to machines whose original cost equals or exceeds VND 30,000,000, salvage value thereof shall equal 10% of the original cost.

- Salvage value of machines whose original cost is less than VND 30,000,000 shall not be calculated.

dd) Depreciation rate of a machine (%/year) shall be determined on the basis of depreciation rate of machines specified under Annex No. 2 hereto.

e) Number of shifts of a machine in a year (shift/year) shall be determined based on total working shifts of machines in a year specified under Annex No. 2 hereto.

1.2. Determination of repair cost

a) Repair cost in machinery cost per shift shall be determined as follows:

 (3)

In which:

- C_SC: repair cost in machinery cost per shift (VND/shift)

- D_SC: repair rate of machine (%/year)

- G: original machine cost before tax (VND)

- N_CA: number of shifts of the machine in a year (shift/year).

b) Repair rate of a machine (%/year) shall be determined on the basis of repair rate of machines specified under Annex No. 2 hereto.

c) Original machine cost before tax (G) and number of shifts of machines in a year (N_CA) shall be determined as specified in Points c and e Section 1.1 of this Annex.

d) Repair cost does not include cost for replacement of high-cost working components whose depreciation depends mostly on nature of the work.

1.3. Determination of fuel and energy costs

a) Fuel and energy that are gasoline, oil, electricity, gas or compressed gas consumed in a single working shift to power the machine shall be referred to as primary fuel.

Lubricating greases, transmission fluid, etc. shall be referred to as secondary fuel in a shift of machines and determined by a coefficient of primary fuel cost.

b) Fuel and energy cost in machinery cost per shift shall be determined as follows:

 (4)

In which:

- C_NL: fuel and energy cost in machinery cost per shift (VND/shift);

- D_NL: type i fuel and energy consumption rate of machines in a shift;

- G_NL: type i fuel price;

- K_Pi: coefficient of type i secondary fuel cost;

- n: number of types of fuel and energy used in a shift.

c) Fuel and energy consumption rate in a shift of construction machinery and equipment are specified according to Annex No. 2 hereto.

d) Fuel and energy price shall be determined based on:

- Gasoline and oil price: based on press notice on gasoline and oil prices of Vietnam National Petroleum Group Petrolimex at the time of determining machinery cost per shift and area of construction sites;

- Electricity price: based on regulations and law on electricity price of the government at the time of determining machinery cost per shift and area of construction sites.

dd) Coefficient of secondary fuel cost for a shift shall be determined depending on each type of machine and specific conditions of construction. Average value of coefficient of secondary fuel cost:

- Machine and equipment run by gasoline engine: 1.02;

- Machine and equipment run by diesel engine: 1.03;

- Machine and equipment run by electric engine: 1.05.

e) In case machines are used to perform certain tasks (conduct survey, experiments and others) and fuel and energy costs have been accounted for in material cost in unit price of said tasks, machinery cost per shift shall not include fuel and energy cost.

1.4. Determination of operator cost

a) Operator cost for a shift shall be determined on the basis of number, composition, group, rank of operators and unit price per working day corresponding with rank of operators.

b) Operator cost in machinery cost per shift shall be determined as follows:

(5)

_{In which:}

- N_i: number of workers classified by rank operating type i machines in a shift;

- C_TLi: unit price per working day in which workers operate type i machines;

- n: number and type of workers operating machines in a shift.

c) Number of workers classified by rank operating a type of machines in a shift shall be determined in number, composition and rank of operators as specified under Annex No. 2 hereto.

d) Unit price per working day in which workers operate machines is determined based on unit price for construction workers publicized by provincial People’s Committees.

dd) In case machines are used to perform certain tasks (conduct construction survey, experiments and others) and operator cost has been accounted for in worker cost in unit price, machinery cost per shift shall not include operator cost.

1.3. Determination of other costs

a) Other costs in machinery cost per shift shall be determined as follows:

 (6)

In which:

- C_K: other cost in machinery cost per shift (VND/shift);

- G_K: rate of other cost (%/year);

- G: original machine cost before tax (VND);

- N_CA: number of shifts of the machine in a year (shift/year).

b) Rate of other cost (%/year) shall be determined on the basis of rate of other costs specified under Annex No. 2 hereto. In case types of machinery and equipment that are not specified under Annex No. 2 hereto, rate of other cost shall be determined as per the law under Section 2 of this Annex.

c) Original machine cost before tax (G) and number of shifts of machines in a year (NCA) shall be determined as specified in Points c and e Section 1.1 of this Annex.

2. Determination of cost per shift of construction equipment and machinery not mentioned under Annex No. 2 hereto:

In case types of equipment and machinery are not specified under Annex No. 2 hereto, cost per shift of said equipment and machinery shall be determined following methods of survey and identification of cost norms and basic data of machinery cost per shift specified in Section 2.1

The Annex hereto shall serve to calculate and determine machinery cost per shift. With respect to certain types of construction equipment and machinery whose rental is available on the market, said rental can be referred to serve calculation and determination of machinery cost per shift using methods specified under Section 2.2 hereof.  To be specific:

2.1. Survey methods for determining cost norms and basic data of machinery cost per shift

a) Survey to determine machinery cost per shift based on cost norms and basic data of machinery cost per shift shall be carried out in following order:

- Step 1: Prepare list of construction machinery and equipment whose cost per shift needs to be determined.

- Step 2: Consult figures to determine each cost norm and basic data determining contents of machinery cost per shift;

- Step 3: Calculate and determine average machinery cost per shift.

b) Contents of survey determining cost norms to calculate machinery cost per shift:

- Depreciation rate of machines: conduct survey on level of depreciation of the machines during use publicized by manufacturers or according to specific use conditions of the machines;

- Repair rate of machines: conduct survey to collect and integrate data regarding maintenance and repair cost for the entirety of machines’ useful life from following documents and papers: site diary, listing of maintenance and repair cost, regulations on maintenance and repair; conversion of total maintenance and repair const into percentage (%) of the original cost of the machines; equal distribution of % of maintenance and repair cost among the machines' useful life.

- Number of shifts in a year: conduct survey to collect and integrate data regarding actual use period of machine from documents and papers related to machine use period, including: site diary, periodic statistical reports on use period, technical regulations and requirements regarding maintenance and repair period, figures on impact of weather to working period of the machines; regulations on service life of the machines in technical documents of the machines or publicized by manufacturers, etc. Add other factors that affect number of shifts in a year depending on specific conditions of the construction.

- Fuel and energy consumption rate: consult amount of fuel and energy powering the machines throughout actual working period of the machines in a shift; figures for calculation as specified in technical documents publicized by manufacturers regarding fuel and energy consumption during operation.

- Number of operators: conduct survey on number of operators, craft (rank); conduct survey on regulations regarding operators publicized by manufacturers.

- Rate of other costs: conduct survey to collect and integrate data regarding other costs of machine including necessary costs to enable normal and effective operation at construction as specified in Point b Clause 2 Article 4 hereof; convert such costs into % of depreciation value of the machines; distribute management expenditure among years of useful life.

c) Contents of survey determining original cost:

Original cost of a machine whose cost per shift are to be determined shall be determined based on:

- Purchase agreements and other related expenditure to bring the machine into operational readiness;

- Price notice of providers or enterprises operating in construction machinery and equipment, providing and leasing construction machinery and construction and other relevant expenditure to bring the machine into operational readiness;

- Consult original cost of machines that were and are being used in similar constructions and satisfactory to base market price at the time of determining machinery cost per shift;

- Consult original cost from dossiers on construction machinery of contractors awarded with investment construction;

- Consult original cost publicized by adjacent areas.

d) Consolidate figures for processing and calculation of machinery cost per shift.

- Cost norms of determination of machinery cost per shift and original cost shall be screened and processed on the basis of consolidation of information and figures based on each instance.

- In case any of the cost norms of determination of machinery cost per shift contains inadequate figures or data or lacks the basis or documents to conduct survey, may revise regulations on cost norms of other machines sharing the same technical functions with different capacity or basic technical specifications specified under Annex No. 2 hereto.

- Machinery cost per shift of each construction work piece shall be determined using method of identifying basic cost components of machinery cost per shift based on post-analysis figures.

- Cost norms of determining machinery cost per shift determined by survey methods shall be submitted to Ministry of Construction for consolidation and issuance serving management of construction investment.

2.2. Survey methods for determining machinery rental per shift on the market: 

a) Procedures for determining machinery cost per shift based on machinery rental survey:

- Step 1: Prepare list of construction machinery and equipment whose rental is available on the market;

- Step 2: Conduct survey determining machinery rental per shift on the market: ‘

- Step 3: Calculate and determine machinery cost per shift based on average machinery rental per shift.

b) Range/area of survey: Within the areas and adjacent areas.

c) Survey principles:

- Machinery rental shall be determined by collecting and consolidating figures and list of machinery rental of construction enterprises and enterprises trading, leasing machines.

- Machinery rental subject to survey shall be satisfactory to types of construction machines and equipment and included within issued estimates quota or construction estimates.

d) Basic information of survey contents:

- Machinery rental per shift only includes the entire or some of the expenses namely depreciation, costs of repair, fuel, power, operators and other expenses. Other costs related to leasing the machines to enable function and operation at construction site (if any) namely costs specified in Clause 2 Article 4 hereof and expenditure on transportation of machine and equipment to the constructions site, etc. shall be excluded from the surveyed machinery rental.

- The surveyed machinery rental per shift shall be determined according to a working shift (according to regulations and law on a working shift of construction estimates) and leasing methods (operation included or excluded in addition to machine leasing) together with accompanying renting conditions.

- In case enterprises publicize machinery rental per hour, per day, per month or per year, said rental shall be converted to rental per shift to serve calculation.

- In case the machine rent includes operation, the survey must separately identify costs related to machine operation (including fuel, power and operators) and costs allocated in machinery rental (including depreciation cost, repair cost and other costs).

- Conduct survey on basic data of the machines: technical specifications (type, capacity, dimension, fuel consumption, etc.); origin; conditions; etc.

- Conduct survey on basic information enterprises leasing the machines;

dd) Consolidate figures for processing and calculation of machinery cost per shift.

Surveyed machinery rental shall be classified depending on type and capacity and processed before calculating average machinery rental serving as the basis for issuance, to be specific:

- Fuel, energy and operator costs in surveyed machinery rental per shift shall be verified according to regulations of manufacturers on fuel and energy consumption, operator composition and regulations on fuel and energy costs, operator unit price in Section 1 of this Annex. Then said costs shall be processed using regression method and converted to figures at the time of calculation and consolidation to determine costs.

- Depreciation cost, repair cost and other costs in surveyed machinery rental per shift shall be processed using regression method and converted to figures at the time of calculation and consolidation to determine costs.

4. Determination of cost per shift of idle machine

a) Cost per shift of idle machine refers to cost per shift of machines mobilized to the constructions sites without having tasks to execute due to reasons other than the contractors’.

b) Cost per shift of idle machines include depreciation cost (shall be allocated with 50% of depreciation cost), operator cost (shall be allocated with 50% of operator cost) and other costs.

5. Determination of machinery cost per hour

a) Machinery cost per hour refers to cost paid by the tenants to the lessors to have the right to use the machines in a definite period calculated by the hour (less than a shift) to complete a construction work piece.

b) Machinery cost per hour includes fuel and energy cost; operator wages; depreciation cost, repair cost and other costs calculated and distributed within an hour of work.

c) Depending on type of construction machines, nature of the work, technology and construction methods, machinery cost per hour shall be determined on the basis of multiplying machinery cost per shift publicized in local schedule for machinery cost per shift with 1.2 or conducting survey to determine following instructions specified in Section 2.2 under Annex 1 hereto.