Mr. Ngo Sy Hai (Hanoi) works at the project management board of state-owned enterprises, using non-budget state capital. His unit is implementing a construction investment project (cost management according to Decree No. 32/2015/ND-CP) and encounters controversial issues as follows:

During the bidding process for the equipment bidding package (2 phases, 1 dossier bag), the bid solicitor proposed to reduce the spare equipment portion in this bidding package and it has been approved by the investor and the grant investment decision approval in terms of policy. There are 2 different views on the steps to implement this adjustment:

The first point of view is that the reduction of backup equipment will reduce the value of equipment in the work estimate, leading to a change in the cost structure in the work estimate. This is the case where the project estimate is adjusted, and therefore the work estimate must be adjusted and then the bid package estimate adjusted.

The second point of view is that this is purely a reduction in the amount of work done, not a case of changing the estimated cost structure, just approving the revised package estimate.

Those who follow the second point of view argue: Most of the bidding package prices when updating prices 28 days before the bid opening date change compared to the prices in the work construction estimate, if this is considered a structural change, each when updating the bid package price, if there is a change, it must approve the project estimate, in fact, no unit does so.

Mr. Hai asked, which of the above views is correct?

The Ministry of Construction responded to this issue as follows:

According to the content of the question asked by Mr. Ngo Sy Hai, the case of construction investment projects complying with Decree No. 32/2015/ND-CP dated March 25, 2015 of the Government on management of construction investment costs then the cases in which the construction cost estimate may be adjusted are specified in Article 11 of Decree No. 32/2015/ND-CP:

"1. The approved work construction cost estimate may only be adjusted in the following cases:

a) Adjust the total construction investment according to the provisions of Article 7 of this Decree;

b) Changing or supplementing the design but not contrary to the basic design or changing the cost structure in the estimate, including contingency costs, but does not exceeding the approved total construction investment.

2. The adjusted work construction cost estimate includes the approved work construction estimate plus (or minus) the increased (or decreased) value. The increased (or decreased) value must be verified and appraised as a basis for approving the adjusted construction estimate.

3. The investor organizes the determination of the adjusted work construction estimate as the basis for adjusting the contract price, the bid package price and the adjustment of the total investment.

4. In case only the structure of cost items is adjusted but does not change the value of the approved construction estimate, including contingency costs, the investor shall organize the adjustment.

5. Competence to appraise and approve adjusted construction cost estimates shall comply with the provisions of the Decree on construction investment project management.

Accordingly, Mr. Hai needs to clarify whether the reduction of the project's backup equipment is in the case of adjustment of the construction estimate specified in Article 11 of Decree No. 32/2015/ND-CP before implementing the next steps.