Project management costs are necessary expenditures on project management, including preparation, execution and inauguration of the project (including costs of monitoring and evaluating the works construction investment project)

Through the receiving and responding system to businesses ‘recommendations, the investment- construction project management unit of Phu Yen Province requests the authorities to resolve this following issue:

Pursuant to Point c, Clause 2, Article 52 of Decree No. 84/2015/NĐ-CP the costs of supervision and assessment of investment carried out by the programs owner, investor, authority competent to sign project contracts, or an organization hired by such authority is 20% of the program/project management cost and included in the total investment in the program/project;

Pursuant to Point a, Clause 1, Article 3 of Circular 06/2016/TT-BXD dated March 10th 2016 of the Ministry of Construction guiding the determination and management of construction  investment costs, The project management costs include the costs stipulated in Clause 2, Article 23 of Decree No. 32/2015/ND-CP are the necessary costs to implement the project management from the stage of project preparation, implementation and end of construction to put the works of project into operation as follows:

- Making the pre-feasibility study report on construction investment (if any), report on investment policy recommendations (if any), feasibility study report on construction investment or report on economical - technical construction investment;

- Selecting contractor in construction activities;

- Monitoring and evaluating the works construction investment project;

- Making acceptance and handover of works;

Standard project management costs specified in the Decision No. 79/QĐ-BXD dated February 15th 2017 of the Ministry of Construction on standard project management and construction consulting costs is the basis for determination of project management costs in total investment and construction estimates. Project management costs are necessary expenditures on project management, including preparation, execution and inauguration of the project (excluding costs of project management by competent authorities in case of PPP projects) as specified in Clause 1a Article 3 of Circular No. 06/2016/TT-BXD)

As specified in point 11 of Decree No. 79/QĐ-BXD dated February 15th 2017 of the Ministry of Construction, if the project management board is capable of performing project management tasks of other projects or certain consulting tasks, the cost of such tasks shall be included in the cost of the project management board. The aforementioned costs shall be managed in accordance with applicable instructions.

Pursuant to these above provisions, the cost of monitoring and evaluating the works construction investment project is 20% of the program/project management cost.

Investment- construction project management unit of Phu Yen Province would like to ask: When carrying out the supervision and assessment of investment project, shall the owner enjoy this cost?

Regarding this issue, the Ministry of Construction gives following opinion:

Standard project management costs specified in Decision No. 79/QĐ-BXD dated February 15th 2017 of the Ministry of Construction on standard project management and construction consulting costs are necessary expenditures on project management, including preparation, execution and inauguration of the project, including the supervision and assessment costs of investment-construction project.

Regarding the case in which a third party is hired to consult, monitor and evaluate the investment-construction project, this cost shall be included in the project management cost.