In which, the Decree stipulates the advance payment of construction contracts at public investment projects, public-private partnership (PPP) projects as follows:
The advance payment of the contract is carried out after the construction contract takes effect and the contractor has received the advance payment guarantee (for cases requiring advance payment guarantee) corresponding to the value of each type of money agreed upon by the parties; specifically for construction contracts, there must be a site clearance plan or a land handover record (full or part) of the site clearance organization handed over to the investor in accordance with the agreement in the contract.
The amount of advance, the number of advances, the time of advance and the amount of advance recovery through payments are specifically recorded in the bidding documents, request documents or in the draft construction contract sent to the contractor for the contractor to use as a basis for calculating bid prices, proposed prices and must be consistent with the ability to balance, arrange, and allocate capital to implement the contract...
The contract advance level must not exceed 30% of the contract price at the time of conclusion (including provision if any). In case it is necessary to advance at a higher level for the contractor to deposit or pay in advance to the manufacturer or supplier of materials and equipment according to the technology design to ensure the requirements of the project and other necessary cases, it must be permitted by the investor. For projects where the investor is the Prime Minister, the decision on the advance level higher than 30% is decided by the Minister, Head of a ministerial-level agency, or Chairman of a provincial-level People's Committee.
Minimum advance for consulting contracts: 15% of the contract price for contracts worth over 10 billion VND; 20% of the contract price for contracts worth up to 10 billion VND.
Minimum advance for construction contracts: 10% of the contract price for contracts with a value of over 50 billion VND; 15% of the contract price for contracts with a value from 10 billion VND to 50 billion VND; 20% of the contract price for contracts with a value under 10 billion VND.
Minimum advance for contracts for supplying materials and equipment, EC, EP, PC and EPC contracts, key-to-key contracts and other types of construction contracts: 10% of the contract price.
In case the parties agree to advance at a higher level than the minimum advance mentioned above, the contract price corresponding to the contract advance exceeding the minimum advance will not be adjusted from the time of advance (including cases of multiple advances).
Advance money is gradually recovered through payments, the recovery level for each payment is agreed upon by both parties in the contract, but must ensure that the advance money is recovered in full when the payment value (including contract advance, payment of completed volume) accumulates to reach 80% of the contract price agreed upon.
