v. Quality control within the scope of EPC contract
1. Tasks, items, and facilities to be delivered must meet quality conditions as prescribed in regulations on construction quality control and Article 13 of Decree No. 37/2015/NĐ-CP. The Contractor must adopt appropriate measures for controlling quality of the work performed by itself or the subcontractor.
2. All facilities, work items within the scope of EPC contract to be put into operation must meet the conditions prescribed in Clause 4 Article 31 of the Government’s Decree No. 46/2015/ND-CP dated May 12, 2015 on construction quality control and maintenance and Circular of the Minister of Construction on guidelines for construction quality control and maintenance.
vi. Management of safety, environment protection, and fire prevention within the scope of EPC contract
When the EPC contract is performed, apart from regulations prescribed in Article 48 of Decree No. 37/2015/NĐ-CP, the parties must comply with the following regulations:
1. The Employer shall inspect the Contractor’s adoption of measures for labor safety, environment protection, and fire prevention as agreed upon in the signed EPC contract and relevant law provisions.
2. Labor safety management:
a) Adhere to applicable regulations of the Government on labor safety;
b) The Contractor shall provide training in safety for its labor and provide adequate personal protective equipment and necessary rescue equipment;
c) The Contractor shall regularly inspect, test, repair, and control protective equipment, scaffolding, working platforms, jacks, transporting, lifting, lighting and protective equipment, and standards for replacing those devices;
d) Ensure the availability of fences, lighting and protective system of the facility until its completion and delivery.
3. Management of environment:
a) The Contractor must adopt measures for environment assurance for labor on site and surrounding environment;
b) The parties shall inspect and monitor the construction environment protection, and be subject to the inspection of environment authorities. If the Contractor fails to comply with regulations on environment protection, the Employer or a competent authority is entitled to suspend the construction and require the Contractor to strictly adopt measures for environment protection;
c) Any entity causing harm to environment during the construction process shall take legal responsibility and compensate for damage at its/his/her faults.
4. Management of fire prevention:
a) Involved parties in the EPC contract must comply with regulations on fire prevention;
b) Install and maintain a system of fire safety so as to control, alert, or make reasonable predictions, and avoid possible occurrence of damage to people and property from fire.
vii. Management of amendments to EPC contract and other essential contents within the scope of EPC contract
1. The amendments to the EPC contract must be consistent with regulations in Section 5 Chapter II of Decree No. 37/2015/NĐ-CP.
2. The involved parties of the contract shall also, according to the characteristics and nature of the contract, apply other regulations of legislation on construction investment for the purpose of managing the contract performance properly.
viii. Management of contract price, payment and settlement of EPC contract
1. Lump sum contract is a basic form of contract price applicable to an EPC contract. If the EPC contract applies other forms of contract price as prescribed in Article 15 of Decree No. 37/2015/NĐ-CP, the investment decision maker shall, according to characteristics, nature, and scope of each EPC project/contract package, select an appropriate form of contract price, provided that it satisfies conditions prescribed in Clause 5 Article 15 of Decree No. 37/2015/NĐ-CP and take legal responsibility for the project’s effectiveness.
2. When the form of lump sum contract is used, a price schedule of tasks and work items must be enclosed with EPC contract so as to facilitate the management of amendments to the EPC contract during its performance.
3. The payment of EPC contract shall be consistent with Article 19 of Decree No. 37/2015/NĐ-CP.
4. The settlement of EPC contract shall be consistent with Article 22 of Decree No. 37/2015/NĐ-CP.
5. The adjustments to the EPC contract price shall be consistent with Circular No. 07/2016/TT-BXD dated March 10, 2016 of the Minister of Construction on guidelines for adjustments to construction contract price.
See more issues related to construction contracts:
– Types of construction contracts;
– A number of fundamental issues about construction contracts (part 1);
– A number of fundamental issues about construction contracts (part 2);