Latest 2023 Regulations on Construction Project Management – What Project Owners Need to Know

Project management regulations are always a top concern for investors and project managers. Clearly understanding and strictly adhering to project management regulations is a mandatory requirement to ensure the project’s legality, efficiency, and quality, while also helping to avoid risks and legal violations during project implementation. So, what are the key points that investors and project owners need to be aware of? 1Office will cover everything in detail in the following article.

1. Legal Basis for Project Management Regulations

1.1. Law on Public Investment

Issued in 2019, the Law on Public Investment regulates the development and management of public investment projects. The Law on Public Investment includes provisions related to contractor selection, bidding procedures, project appraisal, and monitoring and evaluation of project implementation results.

1.2. Law on Construction

The Law on Construction was issued in 2014 and has been amended and supplemented multiple times. This is the law that contains the most specific and detailed regulations on the management of construction investment projects. Some key contents of the Law on Construction include construction registration and licensing, construction supervision, quality inspection of works, construction project management, and the responsibilities of the investor.

1.3. Regulations from the Ministry of Construction

The Ministry of Construction has issued many specific circulars and resolutions related to construction project management, with some key contents including:

• Circular No. 04/2019/TT-BXD guiding the management of construction investment projects
• Circular No. 20/2016/TT-BXD on the quality management of construction works
• Circular No. 16/2016/TT-BXD on the schedule management of construction works
• Circular No. 01/2018/TT-BXD guiding occupational safety management in construction
• Circular No. 13/2016/TT-BXD on the management of construction materials
• Circular No. 05/2016/TT-BXD on the management of construction supervision

In addition, guiding documents, technical regulations, and technical standards in the construction sector issued by competent authorities and organizations are also used as a legal basis for managing construction investment projects.

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2. New Regulations on Construction Investment Project Management – Key Points to Note

Decree 15/2021/ND-CP is the latest government regulation on project management. The Decree took effect on March 15, 2021, replacing Decree 77/2010/ND-CP. Some key contents of Decree 15/2021/ND-CP on project management that investors and project owners should pay special attention to are:

2.1. Regulations on Applicable Subjects

Decree 15/2021/ND-CP applies to all projects involving state budget funds, foreign-invested projects, and investment projects in the construction sector.

2.2. Regulations on the Project Management Unit

According to Decree 15/2021/ND-CP, the Project Management Unit is a project management entity established to manage public investment and construction investment projects. The Project Management Unit has the function and task of carrying out project management activities such as project planning, investment capital management, quality control of works, and management of project time and costs. The specific regulations are as follows:

• The investor must establish a Project Management Unit to manage and operate the project. The Project Management Unit must ensure close coordination among participating units during project implementation.
• The tasks of the Project Management Unit include:

• • Developing project management plans and related reports
  • Controlling the project’s schedule and quality
  • Managing project-related documents and records
  • Managing and allocating the project budget
  • Carrying out legal procedures related to the project
  • Supervising and inspecting the activities of related parties
  • Performing other tasks related to project management as required by the investor

• Powers of the Project Management Unit:

• • The project management board has the right to request the investor to provide information, documents, budget, and other necessary conditions to perform its tasks.
  • The project management board also has the right to propose solutions, change plans, project management process and the project budget, as well as report and propose solutions to the investor.

• Members of the project management board are appointed by the investor and must meet the requirements for capacity and experience in managing project processes. The project management board must have a head who is responsible for directing and is accountable for the results of project management activities.

2.3. Regulations on project management costs

Decree 15/2021/ND-CP regulates project management costs in Vietnam as follows:

• Project management costs include expenses for planning, monitoring, inspecting, evaluating, and reporting progress, quality management costs, and training costs for project management staff.
• The investor is responsible for managing and using project management costs effectively, ensuring they are reasonable and in compliance with legal regulations.
• Project management costs are included in the total investment cost of the project, not exceeding a maximum of 10% of the total investment cost (excluding land purchase and construction costs).
• For small-scale or simple projects, the investor may reduce the project management cost ratio to below the maximum of 10% of the total investment cost, but not lower than 2% of the total investment cost.
• The investor must prepare a project management cost report to submit to competent authorities for review, confirmation, and approval before implementing the project.
• The payment and management of project management costs must comply with the accounting, auditing, and tax regulations of Vietnamese law.

2.4. Other regulations on project management

In addition, Decree 15/2021/ND-CP also has regulations on other aspects of project management, including:

• Regulations on risk management, environmental protection, anti-corruption, and labor safety assurance
• Regulations on the responsibilities and scope of inspection and examination for the project management board
• Regulations on the responsibilities and scope of supervision by relevant agencies regarding the activities of the project management board
• Regulations on the management of public and social investment projects, including the management, evaluation, and supervision of investment projects

With Decree 15/2021/ND-CP, the Government aims to issue specific, transparent, and effective regulations to improve the quality of project management in Vietnam, ensure transparency, integrity, and accuracy in the use of state budget resources, and enhance the competitiveness of the Vietnamese economy.

In the article above, 1Office has introduced readers to information related to project management regulations that project owners need to understand. Besides complying with legal regulations, applying technology in project management is the key to improving efficiency and optimizing resources for construction projects. For a consultation and a trial of the market-leading project management software, please contact us using the information below:

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