MINISTRY OF INFORMATION AND COMMUNICATIONS | SOCIALIST REPUBLIC OF VIETNAM Independence – Freedom – Happiness No.: 04/2020/TT-BTTTT | Hanoi, February 24, 2020
CIRCULAR
PRESCRIBING ESTIMATION AND MANAGEMENT OF COSTS OF INFORMATION TECHNOLOGY APPLICATION PROJECTS
Pursuant to the Law on Information Technology dated June 29, 2006;
Pursuant to the Government’s Decree No. 73/2019/ND-CP dated September 05, 2019 prescribing management of state investments in information technology;
Pursuant to the Government’s Decree No. 17/2017/ND-CP dated February 17, 2017 defining functions, tasks, powers and organizational structure of the Ministry of Information and Communications;
At the request of the Director General of Authority of Information Technology Application;
The Minister of Information and Communications promulgates a Circular prescribing the estimation and management of costs of information technology application projects.
Chapter I
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Article 1. Scope
This Circular introduces regulations on estimation and management of costs of information technology (IT) application projects funded by state budget for development investment expenditures, including total investment, cost estimates and norms, and unit costs of IT application.
Article 2. Regulated entities
1. This Circular applies to regulatory authorities, organizations and individuals engaged or involved in estimation and management of costs of IT application projects funded by state budget for development investment expenditures (hereinafter referred to as “cost estimation and management”).
2. Regulatory authorities, organizations and individuals involved in cost estimation and management of IT application projects with other funding sources are encouraged to apply this Decree.
Article 3. Cost estimation and management rules
1. Objectives and efficiency of IT application projects must be ensured.
2. Total investment, cost estimates, unit costs of IT application must be properly calculated and include all cost items as prescribed.
3. The State shall perform cost management by promulgating, instructing and inspecting the implementation of regulations on cost management.
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Chapter II
SPECIFIC PROVISIONS
Section 1. TOTAL INVESTMENT AND COST ESTIMATE
Article 4. Method for determining total investment
Total investment shall be determined by adopting the methods prescribed in Clause 4 Article 19 of the Government's Decree No. 73/2019/ND-CP dated September 05, 2019 prescribing management of state investments in information technology (hereinafter referred to as “Decree No. 73/2019/ND-CP”). Methods for determining total investment are elaborated in Appendix 01 enclosed herewith.
Article 5. Method for determining cost estimate
1. Determination of construction costs
Construction costs are determined by estimation based on the norms provided in Section 1 of Appendix 02 enclosed herewith.
2. Determination of equipment costs
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- Equipment costs are determined by estimation based on the quantity and categories of equipment to be purchased, and the market price of such equipment as prescribed in Section 2.1 of Appendix 02 enclosed herewith;
- Costs of building, development, upgrading and expansion of internal-use software are determined according to provisions in Section 2.1 of Appendix 02 enclosed herewith.
b) Costs of equipment installation, software setup, testing and calibration/modification of equipment and software are determined according to provisions in Section 2.3 of Appendix 02 enclosed herewith;
c) Costs of database building, data standardization and conversion serving data entry tasks, and inputting of data into the database are determined according to provisions in Section 2.2 of Appendix 02 enclosed herewith;
d) Costs of training in use of equipment/software and costs of training provided for system administrators and operators (if any) are determined according to provisions in Section 2.4 of Appendix 02 enclosed herewith;
dd) Costs of equipment transport and insurance (if any), taxes and fees related to the procurement of equipment are determined by estimation if they are not included in equipment procurement costs;
e) Costs of use, assistance, management or operation of the project’s products or work items before they are accepted and transferred (if any) are determined by estimation according to provisions in Section 2.5 of Appendix 02 enclosed herewith.
3. Determination of project management costs
Project management costs are determined on the basis of cost norms expressed in percentage or by cost estimation (if project management consultants are employed) in conformity with duration and scale of the project, and characteristics of the project management tasks as prescribed in Section 3 of Appendix 02 enclosed herewith.
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a) Investment consultancy costs are determined on the basis of cost norms expressed in percentage adopted by the Ministry of Information and Communications or by cost estimation based on the scope and quantity of consulting works, and the plan for performing the contract package as prescribed in Section 4 of Appendix 02 enclosed herewith;
b) Costs of investment consultancy works performed before the cost estimate is prepared shall be determined by values of the concluded consulting service contracts in accordance with state regulations.
5. Determination of other costs
Other costs include costs which are not specified in Clause 1 through 4 of this Article and are determined on the basis of cost norms expressed in percentage adopted by the Ministry of Information and Communications, or by a regulatory authority, or by cost estimation as prescribed in Section 5 of Appendix 02 enclosed herewith.
6. Determination of cost contingency
Cost contingency for additional quantity of works is expressed as a percentage (%) of total amount of construction costs, equipment costs, project management costs, investment consultancy costs and other costs;
Contingency for cost escalation is determined according to the duration of investment in the project (expressed in months, quarters and years).
Cost contingency shall be determined according to provisions in Section 6 of Appendix 02 enclosed herewith.
Section 2. COST NORMS AND UNIT COSTS OF IT APPLICATION
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1. IT application cost norms include economic-technical norms and cost norms expressed as percentage.
2. Economic-technical norms are the norms for consumption of materials, manpower and building machinery which are determined in conformity with technical requirements, adopted technologies and solutions, and specific scope of works for completing a workload unit.
3. Cost norms expressed as percentage are the basis for determination of costs of some works of an IT application project, including project management costs, investment consultancy costs and other costs.
Article 7. Methods of establishing IT application cost norms
1. Economic-technical norms are established as follows:
a) Make list of works in which specific technical requirements, adopted technologies and solutions, scope of works and suitable calculation unit must be specified;
b) Determine work components from the preparation stage to completion of works;
c) Determine costs of consumption of materials, manpower and building machinery;
d) Establish cost norms by aggregating costs of consumption of materials, manpower and building machinery.
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Article 8. Management of IT application cost norms
1. The Ministry of Information and Communications shall promulgate IT application cost norms which shall be used for estimation and management of IT application costs.
2. With regard to distinct works of sectors or provinces, related ministries and provincial People’s Committees shall, based on the methods for establishing cost norms laid down in Clause 1 Article 7 hereof, determine or hire qualified organizations or individuals to determine, adjust and verify costs, and promulgate cost norms after obtaining the consent from the Ministry of Information and Communications. Promulgated cost norms must be presented to the Ministry of Information and Communications for monitoring.
Promulgated economic-technical norms are the basis for determining unit costs, total investment, cost estimates and managing costs of IT application projects.
Article 9. Methods of establishing IT application unit costs
1. Unit costs are the basis for determining costs of an IT application project.
2. IT application unit costs shall be established on the basis of costs selected from economic-technical norms adopted by the Ministry of Information and Communications, relevant cost items and provisions in Appendix 04 enclosed herewith.
Chapter III
IMPLEMENTATION
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1. This Circular comes into force from April 09, 2020 and supersedes the Circular No. 06/2011/TT-BTTTT dated February 28, 2011 of Minister of Information and Communications prescribing estimation and management of costs of IT application projects.
2. In-progress IT application projects, which have been approved before the effective date of Decree No. 73/2019/ND-CP shall be governed by regulations on estimation and management of costs of IT application projects applicable at the time the project is given approval.
Where necessary, provisions herein may be applied to such projects according to decisions by competent persons provided any interruption to the project progress should be avoided.
Article 11. Responsibility for implementation
1. Authority of Information Technology Application affiliated to the Ministry of Information and Communications shall be responsible for disseminating, organizing, instructing and supervising the implementation of this Circular.
2. Regulatory authorities, organizations and individuals engaged or involved in estimation and management of costs of IT application projects funded by state budget for development investment expenditures are responsible for the implementation of regulations herein.
3. Difficulties that arise during the implementation of this Circular should be reported to the Ministry of Information and Communications (via Authority of Information Technology Application) for consideration./.
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