Community Investment Funds - CIF Manual Cao Bang

Manual
Guideline on Implementing The Regulation
on Decentralization and Management of
CIFs in Cao Bang

LIST OF ABBREVIATIONS AND ACRONYMS

ADB Asian Development Bank
CDB Commune Development Board
CEM Committee for Ethnic Minorities
CIF Community Investment Fund
CIG Common Interest Group
DARD Department of Agriculture and Rural Development
DBRP Developing Business with the Rural Poor
DPC District People’s Committee
DPI Department of Planning and Investment
DoF Department of Finance
DPMO District Project Management Office
EU European Union
EUR European currency
IFAD International Fund for Agricultural Development
GOL Government of the Grand Duchy of Luxembourg
ODA Official Development Assistance
PPB Project Preparation Board
PPC Provincial People’s Committee
PPMU Province Project Management Unit
TA Technical Assistance
TOR Terms of Reference
ToT Training of Trainers
USD United States Dollar
UN United Nations
VBARD Vietnam Bank for Agriculture and Rural Development
VBSP Vietnam Bank for Social Policies
VND Vietnamese currency (Dong)

The manual “Guideline on implementing the regulation on decentralization and management of
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FOREWORD
The “Developing Business with the Rural Poor (DBRP) in Cao Bang”
project is designed to empower targeted communes and communities to
propose their own socio-economic development plan in the light of “People
know, People discuss, People do, People inspect and People benefit”. The
government at all levels will provide support in procedures and finance,
methods and experts for improving the local people’s and communes’
capacities. This creates the most fundamental element for sustainable
development of rural economics and for poverty reduction as the project’s
objectives.
The project has introduced, though at small extent, a new thought and approach
of the State management agencies on organization, implementation, and
management of investment and basic construction projects, especially those
belonging to the national target programmes. It is therefore easy to see that the
project will have to face more risks than others, namely:

- Empowerment to the commune level while the qualification of officials at
the commune level and the grassroots level is still limited, which is the
greatest risk of the project.

- The target area is quite large (in more than 10 districts and 50
communes), with poor infrastructure, limited qualifications of people, and
low living standards (people in some particular places are very poor).
The project staff at all levels must be patient, diligent, hard-working, and
sympathetic towards the poor so as to implement well the project’s
objectives.
The manual “Guideline on implementing the regulation on decentralization and
management of the Community Investment Funds (CIFs)” includes 2 volumes:
Volume 1: “CIF utilization processes” including:
1. Part 1: Process of Project Formation and Proposal by the Community
2. Part 2: Processes of Survey, Design and Consultant Selection.
3. Part 3: Methods of Bidding and Contractor Selection
4. Part 4: Process of Construction Quality Management;
5. Part 5: Payment and Final Settlement of Accounts of The Project
6. Part 6: Process of Management, Operation and Maintenance
Volume 02: Appendices

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The manual “Guidelines on implementing the regulation on decentralization and
management of the Community Investment Funds (CIFs)” is an instructional
document for DPMO, CDB, and Village Development Board to understand and
implement according to the procedures for planning, implementation and
management of a Small&Medium Scale construction investment project in the
commune with the community participation. This manual refers to contents and
implementation manner of each specific activity in the project implementation
process.
The manual also helps community staff and DPMO during the instruction and
support towards the communes and villages to implement the steps of forming,
proposing, implementing and managing sub-projects in the communes.
Besides, it can be used as a reference for the training staff, monitoring and
evaluation staff, and financial staff of the Provincial Project Management Unit
during their task implementation.
The manual “Guideline on implementing the regulation on decentralization and
management of the Community Investment Funds (CIFs)” is compiled under the
leading of Mr. Phuong Tien Tan – Deputy Director of the DPI – Project Director
and participation of national and international consulting organizations:

• Lux-Development – VIE/029 project:
- Mr. Rudi Schuetz – Chief Technical Advisor of VIE/029 Project
- Mr. Doan Manh Tuong – Senior Infrastructure Expert – VIE/029 Project
• Consultancy team:
- Mr. Nguyen Quang Phuc – Consultant
- Mrs. Tran Thi Kim Dang – Consultant
- Mrs. Dam Thi Thao – Head of Expenditure Control Department – the
State Treasury Branch of Cao Bang Province
- Mr. Duong Hung Dung – Head of Investment Office – Cao Bang
Provincial Department of Finance
- Mr. Dam Van Hai – Head of Budget Department – Cao Bang Provincial
Department of Finance
- Mrs. Hoang Thị Tuyen – Head of Accounting Office – State Treasury
Branch of Cao Bang Province
- Mr. Hoang Trung Kien – Vice Head of Foreign Economic Relations Office
– Cao Bang Provincial Department of Planning and Investment
- Mr. Vu Anh Tuan – Vice Head of General Office - Cao Bang Provincial
Department of Planning and Investment
• DBRP Project in Cao Bang:

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- Mr. Nong Minh Thang: Deputy Director of Project Management Unit.
- Mr. Pham Xuan Tung : Chief Accountant
- Mr. Lam Duy Tang: Head of Community Planning Department.
- Mrs. Tham Thi Loan : Staff of Monitoring and Evaluation Office
- Mrs. Bui Thi Que: Vice Head of Community Planning Department
Besides, it includes the participation and comments by many relevant agencies
in the province (Department of Construction, DPI, DPMOs, etc.) and, especially,
the consideration and support by IFAD in Vietnam;
We would like to express our faithful gratitude to the close coordination of the
experts and organizations that have helped us in completing this manual;

Management Unit of the DBRP Project in Cao Bang

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GENERAL REGULATIONS
I. Implementation bases:
Pursuant to the Financing Agreement No. 741 – VN and the Non-
refundable Aid No. 997 – VN signed on 16 January 2008 between the
Government of the Socialist Republic of Vietnam and the International Fund for
Agricultural Development (IFAD);
Pursuant to Decision No. 2025/QD – UBND dated 7 September 2009 by
Cao Bang PPC on issuing the regulation on decentralization and management
of the CIFs under the DBRP Project in Cao Bang.
II. Detailed guideline on implementation of CIF:
1. Introduction of CIF and principles of fund use:
- The DBRP project in Cao Bang, which is implemented in 50 communes of 10
districts, aims at improving the life quality of the rural poor through the market
participation and contributing to sustainable and equitable poverty reduction.
Under this, the CIF is a Project improving the commune financial management
capacity and directly contributing to poverty reduction by allocating the
commune budget to for-the-poor agricultural and rural development activities,
namely: Building village and commune level infrastructures, production and
marketing facilities, and operational capacity building services
CIF will be used to complement and assist the existing capital sources and
programmes: Programme 135-Phase II, Programme 30A, etc.
The investment capital in the project’s CIF under regulations of the Agreement
includes:
+ 80% from IFAD loan
+ 20% from the Government of Vietnam and beneficiaries
- The owner of investment capital in the CIF is the CDB, who has an active
account at the District State Treasury.
+ Only use maximum 90% of IFAD loan to invest in commune
infrastructure
+ The remaining 10% for improving the commune capacity. (including
training in computer use for the mass organizations, commune Party Committee
and People’s Committee; training skills such as meeting facilitation, and
minutes taking for the CIG leaders, and heads of villages; developing the
production and business models for others’ learning and replication; organizing
visits to effective production and business models inside and outside the
province, etc. depending on the actual needs of the commune.)

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- To be used effectively, publicly, and transparently for the right purposes.
2. Scope of adjustment.
The scope of adjustment under this regulation includes the infrastructure works
in communes, and commune capacity improvement activities invested by the
capital from the DBRP project, including:
- IFAD capital: Capital funded by IFAD.
- Counterpart fund of the Government of Vietnam: Including the
Government budget for operation expenses and domestic taxes.
Counterpart capital by the beneficiaries: Mainly in kind such as labor, materials
for building rural infrastructure and contributions from site clearance.
III. Conditions of disbursement and forms of money transfer of the CIF
1. Conditions of disbursement:
- The commune has its approved participatory socio-economic
development plan;
- The commune is trained on the commune integrated financial
resources management process and the management and use
process of the CIF;
- The commune has the approved estimate of CIF;
- The commune has issued the decision on establishing the CDB;
2. Management and use process of the CIF:
2.1. Establishment of CDB:
- The DPC issues a decision on establishing CDB (Participants:
Chairman of Commune People’s Committee as the head of the board,
commune accountant, land registry or construction staff, staff in the
commune departments, etc.)
- Transaction account opening: After the issuance of the decision on
establishment, CDB opens an account at the District State Treasury
2.2. Meeting of CDB:
CDB organizes CIF utilization and assigns tasks to its members. The
participants include the CDB, collaborators (if any) and representatives of the
District Project Management Unit. The main contents to be mentioned in the
meeting include:
- Publicly announcing of the CIF, informing about capital source and
cost norm;

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- Inspecting, reviewing and considering the approved socio-economic
development plan and selecting the activities to be funded by the CIF.
- Selecting and determining benefited villages and hamlets;
- Agreeing on capital allocation to the activities;
- Assigning tasks to the members of the CDB and collaborators (if any)
in management, implementation and monitoring of the activities under
the CIF
2.3. Meeting at benefited villages:
CDB coordinates with the heads of villages/hamets to organize village and
hamet meetings to inform about the CIF and determine the beneficiaries of the
fund. Everyone in the village, including males and females, especially the poor
and ethnic minority people are invited to the meeting
- Notifying information about the CIF including:
+ Total financed budget of the commune and expenditure amount to be
allocated to the village in the year
+ Principles, conditions and objects of the fund
+ Activities proposed by the village in the Socio-economic Development
Plan financed by the CIF; budget estimates for these activities
Notes:
- Village and hamet meetings are conducted only when the
representatives of at least 70% of the households in the village, hamlet
are present and the gender priority is applicable;
- Ensuring the sufficient time for discussion, opinion exchange and
proposals;
- At the end of the village meeting, the following results must be
achieved:
Minutes of village meeting, including the summary table of activities
2.4. Appraisal of the village/hamlet activities:
On receiving the minutes of village/hamlet meeting, the CDB conducts appraisal
of the activities proposed by the village/hamlet, while ensuring that:
- Total expenditure for village/hamlet activities must be suitable with the
amount allocated to the village from the community development fund;
- The activities proposed by the village/hamlet must be suitable with the
priority activities in the conclusion of the CDB meeting. If such

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activities are not of the priority activities in the conclusion of the
extended CDB meeting but are suitable with the people’s expectation,
the CDB will consider and issue their decision.
3. Organizing the operation structure of the CIF
The operation structure of the CIF in Cao Bang includes provincial, district
and commune levels. The specific responsibilities of each levels are as
follows:
3.1. Commune Development Board (CDB):
- Assigning tasks related to the functions and duties of the Board to
each member of the CDB in accordance with their knowledge and
capacity;
- Participating in village, hamlet, and commune development planning;
summarizing the village, hamlet, commune needs using the
participatory approach with the assistance and guidance of the Cao
Bang Provincial DPI, district DPMO, and DBRP project in Cao Bang
- Defining the highest priorities for activities financed by the CIF using
the participatory approach;
- Informing the purposes, objectives and the regulations and criteria of
CIF management, and capital source in commune meetings;
- Making expenditure estimates for the activities;
- Instructing the villages and hamlets to implement the activities;
- Organizing seminars and training workshops in communes, villages
and hamlets;
- Preparing and recording management and monitoring forms and
archiving them all systematically at the Commune People’s
Committee;
- Collecting all the receipts and invoices related to the expenses for CIF
management activities as requested by the Project;
- Making annual reports on the results of CIF management and use,
conducting annual wrap-up meeting to evaluate the Fund management
and use and consider the effectiveness of the support from the fund
according to the requirements.
3.2. District Project Management Office (DPMO):
- Assigning functional tasks to each member in accordance with their
knowledge and capacity;

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- Participating in and supporting the village, hamlet, and commune
development planning activities;
- Organizing seminars and training workshops related to the Project in
the district and commune.;
- Supporting and advising the communes during their use of Fund as
requested by the project;
- Coordinating with related parties to solve the problems arising from
Fund management;
- Carrying out inspection, supervision, monitoring and evaluation of the
CIF utilization in the communes of district regularly and extraodinarily;
- Summarizing and reporting the plan progress and the fund use every
three months to the Provincial Project Management Unit;
- Organizing 6-month and one-year preliminary wrap-up meetings on
implementation of the project activities in the area;
- Making an annual summary report on the CIF management and use
and submitting the report to the DPC and the Provincial Project
Management Unit on the 30th of January every year.
3.3. Cao Bang Provincial Project Management Unit (PPMU):
- Making plans for implementing activities improving system capacity
and the commune’s financial management capacity (document
compilation, seminar and training workshop preparation and
organization) to implement in communes using the CIF;
- Making plans for organizing and using the CIF in 10 districts of the
Project;
- Directing the 10 districts to make plans of using expenditure sources
from the Community Invesment Fund (CIF) for and organize
implementation of the activities accodring to the plan, progress and
results;
- Ensuring purpose-driven and effective financial and CIF management;
- Preparing periodic reports (report on the progress and use of fund) as
requested by the Project;
- Transfering all the annually allocated expenditure to the commune as
soon as all the necessary conditions are satisfied;
- Summarizing and introducing good experience in management and
use of the commune development fund of districts to the communes;

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4. Commitments and rules on the use of CIFs:
Using forms I - 1 and I - 2:

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PART I: FORMING AND PROPOSING PROJECTS
I. Village/hamlet meeting for work selection;
1. Purposes and results to be achieved:
- People in the village know about the members of the CIF management
board, status quo of the existing works in the village, village potentials
and limitations, amount of capital and eligible investment projects that
may be proposed;
- Selecting and proposing the works of villages, inter-villages, and
communes
2. Participants:
- All people in the village (both males and females)
- Representatives of organizations, departments, and associations in the
village
- DPMO support staff and community staff of the provincial project (If
required)
3. Content:
- Informing the list of members of the CIF management board;
- Introducing eligible investment projects, average investment rate for each
project, and the capital allocated to the commune in the project
implementation cycle and each year;
- Evaluating the status quo of the existing projects in the village,
- Selecting and proposing the construction investment projects in the
village
4. Steps of implementation:
• Step 1: Preparation:
DPMO support staff and PPMU community staff meet the heads and leaders
of villages to agree and inspect its preparation

• Step 2: Meeting
- The head of village introduces the participants, content, purposes and
secretary of the meeting;
- The village representative introduces the list of members of the newly
established CBD;

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- Presenting the criteria for proposing and selecting the eligible investment
projects according to regulations of the project, including: Project items,
investment norms, amount of capital allocated to the commune and the
capital each year;
- Taking time to answer the people’s questions;
- Instructing people to select suitable projects:
+ Dividing people into separate teams by gender;
+ Each village representative acts as the team leader and instructs his
members to propose projects;
+ Agreeing on the selected projects;
+ Reaching an agreement among teams and giving votes;
+ Disclosing the number of votes for each project and arranging them by the
number of votes from higher to lower

• Step 3: Meeting summary and evaluation
5. Necessary documents:
- List of the CDB members in Ao paper;
- Minutes of invested project list;
- Board, papers, chalk, etc.
- Table of village project status quo evaluation

• Criteria for project selection:
- Included in the list of the eligible investment projects
- Have the highest number of beneficiaries in the village;
- Have little or no impact on the environment;
- Have little impact on movement, compensation, and resettlement;
- Easy to implement, and everyone in the village is able to participate in
implementation;
- Not coincide with other programmes/projects;
- Have a short time of work execution
- Placed where there are many CIGs established by the Project
- Suitable with the project expenditure
- Giving priority to females
(Forms I - 3 and I - 4 attached)
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II. COST ESTIMATE OF THE PROJECT SELECTED BY THE
VILLAGE/HAMLET
1. Contents:

- Classifying the projects selected by the people in the village;
- Carrying out field surveys to these projects, and making estimate of
main volumes;

- Making basic cost estimate based on the investment rate
2. Purposes and Results to be achieved:
Preliminary cost estimate of investment in the projects selected by the
people for submission to the commune and meeting for final selection is
obtained.
3. Participants:

- DPMO support staff or PPMU infrastructure staff
- Key staff of the CDB, and Village Development Board.
4. Order of implementation:

- The projects proposed and selected by the people are classified into
2 types: new construction works and improved construction works;

- Carrying out surveys of the project status quo;
+ The survey participants record necessary data such as scope
description, status quo, number of beneficiaries, etc. and make
preliminary estimates of the main volumes;
+ Collecting opinions of the survey participants, discussing and reaching
an agreement to make construction cost estimates for the projects
according to form I - 5
(Notes: The project Investigation, survey and cost estimate steps
require the efficient support of DPMO staff and PPMU infrastructure
staff)
III. COMMUNE MEETING FOR COMMUNE PROJECT SELECTION
1. Contents:

- Representatives of the villages introduce the proposed projects
selected by the people;

- Summarizing the projects of the commune’s villages;

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- Comparing the projects with the selection criteria;
- Voting to select projects
The proposals of the villages/hamlets are summarized to select the
commune projects in a fair and democratic manner
3. Participants:

- All the members of the CDB;
- Heads and secretaries of the villages;
- Representatives of the Communist Party, Youth Union, and social
organizations of the commune;

- DPMO and PPMU staff (If any)

• Step 1: Preparation;

• Step 2: Meeting process:

- Head of the CDB presides over and introduces the participants,
contents, and purposes of the meeting;

- Representatives of the villages present their village’s project selection
and proposal results;

- Representative of the CDB presents the criteria of project selection to
the commune;

- District support staff instructs on project selection by voting method;
- Summarizing and evaluating the meeting, reaching an agreement on
the minutes and signing thereon according to the form

• Criteria for commune project selection:

- Included in the list of eligible investment projects;
- Have many benefited villages and people;
- Have poor villages (according to the commune evaluation);
- Have many benefited poor people;
- Have little or no impact on the environment;

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- Have very little or no impact on movement, compensation, and
resettlement;

- Capable of self-implementation and local people contribute many
working days;

- Suitable with capital source invested and allocated to the commune;
- Not coincide with the works of other projects, and have a short
execution time

- Have many CIGs supported by the project.
- Expenditures for each work are suitable with the project expenditure
- Project proposed by many females
(Attached forms: form I -6 and appendices)
IV. PREPARING AND SUBMITTING THE PROPOSED PROJECT LIST
1. Purposes and Results to be achieved

- Preparing the proposed project list selected by the people in the
commune and submitting it to the District People’s Committee (DPC),
PPMU for appraisal and approval

- The content presents the people’s expectation and ensures validity in
terms of legal procedures and priority order

- The proposal document is bound in the regulated form, including:
+ Statement summarizing the project list;
+ Proposal for each project shall be bound in separate pages;
+ Attached appendices (If any)
2. Participants:

- CDB;
- DPMO or PPMU support staff (if required)
3. How to make a statement:

- Name of project: as stated in the statement;
- Construction location: Writing the exact name of work position named
by the locality according to the village/hamlet and commune

- Briefly describing the project scope and its status quo;
- Giving preliminary investment cost estimate
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- Expected implementation time (It is possible to consult PPMU or
DPMO staff);

- Methods of implementation
(Attached forms: form I-7 and appendices)
(Notes: The representative signatures of the followings are required in
the proposal: Head of the CDB, DPMO support staff)
V. APPRAISAL & APPROVAL OF PROJECT PROPOSAL

- PPMU makes a decision on agreeing with the project list in
accordance with the project objectives;

- DPC appraises and makes a decision on approving the communes’
proposals submitted by the CDB
2. Participants:

- Specialized department of the relevant districts (Department of
Finance - Planning, Department of Industry and Trade)

- DPMO
- DPC, and PPMU

- CDB submits the proposals to PPMU for consideration whether the
proposed project lists are suitable with the project objectives and then
making a decision on approving the proposed list

- CDB submits the proposals to the DPC;
- Group of specialized departments (Department of Industry and Trade,
Department of Finance - Planning) appraises the proposal and
submits it to the DPC;

- Based on the written evaluation of the appraisal team, the DPC gives
its approval according to the following criteria:
+ Project eligibility;
+ Preliminary technical feasibility;
+ Financial capacity;
+ Resettlement and compensation issues;
+ Local People’s contribution possibility;

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+ Possibility of coincidence with other projects
+ Suitability with the project objectives
(Forms I-8 to I - 12 with attached appendices)
VI. NOTIFICATION OF THE PROJECTS SELECTED BY THE DISTRICT
TO THE VILLAGES/HAMLETS
1. Contents:
- Notifying the projects in the villages and commune selected by DPC;
- Notifying the people’s responsibilities, rights, and duties with the project

• Purposes:
Informing the people in the village about the proposed projects selected and
rational reasons for not choosing other proposed projects

• Results:
People in the village know about the projects executed in their village and
commune. They have practical activities to prepare for the participation in
building and contributing to the projects
- After the commune meeting, the village representatives will post up the
list of projects appraised and selected by the district at public sites or the
village bulletin
- Informing on the village radio station;
- Notifying to the people in meetings

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PART II – SURVEY, DESIGN AND PREPARATION OF ECO-TECHNICAL
REPORT
The survey, design, and preparation of estimate and eco-technical report for
the projects include the following tasks:
1. Selecting consultants on survey, design and preparing eco-technical
report;
2. Process of survey, design and preparing eco-technical report;
3. Holding village/hamlet meetings for approving the project survey and
design plans;
4. Acceptance of eco-technical report and construction drawing;
5. Submission, appraisal, approval of eco-technical report and construction
drawing.
Because these tasks require highly qualified staff in CDBs, DPMO and
PPMU infrastructure staff are required to provide frequent support to the
CDBs for the best quality outputs;
I. Selection of consultants on survey, design and preparing eco-
technical report
1. Purposes and results:
Selecting the most capable contractor on survey, design and eco-technical
report preparation to meet the quality and progress of the project
2. Persons in charge:
- Head of CDB
- DPMO support staff (Commune support)
• Step 1: Preparing and approving the TOR
- With the support of the DPMO’s TA staff, CDB sets up the provisions on
tasks of survey and design consultant based on the approval decision
according to form II -1

• Step 2: Sending invitation letter for expression of interest
Based on the list of potential consultancy bidders provided by DPI, PPMU,
DPMO or the contractors implementing these tasks in the commune, CDB
will send an invitation letter for expression of interest to at least 03 bidders
according to form II - 2

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• Step 3: Learning the list of eligible and capable bidders and
selecting the contractor
- Inviting bidders to submit Documents of capacity, experience, etc. to
confirm their capacity
- Considering, evaluating and selecting the most capable bidders for
contract negotiation based on the bidders’ Document of capacity and
with the support of district TA staff, and PPMU infrastructure staff

• Step 3: Invitation for contract negotiation and signing
After the result of selecting the consultant for survey, design and eco-
technical report preparation is available; CDB will send the selected bidder
an invitation letter for contract negotiation according to form II - 3

• Step 4: Contract negotiation
- Carrying out the contract negotiation with the consultant based on the
tasks approved. The negotiation content includes:
+ General regulations
+ Consultant’s tasks
+ Contract price
+ Form of contract
+ Contract implementation time
+ Payment method and progress of contract.
The negotiation minutes are prepared according to form II - 4 with the
signature of representatives of the related parties (CDB, Contractor)
Notes: These processes require the support by DPMO or PPMU staff
• Step 5: Preparing a written approval on Single-source selection and
contract signing
- The CDB prepares an approval decision on result of selecting the
consultant for survey, design and economic-technical report preparation
- Signing contract with the consultancy contractor (According to form II -
6)
II. Survey, design and preparation of eco-technical report

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The project documents of execution design drawing and eco-technical report
are the basic legal documents to implement the following tasks: bidding,
managing and monitoring the work execution, carrying out payment and final
settlement of accounts and the work acceptance. These documents are also
the basis for such implementation during operation, and maintenance.
2. Participants:
- CDB
- Employed consultant
- Heads and leadership of villages
- DPMO and PPMU TA staff
a) Survey: Based on approved tasks for the survey and design consultant,
the employed consultant sets up survey plan for the project and submits
it to the CDB for approval
- CDB issues a decision on survey plan approval
- The consultant carries out the project survey according to the approved
plan
- Making survey report and submitting it to the CDB for approval
- CDB approves the survey report by the consultant
b) Designing, making estimates and preparing economic-technical
report:
- Based on the survey result, the consultant sets up the design plan, and
makes estimates and economic-technical report for the project
Notes:
- When designing works with simple techniques, the model design plan
and shaped design should be taken full advantage.
- The design plan must ensure the highest economic benefit, smallest land
area and least compensation, with little impact on the environment, etc.
- The economic-technical report must clearly show the socio-economic
development targets of the area or village/hamlet as well as the targets
related to the project’s monitoring and evaluation indicators such as
number of beneficiaries, irrigated land area, etc. and clarify the number
and value of the people’s contribution and of the Project, or contribution
forms by the beneficiaries, etc.

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During the survey and design, the consultant must consult the benefited
communities, villages as well as commune governments to have the most
feasible plan. CDB should monitor all of this process of the consultant.
DPMO and PPMU staff will support the CDB during this monitoring process.
III. Village/hamlet meeting for approval on the project survey and
design plans
- Informing the plans and results of project survey and design to the
village/hamlet people
- Helping the village/hamlet people and beneficiaries of the Project be
informed about the design plan, and their contribution responsibility and
other responsibilities with the project
2. Participants :
- CDB
- Village/hamlet leadership
- DPMO and PPMU staff
- Representatives of the benefited village people
- Holding commune meetings to inform the CDB members
- Informing the commune people by:
+ Posting up the design plans at the commune head office
+ Informing on the radio station of the village
+ Directly informing the villages
- Holding meetings of all the commune people for the plan approval,
discussing and reaching an agreement on:
+ Responsibilities, rights and duties of the people with the project
+ Duties of the people with the reciprocal contribution as 10% of the
project
+ Method of the work organization, execution, and monitoring with the
people’s participation
+ Compensation and site clearance plans

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All of these processes are recorded in minutes with the agreement and
signature of CDB, and heads of villages attached with the list of households
IV. Acceptance on results of the survey, design and eco-technical
report
- Preparing the minutes of acceptance on the quality of survey, design and
ecotechnical report in accordance with regulations and contracts
2. Participants:
- CDB
- Support by DPMO and PPMU staff
- Evaluating the quality of survey and design compared to the applicable
survey and design tasks and standards
- Checking the form and quantity of survey and design result reports
- Making acceptance on the volume of construction survey work according
to the signed contract of construction survey
- Preparing minutes and reaching an agreement on accepting survey and
design according to form II - 8
V. Submission, appraisal, and approval of eco-technical report, design
of shop drawing, estimate and project bidding plan
Achieving a decision on approving the Document of execution technique
design, estimate, eco-technical report and the project bidding plan as a legal
basis for CDB to organize the bid, select contractor and execute the works.
2. Participants:
- CDB submits the Document of design, estimate, eco-technical report and
the project bidding plan
- The district’s specialized departments (Department of Industry and
Trade, Department of Finance – Planning) are assigned to be
responsible for appraisal
- The DPC issues a decision on approval

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• Step 1: CDB makes a statement and submits it to the district’s relevant
specialized departments for appraisal and approval of the Document of
design, estimate, eco-technical report and the project bidding plan with
the support of the DPMO and PPMU staff according to form II - 9

• Step 2: DPC assigns the relevant departments to carry out appraisal
and submit appraisal report or revision (If any)

• Step 3: DPC issues a decision on approval based on the appraisal report
by specialized departments
Notes: These steps are implemented with the DPMO and PPMU staff
support

PART III – METHODS OF BIDDING AND BIDDER SELECTION
GENERAL INSTRUCTIONS
To ensure strict compliance with recommendations by IFAD in procurement and
bidding, the Commune Development Board needs to be aware of the following
issues during the project implementation:
- Complying with the Decision No. 2025/2009/QD-UBND dated September
7, 2009 by the PPC on issuing instructions of management, use and
disbursement procedure of CIF source, and not misapplying the
regulations negotiated by IFAD and the PPC (via instructions and
manual).
- During selection of consultant, CDB should pay attention to the
consultant’s capacities and set up requirements for the consultant such
as document quality, and completion period, and should carry out
cautious negotiation before making the decision on appointment of
consultant. CDB shall actively control the implementation time and avoid
the case of excessive workload on the consultant that leads to delay of
the project progress
- Actively contacting the district’s specialized departments for record &
document appraisal and approval
- Avoiding unclear and non-transparent situations in bidding that were
warned by IFAD such as:
+ Same font and size in the documents

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+ Minor difference in bid prices by the bidders
+ Bidders participating in the bid packages all win the bid respectively
+ If any evidence of bid rigging is found by IFAD, the loan provision will
be ended and the whole province has to take responsibility for this
problem.
METHODS OF BIDDING IN THE PROJECT
According to general regulations by IFAD, the Project divides the methods of
bidding according to the following bid package prices:
1. For the project with bid package price > 60,000 USD (or an
equivalent amount in VND at the current exchange rate)
The method of single envelope competitive bidding shall be applied. Bidding
documents and Bids shall be prepared in both English and Vietnamese. The
opinions and approval by IFAD shall be obtained before the project
implementation

2. For the project with bid package price > 30.000 USD up to ≤ 60.000
USD (Or an equivalent amount in VND at the current exchange rate):
The method of local competitive bidding shall be applied

3. For the project with bid package price ≤ 30.000 USD (Or an
equivalent amount in VND at the current exchange rate):
The method of local competitive bidding or appointment of contractors shall be
applied
4. For the project with bid package price < 300 million VND:
The force account method can be applied. When this method is applied, the
Owner should pay careful attention to capacity, labor mobilization capacity,
equipment and machines for implementation and supervision in accordance
with the articles No.7 to No.13 of the Decision 2025/QD-UB dated September 7,
2009
Note:
- For consultancy and supervision packages, Bid preparation and
evaluation packages consultancy, and insurance packages, the method
of appointment of contractor shall be applied due to relatively small bid
package value. The order for this will be similar to the appointment of
contractor of survey and design consultancy.
- Due to the relatively small value of the project’s works, the process of
submission, appraisal and approval of the bidding plan may be

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immediately implemented during the submission, approval and appraisal
of economic and technical statements;
- CDBs may employ consultant for bidding management (From the
document preparation, submission and approval to the signing of the
construction contract with contractors). In case, CDBs are of full capacity
to carry out the work, they can implement this process by themselves
under supervision and with the support of DPMO, PPMU officials.
The content of bidding for construction contractor selection in the
competitive bidding shall include the following steps:
• Step 1: Submission, appraisal and approval of the bidding plan

• Step 2: Preparation, submission, appraisal and approval of the bidding
document
• Step 3: Invitation for bids

• Step 5: Opening and evaluation of bids

• Step 6: Submission, appraisal and approval of bidding results

• Step 7: Notification of bidding results

• Step 8: Negotiation and signing of the construction contract
In this part, we shall only present the procedures of Bidder selection for
construction contracts. The order of bidder selection for bidding preparation and
management consultancy, consultancy and supervision and insurance package
shall be applied according to part 2 – Selection of consultant for survey, design
and preparation of eco – technical statements.

A. THE METHOD OF LOCAL COMPETITIVE BIDDING

I. SUBMISSION, APPRAISAL AND APPROVAL OF THE BIDDING PLAN
Due to relatively small value of the project’s works, this step may be carried
out simultaneously with the submission, appraisal and approval of economic
and technical statements. However, this part shall be introduced separately
here.
- To obtain a specific plan that helps CDB carry out the bidder selection in
compliance with the right method and project progress.
2. Participants:
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- The commune development board (CDB) (Or the employed consultant)
- DPMO, PPMU Support officials
- The district’s departments (Offices of Industry and Trade, Finance –
Planning)
- The District People’s Committee
3. Content:
The content of the bidding plan shall include:
- The packages shall be divided into consultancy and supervision
package, construction package, insurance package and bid management
consultancy package
- Prices and capitals for packages
+ Price for construction package shall be determined basing on the total
estimate, and the project estimate. It is necessary to clearly mention the
contribution by the local people in terms of materials, workforce and cash
(If any) in the bid package price
+ Price of consultancy package shall be determined basing on the cost
norms pursuant to the circulars, decrees by the Government and
concerned Ministries and Industries for each relevant task.
- Method of bidder selection: the method of bidder selection for each
package shall be specified.
+ Construction package: whether the package in the form of competitive
bidding, appointment of contractor or force account shall be specified.
+ Consultancy package: Only the method of appointment of contractor
shall be applied.
- Bidding organization period for each package: the period from the
issuance of bidding document to the notification of bidding results which
will be specified in the bidding plan.
- Type of contract: types of contracts (Price adjustment, non-price
adjustment, etc.) shall be specified. The selection of contract types shall
be subject to the nature and time of the bid package implementation
- Contract implementation time shall be determined basing on the
approved project progress and the actual capacity for bid package
implementation

• Bidding plan documents submitted for appraisal and approval:

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- Implemented task: (For example, survey, design, and consultancy for
bidding management, etc.)
- Non-bid tasks (For example, site clearance, compensation, etc.)
- Bidding plan: As the above content
- Attached appendices (If any)

• Step 1: Bidding plan submission for appraisal
- CDB (Or the employed consultant but signed by the head of CDB) shall
prepare the statement and submit it to the district’s office of finance –
planning for the bidding plan appraisal
- The district’s office of finance – planning verifies the bidding plan in
compliance with regulations of the Law on bidding and provides appraisal
report

• Step 2: Approval of bidding plan
- Based on the appraisal report, CDB (Or the employed consultant but
signed by the head of CDB) shall prepare and submit the bidding plan
statement to the DPC for approval according to form III - 1
- The DPC shall make decision on approving the bidding plan
II. PREPARATION, SUBMISSION, APPRAISAL AND APPROVAL OF
THE TENDER DOSSIER
- To obtain a quality tender dossier for bidding
2. Participants:
- CDB
- The employed consultant
- The District’s specialized departments (Office of Finance - planning,
industry and trade, etc.)
3. Contents of the tender dossier:
Refer to the form of small-scaled construction tender dossier by the
Ministry of Planning and Investment
4. Order of implementation steps:
• Step 1: Preparation of Tender Dossier

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- The employed consultant shall prepare the tender dossier for the
project
- The content is as the aforesaid and according to the form of tender
dossier for small-scaled project (issued by the Ministry of Planning
and Investment)
• Step 2: Appraisal of tender dossier
- CDB (Or the employed consultant but signed by the head of CDB) shall
prepare the statement according to form III - 2 and submit it to the
district’s office of finance – planning for tender dossier appraisal
- The district’s office of finance – planning shall verify the tender dossier
in accordance with regulations of the Law on bidding and shall issue the
appraisal report

• Step 3: Approval of tender dossier
Based on the appraisal report, CDB shall make decision on approving
the tender dossier according to form III - 3
III. INVITATION FOR BIDS AND SALE & ISSUANCE OF TENDER
DOSSIER
- Bidders in the area can know the bidding information of the project
- Obtain the list of participating bidders
2. Participants:
- The Commune Development Board
- The commune community supervision board
- Mass media (Newspapers, television, radio, etc.)
- The employed consultant

- Based on the bidding plan, CDB (or the employed consultant but signed
by the head of CDB) drafts the invitation for bids and sends to
newspaper and television, etc. according to form III - 4

• Step 2: Issuing tender dossier to Bidders
Bidders will come to buy the tender dossier as stated in the invitation for
bids. The participating bidders shall be required to present:

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- Referral of the bidder’s representative (with seal and signature by the
bidder’s representative)
- Identity documents of the buyer (ID card, driving license, etc.)

• Step 3: Bid closing
- At the time as specified in the invitation for bids, the bid closing shall be
carried out before the witness of members of the Team of Bidding
Experts (The team of bidding experts may be the employed consultant or
members of CDB if qualified)
- Prepare minutes of bid closing according to form III - 5
- All bids submitted after the specified time will not be opened and
returned to the bidders with original seal
- The bids must be maintained according to the policy of confidential
document management
IV. OPENING AND EVALUATION OF THE BIDS
A. Bid opening
1. Participants:
- The bidding consultancy team
- CDB
- The community supervision board
- Participating bidders
- DPMO, PPMU (If any)
- At the time and place as specified in the invitation for bids, open bids of
the bidders before the witness of the parties involved
- The team of bidding experts shall open the Bids of the bidders and reads
loudly the following information:
+ Bidder’s name
+ Bid price
+ Discount (If any)
+ Bid bond
+ Other necessary information
- CDB (Or the employed consultant) shall prepare the minutes of bid
opening according to form III - 6
B. Evaluation of bids

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To select the best qualified bidder who offers the lowest price for the project
implementation
2. Participants:
- Team of bidding experts
- CDB
- DPMO, PPMU Officials (If any)

• Principles:
- Only the bid evaluation criteria approved in the tender dossier shall be
used for evaluation of bids
- Ensure confidentiality, justice, and impartiality during the evaluation
process.
- Issues to be clarified about the bidders’ Bids shall be in writing and
agreed and signed by the head of CDB and sent to the bidders

• Order:
- Checking the eligible status of the bidders: Whether the bid bond is fully
prepared and meets basic requirements according to the tender
dossier? The Bids must pass preliminary review steps to be reviewed in
the next round
- Evaluating the bidders’ experience and capacity: the evaluation criteria in
the tender dossier shall be used for evaluation of the Bids. Only
documents that meet the above criteria may go to the next round
- Finance evaluation: Check the price and arithmetic errors, discount
calculations, and adjust differences compared to the tender dossier
- Preparing evaluation report: based on the evaluation results by experts,
the team of bidding experts shall prepare the bid evaluation report and
submit it to the authorities for appraisal and approval according to the
Decree No. 85/2009/ND-CP
Bidder who offers the bid that meets all requirements on experience,
technical and financial capacity as provided in the tender dossier and offers
the lowest bid price will be recommended for contract award
Note: During the evaluation process, the experts may carry out independent
evaluation or evaluation with the approval of the whole team. All members of
the expert team must sign the final evaluation report.

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V. SUBMISSION, APPRAISAL AND APPROVAL OF BIDDING RESULTS
To obtain the bidding approval result and select contractor for the project
implementation
2. Participants:
- CDB (Head of the board)
- Team of bidding experts
- PPMU, DPMO officials (if required)
- District’s specialized departments (Offices of finance-planning, industry
and trade)

• Step 1: Preparation of statement and submission of bidding result
for appraisal
- The team of bidding experts shall prepare the statement of bidding
results for appraisal (Signed and sealed by the head of CDB) and
submits it to the district’s specialized departments for appraisal
according to form III - 7 (Note: The statements must be arranged in the
order in which the winning bidder shall be at the first rank followed by
next bidders attached with the following documents: Evaluation report,
bids and bidding document)
- The district’s specialized departments shall carry out appraisal of the
bidding results and issues appraisal report

• Step 2: Approval of bidding results
- Based on the appraisal report, CDB shall issue the decision on
Approving the bidding results according to form III - 8
VI. NOTIFICATION OF BIDDING RESULTS:
To notify the project bidding results to the bidders, concerned agencies and
the whole people in the commune
2. Participants:
- CDB
- DPMO, PPMU Officials (If required)

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CDB shall notify the award notice according to form III - 9 to the bidders
and concerned agencies, and then shall invite the successful bidder to come
for negotiation and signing the contract.
VII. NEGOTIATION AND SIGNING OF CONTRACT
- To obtain basic agreement on the construction contract
- To sign the construction contract
2. Participants:
- CDB
- The successful bidder
- DPMO, PPMU representatives (If required)
3. Content:
• CDB and successful bidder shall meet and negotiate the contract with
the following contents:
- Construction engineering (Criteria to be applied, construction order, etc.)
- Construction period
- Contract form
- Contract value
- Advance, payment and final settlement of accounts and warranty
After agreement, the parties shall prepare the minutes according to form III
- 10
Contract signing: CDB shall sign the construction contract with the
successful bidder before the witness of the parties involved: DPMO, PPMU,
Community Supervision Board, Commune People’s Committee, etc. The
contract shall be prepared in accordance with form III - 11

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B. COMMUNITY BIDDING AND CONSTRUCTION OF COMMUNITY
BIDDING WORKS
1. Regulations on community bid packages
Definition: Community bidding is a process of selecting bidder who is a
mass organization, household group or local people group to carry out the
construction package which has the value of less than 300 million VND
funded by IFAD Programme.
- The community bid packages are those of small-scaled and simple works
within the scope of hamlet and village such as, house of culture,
classroom (primary school, preschool), drying oven for agricultural
products, etc. or the package that combines separate and small work
items which have the following features:
+ Bid package value of less than 300 million VND
+ Simple technical work that can be carried by the local people, mainly
using handicraft labors and available materials in local area
+ Being approved in the bidding plan
2. Purposes:
- To facilitate the local people to directly participate in implementing the
programme of IFAD project in the local area
- The local people will get employment, use their knowledge, carry out
simple work and use available materials in the local area to increase their
income and help to reduce poverty
- To empower rights to the local people for taking ownership and promote
the sustainability of the works
3. Bidding participants:
- Social mass organizations such as, Farmers’ Association, Veterans
Association, Women’s Association, Youth Union, and the participation
shall be specified as follows:
+ At least more than 50% of the members agreeing on bidding
participation by the union and association
+ Having enough time, labors and experience for implementing the
package
- The participation of the household group, and people groups in the
commune shall be specified as follows:

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+ All group’s members are local people (who have permanent residence
in the commune)
+ Representatives of household group and local people group are not
under sentence execution period
+ Having enough time, labors and experience for implementing the
package
• Step 1: Provision of the work survey and design:
- According to requirements, almost these work items only require simple
techniques and their value is small. Therefore, the survey, design and
preparation of economic – technical statement may use the shaped
design and sample design provided by DPMO and PPMU. According to
the decision No. 2025/QD-UBND dated September 7, 2009 by Cao Bang
PPC, the preparation of the economic – technical statement for the
package value of less than 300 million VND will not be required.
- When providing the shaped design, and sample design for the work,
DPMO or PPMU shall full provide both quantity and detailed estimate,
total estimate for the Commune Development Boards

• Step 2: Bidding plan:
- Based on the economic – technical statement and the shop drawing
design, total work estimate, the Commune Development Board (Or
individual employed consultant) shall prepare the bidding plan with
support of the DPMO and PPMU officials according to form III.B - 1
- Contents of the bidding plan:
+ Bid package name: When assigning the tasks and grouping project
tasks into a bid package, CDB should provide a name for such package
to fit the purposes of tasks specified by the project
+ Bid package price: the total amount estimated to be allocated for the
work execution. To calculate the package price, the CDB shall base on
the approved estimate (if any) or the state’s regulations on expenditure
norm or on the market price depending on the information the CDB
obtain. For the community package, the package price must be less than
300 million VND
+ Funds for the bid package: 90% from IFAD capital and 10% from the
contribution capital
+ Method of bidder selection: Community bidding
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+ Time for bidder selection: The time shall be counted from the time CDB
gives public notification of the bid package to the time of signing contract
with the selected community bidder. This time shall be suitable with the
project’s progress in the economic – technical statement
+ Contract form: Due to simple and small-scaled nature of the tasks and
work, the Commune Development Board needs to specify the contract
form as Fixed-price Contract
+ Time of contract execution: The time of contract execution shall be
calculated from the time the Commune Development Board signs the
contract with the community bidder to the time the bidder finishes and
hands over the products and work to CDB. CDB should calculate this
time for ensuring the fulfillment of the tasks in accordance with the time
of project implementation
- Submitting the bidding plan for appraisal: The Commune Development
Board submits the bidding plan to the District’s specialized departments
for review and appraisal. The submission document shall include:
+ Statement according to form III.B - 2
+ Bidding plan according to form III.B - 1
+ Other related documents
- The district’s departments shall carry out appraisal of the bidding plan
- CDB shall issue decision on approving the bidding plan according to
form III.B - 3

- Based on the approved bidding plan, CDB shall publicly notify the
construction work or goods to be provided so that all commune people
are aware of and register for participation. The invitation for community
bid shall be in accordance with form III.B - 4
- Form of notification: Posting notice on the bulletin of the hamlet,
commune, or reading on radio station of such hamlet, commune.

• Step 4: Setting up selection criteria:
- CDB shall set up criteria on selecting execution community and submits
to the commune People’s Committee for approval. The selection criteria
must be simple, understandable and close to specific requirements of
each work as well as specific conditions of each commune/hamlet. In
addition to the price, there are some suggestions for the content of these
criteria:
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+ Foreman steering the execution community shall be required. The
foreman shall be experienced in the works of the similar nature in the
area. The more skilled and experienced foreman shall be preferred.
+ Community of plentiful women, ethnic minority people and the poor
shall be given priority for realizing the motto of “Local people get the
works and employments” to increase income and improve living
standards in terms of material and spirit for the people
• Step 5: Public meeting with the local community shall be held to
introduce the assignment to be done in order to provide the local people
with necessary information about the bid package:
Meeting contents:
- Description of the work, construction location
- Technical requirements of the work
- Time of execution
- Anticipated bid package price
- Quality requirements of the work
- Deadline for registration of bidding participation
• Step 6: The mass organizations, and household (local people) group
shall prepare documents and workforce to participate in negotiation and
bidding
- Based on the work load, technical requirements, materials and working
days, the mass organizations or household group/local people group
shall discuss to agree on the bid price and conditions for executing the
bid package in order to prepare for the negotiation and bidding process
- The mass organizations, and household (local people) group shall
appoint 1 representative to participate in the negotiation (The
representative must be agreed by at least 70% of the group members
and the written election document shall be required)
- Preparing necessary documents relating to for the capacity of bid
package execution: workforce (labors), experience, skills, materials,
anticipated methods (plans) of executing the bid package (the list of
workforce, experience, skills and proposed preliminary execution plan
shall be required)

• Step 7: Selection of community bidder:

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- In the event only one mass organization or household group, or local
people group takes charge of executing the bid package, such mass
organization, household group, or local people group shall appoint a
representative to negotiate with CDB. During the negotiation, CDB will be
responsible for obviously explaining purposes, meanings and tasks to be
implemented by the bidder so that the local people understand
thoroughly the tasks. Specifically, the following main issues will be
discussed:
+ Work load to be done
+ Amount to be paid (working days)
+ Working time and deadline for work accomplishment
+ Work quality to be obtained and conditions of acceptance, signing the
minutes of acceptance as the basis for payment
+ List of the people committed to participating in the work implementation
- In case a number of mass organizations/ household groups, or local
people groups (The Youth Union, Women Association, Veterans
Association, Co-operative teams and mason team) wish to execute the
bid package, the bidder who proposes the lowest price will win the bid
and be invited to negotiate for contract signing. If such negotiation fails,
the bidder who offer the second, third lowest price will be invited
respectively

• Step 8: Preparing documents for proposing appraisal and approval
of bidding results:
- Head of CDB shall prepare the statement according to form III.B - 5,
and submit it to the district’s departments for appraisal of bidding results.
The content shall include:
+ Evidences proving that the method of work execution applied is force
account: small capital, simple nature, using handicraftsmen as the main
labor force, available materials for the work, etc.
+ Evidences showing that CDB is qualified to execute the work
themselves: specifying the name of the mass organization/union that can
take charge of, and execution capacity, experience and prestige of such
organization, etc.
+ The work value approved in the investment report
+ Construction period
+ Other issues
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- The district’s departments shall verify and provide appraisal report
- CDB makes approval decision according to form III.B - 6

• Step 9: Contract negotiation and signing
- After getting the approval result, the Commune Development Board
invites the bidder and negotiates the contract signing according to the
following principles:
+ The contract price must not exceed the approved work estimate
+ Controlling the labor price at a flat rate paid by the community bidder
according to this price basing on the market price and within the norm
(With calculation under the support of DPMO & PPMU officials)
- Head of CDB shall sign the contract with the representative of the
construction contractor
- The contract is signed
5. Construction, payment and final settlement of accounts of the
community bidding works
• For CDB:
- After the contract is signed, CDB shall make an advance to the
contractor at least 50% of the contract value (but not exceed the capital
planned or the year estimate arranged for the package)
- During the contract implementation, CDB or community supervision
board shall appoint technical officials to instruct the people to implement
the work in accordance with requirements of construction engineering,
criteria and code. CDB, community supervision board and the
representative of beneficiary shall carry out acceptance of each work
item as the basis for payment made to the people

• For the successful mass organization/ household group
- The successful mass organization/ household group shall prepare
materials, and labors to implement the package in accordance with
technical requirements and the package execution period mentioned in
the contract
- The successful mass organization/ household group shall propose CDB
to provide forms of documents serving the disbursement, payment and
final settlement of accounts (timekeeping table, material purchase receipt
from local people, table of finished workload, etc.)

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- Executing the work in accordance with technical requirements of the
owner

• Payment and final settlement of accounts
- The contract shall be signed by and between CDB and the mass
organization, household group or local people group who execute the
package. Such contract shall not require the seal of party B.
- The table of finished workload must be signed by CDB and the
representative of the team, household group, or local people group
executing the package and the supervisors (supervision and
consultancy, community supervision board)
- CDB shall prepare the proposed document of advance payment, and
payment for the team, groups of households/local people in charge of
execution in order to directly pay for individuals participating in execution
of the work. In case the representative of the execution team/group has a
bank account, the State Treasury will transfer money to such account as
required by CDB
- Based on the contract terms and the execution progress, CDB will
determine the advance level appropriately to the investment capital
demand of the project which shall not exceed the real capital demand for
the execution team, and group of household/people.
- CDB and the community supervision board are responsible for closely
supervising the wage payment for execution participants
The purchase receipt for materials such as rock, sand, gravel, bamboo,
neohouzeaua, and wood exploited in the commune area is not required. The
seller and buyer can declare by themselves and with confirmation of the
head of village and the commune People’s Committee in the selling area;
the two sides can determine the price and quality themselves but the price
shall not exceed the average market price in the district area.

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PART IV: PROCESS OF WORKS QUALITY MANAGEMENT
GENERAL INSTRUCTIONS
During the implementation of acceptance, CDB shall give top priority to the
quality management.
Supervision of the work shall comply with management regulations of the State
and IFAD and shall be implemented as follows:
- CDB: supervision personnel (called the Owner supervisor) shall be
required to take charge of supervising progress, solving problems arising
during the execution, etc. and quality supervision, inspection of internal
acceptance document of the contractor, preparing A- B acceptance
document if qualified (Employing a consultant is recommended because
the quality supervisor is required to obtain the supervision certificate
appropriate with the project scope).
- Supervision consultant: in case the supervision consultant is employed
by the owner, the consultant shall act as the Owner’s representative for
supervising the work and preparing quality acceptance documents,
checking the progress, solving problems arising at the construction site
and preparing reports to the Owner as provided (note: although the
consultant is employed, the Owner shall still be responsible for its
supervision task as an Owner).
- Community supervisor: all CIF works shall require the community
supervision board participating in supervising the execution process,
checking the signature in acceptance document (The community
supervision board implements in accordance with regulations in the
Decision No. 2025/2009/QD-UB by Cao Bang PPC and the Decision No.
80/2005/QD - TTg dated 18 April 2005 by the Prime Minister on the
community investment supervision rules and the joint Circular No.
04/2006/TTLT-KH&DT-UBTUMTTQVN-TC dated 4 December 2006 by
the Ministry of Planning and Investment – Standing Board of Vietnam
Fatherland Front Central Committee – Ministry of Finance on guiding the
implementation of the Decision No. 80/2005/QD-TTg dated 18 April 2005
by the Prime Minister).
Steps of implementation:
• Step 1: Preparing the Contract of Employing the Supervision Consultant

• Step 2: Establishing the community supervision board and the
community supervision team

• Step 3: Handing over the execution area to the contractor
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• Step 4: Managing the execution and accepting, and handing over the
project for putting it into use

• Step 5: Management of Additional works
I. SELECTION OF SUPERVISION CONSULTANT
The selection procedure of supervision consultant for CDB is similar to the
selection of survey and design consultant and preparing eco – technical
report.
Note: The supervision consultant may be:
- An organization, company
- Individual (Complying with regulations of the Law on Construction,
Decree No. 209 and Decree No. 12 by the Government)
- The supervision consultants shall be required to provide appropriate
diploma, certificate and practice certificate of supervision, etc.
II. ESTABLISHMENT OF COMMUNITY SUPERVISION BOARD
- The establishment is to ensure that the work shall be constructed in
accordance with the given objective, quality, time and anticipated
expenditure as well as facilitate the people benefited from the project to
directly participate in management and supervision of implementation
process on a democratic, public and transparent basis;
- The community supervision board and community supervision group
shall be positioned in CDBs and hamlets respectively for the project
2. Participants:
- The community supervision board shall include 3 to 5 persons who are
members of CDB and directly benefited from the project (for example,
Head of the village, deputy head of the village, farmer association, etc.)
- At least 1 person who owns certain knowledge of construction
engineering or management of construction process (he/she can be the
construction or cadastral official in the commune, etc.) shall be required.
3. Obligations and rights:
- Coordinating with the employed supervision consultant to implement
daily checking and supervision of the work construction in terms of
construction quantity and quality, cost and time for accomplishment of
the work items

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- Proposing to the head of CDB to suspend execution of the work when
the poor quality and quantity of work and violation of implementation time
are found during the construction.
- Opening the journal of the community supervision board, regularly taking
note of the execution condition of the work, preparing periodic and
regular reports of the execution condition and submitting it to CDB
- Presenting CDB to acquire opinions from local people on any issue
related to the construction of the work
4. Supervision method and approach:
- The selection of appropriate regime and frequency of regular or periodic
checking and supervision shall be based on specific conditions of each
commune, and the number as well as nature, scale of the work and
capacity of the members of the supervision board
- Methods: the following methods shall be applied:
- Intuitive inspection: Directly touching, listening, knocking and looking at
the parts or components, or materials used for the work in order to
inspect and evaluate quality of such parts or components of the work;
- Inspection shall be carried out by using simple measuring tools such as
ruler, measuring tape, etc. to inspect the size of structure and materials,
etc. for the work
- Supervising preparations for the construction: checking the construction
area, construction site, landmarks, electricity and water supply systems
to the site, number of material types used for the construction
- The inspection of the implementation process of the Contractor at site:
Check the centre line, landmark, size and time, etc. and other tasks
according to the design, shall be carried out together with the supervision
consultant.
- Participating in final acceptance of the work parts. Taking note and
delivering periodic reports, receiving and making reports of the opinions
by the local people to CDB.
- Participating in acceptance and handing over of the project for putting it
into use
Steps of implementation are specified as follows:

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Inspecting preparations for construction:
+ Documents, design drawings
+ Construction area, construction site
+ Materials provided for construction of the work

Regular/ periodic inspection of the execution quality:
+ According to each type of work: excavation, backfilling, etc.
+ According to parts and structure: Foundation, surface, walls, etc.

Confirming the work quantity and quality:
+ Agreeing with the supervision consultant on quantity and quality of
the finished work items.

Taking note and reporting the implementation status:
+ Taking note of the implemented works on daily basis
+ Proposing ideas to the supervision consultant and DPMO, PPMU
staff at site

Participating in the work acceptance and hand-over:
+ Contributing opinions on quality, time and cost of the execution
+ On behalf of the CDB, notifying the local people the issues relating
to construction process

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III. HANDING OVER THE CONSTRUCTION AREA TO THE
CONTRACTOR:
- To hand over the construction locations, landmarks, the works direction
and technical issues relating to the work to the contractor
- The contractor shall take over the construction area, main landmarks as
well as other issues related to execute the work
2. Participants:
- CDB
- Design consultant
- Supervision consultant
- Contractor
- Based on the landmarks established during survey and design process,
the design consultant shall hand over the construction area to the
contractor before the witness of the supervision consultant, CDB and the
community supervision board
- The contractor shall re-check the landmarks, location and direction of the
work handed over by the design consultant (Preparing recommendation
document if any defects are found)
- Based on the site clearance landmarks, CDB shall carry out the site
clearance and hand over the site to the contractor
- Preparing the minutes of the land hand-over according to form IV - 1
- CDB shall hand over the document to the contractor according to form
IV - 2
IV. CONSTRUCTION MANAGEMENT:
- To help CDB understand the steps of quality management during
construction process
- CDB shall manage the construction process of the work to ensure the
construction quality and time as regulated in the signed contract.
2. Participants

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- The employed supervision consultant
- CDB
- The contractor
3. Steps of implementation

• Step 1: Inspecting the contractor’s process of equipment and labor
force mobilization
- CDB together with the supervision consultant and the community
supervision board shall inspect machines, equipment, and labor force
proposed by the Contractor in his bid for execution of the work

• Step 2: Inspecting the materials prepared for the works
- Based on the current and general regulations of the project, CDB
together with the community supervision board shall inspect the ex-
factory certificate of materials before using them for the works. The
contractor can only use the materials after providing such certificate.

• Step 3: Accepting the construction work
- Each construction work item must be accepted in order (for example,
items of excavation, wall building, layer backfill, etc.) and agreed by the
supervision consultant to implement the next tasks
- Before accepting the construction work, the contractor must carry out
internal acceptance of his own construction works and records into
minutes according to form IV - 3
- Implementing acceptance of the construction work. Participants in
acceptance: The supervision consultant, representative of the contractor
(It is possible to invite CDB and the community supervisor if required)
according to form IV - 4

• Step 4: Final acceptance of the construction work item:
- The final acceptance of the construction works for all big or hidden
finished items shall be carried out (for example: excavation, backfilling,
wall building, and plastering work items …)
- Before final acceptance of the construction work items, the contractor
shall carry out final internal acceptance of his construction work items
and records into minutes according to form IV - 5
- Implementing final acceptance of construction work items. Participants in
acceptance: the supervision consultant, representative of the contractor,
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CDB (It is possible to invite the community supervisor if required)
according to form IV - 6

• Step 5: Acceptance of the as-built document:
- The contractor shall prepare the as-built document and submit 07 sets of
the document to CDB before the acceptance and handing over the
project for putting it into use
- Content of the as-built document:
+ Volume 01: Legal documents
+ Volume 02: Records of works quality management
Specific regulations will be mentioned in the Appendix – Requirements
of the as-built document
- CDB shall establish a team of as-built document acceptance
- Inspecting and accepting the as-built document. Participants include:
Head (Deputy Head) of CDB, supervision consultant. Invited participants:
DPMO, PPMU, the community supervision board, contractor, and such
work shall be made into written document
- In case the acceptance can not be carried out and the contractor is
required to make amendment and to complete the document, the number
of days within which the contractor is requested for amendment,
completion and reacceptance shall be specified.

• Step 7: Acceptance, hand-over of the work for putting into use:
- After accepting the as-built document, establishing the acceptance
council to hand over and putting the works into use
- Participants: head of CDB as the Council Chairman, other members
include: Representative of the supervision consultant, representative of
the design consultant (If required) and invited participants: PPMU, DPMO
and the Community supervision board…
- Content:
+ Bases for acceptance
+ Evaluation of execution quality
+ Evaluation of execution progress
+ Evaluation of execution quantity and cost
+ Amendments against the approved design
+ Opinions of the parties
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And such contents shall be made in writing with signatures and seals of
the parties according to form IV - 7
V. MANAGEMENT OF ADDITIONAL WORKS:
1. Objective and output:
- To manage additional costs during construction of the work
- To overcome shortcomings that are not considered in the construction
design
- To avoid the wastage, false statement and collusion among the parties
2. Participants:
- CDB
- The district project office, the District People’s Committee
- The supervision consultant
- The design consultant
- The contractor
Principle: Efforts should be made to avoid arising problems caused by
subjectiveness. When the problems arise, settle the expenditure increase
within the scope of under 10% of the signed contract value, except for the
force majeure.

• Step 1: Preparing the minutes of field inspection
- As the contractor finds out mistakes in the design and the supplement to
the arising items to fulfill the work is required , the contractor should
submit official document to CDB to propose for supplementing the arising
items
- CDB shall send invitation letter to summon the concerned parties (The
supervision consultant, design consultant and Community supervision
board) to implement the field inspection and prepare the Minutes of field
inspection according to form IV - 8 with signatures and seals of the
parties

• Step 2: Submission of arising and additional quantity and value for
approval
- Based on the quantity and unit price submitted by the design consultant
and inspected by the supervision consultant and CDB, establish the
statement of applying for the supplement of arising items (Including both

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value and quantity) and submit it to the DPMO and the District’s
specialized departments for appraisal. The statement shall be in
accordance with form IV - 9
- The district’s project office and other departments shall verify and issue
the appraisal document
- After appraisal results are issued, CDB shall make decision on approving
the quantity and value of additional arising items. The approval decision
shall be in accordance with form IV - 10

• Step 3: Making decision of adjustment of the project estimation and
delivering it to the concerned parties
- In case the arising value does not exceed 10% of the package value,
CDB will issue a decision of adjusting total estimation of the project and
deliver it to the concerned parties (DPMO, PPMU, treasury…)
- In case the much excessive arising quantity which exceeds the approved
total investment, the District People’s Committee shall issue a decision
on adjusting total investment of the project and deliver it to the concerned
parties (the Commune People’s Committee, DPMO, PPMU, Contractor,
Supervision consultant, Design Consultant and treasury…)

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PART V: PAYMENT AND FINAL SETTLEMENT OF ACCOUNTS OF
THE PROJECT
I. PAYMENT
As the work items of the project are only in small scale, of simple nature and
require short execution time, the payment shall be divided into 02 phases:
- Advance for the construction contract (Maximum 50% of the Contract
value)
- Payment upon the work completion
1. Documents submitted to the State treasury for one time:
- Economic – technical report of the work (Issued by CDB)
- Decision on approving the economic – technical report and total
estimate for the work (Issued by CDB)
- The decision on approving the result of construction bidder
selection (Issued by CDB)
- The construction contract between the Owner and the Contractor
(Attached with the detailed bid award quotation per work item)
(Issued by CDB)
- The Performance Guarantee (Issued by the Contractor if
required)
2. Advance for the construction contract:
Required documents for advance shall include:
- The advance guarantee (As required)
- Application for advance (Prepared by the contractor)
- Proposal for advance payment (Submitted to the Treasury and parties by
the Development Board) according to form B01/KB
- Document of investment capital withdrawal (Issued by CDB)
according to form C3-07/NS
3. Payment upon the works completion:
After the acceptance, hand-over of the works for use, CDB shall make
payment for the finished quantity of the work to the contractor. The
as-built payment document shall include:
- The minutes of final settlement of accounts of the construction
value/ quantity between the Contractor and the Owner according

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Community Investment Funds - CIF Manual Cao Bang

Community Investment Funds - CIF Manual Cao Bang

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