Principles and Beneficiaries of Incentives for Domestic Goods and Contractors

Principles and Subjects of Preferences for Domestic Goods and Contractors (Illustrative Image)

Decree 95/2020/ND-CP stipulates the principles and subjects eligible for preferences regarding domestic goods and contractors in procurement bidding according to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership as follows:

Subjects Eligible for Preferences:

- For goods procurement packages, contractors are eligible for preferences when participating in intra-region and international bidding for packages applying domestic preference measures as prescribed in Article 15 of this Decree to provide goods whose domestic production costs account for 25% or more;- For consulting service packages, non-consulting services, construction services, and mixed packages, subjects eligible for preferences when participating in intra-region and international bidding, applying domestic preference measures as prescribed in Article 15 of this Decree, include: domestic contractors participating as independent bidders or in joint ventures with other domestic contractors; foreign contractors in joint ventures with domestic contractors or using domestic subcontractors where the domestic contractor undertakes 25% or more of the package's value.

Preference Principles:

- In the case that a contractor is subject to more than one type of preference, only one highest preference type will be applied as per the bid invitation documents or request for proposals;- For mixed packages, preference calculation is based on all proposals of the contractor in the consulting, goods supply, and construction service parts. Contractors are eligible for preferences when the proposed domestic cost (consulting, goods, and construction services costs) accounts for 25% or more of the package's value;- If after calculating preferences, the bid proposals or proposal submissions are equally ranked, preference is given to contractors with higher domestic cost proposals or those employing more local labor (calculated based on the value of wages and salaries paid).

Details can be found at Decree 95/2020/ND-CP effective from August 24, 2020.

Ty Na

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