Regulations on dealing with exceptional situations in Vietnam

Regulations on dealing with exceptional situations in bidding in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. What is dealing with exceptional situations?

According to Clause 1, Article 86 of the Law on Procurement 2013, dealing with exceptional situations means settlement of cases arising in bidding which have not yet been stipulated specifically clearly in law on procurement.

The person making a decision on dealing with any exceptional situation in bidding shall be responsible before the law for his decision on the basis of ensuring the following principles:

- Ensuring competitiveness, fairness, transparency and economic efficiency;

- Acting on the basis of the approved plan on selection of bidder/ investor, EOI requests, Prequalification Documents, Bidding Documents, Request for Proposals, EOI responses, Applications, Bids, Proposals; result of selection of bidder/ investor;

The contract signed with selected bidder/investor; practical situation of performance of packages and projects.

2. Competencies for dealing with exceptional situations in bidding in Vietnam

According to Clause 2, Article 86 of the Law on Procurement 2013, the competencies for dealing with exceptional situations in bidding:

- For contractor selection to perform packages of project, the person making decision to deal with exceptional situations is investor. In complex cases, the investor may make decision on dealing with exceptional situations after consulting the competent person;

- For selection of tenders in recurrent procurement, centralized procurement, the person making decision to deal with exceptional situations is the Procuring Entity;

- For investor selection, the person making decision to deal with exceptional situations is competent person.

3. Regulations on handling of bidding cases in Vietnam

The handling of bidding cases in Vietnam according to Article 117 of Decree 63/2014/ND-CP is as follows:

(1) If the value or contents of a contract need adjusting, the plan to select the contractor must be adjusted under the regulations of the law before the bid opening (other than the cases prescribed in Clause 2 and Clause 8 Article 117 of Decree 63/2014/ND-CP).

(2) If the approved contract estimate is different from the contract value in the approved plan to select the contractor, such contract estimate shall replace such contract value as follows:

- If the approved estimate is higher than the contract value in the plan to select the contractor but such estimate is lower than the total investment of the project and the approved budget estimate, the plan to select the contractor shall not be adjusted.

If the approved estimate is higher than the total investment of the project and the approved budget estimate, the plan to select the contractor shall be adjusted; if the method for selecting the contractor in such plan is no longer conformable, such method shall be adjusted;

- If the approved estimate is lower than the contract value in the plan to select the contractor but the method for selecting the contractor in such plan is not changed, the plan shall not be adjusted;

If the method for selecting the contractor needs adjusting to be conformable with the new value of the contract according to the approved estimate, the plan shall be adjusted.

(3) If there are fewer eligible short-listed bidders, depending on each contract, such case shall be handled by:

- Adding more bidders to the short-list;

- Allowing the invitation for bid to be sent to the short-listed bidders.

(4) After the deadline for submitting bids regarding the opening bidding, limited bidding or competitive bidding, there are fewer bidders submitting the bid-envelopes and proposals, such case shall be handled within 04 hours from such deadline by either:

- Extending the deadline in order to attract more bidders to submit the bid-envelopes and proposals. In this case, the new deadline for submitting bids and corresponding deadline must be specified so that the bidders can adjust the submitted bid-envelopes and proposals according to the new requirements;

- Immediately opening bid-envelopes to carry out evaluation.

(5) In case of a contract containing several items:

- The invitation for bid, request for proposals must prescribed the conditions for submitting bids, measures and value of tender guarantee for each item or various items and method of evaluation of each item or some items so that the bidders can make appropriate bids;

- The evaluation of bid-envelopes, proposals and consideration for contract award must ensure that the total successful bid for the contract is the lowest bid (if the contract is awarded according to the lowest bid); total evaluated price is the lowest (if the contract is awarded according to the evaluation);

Overall score is the highest (if the contract is awarded according to the application of combined technical and price-based method) and the successful bid for the contract is lower than the approved price for the contract without compared with the estimated cost of each item of the contract;

- In case there is an item of some items of a contract which no bidders are interest in or no bidders satisfy the requirements prescribed in the invitation for bid and request for proposals, the investor shall send a report to the competent persons to adjust the plan to select the contractor by making the item(s) into an independent contract whose value is the total estimated cost of such item(s);

The selection of contractors meeting the technical requirements with regard to the items to which bidders submitting bid-envelopes must ensure the evaluation principles prescribed in Point b this Clause;

- There will be one contract if a contractor wins all of the contract items. There will be several contracts if several contractors win different contract items.

(6) If the unit prices in the bid-envelope and proposals are remarkably low, which seriously affects the contract, the procuring entity shall request the bidder to make a written explanation for the feasibility of such unit prices. If the explanation of the bidder is not clear and persuasive, such unit prices shall not be accepted.

Such case shall be considered deviation and such deviation shall be adjusted under the regulations similar to the regulations on the deficient quoted value and proposals compared with the requirements in the invitation for bid and request for proposals in accordance with the regulations in Article 17 of Decree 63/2014/ND-CP.

(7) If the bid by the bidder ranked first exceeds the contract value (after error correction, adjustment of deviation, and deduction of discount) and the by one ranked bidder is lower than the contract value (after error correction, adjustment of deviation and deduction of discount), the bidder ranked first shall be invited to the price negotiation provided that the negotiated price shall not exceed the approved contract value.

If such negotiation collapses, the bidder ranked next shall be invited.

(8) If the bids by the bidders meeting the technical requirements and included in the ranked list exceed the approved contract value (after error correction, adjustment of deviation, and deduction of discount), such case shall be handled by either:

- Allowing such bidders to submit new bids if the contract value includes the constituents of the contractual cost;

- Allowing such bidders to summit new bids and the procuring entity to request the investor to reconsider the approved contract value and invitation for bid, if necessary.

If the bidders are allowed to submit new bids, the deadline for the preparation and submission of new bids must be specified. The bidders shall submit new bids within 10 days from the day on which the procuring entity send the written request for the submission of new bids.

The opening of bid-envelopes submitting new bids shall be specified according to the procedures for bid opening prescribed in Article 29 of Decree 63/2014/ND-CP.

If the contract value in the approved plan to select the contractor needs adjusting, the competent persons shall give a decision on such adjustment within 10 days from the receipt of such adjustment and before the deadline for the submission of new bids;

- Allowing the bidder ranked first to enter into the price negotiation provided that the negotiated price shall not exceed the bid (after error correction, adjustment of deviation, and deduction of the lowest discount).

If the contract value in the approved plan to select the contractor needs adjusting, the competent persons shall give a decision on such adjustment within 10 days from the receipt of the request for such adjustment.

If such negotiation collapses, the bidder ranked next shall be invited. This method shall apply on only the open bidding contracts and the investors shall be responsible for the competitiveness, impartiality, transparency and economic effectiveness of the contracts.

(9) If a successful bid is lower than 50% of the approved contract value, an interdisciplinary assessing group shall be established to request the contractor to clarify constituents of the contractual cost and to consider relevant evidences such as:

- The factors related to the execution of work, manufacturing process or provision of cervices;

- The applied economic solutions or the considerable advantages of the contractor leading to the advantages in prices;

- The origin of the goods, services and personnel provided for the contract provides that the regulations of the law must be complied with;

If all requirements prescribed in Points a, b and c Clause 9 Article 117 Decree 63/2014/ND-CP are satisfied, the bid-envelope and proposal of the bidder are accepted to win the contract.

The investor can set the value of tender guarantee higher than 10% but less than 30% of the successful bid which must approved by the competent persons. Such approval must be recorded in writing.

In case of any bidder supported by any entity, which leads to unhealthy competition, the bid-envelope and proposal of such bidder shall be invalidated.

(10) If the invitation for bid allow the bidders to propose construction methods other than the construction methods prescribed in the invitation for bid, the difference between the workload according to the construction methods in the invitation for bid and the workload according to the construction methods proposed by the bidders shall not be adjusted in accordance with the regulations in Article 17 of Decree 63/2014/ND-CP.

Such difference shall not be considered negative deviation.

(11) If the contractor violates the contract or is ineligible to continue executing the contract, which seriously affects the progress, quality and effectiveness of the contract, the investor shall request the competent persons consider approving the cancellation of the contract with such contractor.

The remaining work shall be applied the no-bid contract of methods of selection of another contractor provided that the quality and progress of the contract is ensured.

The value of the remaining work given to the new contractor is calculated by subtracting the value of the completed work from the contract value. In case of no-bidding contract awarding, the competent persons must ensure that the contractor must be qualified enough to carry out the remaining work.

If the contractor is not responsible for the delay in conducting the contract, the contract signed with such contractor shall not be cancelled.

In case the contract signed with the delinquent contractor must be ended, the investor must send a report to the Ministry of Planning and Investment for consideration and announcement of such delinquent contractor on the national bidding system and the Vietnam Public Procurement Review Journal within 05 working days from the issuance of Decision on the contract cancellation;

Such report must specify the reasons for the contract cancellation, method of selection of new contractor and appointed contractor in case of no-bidding contract awarding.

(12) In case any bidder is separated or merged during the bidding, such bidder shall be allowed to continue participating in the bidding.

(13) When signing the contract, if the contractor does not satisfy the requirements for technical and financial competence prescribed in Clause 2 Article 64 of the Law on Procurement, the bidder ranked next shall be invited to the contract negotiation.

In this case, such bidder must revalidate their bid-envelope and tender guarantee if the bid-envelope is invalid and the tender guarantee is refunded or cleared.

(14) That more than one bidder is considered equal after evaluation shall be handled by:

- Awarding the contract to the bidder that has the highest technical score if the contract is awarded according to the lowest bid;

- Awarding the contract to the bidder that has the lowest bid if the contract is awarded according to the evaluation or application of combined technical and price-based method.

(15) Any case other than the cases prescribed in Clauses 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13 and 14 of Article 117 of Decree 63/2014/ND-CP arising shall be considered by the investor provided that the bidding must be competitive, impartial, transparent and economically effective.

Quoc Dat

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