Regulations on framework agreement in the centralized procurement in Vietnam

Regulations on framework agreement in the centralized procurement in Vietnam (Internet image)

1. What is centralized procurement?

According to Clause 1, Article 44 of the Law on Procurement 2013, centralized procurement means a way to organize an competitive bidding in order to select contractor through a centralized procurement unit with the aim to reduce expenses, time, and focal units of bidding organization, strengthen the professionalism in bidding, and contribute in increasing economic efficiency.

2. Principles of centralized procurement in Vietnam

Principles of concentrated procurement according to Article 68 of Decree 63/2014/ND-CP stipulate as follows:

-  The purchases must be made via a unit specialized in bulk purchasing (hereinafter referred to as bulk-purchasing unit) of a Ministry, ministerial agency, Governmental agency, a central agency, the People’s Committee of a province, or a company.

If the bulk-purchasing unit is not capable, it shall hire a professional bidding organizer to select a contractor.

- With regard to goods and services on the list of goods/services that must be purchased in bulk, the buyer shall recognize the result of contractor selection, the framework agreement, and sign a contract with the selector contractor via shopping pursuant to the framework agreement.

If the contract is signed with a contractor other than that selected via shopping, the contract shall not be paid for.

- Application of online bidding to bulk purchasing shall be carried out under the roadmap approved by the Prime Minister.

- When selecting contractors to perform similar contracts within the competence of different persons, such persons shall reach an agreement on authorizing a competent person as prescribed in Article 73 of the Law on Procurement 2013;

In this case, the competent person shall appoint a unit capable of selecting a contractor and fulfill other obligations prescribed in Article 69 of Decree 63/2014/ND-CP.

3. Cases of centralized procurement in Vietnam

In case of application of concentrated procurement according to Clause 2, Article 44 of the Law on Procurement 2013, centralized procurement shall apply in case where goods and services need to be procured with big quantity, similar categories at one or many agencies, organizations, enterprises or investors.

4. Forms of centralized procurement in Vietnam

Centralized procurement may be performed in one of the ways in Clause 3, Article 44 of the Law on Procurement 2013 as follows:

- The centralized procurement unit gathers needs of procurement, conduct the selection of bidder, directly sign contract with the selected bidder for goods or service provision;

- The centralized procurement unit gathers needs of procurement, conduct the selection of bidder, sign a written framework agreement with one or many selected bidders as basis for units which have need of Direct Procurement to sign contract with the selected bidders for goods or service provision.

5. Regulations on framework agreement in the centralized procurement in Vietnam

- According to Clause 1, Article 45 of the Law on Procurement 2013, framework agreement in the centralized procurement means a long-term agreement between the centralized procurement unit with one or many selected bidders, in which include standards and conditions as basis for procurement according to each specific contract.

- Duration for use of framework agreements shall be stipulated in plan on bidder selection but not exceed 03 years according to Clause 2, Article 45 of the Law on Procurement 2013.

- According to Article 72 of Decree 63/2014/ND-CP stipulating that, depending on the scale and characteristics of the contract, the bulk-purchasing unit shall specify the contents of the framework agreement in the invitation for bids, which consist of:

+ The goods/services provided; quantities of goods/services;

+ Intended delivery time and location;

+ Conditions for transfer of goods/services; advances, payments, and contract finalization;

+ Ceiling prices of goods/services;

+ Warranty, maintenance; training, instructions on using goods/services;

+ Responsibilities of the goods/services provider;

+ Responsibilities of the unit that directly signs the sale contract;

+ Responsibilities of the bulk-purchasing unit;

+ Effective period of the framework agreement;

+ Penalties for contract breaches;

+ Relevant contents.

Quoc Dat

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