Regulations on Direct Contracting in Vietnam under the Law on Procurement

Regulations on Direct Contracting in Vietnam under the Law on Procurement (Internet image)

1. Cases of Direct Contracting in Vietnam

1.1. Direct Contracting for contractor in Vietnam

According to Clause 1, Article 22 of the Law on Procurement 2013, Direct Contracting for contractor shall apply in the following cases:

(1) Packages need to be performed to immediately overcome or timely handle consequences caused by force majeure event;

Packages need to be performed to ensure national secret;

Packages need to be carried out immediately to not cause damages directly to life, health and assets of population communities on geographical areas or to not severely affect to adjacent projects;

Procurement of purchasing drugs, chemicals, supplies, and health equipment in order to carry out the work of prevention and fighting of epidemics in urgent cases;

(2) Urgent packages need to be carried out aiming to protect national sovereignty, national borders, and islands;

(3) Packages of provision of consulting services, non-consulting services, procurement of goods which must buy from contractors performed previously due to ensuring the compatibility of technologies, copyright which not able to buy from other contractors; packages with nature of research, test; purchase of intellectual property copyright;

(4) Packages provide consulting service for making feasible study reports, construction designs which have been appointed for authors of designs of works architectures who won in selection or are selected when authors have full conditions and capability in accordance with regulations; packages of construction of statues, reliefs, monumental paintings, art works in association with author right from the creation stage to stage of construction of the works;

(5) Packages of relocation of technical infrastructure works managed directly by a specialized unit in order to serve the work of ground clearance; packages of detection and disposal of bombs, mines, explosives in order to prepare construction of works;

(6) Packages of providing public products and services, packages with package price in the limitation allowed to apply Direct Contracting as prescribed by Government in line with economic-social conditions in each period.

1.2. Direct Contracting for investor in Vietnam

According to Clause 4, Article 22 of the Law on Procurement 2013, Direct Contracting for investor shall apply in the following cases:

- There is only one investor registering bidding;

- There is only one investor able to perform due to concerning intellectual property, commercial secret, technologies or capital arrangement;

- Investor proposing project satisfy requirements of implementation project with feasibility and highest efficiency in accordance with regulations of Government.

2. Conditions for Direct Contracting in Vietnam

Conditions for Direct Contracting are specified in Clause 2, Article 22 of the Law on Procurement 2013 as follows:

Implementation of Direct Contracting for packages defined at points (2), (3), (4), (5), (6) must satisfy all the following conditions:

- Having an approved decision on investment, except for consulting packages for project preparation;

- Having an approved plan on selection of bidders;

- Having been allocated capital at the request of the time for performance of procurement;

- Having an approved estimate in accordance with regulation, except for case of EP, EC, EPC packages, turnkey packages;

- Having time for implementation of Direct Contracting as from the day of approving Request for Proposals to day of signing contract not exceeding 45 days,

Case of packages with big scale, complex content not exceeding 90 days;

- Contractor who is suggested for Direct Contracting must have name in the database on contractors of regulatory bodies on bidding operation.

Note: For packages under cases of Direct Contracting specified at Section 1 and satisfy conditions for Direct Contracting specified at Section 2 but still able to apply other forms of selection of bidder defined at Articles 20, 21, 23 and 24 of the Law on Procurement 2013, encouraging to apply other forms of selection of bidder.

3. Limits on no-bid contract awarding in Vietnam

Article 54 of Decree 63/2014/ND-CP stipulates the limits on no-bid contract awarding as follows:

Limits on no-bid contract awarding prescribed in point (6) Section 2:

- Contracts for consulting services, non-consulting services, and public services: VND 500 million; contracts for goods procurement, construction, installation, procurement of medicines, medical equipment, public procurement, mixed contracts: VND 01 billion;

- Contracts for regular procurements: VND 100 million.

Ngoc Nhi

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