Tasks that require contractor selection in Vietnam

Tasks that require contractor selection in Vietnam (Internet image)

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

1. Tasks that require contractor selection in Vietnam

According to Article 5 of Circular 10/2015/TT-BKHDT, contents of the tasks that require contractor selection include the tasks and value of each procurement according to Article 35 of the Law on Bidding 2013. To be specific:

(1) Procurement name:

The procurement must reflect its content (construction, installation, procurement of goods, consulting services, non-consulting services, mixed contents) and scope according to the decision on project approval. If the procurement is divided into smaller parts, the name of each part must reflect its basic content.

(2) Procurement price:

The procurement price is determined on the basis of total investment in the project. If a cost estimate has been approved before the contractor selection plan is made, the cost estimate shall be the basis for determination of the procurement price.

The procurement price must be sufficient to cover the expenses of the procurement including cost contingency (against inflation, additional works, and other temporary amounts (if any)), fees, charges, and taxes.

If the contract duration is short without risks or inflation, cost contingency is zero. Cost contingency shall be determined by the investor depending on the characteristics of the procurement within the limits prescribed by law. The procurement price shall be updated 28 days before the bid opening date if necessary.

- With regard to the procurement of consultancy services for making the pre-feasibility study report or feasibility study report, the procurement price is determined according to information about average price according to statistics of completed projects over a certain period of time; total investment shall be determined according to investment rates and preliminary total investment;

- If the procurement is divided into smaller parts, the value of each part must be estimated.

(3) Each procurement must have specific sources of capital or method of capital provision and disbursement time in order to pay the contractors; if the procurement is funded by ODA or concessional loans, the sponsors’ names, ratio of capital sources including grant capital and counterpart capital must be specified.

(4) Contractor selection methods:

Each procurement must have a specific method of contractor selection: domestic or international contractor selection, whether or not short-listing, online contractor selection is applied according to regulations of law on bidding. Explanation for competitive bidding is not required; Explanation for international bidding is required; To be specific:

- Competitive bidding is applied to procurements regulated by the Law on Bidding, except for the cases mentioned in Point b, Point c, Point d, Point dd, Point e, Point g, and Point h of Clause 4 of Article 5 of Circular 10/2015/TT-BKHDT;

- Selective bidding is applied to procurements with high or special technical requirements that are met by few contractors;

- Direct contracting is applied in the cases mentioned in Clause 1 Article 22 of the Law on Bidding 2013 and Article 54 of Decree 63/2014/NĐ-CP, provided requirements in Clause 2 Article 22 of the Law on Bidding 2013 are satisfied;

- Competitive offering is applied according to Article 23 of the Law on Bidding 2013 and Article 57 of Decree 63/2014/NĐ-CP;

- Direct purchasing is applied according to Article 24 of the Law on Bidding 2013. In this case, the investor must explain its advantages over other methods of contractor selection;

- Self-performance is applied according to Article 25 of the Law on Bidding 2013. In this case, the investor must explain its advantages over other methods of contractor selection;

- Contractor selection in special cases is applied if the procurement has special requirements that cannot apply the contractor selection methods mentioned in Point a, Point b, Point c, Point d, Point dd, and Point e of Clause 4 of Article 5 of Circular 10/2015/TT-BKHDT.

In this case, the person competent shall approve the contractor selection after the Prime Minister issues a decision on a contractor selection method in the special case according to Article 26 of the Law on Bidding 2013;

- Community participation shall be applied according to Article 27 of the Law on Bidding 2013.

Contractor selection methods other than competitive bidding must not be applied without satisfying all conditions prescribed by the Law on Bidding 2013.

(5) Contractor selection processes:

- One-envelop process is applied in the following cases:

+ Competitive bidding, selective bidding are applied to procurements of non-consulting services, goods, construction and installation, small-scale mixed procurements; “single-stage two-envelop” process may be applied if necessary;

+ Normal and abridged competitive offering is applied to procurements of non-consulting services, goods, construction and installation;

+ Direct contracting is applied to procurements of consulting services, non-consulting services, goods, installation, mixed procurements; this part will be excluded if abridged direct contracting process is applied;

+ Direct purchasing is applied to procurements of goods.

- Single-stage two-envelop process is applied to competitive bidding and selective bidding with regard to procurements of consulting services, non-consulting services, goods, construction, and mixed procurements;

- Two-stage two-envelop process is applied to competitive bidding and selective bidding with regard to large-scale, complicated procurements of goods, construction and installation, and mixed procurements;

- Two-stage two-envelop process is applied to competitive bidding and selective bidding with regard to procurements of goods, construction and installation, and mixed procurements that involve new, complicated, special technologies;

(6) Time for stating contractor selection

The contractor selection process shall begin when bidding documents, request for proposals are issued. In case of competitive bidding that applies short-listing, the contractor selection process shall begin when the request for expression of interest, pre-qualification documents is issued.

(7) Types of contract:

Depending on the scale, characteristics of each procurement, the investor shall decide on the type of contract as the basis for making the bidding documents, request for expression of interest, bidding documents, or request for proposals, and conclude the contract.

Each procurement may be done under one or multiple contracts; each contract may apply one or several types of contracts prescribed in Point a through d of Clause 7 of Article 5 of Circular 10/2015/TT-BKHDT.

If multiple types of contract are applied, each type and its corresponding works must be specified. In case of all-inclusive contract, the investor is not required to provide explanation.

- All-inclusive contract is a basic type of contract. All-inclusive contracts must be used for procurements of consulting services, non-consulting services, construction and installation and mixed procurements on a small scale.

All-inclusive contracts shall primarily be used for procurements of goods.

- Contracts with fixed prices shall be applied to procurements of which prices for every work remain unchanged throughout the contract duration.

- Contracts with variable prices shall be applied to procurements that do not have accurate quantity or volume, and prices are likely to vary during the contract duration.

If goods are special, complicated, and the contract duration exceeds 18 months, variable prices may be applied.

- Fixed term contracts are applied to procurements of consulting services.

(8) Contract term:

The contact terms begins from the effective date of the contract until the parties fulfill their contractual obligations, except for warranty period (if any). The contract term must be appropriate for the project schedule. If the procurement is divided into smaller parts, the duration of each part must be specified.

2. Submitting and approving contractor selection plan in Vietnam

Submitting and approving contractor selection plan according to Article 6 of Circular 10/2015/TT-BKHDT as follows:

- The investor shall submit the contractor selection plan to the competent persons for consideration and approval.

- The competent persons shall appoint an organization to appraise the contractor selection plan.

- Appraisal of the contractor selection plan involves inspection, evaluation, and provision of opinions according to regulations of law on bidding and relevant regulations of law about:

+ Division of the project into procurements:

The project is divided into procurements according to the technical characteristics, procedures, consistency of the project, and rationality of the procurement scale.

+ Legal basis for making the contractor selection plan:

Legal basis for making the contractor selection plan and notes (if any).

+ Contents of the application for contractor selection plan approval:

++ The contents mentioned in Clause 3 Article 4 of Circular 10/2015/TT-BKHDT, conformity with regulations of law on bidding and relevant regulations of law, requirements of the project, notes (if any) with regard to the tasks that require contractor selection including the contents in Article 5 of Circular 10/2015/TT-BKHDT;

++ Conformity of total value of completed tasks, tasks that do not apply contractor selection method, tasks that require contractor selection, and tasks that do not require contractor selection compared to total investment of the project.

+ Bidding supervision:

If the bidding process must be supervised, the applicant shall request the competent person to appoint a person or unit mentioned in Clause 2 Article 7 of Circular 10/2015/TT-BKHDT to supervise the bidding process.

- The appraising organization shall give general remarks about the contractor selection plan, express agreement or disagreement with the investor’s contractor selection plan, request the competent person approve the contractor selection plan if it is accepted, or provide explanation and propose solutions to the competent person of the contractor selection plan is not accepted.

- The appraising organization shall make an appraisal report according to Form No. 2 enclosed with Circular 10/2015/TT-BKHDT and submit it to the competent person for approval.

- Individuals participating in the appraisal must have suitable capacity, experience, foreign language skills, and bidding qualifications.

- The appraisal report shall be sent to the competent person within 20 days from the day on which the appraising organization receives sufficient documents.

- In case of direct contracting prescribed in Point a Clause 1 Article 22 of the Law on Bidding 2013, unless the procurement is necessary for protection of state secrets, within 07 working days from the day on which the investor or supervisory authority of the procurement selects a qualified contractor, the investor must submit the contractor selection plan to the competent person for approval

. In this case, appraisal of the plan is not required.

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