The Government last month issued a decree on bidding aiming to increase competitiveness among bidders and their independence with investors.
Decree No. 85/2009/ND-CP, which took effect in December, guides the 2005 Bidding Law, the 2009 Law amending a number of articles of Laws on Capital Construction Investment, and the selection of bidders under the 2003 Construction Law.
The decree with 13 chapters and 77 articles, which replaces Decree No. 58/2008/ND-CP and Decision No. 49/2007/QD-TTg, specifies bidding plans, the order to select or designate contractors, decentralization of bid evaluation and approval, settlement of complaints and handling of violations.
Under the decree, bidders and consultants compiling bidding dossiers and evaluating bids; and construction contractors and supervisors must be organizationally and financially independent without depending on a common managing agency. These contractors must be enterprises operating under the Enterprise Law or must not be under the same agency which decides on their establishment. A contractor must not own a share of over 30% of another contractor.
The organizational and financial independence principle also applies to investors and bidders for bid packages under the same project. A bidder operating under the Enterprise Law must not own a share of over 50% of another bidder. Bidders being non-business units must not belong to the same agency or unit deciding on their establishment and must be financially independent when providing services or goods.
A bidder being a state enterprise established under the 2003 Law on State Enterprises and to be transformed under the Enterprise Law must not own a share of over 50% of another bidder from the time its transformation must be completed under the decision of a competent authority.
Bidders being state enterprises in which the State holds the controlling share comply with the Prime Minister’s regulations.
The decree allows contractors formulating work construction investment projects to make construction designs and those making construction designs to involve in other project steps, which is banned under the 2005 Bidding Law and Decree 58.
It makes specific provisions on international bidding. A bidder entitled to incentives will enjoy an additional 7.5% of its total points for a consultancy bid and 7.5% of its technical points, for a consultancy bid requiring high technology.
For a construction and installation bid, the evaluation price for a bidder ineligible for incentives will be increased by 7.5% of the bid price after it is adjusted by that bidder.
For a procurement bid, the evaluation price for a bidder ineligible for incentives will be increased by an amount equivalent to the value of payable import duty and import-related charges and fees which, however, must not exceed 15% of the goods value. Incentives are not applicable to goods liable to import duty and import-related charges and fees.
Incentives for a bid to select the general designer or general contractor will be determined under regulations on consultancy bids or construction and installation bids, respectively.
For equally rated foreign bidders, those offering a higher domestic value will be prioritized. When domestic and foreign bidders are equally rated after incentives are applied, domestic bidders will be prioritized.
The decree raises the maximum value of a bid to be implemented by a designated contractor to VND 3 billion from VND 500 million under Decree 58 and to VND 2 billion from VND 1 billion, for a procurement bid. It also allows contractor designation for a construction and installation bid valued at less than VND 5 billion while this value is limited at below VND 1 billion under Decree 58.
For a consultancy, procurement or construction and installation bid valued at under VND 500 million, contractor designators only need to send draft contracts to contractors.
Contractor designation applies to consultancy bids valued at up to VND 3 billion, procurement bids valued at up to VND 2 billion and construction and installation bids and bids to select general constructors (not general designers) valued at up to VND 5 billion under development investment projects under the Bidding Law and major upgrading or repair projects of state enterprises and bids to procure assets to maintain regular operations of state-funded agencies and organizations, which are valued at up to VND 100 million.
The decree also details bidding costs, information and deadlines. It allows investors to decide on the price of a bidding dossier (including taxes) which, however, must not exceed VND 1 million for domestic bids. For international bids, the price must comply with international practice.
The cost for evaluating bidder selection results equals 0.01% of the bid price (even when no bidder is selected), but is between VND 1 million and VND 50 million.
The cost for a consultancy council to settle a bidder’s complaints about bidder selection results equals 0.01% of the price offered by the complaining bidder, but is between VND 2 million and VND 50 million.
Bidding information, which must be published on the Bidding newspaper, will be provided by ministries, ministerial-level agencies, other central agencies, People’s Committees of different levels, investors and bid solicitors.
Information on pre-qualification and bid invitation and invitation for submission of dossiers of interest or goods offering must be provided at least three working days before notices on these invitations are published. Other information specified in Clause 1, Article 5 of the Bidding Law, must be provided within seven days after the date of signing of the documents.
The information provision and schedules and expenses for publishing bidding information on the Bidding newspaper and the bidding website comply with the Ministry of Planning and Investment’s regulations.
Under the decree, investors must approve dossiers of request within 10 days after receiving the written request for such approval from bid solicitors or evaluation reports on dossiers of request (if any). They must approve bidding dossiers and approve or give opinions on contractor selection results within 10 days after receiving evaluation reports from evaluators. The validity duration of a bidding dossier must be specified in this dossier, but must be 180 days at most from the date of closing the bidding, which may be extended for not more than 30 days.
Under the decree, the following work can be carried out concurrently: pre-qualification of bidders and compilation of bidding dossiers; approval of bidding dossiers and notification of bidding invitation; and notification of bidding results and negotiation and finalization of contracts.
Foreign contractors winning bids to be implemented in the Vietnamese territory must observe Vietnamese laws on immigration, import and export, registration of temporary residence, accounting systems and taxes and other regulations unless otherwise provided by treaties to which Vietnam is a contracting party or international agreements signed by competent Vietnamese authorities.
Within 15 days after the effective date of a contract signed with a foreign contractor, the project investor must submit a report on contractor selection by mail or e-mail to the Ministry of Planning and Investment and line ministries (for projects managed by these ministries or their investment decided by ministers), the Ministry of Construction (for construction bids) and provincial-level Planning and Investment Departments (for locally managed projects) for sum-up and monitoring.