To ensure that bidding activities for the selection of contractors are carried out within the framework of the Law on Bidding 2023, on February 27, 2024, the Government promulgates Decree 24/2024/ND-CP detailing a number of articles and measures to implement the Law on Bidding on the selection of contractors ("Decree 24"). Decree 24 has the following notable contents:
1. Detailed guidance on the independent requirements of contractors for each bidding package
a. Specify in detail the subjects that the contractor must be financially and legally independent when bidding (besides the investor and the tenderer)
Accordingly, Decree 24 guides for the following bidding packages:
- Construction and installation package, goods procurement, non-consulting, PC;
- Consulting service package;
- EPC, EP, EC packages;
- Turnkey tender.
b. Stipulate the bases for determining the legal and financial independence of the parties, in particular:
- The ratio of shares and contributed capital between the parties is determined at the time of bidding closure and according to the ratio stated in the enterprise registration certificate, establishment decision, other papers of equivalent value.
- The capital ownership ratio of organizations and individuals in a consortium is the sum of the value of all products between the capital ownership ratio of organizations and individuals in the members multiplied by the percentage of the workload of the corresponding members in the consortium.
b. Some exceptions:
- Parent companies, subsidiaries, member companies of economic groups and state corporationsmay participate in each other's bidding packages if the products and services under such packages belong to the main production and business lines of economic groups or state corporations.
- Public non-business units and enterprises having the same agency directly managing and contributing capital when participating in bidding for each other's bidding packages are not required to meet regulations on legal independence and financial independence between contractors, investors and tenderers.
2. Detail preferential issues for contractors when participating in bidding
2.1. In general, Decree 24 provides for many additional cases in which goods are entitled to preferential treatment when participating in bidding, in which the following goods are especially encouraged:
- Goods of Vietnamese origin and origin: are not required to achieve the ratio of domestic production costs to commodity prices of 25% or more as prescribed in the previous Decree 63/2014/ND-CP;
- Goods of innovative enterprises;
- The goods are certified eco label, energy label and equivalent.
2.2. The contractor is entitled to only one type of incentive that is most beneficial when participating in the tender
The Law on Bidding 2023 stipulates many beneficiaries of incentives and many forms of incentives in bidding for the selection of bidders. However, Decree 24 stipulates the principle that contractors participating in bidding who are entitled to more than one type of incentives in the assessment of capacity and experience or in the assessment of finance, when calculating incentives, are entitled to only one type of incentive that is most beneficial to the contractor corresponding to each content of assessment of capacity and experience or assessment prices for financing; At the same time, in case all bidders are entitled to the same incentives, there is no need to calculate incentives for comparison and ranking.
2.3. Conditions for innovative products of Vietnamese origin must be met to enjoy incentives when participating in bidding
Decree 24 stipulates that innovative products of Vietnamese origin must meet to enjoy incentives when participating in bidding as one of the following conditions:
- Products on the list of high technologies prioritized for development investment or on the list of hi-tech products encouraged for development;
- Products formed from scientific and technological research results of science and technology enterprises;
- Products created on the basis of inventions, layout designs of semiconductor integrated circuits and plant varieties of the contractor themselves shall be granted protection certificates for a period not exceeding 05 years from the date of issuance;
- Semiconductor chip products;
- Products won the Ho Chi Minh Prize, State Prize for Science and Technology;
- New products are created from research and development results at one of the facilities of the National Innovation Center;
- New products created from the results of scientific research and technological development.
Decree 24 also stipulates that innovative products are only entitled to incentives for a period of 06 years from the first production and are eligible for marketing.
2.4. Specific incentives for domestic innovative start-ups, domestic contractors producing goods of Vietnamese origin and sustainable bidding
a. For domestic innovative startups
When a domestic creative start-up enterprise bids for its innovative products under this regulation, it is not required to meet the requirements on revenue and number of years of operation in the same industry within 06 years from the time the product is first produced and eligible to be marketed.
b. For domestic contractors producing goods originating in Vietnam
Domestic contractors who are allowed to transfer technology to produce goods of Vietnamese origin under bidding dossiers shall be entitled to:
- Not having to meet the requirements on turnover, number of years of operation in the same industry within 05 years from the time the product was first manufactured and eligible for marketing;
- For transferred technologies on the list of industries preferential for investment or the list of technologies encouraged for transfer according to regulations, they are not required to meet the requirements for confirmation of successful operation, the time the product has been used to ensure the quality requirements confirmed by the user.
Domestic contractors producing goods of Vietnamese origin in accordance with bidding dossiers shall be entitled to:
- Not having to meet the requirements on revenue and number of years of operation in the same industry as the bidding package under consideration when the contractor bids for goods that are first produced by the contractor and eligible to be put on the market during 05 years before the time of bidding closing. The contractor is entitled to this incentive from the time the contractor is established but not exceeding 07 years from the time of bidding closing;
c. For sustainable bidding
Decree 24 allows investors to stipulate requirements for sustainable bidding in bidding dossiers and request dossiers. Contractors offering solutions, goods and services that meet the requirements of sustainable bidding shall continue to be considered and evaluated.
3. Improve the contractor's responsibility in signing contracts and implementing bidding packages
To improve the responsibility of contractors, Decree 24 stipulates that contractors are valued for their reputation in participating in bidding when performing acts such as:
- The contractor fails or refuses to compare documents or negotiate contracts during the effective period of bid dossiers or proposal dossiers;
- The contractor has collated documents and negotiated the contract but refused or did not sign the contract negotiation minutes;
- The selected contractor wins the bid but fails to conduct or refuses to complete the contract or framework agreement or fails to sign the contract or framework agreement;
- The contractor has signed the framework agreement but does not proceed or refuses to complete the contract or does not sign the contract.
Bidders who commit the above acts will be posted on the National Procurement Network and must take measures to secure bids with a value 03 times the required value for other bidders within 02 years from the last time the above acts are performed.
In addition, Decree 24 requires the investor or unit wishing to procure in centralized procurement to be responsible for publicizing the contractor's contract performance results on the National Procurement Network System. The posting of information on the results of contract performance applies to each contract and is based on the scope of work under the contract performed by the contractor. The posting time may be during or after the bidding package execution period but not later than 06 months from the end of the bidding package implementation period. This information is also included in the criteria for evaluating contractors.
These regulations will contribute to improving the responsibility of contractors in signing contracts and implementing bidding packages.
4. Detailed regulations on contractor evaluation criteria
Previously, the process of conducting bidding to select contractors according to the types of bidding was specified in Decree 63/2014/ND-CP ("Decree 63"). In general, Decree 24 retains the implementation procedures stipulated in Decree 63. However, it should be noted that Decree 63 does not detail specific criteria for evaluating contractors in terms of capacity, experience, technique, and price, but empowers the tenderer to prescribe these evaluation standards and show bidding documents. This regulation leads to many obstacles in implementation, even negative acts, and violations in practice. To overcome the above situation, Decree 24 specifies the criteria for evaluating contractors in terms of capacity, experience, technique, and price.
Some contractor evaluation criteria mentioned in Decree 24 are as follows:
a. For assessment standards of competence and experience:
+ Experience in performing similar contracts;
+ Financial capacity including net asset value, revenue;
+ The fulfillment of the obligation to declare and pay taxes;
+ Professional capacity of key staff;
+ Information on the contractor's contract performance results;
b. For technical evaluation standards:
+ Technical quality of goods and services;
+ Production standards, manufacturing standards, and technology; rationality and economic efficiency of technical solutions, measures to organize the supply and installation of goods;
+ Geographical and environmental adaptability; environmental impacts and remedies;
+ Factors on commercial conditions, delivery time, technology transfer training, provision of after-sales services; progress of supply of goods; environmentally friendly factors;
In addition to the above outstanding issues, Decree 24 also specifies issues on the process of performing other important works of the Bidding Law 2023 such as appointment of bidders, competitive offers, direct procurement, selection of contractors in special cases, drug.
Decree 24 takes effect from February 27, 2024.
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