According to regulations, bidding is the process of selecting contractors to sign and perform contracts for the provision of consulting services, non-advisory services, goods procurement, construction, and installation; selecting investors to sign and perform investment project contracts. So, to participate in the bidding, do the participating subjects need to meet any conditions? If yes, what are the conditions for participating in the bidding of organizations? Will household businesses be able to participate in the bidding? To dig deeper into this, today, LSX Lawfirm will give you an article about “Can Vietnamese business households participate in bidding activities?“, as follows:
Legal grounds
- Law on Bidding 2013
What is a tender?
According to the provisions of Clause 12, Article 4 of the Law on Bidding 2013:
“Bidding is the process of selecting a contractor to sign and perform a contract for the provision of consulting services, non-advisory services, goods procurement, construction, and installation; select investors to sign and perform contracts on investment projects in the form of public-private partnerships, investment projects using land on the basis of ensuring competition, fairness, transparency, and business efficiency. economic.”
Thus, we can see, that bidding is the process by which the investor selects a contractor that meets his requirements. In which, the buyer will organize bidding for the seller (contractors) to compete with each other. The buyer’s objective is to obtain goods and services that satisfy his requirements in terms of technique, quality, and lowest cost. The contractor’s aim is to obtain the right to supply and purchase such goods or services at a price sufficient to cover input costs and ensure the highest possible profit. Thus, the nature of bidding has been recognized by society as healthy competition to be able to do something, a certain request.
What is a household business?
A household business is not a type of business.
In Clause 1, Article 79 of Decree 01/2021/ND-CP, the characteristics of business households are as follows:
A business household is registered and established by an individual or members of a household and is responsible for all his/her assets for the household’s business activities. In case household members register business households, they shall authorize one member to act as the business household representative. For individuals registering business households, the person authorized by household members to act as the business household representative is the owner of the business household.
Conditions for participating in the bidding of organizations
In Clause 1, Article 5 of the Law on Bidding 2013, the eligibility of contractors and investors being organizations is as follows:
- Having registration of establishment and operation granted by a competent authority of the country in which the contractor or investor is operating;
- Independent financial accounting;
- Not in the process of dissolution; not concluded to be in bankruptcy or insolvent debt as prescribed by law;
- Registered on the national bidding network system;
- Ensuring competition in bidding as prescribed in Article 6 of this Law;
- Not in the period of banned from bidding.
- Being on the shortlist in case the shortlist has selected;
- Must form a joint venture with a domestic contract or use a domestic sub-contractor for a foreign contractor when participating in international bidding in Vietnam, unless the domestic contractor is not qualified to participate in any part of the bidding process. any work of the contract.
Can business households participate in bidding?
Clause 1, Article 5 of the Law on Bidding No. 2013, stipulates that a contractor is an organization when it fully meets the following conditions:
- Firstly, Having registration of establishment and operation granted by a competent authority of the country in which the contractor is operating;
- Secondly, Independent financial accounting;
– Not in the process of dissolution; not concluded to be in bankruptcy or insolvent debt as prescribed by law;
– Registered on the national bidding network system;
- Firstly, Ensuring competition in bidding according to regulations;
- Secondly, Not in the period of banned from bidding.
According to Clause 1, Article 79 of Decree No. 01/2021/ND-CP, a business household registered to established by an individual or members of the household and is responsible with all its assets for its business activities. household business. In case household members register business households, they shall authorize one member to act as the business household representative.
For individuals registering business households, the person authorized by household members to act as the business household representative is the owner of the business household.
In case a business household registers its establishment, operates legally, and meets other conditions mentioned above, it is considered eligible to participate in bidding.
Therefore, business households can participate in the bidding because they have met the conditions for having a business registration certificate and independent financial accounting.
Other conditions, business households can completely meet when checking and doing some other procedures.
How do prove the financial capacity of the business household?
According to the guidance in Clause 2.1, Section 2, Chapter III, the Form of bidding documents for procurement of goods issued together with Circular No. 05/2015/TT-BKHDT, one of the criteria for assessing the contractor’s capacity and experience financial performance.
Accordingly, when participating in bids, bidders must submit financial statements of the years required by the bidding documents to prove their healthy financial position and have a positive net worth in the latest year.
Regarding the assessment of financial capacity, if the relevant law does not require a business household to have a financial statement, in order to prove its financial capacity, the business household may approve the following documents: Other related financial statements recognized by law (such as tax finalization dossiers or written certifications of tax payment obligation fulfillment…).
Conditions for issuance of bidding documents, dossiers of requirements?
– Bidding documents and dossiers of requirements of a bidding package may only release for contractor selection when the following conditions fully satisfied:
- The approved contractor selection plan;
- The approved bidding documents and dossiers of requirements include the required contents of bidding procedures, bidding data sheet, evaluation criteria, bid forms, and table of bidding volumes; requirements on progress, technique, and quality; general and specific conditions of the contract, a sample of contract documents and other necessary contents then;
- Notice of invitation for bids, a notice of invitation to offer, or a short list published in accordance with this Law;
- Funds for the bidding package shall arrange according to the progress of the bidding package then;
- Contents, list of goods and services, and cost estimates approved by competent persons in case of regular or concentrated procurement.
- Ensure handover of the construction site according to the schedule of implementation of the bidding package.
- – Bidding documents and project requirements may only release for investor selection when the following conditions are fully satisfied:
- Projects on the list of projects announced by ministries, ministerial-level agencies, Governmental agencies, People’s Committees of provinces or centrally run cities in accordance with the law, or projects proposed by investors. export;
- The approved investor selection plan;
- Bidding documents, dossiers of requirements approved;
- The notice of invitation for bids or a short list shall be published in accordance with this Law.
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Related article
- Bidding in accordance with Vietnamese law
- What are the rights and obligations of parties in bidding for goods or services in Viet Nam?
Related questions
The legal form of the bidding relationship for goods and services is the bidding documents and the bidding documents. A bidding document is a legal document prepared by the bid solicitor, which contains all technical, financial, and commercial requirements of goods to be procured and services to be used. The bid documents show the capacity and responsiveness of the bidders to the requirements in the bidding documents.
According to Commercial Law, in bidding activities, there may appear third parties such as consulting companies helping to prepare bidding documents, helping experts, and evaluating bids. However, this is an activity without intermediaries, with no traders providing the service of bidding for goods and services for other traders to receive remuneration. Meanwhile, the Law on Bidding 2013 further stipulates professional bidding organizations including bidding agents, established non-business units, and professional bidding functions. The establishment and operation of Bidding agents shall comply with the law on enterprises. A bidding relationship is always established between one bid solicitor and many bidders. But there are exceptions such as in the case of investment designations then.
International bidding is the process of selecting contractors that meet the requirements of the bid solicitor with the participation of foreign and domestic contractors.
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