What are rights and obligations of parties in bidding for goods or services in Viet Nam?

Bidding for goods or services is a commercial activity that, if conducted effectively, will ensure fair competition, and enable the buyer to choose the most appropriate seller to provide the best quality goods or services according to certain criterias. The seller has an environment to demonstrate the quality of his goods and services. What are current Vietnamese legal regulations on bidding for goods or services? Join Lawyer X to find out through the following article: “My company wants to organize a bidding to find a contractor with the suitable capacity to provide standard medical equipment for our business in Viet Nam.  Can you provide me information about organizing bidding activities, what are the rights and obligations of the parties? Thanks for your advice! “

Legal grounds

Commercial law

What is bidding for goods or services?

Bidding for goods or services means a commercial activity whereby a party purchases goods or services through bidding (referred to as bid solicitor) in order to select, among traders participating in the bidding (referred to as bidders), a trader that satisfies the requirements set forth by the bid solicitor and is selected to enter into and perform a contract (referred to as bid winner).

 The selection of the form of open bidding or restricted bidding shall be decided by bid solicitors. Bidding for goods or services shall be conducted in either of the following two forms:

– Open bidding which is a form of bidding whereby the bid solicitor does not limit the number of bidders; – Restricted bidding which is a form of bidding whereby the bid solicitor invites only a limited number of bidders to participate in the bidding.

Modes of bidding include bidding with one bid dossier bag and bidding with two dossier bags. Bid solicitors shall have the right to select the mode of bidding and must notify such in advance to bidders. In case of bidding by mode of one dossier bag, a bidder shall submit its bid dossier consisting of technical and financial proposals in one dossier bag according to the requirements in the tendering dossier and the opening of bids shall be effected only once. In case of bidding by mode of two dossier bags, a bidder shall submit its bid dossier consisting of technical and financial proposals in two separate dossier bags submitted simultaneously, and the opening of bids shall be effected twice. The dossier on technical proposals shall be opened first.

Rights and obligations of parties in bidding for goods or services

*Pre-qualification of bidders

Bid solicitors may organize the pre-qualification of bidders in order to select those bidders that are capable of satisfying the conditions set forth by bid solicitors.

*Tendering dossiers

– A tendering dossier comprises:

+ Tendering notice; A tendering notice comprises the following principal contents: Name and address of the bid solicitor; Brief description of bidding contents; Time limit, place and procedures for receipt of tendering dossiers; Time limit, place and procedures for submission of bid dossiers; Instructions for reading tendering dossiers.

+ Requirements related to goods or services subject to bidding;

 + Methods of evaluation, comparison, grading and selection of bidders;

+ Other instructions related to bidding.

– Expenses for supply of documents provided to bidders shall be stipulated by bid solicitors.

– Bid solicitors shall have to notify on the mass media in case of open bidding or send notices on invitation to register for bidding participation to qualified bidders in case of restricted bidding.

*Bid bonds

 – Bid bonds shall be made in the form of bid deposit, collateral or guarantee.

– Bid solicitors may request bidders to make bid deposits, bid collaterals or provide bid guarantees when submitting their bid dossiers. The percentage of a bid deposit or collateral shall be set out by bid solicitor but must not exceed 3% of the total estimated value of goods or services subject to bidding.

– Bid solicitors shall stipulate the mode and conditions for making deposits, collaterals or providing bid guarantees. In case of bid deposits or collaterals, such deposits or collaterals shall be returned to unsuccessful bidders within seven working days from the date the bidding results are announced.

 – Bidders shall not be allowed to receive back their bid deposits or collaterals in cases where they withdraw bid dossiers after the expiration of the time limit for submitting bid dossiers (referred to as “bidding closure”), fail to enter into contracts or refuse to perform contracts in cases where they are bid winners.

– Guarantors for bidders are obliged to guarantee bids for the guaranteed within the value equal to deposits or collaterals.

*Confidentiality of bidding information

– Bid solicitors must keep confidential bid dossiers.

– Organizations and individuals involved in the organization of bidding and in the evaluation and selection of bids must keep confidential information relevant to the bidding.

*Bid opening

Bid opening is the opening of bid dossiers at a fixed time or in cases where there is no prefixed time, the time of bid opening shall be the time immediately after the bidding closure.

All bid dossiers submitted on time must be opened publicly by bid solicitors. Bidders shall be entitled to attend the bid opening. Bid dossiers which are not submitted on time shall be rejected and returned to bidders unopened. Consideration of bid dossiers upon bid opening

*Evaluation and comparison of bid dossiers

– Bid dossiers shall be evaluated and compared according to each criterion for an overall evaluation. The criteria for evaluation of bid dossiers shall be provided for by bid solicitors.

– The criteria shall be evaluated by the score-giving method or other methods determined prior to the bid opening.

*Amendment of bid dossiers

– Bidders are not allowed to amend their bid dossiers after the bid opening.

– In the course of evaluation and comparison of bid dossiers, bid solicitors may request bidders to clarify matters related to their bid dossiers. Requests of solicitors and replies of bidders must be made in writing.

– Where bid solicitors amend some contents in tendering dossiers, they must send such amendments in writing to all bidders at least ten days before the deadline for submitting bid dossiers so that bidders have enough time to finalize their bid dossiers.

*Classification and selection of bidders

 – On the basis of the result of the evaluation of bid dossiers, bid solicitors shall have to classify and select bidders according to the method already determined.

– Where many bidders obtain equal scores and equally satisfy criteria to win the bidding, the bid solicitor shall have the right to select winning bidder.

*Notification of bidding results and entry into contracts

– Immediately after bidding results are available, bid solicitors shall have to notify them to bidders.

– Bid solicitors shall finalize and enter into contracts with bid winners on the following bases:

+ Bidding results;

+ Requirements stated in tendering dossiers;

+ Contents in bid dossiers.

*Contract performance security

– Involved parties may agree that bid winners should make deposits or collaterals or be provided with guarantees to secure the performance of contracts. Money amount to be deposited or used as a collateral shall be set by bid solicitors but must not exceed 10% of the contract value.

 – Contract performance security measures shall be effective up to the time of completion of contractual obligations by bid winners.

– Unless otherwise agreed, bid winners shall receive back deposits or collaterals as security for the performance of contracts upon the liquidation of such contracts. Bid winners shall not be entitled to receive back deposits or collaterals as security for the performance of contracts if they refuse to perform such contracts after they are entered into.

– After paying deposits or making collaterals to secure the contract performance, bid winners shall have their bid deposits or collaterals refunded.

*Reorganization of bidding

A bidding shall be reorganized in one of the following cases:

 – Where there is a violation of the regulations on bidding;

– Where all bidders fail to satisfy the bidding requirements

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