Basic Legal Content of Contract Conclusion in Bidding

participate. The inviting party must conduct a public invitation to bid and issue bidding documents to interested bidders. The bidding documents must not state any conditions that limit the participation of bidders or create advantages for one or several bidders, causing unfair competition. This form of bidding is encouraged to be applied in national bidding laws because it has thoroughly applied Adam Smith's invisible hand doctrine in the market mechanism.

- Limited bidding

Restricted bidding is applied in the following cases: (i) At the request of a foreign sponsor for the capital used for the bidding package; or

(ii) Bidding packages with high technical requirements or technical specificity; bidding packages of a research or experimental nature that only a few bidders are capable of meeting the requirements of the bidding package. Unlike open bidding, restricted bidding only stipulates the minimum number of limited bidders to be invited, which is 05 (five) bidders. The inviting party determines a short list of at least 05 (five) bidders with sufficient capacity, experience and the need to participate in the bidding, and submits it to the investor for approval.

- Bidding

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Direct bidding is applied in the following cases:

a) In case of force majeure due to natural disasters, enemy sabotage, or incidents that need to be resolved immediately, the investor or the agency responsible for managing the construction or property must immediately appoint a contractor to perform the task; in this case, the investor or the agency responsible for managing the construction or property must, together with the appointed contractor, carry out the contractor appointment procedure according to regulations within no more than fifteen days from the date of appointment;

b) Bidding packages requested by foreign sponsors;

c) Bidding packages of a national secret nature; bidding packages of urgent projects for national interests;

d) Bidding packages for the procurement of materials and equipment to restore, maintain, and expand the capacity of equipment and production technology lines that were previously purchased from one supplier and cannot be purchased from other suppliers due to the need to ensure compatibility of equipment and technology;

d) The bid package has a value within the designated bid limit or due to other special requirements as prescribed by the Government.

The appointment of contractors applied to bidding packages within the prescribed limits must ensure more efficiency than bidding in the direction of quantifying the efficiency of socio-economic factors and other factors. In terms of economic factors, the appointment of contractors must ensure: shortening construction time, reducing risks of material price fluctuations; minimizing bidding costs and related costs.

… In terms of social factors, bidding contributes to the accumulation of wealth for society; early selection of contractors to provide services, serving people's lives, bringing other benefits to society.

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Direct procurement is applied when the contract for a bid package with similar content to the previously signed content does not exceed 06 (six) months, the six-month period is calculated from the date of signing the original contract until the direct procurement result is approved. When implementing direct procurement, the contractor previously selected through bidding may be invited to implement the bid package with similar content. The unit price for the contents of the bid package applying direct procurement must not exceed the unit price of the corresponding contents of the similar bid package for which a contract was signed previously. Direct procurement may be applied to implement similar bid packages belonging to the same project or another project.

- Competitive bidding in purchasing goods:

Competitive bidding in the procurement of goods is applied in cases where the following conditions are met: (i) the bid package has a value of less than two billion VND;

(ii) The purchased items are common goods, readily available on the market with standardized technical specifications and equivalent in quality. To specify this content, in Circular 11/2010/TT-BKH dated May 27, 2010 guiding on competitive bidding, in the scope of regulation (Article 1), it clearly stipulates the form of competitive bidding applicable to bidding packages for the procurement of goods under the projects specified in Article 1 of the Law on Bidding when meeting the following conditions: (1) the bidding package price is less than two billion VND and (2) the procurement content is a common type of goods (meaning that many people use it and there is a guaranteed, stable supply source), available on the market (meaning that the goods are delivered immediately when there is a need without having to go through an order for design, processing, manufacturing, production), with standardized technical characteristics (according to Vietnamese standards, basic standards, international standards or foreign standards) and equivalent in quality (meaning that they are interchangeable due to the same technical characteristics, usage features and other characteristics). The subjects of application of Circular 11/2010/TT-BKH are domestic organizations and individuals when applying the form of competitive bidding to purchase goods (Article 2).

When conducting competitive bidding, the inviting party must announce the invitation for bidding and issue the request documents to bidders who wish to participate. Bidders send their quotations to the inviting party directly by fax or by post. For each bidding package, there must be at least three quotations from three different bidders.

- Do it yourself:

The self-implementation form is applied in cases where the investor has sufficient capacity and experience to implement the bidding package of the project under his/her management.

and use, while ensuring high efficiency of self-bid implementation. To ensure competitiveness and efficiency in implementation, in addition to regulations on the capacity of investors, the law also stipulates the participation of independent supervision consultants with investors in terms of organization and finance. When applying the form of self-implementation, the estimate for the bidding package must be approved according to regulations.

- Contractor selection in special cases

In case the bid package has special characteristics that cannot apply the above-mentioned forms of contractor selection, the investor must develop a contractor selection plan, ensuring competition and economic efficiency, and submit it to the Prime Minister for consideration and decision.

Based on legal regulations and on the specific nature of each project, the Competent Authority and the Investor will consider selecting the most appropriate and economically efficient form of bidding.

1.1.3 Bidding process.

Depending on the form, nature and scale of the bidding package, the project bidding process will have its own characteristics, and some stages can be added or shortened flexibly during the implementation process. The bidding process can normally be divided into the following stages:

- Prepare, establish and approve projects by the Competent Person and Investor:

First of all, the bidding project must be approved by the competent authority and the decision to implement the project must be made. According to the scope of authority, the competent person or the Investor will carry out the project preparation with the following tasks:

 Decision to allow project establishment;

 Establish a Project Management Board or hire a professional organization (Bidding Expert Group) as the bid solicitor for the project;

 Hire/ conduct research to establish project and total estimate;

 Approve project and total budget;

 Approve bidding plan;

 Prepare and approve bidding documents/request documents…

During this stage, the Competent Person or the person authorized to decide on investment is responsible for approving the bidding plan, which specifies in detail the bidding form, capital source, implementation progress, etc. The division of the project into bidding packages must be based on the technical nature, implementation sequence, ensuring the project's consistency and reasonable bidding package size. The decision to approve the bidding plan is an important legal basis for conducting bidding and issuing bidding notices.

- Invitation to bid

Depending on the nature and specific conditions of each bid package, when conducting open bidding, the investor can (a) Announce the invitation to bid for open bidding; or (b) Send an invitation to bid for restricted bidding or for open bidding with pre-qualification. The application of the shortlisting procedure must be approved by the competent authority in the bidding plan (Sending invitation to bid). For large and complex bid packages, the pre-qualification form can be applied before conducting the official bidding.

For the form of limited bidding, the Inviting Party selects at least 05 (five) contractors who are considered to have sufficient capacity and experience (according to the provisions of Article 19 of the Law on Bidding) and have the need to participate in the bidding and submits to the investor for approval a list of these contractors to invite to participate in the bidding. In case there is not actually enough minimum number of 05 (five) contractors, the investor shall report to the investment decision maker or authorized person for consideration and decision in the direction of either immediately inviting the list of existing actual contractors or extending the time limit.

time to find more contractors. In case the time has been extended but no more contractors can be found, invite existing contractors.

Invitation to bid is considered the stage of publicizing information about the bidding project. From here, the project is no longer in the investor's preparation process but has been introduced to the contractor.

- Bidding organization

 Issuance of bidding documents

The invitation to bid/request document, after being approved by the investor, will be issued to contractors participating in open bidding, to contractors on the list invited to participate in restricted bidding or to contractors who have passed the pre-qualification stage. The maximum value of the invitation to bid is VND 1,000,000/01 set. The invitation to bid is considered an invitation to negotiate from the investor, the basis for contractors to prepare bidding documents and participate in bidding for the project.

 Receiving and managing bidding documents

Bidding documents of contractors will be received and managed in the form of "Confidential", ensuring the confidentiality of information for contractors. This is an important requirement to implement the principle of ensuring competition in bidding. For the conclusion of contracts in bidding, the bidding documents of contractors can be considered as the proposal to enter into a contract issued by the contractor.

 Bid opening

The opening of bids must be conducted publicly immediately after the closing time for bids with bids submitted as required by the bidding documents.

The main information stated in the bidding documents of each bidder must be announced during the bid opening session, recorded in the bid opening minutes with the signatures of the representative of the inviting party, the representative of the bidder and the representative of the bidder.

Representatives of relevant agencies attend. Conduct public bidding to ensure the principles of competition and equality in bidding.

- Clarifying bidding documents and selecting contractors:

After receiving the bidding documents, based on the criteria of legal requirements, capacity; experience and the proposed winning bid price, the inviting party will select the bidding documents that best meet the requirements. The investor is responsible for reviewing and approving the bidding results based on the report on the bidding results and the report on the appraisal of the bidding results. The bidding results will be publicly announced to all participating bidders. This is considered as acceptance of the offer to enter into a contract, the parties will negotiate and negotiate the bidding contract based on the decision to approve the bidding results, the bidding documents and the approved bidding documents.

In case (i) All bids basically do not meet the requirements of the bidding documents; (ii) Changes in the investment objectives and scope stated in the bidding documents; (iii) There is evidence that the bidding party colludes with the bidder; or (iv) There is evidence that all bidders collude to the detriment of the bidding party's interests, the competent authority shall decide to cancel the bidding and notify all participating bidders [26]. At this time, the purpose of organizing the bidding is not achieved, the investor may consider re-organizing the bidding to select a suitable bidder. The cancellation of the bidding must comply with the procedures prescribed by law, because the cancellation affects the interests of the bidders participating in the bidding, and there is a risk of loss and waste of state assets.

- Negotiate and sign the contract.

Based on the approved bidding results, the contractor and the investor will negotiate the bidding contract. The negotiation must respect the contents agreed upon by both parties through the evaluation of bidding documents.

of the contractor. After completing the negotiations and having a record of the contract negotiations, the contractor and the investor will sign the contract.

1.2 Basic legal content of contract conclusion in bidding

1.2.1 Contracting parties

The contracting subject is one of the factors ensuring the validity of the contract. If in a normal civil contract, the contracting subject can be an individual or a legal entity that meets the requirements of legal capacity and civil conduct capacity, then for contracting in bidding, the conditions for the contracting subject are more diverse and complicated.

As with other common types of contracts, the parties involved in a bidding contract usually include two parties, which can be called the contractor and the contractor.

- Contractor

Based on the approved bidding results, the inviting party is responsible for negotiating and finalizing the contract.

The inviting party, according to the 2005 Law on Bidding, is understood as the investor or a professional organization with sufficient capacity and experience used by the investor to organize the bidding according to the provisions of the law on bidding. Normally, the investor establishes a Project Management Board to organize and manage the bidding implementation. The Project Management Board must meet a number of capacity conditions, for example, for the project management board in construction bidding, the director of the board must have a university degree or higher in a major suitable for the project management certificate and have at least 03 years of professional work experience [3]. In case of insufficient capacity, the investor can hire a third party as a consulting unit to perform the bidding work. The inviting party is responsible for negotiating and finalizing the Contract.

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