Addressing issues in Law No. 61/2005/QH11 on tenders for state procurement (Bidding Law 2005), the National Assembly passed Law No. 43/2013/QH13, dated 26 November 2013, (Bidding Law 2013) to replace Bidding Law 2005. It is hoped that the new law will contribute to a transparent and competitive environment for public procurement activities.
Bidding Law 2013 implements a new method for selecting contractors. Instead of simply relying on the lowest price, the law looks both at the price and the technical submission of the bidders. This is to increase investors’ initiative, flexibility in selecting more appropriate contractors to each type and size of the bidding package. Mainly, though, this is to ensure that a low bid does not lead to half finished or shoddy work product.
Another benefit of Bidding Law 2013 is that it increases opportunities for small scale, local bidders by encouraging the participation of the community in order to promote the development of domestic production and create local employment apart from the forms prescribed in the Bidding Law 2005 (open bidding, limited bidding, direct appointment of contractor, competitive quotation, direct procurement, self-implementation, selection of tenderers, investors in special cases).
The new law provides four methods of selection of contractors and investors: one and two phase options with one or two dossier bag options for each phase type. The one phase one dossier bag option is new to promote smaller contractors.
The law provides preferential treatment for local goods and bidders in domestic or international biddings, particularly goods of which costs for domestic production make up 25% or more; foreign tenderers in partnership with domestic tenderers in which the domestic tenderers comprises over 25% of work value; tenderers employing female laborers of 25% or more of the tender labor force; tenderers employing invalids or disabled people as 25% or more of the tender labor force; or tenderers that are small-size enterprises.
It provides new regulations for price negotiations in situations where there are only one or two tenderers, specifically applied to tenders for medications that have limited producers or are still under copyright protection.
Bidding Law 2013 allows four types of contracts for engaging tenderers: (1) lump-sum contract, (2) contract based on fixed unit price, (3) contract based on modifiable unit price, and (4) time- based contract. This is intended to decrease the opportunity for procurers or tenderers to take windfall profits by negotiating using an inappropriate contract type.
The law simplifies the procurement process by creating a one-off procurement unlike what was provided in the Bidding Law 2005 as concentrated procurement and regular procurement processes.
While at the same time it is simplifying the tender process, it is decentralizing the authority for entering into bid contracts. Decisions on the form of direct appointment of contractors are now in the hands of ministers, heads of ministerial equivalent bodies, Governmental agencies or chairman of people's committees at any level not requiring to submit to the Prime Minister for consideration and decision.
Bidding Law 2013 increases sanctions against assigned individuals who fails to comply with regulations. Individuals infringing the law on bidding must be published in bidding newspapers, the national bidding network system, or other means of mass media and required to pay compensation for loss and damage as prescribed.
The law also provides the possibility of expanding into an online bidding process, though leaves much unsaid on the subject.
Bidding Law 2013 takes effect from 1 July 2014.│