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Law strengthens tender process

Update: August, 15/2014 - 08:39

A medical scan is carried out at Phuoc My Hospital in Binh Duong Province. Medical equipment was among a host of areas addressed in the Revised Bidding Law, which has seen improvements in the monitering of bids for public projects. — VNA/VNS Photo Duong Ngoc

HCM CITY (VNS) — The Revised Bidding Law, which took effect in July, has ushered in great improvement in monitoring bids for public projects and tackling violations, a seminar organised by the Viet Nam International Arbitration Centre (VIAC) heard in HCM City yesterday.

Dr Tran Trinh Tuong, former director of the Institute of Construction Economics, said the law, which superseded the 2005 Bidding Law, spells out in greater detail the process of selecting contractors.

It requires more categories of projects to call for tenders than in the past — like public firms — he said.

It stipulates that winning bids should be based only on a full-package contract, which refers to a fixed-price contract in which the bid must also include possible costs emerging from risk factors and escalation of prices during the implementation of the contract, he said.

This would stop contractors from making very cheap bids that result in poor quality, he said.

Tran Huu Huynh, president of VIAC, said, "This will also stop the practice of making cheap tenders to win a contract and then negotiating with investors to adjust prices."

The law stipulates that assessment of tenders should be made based not only on price but also bidders' technical competence and experience, he said.

"When looking at bid results in the past time, we [realise] we mainly ran after cheap prices. That would be completely wrong under the new law."

Enterprises should learn about the changes to the law to change to their working methods and avoid risks, he counselled.

Truong said the law encourages application of international norms for bid applications and contracts.

Soh Lip San, partner at Singapore-based law firm Rajah & Tann LLP, and Chau Quang Huy, a lawyer at the firm's Viet Nam office, said as a developing country Viet Nam needs foreign bidders to take part in its infrastructure development process.

But since this may cause disputes over contracts because of culture and language differences, getting the contract well drafted right at the beginning is important, Soh said.

Huynh said Vietnamese arbitration centres are competent enough to settle disputes, adding that businesses should take their disputes to them to get justice and save cost and time. — VNS



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