VIETNAM – THE WORLD BANK GROUP IS ASKING DUANE MORRIS ABOUT PUBLIC PROCUREMENT

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VIETNAM – THE WORLD BANK GROUP IS ASKING DUANE MORRIS ABOUT PUBLIC PROCUREMENT
Case StudyAssumptions
BidCo
Is one of the companies participating in the call for tender and meets
all solvency, technical and administrative requirements to compete;
Is a privately and domestically-owned medium-sized Limited Liability
Company (or its most common legal equivalent);
Operates in Ho Chi Minh City;
Is up to date with all regulations and is in good standing with
all relevant authorities, including those related to taxes;
Has all licenses and permits needed to operate in this technical area;
Has already responded to a public call for tender and is already
registered with the procuring entity defined below.
Contract
Entails resurfacing 20 km of a flat two-lane road (not a highway and
not under concession), connecting Ho Chi Minh City to another city within
Vietnam (and within the same state, region or province as Ho Chi Minh
City, if applicable), with an asphalt overlay of 40 to 59 mm (or its most
common equivalent in Vietnam);
Value: USD 2.5 Million (equivalent to VND 56,997,352,120);
Does not include any other work (such as site clearance, subsoil
drainage, bridgework or further routine maintenance).
Procuring Entity
Is the agency in charge of procuring construction works for the
authority that owns the road describedabove;
Is the sole funder of the works, has budget for the works and is solvent.
Procurement Process
Is an open, unrestricted, and competitive public call for tender for
resurfacing a road like the one described above;
Is completed without complaints/challenges/protests frominterested
parties;
Ends with the awarding of the contract to BidCo, whose bid satisfied
all technical and administrative criteria and offered the best value for money.
1. What is the entity that conducts procurement for the authority that owns the majority of roads comparable to
the one described above?
Directorate for Roads of Vietnam within the Ministry of Transport
2. How many open, unrestricted and competitive public calls for tenders for roadwork contracts were completed in
the last 5 years by the Procuring Entity you selected in Q.1?
More than 51
3. Please provide a list of the laws, regulations and other binding materials (including guidelines and manuals) that
regulate public procurement in Vietnam. Please include legislation or other binding materials promulgated at the
national/federal level as well as any additional legislation that is applicable to the Procuring Entity you selected in
Q.1.

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Circular No. 04/2017/TT-BKHDT of 2017
Circular No. 05/2020/TT-BKHDT of 2020
Law on Bidding No. 43/2013/QH13 of 2013
Decree No. 63/2014/ND-CP of 2013
Law on Investment in the form of Public-Private Partnership of 2020
Decree No.25/2020/ND-CP of 2020
Commercial Law No. 36/2005/QH11 of 2005
Decree No. 37/2015/ND-CP of 2015
Circular No. 03/2015/TT-BKHDT of 2015
- Decree 50/2021/ND-CP of 2021
Circular 11/2019/TT-BKHDT of 2020
Comprehensive and Progressive Agreement for Trans-Pacific Partnership
EU-Vietnam Free Trade Agreement of 2020
4. Please list any mandatory standard tender documents and/or standard contract terms that the Procuring Entity
must use for a contract like the one described in Section 1.
Contract terms must specify:
a/ Applied legal bases;
b/ Language used in the contract;
c/ Content and volume of work;
d/ Quality, technical requirements of work; pre-acceptance test and handover conditions;
dd/ Contract performance duration and schedule;
e/ Contract price, advance payment, currency used in payment, and payment for the contract;
g/ Contract performance security, contract advance guarantee;
h/ Adjustment of the construction contract;
i/ Rights and obligations of the parties to the construction contract;
k/ Liability for violations of the contract, rewards and fines for violations of the contract; l/ Suspension and
termination of the contract;
m/ Settlement of disputes over the contract;
n/ Risks and force majeure events; o/ Settlement and liquidation of the contract;
p/ Other contents.
All standards are listed in Bidding Law and Article 141 Construction Law.
5. Are you aware of any change (in practice or in laws/regulations/procedures) related to public procurement
between May 2, 2020 and May 1, 2021? For example: amendments to applicable public procurement laws, enactment
and/or implementation of new regulations, implementation or improvement of e-procurement platforms, changes to the
bid security and performance guarantee framework, etc.
Yes. The implementation of the EU- Vietnam Free Trade Agreement from 1 August 2020

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6. Are you aware of any regulatory or administrative measures (in practice or in
laws/regulations/procedures/contract management) related to public procurement that has been implemented
between May 2, 2020 and May 1, 2021 to respond to the COVID-19 pandemic?
Digitization of interactions between officials and private sector
7. If one or several electronic procurement portal(s) (i.e., an official website(s) specifically and exclusively dedicated
to public procurement) are in operation, please mark which platform would most commonly be used by the
Procuring Entity.
http://muasamcong.mpi.gov.vn
8. Out of all road works contracts with the Procuring Entity, how many are procured through the portal you listed
in Q.7?
More than 75%
9. Which of the following information about road works contracts procured by the Procuring Entity is made
publicly available in machine-readable format? (i.e, data format that can be processed by a computer, such as
XSL, CSV, JSON, XML, etc.)
Estimated cost – as calculated by the Procuring Entity at the time of advertising.
II. PHASES OF THE PROCUREMENT PROCESS
Phase 1: Budgeting and Needs Assessment
1. According to the legal framework, when the Procuring Entity prepares to advertise a new procurement
opportunity for a contract like the one described in Section 1, which of the following are used to estimate the
contract value and projected length of works?
Market analysis, standardized unit cost, project-spcific technical drawings, feasibility study, similar projects from prvious
years
Legal basis: 58/2016/TT-BTC
2. In practice, is the estimated contract value/budget published in the tender notice/tender documents?
Yes
3. Is the Procuring Entity required to have already allocated budget to a specific project before tendering?
Yes, there is a specific budget allocation
4. How often does the Procuring Entity award a contract without having all the necessary funds?
Occasionally (between 25-50%)
Phase 2: from Advertisement to Bid Submission
5. According to the legal framework, would open tendering (i.e. the process in which any business can submit a
bid) be the default method of procurement in Vietnam for a contract like the one described in Section 1?

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Yes, according to Article 20 of Law on Bidding No. 43/2013/QH13 of 2013.
6. According to the legal framework, can the Procuring Entity require bidders to participate in a prequalification
process specific to that contract before being able to submit their economic offer?
Yes, according to Articles 22 and 44 of Decree No. 63 of 2014.
a. How often would this happen for a contract like the one described in Section 1? Rarely (10-25%)
b. In practice, how many days would be necessary for BidCo to receive a decision on its prequalification from the
moment it submitted all the necessary documents? 30 days
c. In your experience, as of May 1, 2021, has Covid-19 impacted the frequency of prequalification and the time
you indicated above? Yes - Longer processing time of dossier - case on case basis.
d. According to the legal framework, must the contractor be registered with the Procuring Entity in order to bid
for a contract like the one described in Section 1? Yes, according to Article 5.1(d), Bidding Law
7. In practice, what is the most common method of procurement for a contract like the one described in Section 1?
Open tendering is the default by law and also the most common in practice
8. Does the legal framework define the situations in which each procurement method should be used?
Yes, according to Articles 21-27 of Law on Bidding No. 43/2013/QH13 of 2013.
9. Does the legal framework prohibit dividing contracts to circumvent thresholds for open tendering?
Yes, according to Article 89.6.k of Law on Bidding No. 43/2013/QH13 of 2013.
a. In practice, how often does this happen? Often (between 50-90%)
10. Which of the following materials need to be made publicly available by the Procuring Entity?
Procurement plans, Model procurement documents and materials/standard contract conditions, Tender notices,
Tender documents and technical specifications, Notices of award/bidding results
11. According to the legal framework, is there a minimum time limit between the advertisement of the tender
notice and the submission deadline for an open tendering procedure like the one described in Section 1?
Yes, Article 6, Decree No. 25/2020/ND-CP
a. In practice, how many days would pass between the advertisement of the tender notice and the submission
deadline for a contract like the one described in Section 1? 30-40 days
b. How often does the Procuring Entity modify the tender documents for any reason after advertisement, but
before the submission deadline? Rarely (between 10-25%)
c. In practice, by how many days would the timeframe you indicated in Q.21.a be extended due to these
modifications? 0 days
12. Does the legal framework establish the minimum content of the tender notice and tender documents?
Yes, according to Articles 218-219 of Commercial Law No. 36/2005/Qh11; and Circular No. 03/2015/TT-BKHDT of
2015.

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13. Which aspects of subcontracting is regulated by the applicable legal framework?
Features, disclosure, liability, according to Article 4 of Law on Bidding No. 43/2013/QH13 of 2013; and Article 128 of
Decree No. 63/2014/ND-CP of 2014.
14. According to the legal framework, if the intent to subcontract was not disclosed in the bid, what is the
contractor who decides to subcontract after the contract is signed required to do?
Inform the procuring entity and seek its approval
15. According to the legal framework, how clarification requests from potential bidders should be addressed?
The procuring entity will answer, but it is not always required to communicate the answer to all other bidders.
16. According to the legal framework, is BidCo required to provide a form of bid guarantee?
Yes, according to Article 11.1 of Law on Bidding No. 43/2013/QH13 of 2013.
a. If bid guarantee is not required by law, would it usually be requested in practice by the Procuring Entity for
a contract like the one described in Section 1? Yes
17. In practice, which instrument would BidCo most commonly use as a bid guarantee?
Bank guarantee/Letter of credit, Bid security declaration
Phase 3: from Bid Opening to Contract Signing
18. Does the legal framework establish a timeframe for the Procuring Entity to proceed to bid opening once the
deadline for bid submission has been reached?
Yes, according to Article 14.4(a) of Decree No. 63/2014/ND-CP
a. In practice, how many days after the deadline for bid submission does the Procuring Entity proceed to bid
opening? 0 day
19. In practice, in a case comparable to the case study scenario, how many days would pass between bid opening
and public notice of award (i.e. the moment in which all tenderers, participants and relevant parties are notified of the
award decision), considering that no complaints/challenges/protests have been filed?
60 days
a. In your experience, as of May 1, 2021, has Covid-19 impacted the process and time to award a contract that you
indicated in Q.29? No
b. In practice, between bid opening and public notice of award, how often does the Procuring Entity ask
questions/additions to bidders on the documents they submitted? Occasionally (between 25-50%)
c. In practice, by how many days would the timeframe you indicated in Q.29 be extended due to
questions/additions asked by the Procuring Entity? 45 days

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20. Is there a standstill (or pause) period between public notice of award and contract signing to allow
unsuccessful bidders to challenge the award decision?
No, standstill is only triggered by objection.
21. In practice, in a case comparable to the case study scenario, how many days would pass on average between
public notice of award and contract signing?
30-40 days
a. In your experience, as of May 1, 2021, has Covid-19 impacted the process and time to sign the contract that
you indicated in Q.31?
No
22. In practice, how many days would pass on average between contract signing, receipt of a notice to proceed with
the works, and the commencement of the works? 30 days
23. Selection committee – Which of the following characteristics are regulated by the applicable legal framework?
The number of members of the committee
The education requirements of members of the committee
The professional requirements of members of the committee
The process to appoint the members of the committee
Legal basis: Article 116 of Decree No.63/2014/ND-CP
24. Are employees of the Procuring Entity required to follow a mandatory code of conduct or ethics that includes
topics like screening procedures, conflict of interest, training requirements, etc.?
No
25. According to the legal framework, which award criterion would be used for a contract like the one described in
Section 1?
At the discretion of the Procuring Entity, according to Articles 39.1, 39.2 and 39.3 of Law on Bidding No.
43/2013/QH13 of 2013.
26. In practice, how often is the award decision based solely on price and not on best value for money?
Very often (> 90%)
27. Does the legal framework establish criteria to identify abnormally low bids?
No
28. Does the legal framework define what constitutes a non-substantial error?

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Yes - Article 4.18 and 4.19 and 42 of Law on Bidding No. 43/2013/QH13 of 2013; and Article 17 of Decree 63/2014/ND-
CP of 2014.
a. In practice, how often does the Procuring Entity require bidders to amend their offers (because of mistakes,
arithmetic errors, etc.)? Rarely (10-25%)
b. In practice, in these cases would the bidder be given the opportunity to rectify such error before
disqualification? Yes - Article 17 of Decree No. 63/2014/ND-CP
29. According to the legal framework, when a bidder is excluded because it did not meet the selection criteria, is it
provided with an explanation of the reasons for the exclusion in writing?
Yes, the bidder must always be provided with an explanation in writing
Legal basis: 63/2014/ND-CP
30. According to the legal framework, when a bidder loses, is it provided with an explanation of the reasons for the
loss in writing?
Yes, the bidder must always be provided with an explanation in writing
Legal basis: 63/2014/ND-CP
Phase 4: Contract Management
31. According to the legal framework, is BidCo required to provide a performance guarantee deposit that
ensures a source of compensation in case of failure to perform its contractual obligations?
Yes, according to Articles 66 and 72 of Law on Bidding No. 43/2013/QH13 of 2013.
a. If a performance guarantee is not required by law, would it usually be requested in practice by the Procuring
Entity for a contractlike the one described in Section 1? Yes
32. In practice, which instrument would BidCo most commonly use as a performance guarantee?
Cash/Certified check
Certificate of deposit
Bank Guarantee/Letter of Credit
33. In practice, how long does it usually take for the Procuring Entity to return the performance guarantee in full
once the works have been completed and accepted by the Procuring Entity?
Within 20 days
34. Which aspects of contract management are regulated by the applicable legal framework?

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Renegotiations. Legal basis: Article 67 Law on Bidding, Article 93 Decree 63/2014/ND-CP
35.How often would a contract like the one described in Section 1 be renegotiated?
Rarely (10-25%)
36. If the contract described in Section 1 were more complex (i.e., lengthier and/or more costly execution, more
complex scope or object, etc.), how often would it be renegotiated?
Occasionally (between 25-50%)
37. According to the legal framework, is there a maximum percentage of price/quantity increase for changing
(variation) orders?
No
38. According to the legal framework, is there a percentage of price increase above which the procuring entity is not
allowed to renegotiate and is always required to re-tender?
No
39. In practice, are the results of contract renegotiations made publicly available?
No
40. In practice, how many days would pass on average from the moment one of the parties requests/initiates a
renegotiation of the contract until a new contract amendment is signed?
30 – Dependent on the negotiation process
a. In your experience, as of May 1, 2021, has Covid-19 impacted the frequency of contract renegotiations and the
time to authorize them? No
41. How often do bidders submit unrealistically low bids to win the contract, confident of having a possibility to
renegotiate at a later stage?
Often (between 50-90%)
42. How often are "emergencies" used as a reason to renegotiate?
Very rarely (< 10% of cases)
43. How often would a changing (variation) order/price adjustment (i.e. a modification below a certain threshold or
clearly defined in the terms of the contract) take place in a contract like the one described in Section 1?
Occasionally (between 25-50%)
a. In practice, how many days would pass on average from the moment that the modification becomes necessary
until a changing (variation) order/price adjustment is issued? 30 days – case by case basis

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44. How often would additional works related to the initial contract (i.e. works by the original contractor that have
become necessary and that were not included in the initial procurement) be awarded to the same contractor
through direct award?
Occasionally (between 25-50%)
a. In practice, how many days would pass on average from the moment additional works become necessary until
they are awarded to the same original contractor? 30 days
Phase 5: Payment, Delays and Quality Assessment
45. According to the legal framework, is there a limit to how much the Procuring Entity can pay upfront for the
contractor to hire workers, buy materials, and start operations in a contract like the one described in Section 1?
No
a. In practice, how much would usually be paid upfront for a contract like the one described in Section 1? 10-50%
b. In practice, if an advance payment is usually issued, does the contractor have to provide a guarantee for receiving
this payment? Yes
c. In practice, how many calendar days will be necessary for BidCo to receive the advance payment once the
request has been submitted to the Procuring Entity? 10-20 days
46. During the execution of the contract, does the legal framework establish a timeframe within which the
Procuring Entity must process the payment once an invoice is received?
Yes, according to Article 19 of Decree No. 37/2015/ND-CP of 2015.
a. In practice, how many calendar days will be necessary on average for BidCo to receive payment once the invoice
has been delivered to the relevantauthority? 30 days
b. In practice, how many people would need to authorize payment within the procuring entity before payment is
made? 2
c. In practice, how often will BidCo receive payment within the timeframe established by the legal framework?
Often (between 50-90%)
d. According to the legal framework, is the company entitled to claim interest on late payments if the Procuring
Entity does not pay within thelegally-established timeframe?
Yes, according to Article 94 of Decree No. 63/2014/ND-CP of 2014.
e. How often would such interest on late payment be paid to thecompany? Often (between 50-90%)
f. In practice, for a contract like the one described in Section 1, how many days would pass on average between the
moment BidCo notifies the Procuring Entity that the works are completed and a formal agreement between them
stipulating that the works are indeed finished and comply with the contract specifications (i.e. a certificate of
completion of works)? 60 days

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g. In your experience, as of May 1, 2021, has Covid-19 impacted the time to certify the completion of works?Yes,
on-site visits are subject to quanrantine regulations by provincial authorities
h. How often do disagreements between the Procuring Entity and BidCo on the completed works delay the process
of reaching a formal agreement that the works are finished? Occasionally (between 25-50%)
i. In practice, by how many days would the aforementioned time be extended to resolve this disagreement and
obtain a certificate of completion of works from the Procuring Entity? 90 days
47. Assuming that BidCo delivers works complying with the quality standards agreed-upon in the contract, within
budget and on time, what strategies, if any, does the Procuring Entity use to delay or avoid payment?
Bureaucracy/ Paperworks inspection
a. How often would BidCo resort to informal payments to facilitate payment? Very rarely (< 10% of cases)
b. In practice, how often is a portion of the payment retained to guarantee the works for a predetermined amount
of time? Occasionally (between 25-50%)
INSPECTIONS AND WARRANTIES
1. Does the Procuring Entity have guidelines or protocols regulating inspections on the quality of the works?
Yes
Legal basis: Decree 06/2021/
2. According to the legal framework, is BidCo required to provide a guarantee upon completion of the works?
Yes
Legal basis: Decree 06/2021/ND- CP
3. If a post-completion guarantee is not required by law would it usually be requested in practice by the Procuring
Entity for a contract like the one described in Section 1?
Yes
4. In practice, which instrument of post-completion guarantee would the Procuring Entity most commonly
request?
Retention of the whole performance guarantee
5. In practice, how long after completion of the works is BidCo required to maintain the instrument you indicated
above?
12-18 months
Formal Challenges throughout the ProcurementProcess

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According to the legal framework, who has legal standing to challenge the contract award?
Bidders
Organizations/Individuals with legitimate interests (i.e. neighbors)
Organizations that protect public goods (i.e. environment NGO)
Research – COVID-19 Recovery
In order to continue public procurement services and the implementation of contracts without interruption, has
the economy introduced (or already had put in place) any measures?
Full tender file digitized, but not on the cloud
Full contract management documents digitized, but not on thecloud
Different payment deadlines for SMEs
Mobile payment system
***
For more information on the above, please do not hesitate to contact the author Dr. Oliver Massmann under
omassmann@duanemorris.com. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC, Member to
the Supervisory Board of PetroVietnam Insurance JSC and the only foreign lawyer presenting in Vietnamese language to
members of the NATIONAL ASSEMBLY OF VIETNAM.

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