What is a tender? Information to know when participating in bidding

Bidding is a part of procurement activities of enterprises, between enterprises and state agencies. This is a form of civilized competition in the market economy, a special transaction method for large-scale transactions that require efficiency and transparency. As a result, all professional enterprises, whether Vietnamese or foreign, regardless of field or size, will not ignore bidding as long as they have sufficient capacity. So, what exactly is bidding? What information is required to participate in the bidding? Follow the article below from DauThau.info to learn about the fundamental concepts of bidding, why bidding is a popular business form in Vietnam, and to analyze what business enterprises should participate in and how enterprises can participate in bidding.

What is a tender? Information to know when participating in bidding

What is a tender? Information to know when participating in bidding

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What is a Bidding?

According to the Law on Bidding (No. 43/2013/QH13) 2013: Bidding is the process of selecting a contractor to sign and perform a contract for the provision of consulting services, non-advisory services, procurement of goods, build; select investors to sign and perform contracts on investment projects in the form of public-private partnerships, investment projects using land on the basis of ensuring competition, fairness, transparency, and economy.
In a nutshell, bidding is the process by which the procuring entity selects a contractor (or investor) who meets its specifications.
If the contractor wins that bidding package, the bid solicitor will notify him of the winning result after the bidding process. What is the winning bid? The winning bid is the contractor chosen by the bid solicitor to sign the contract.

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Why is bidding required?

Bidding is conducted by the bid solicitor so that contractors (or investors) can compete with one another. The goal is to find the least expensive contractor (or investor) who meets their technical and quality requirements. As a result, bidding is a civilized business form in a developed market economy, providing significant benefits to investors in particular and the national economy as a whole.

For bidding using the state budget, the bidding will be required to comply with the Law on Bidding (No. 43/2013/QH13) 2013.

For private bidding, which is not regulated by the bidding law, the bid solicitor still has the right to choose to apply the bidding law (or not, depending on the needs of the bid solicitor). Within the scope of this article, we will focus on introducing state procurement (public procurement). If you are interested in private procurement, please learn more here: https://dauthau.net/en/about/tim-hieu-ve-dau-thau.html

Thus, from the standpoint of the contractor, bidding is the only way for contractors to participate in the state procurement market - a vast and appealing market.

Because bidding generates competition, this vast market is also highly competitive; however, businesses cannot afford to ignore it because it is the primary business method of large corporations. This market will always attract businesses due to its abundant capital and large scale.

What is tender offer?

Bidding is a way in which bidders submit their bids or personnel capacity to the procuring entity in order to demonstrate their capacity and competitiveness for a certain bidding package.

What is winning bid?

Winning bid is the result of contractor selection after bid opening, this is another way of saying when participating contractors are selected to execute the bidding package.

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What is Bidding?

In a simple way, bidding is when the contractor stops participating in the bidding package and quits halfway while the bidding package is ongoing. This phenomenon often occurs in cases such as changes in the price of raw materials or other costs suddenly causing the contractor to be unable to meet the requirements.

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Is tendering only for the state (public procurement)?

Due to the nature of Vietnam's business environment, which has only recently opened to the private sector, bidding in Vietnam's tacit understanding includes the state (the bid solicitor is mainly a state-owned enterprise) and state agencies (relying on state funds). This market is known as the public procurement market.

In fact, the form of the invitation to bid is not limited to the public procurement market. Large private enterprises (e.g., Lotte, Vingroup...) seeking partners must also conduct bidding procedures. Even internationally, international bidding methods are similar to those used in Vietnam; the procedures are simpler, and the system is more modern (e.g., 100% online bidding, no "lobbying" nor paying a commission to the owner if you win the bid).

You just want to participate in bidding for private projects?

Private enterprises purchasing professionally through bidding is becoming increasingly popular in Vietnam. If your company only wishes to participate in the private procurement market and does not wish to participate in public procurement, or if you are a private company seeking bids for a project, visit: http://dauthau.net - The first private auction network in Vietnam - find out more!

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What is public procurement?

The procurement of goods or services by public institutions is known as public procurement (also known as government procurement). Government procurement accounts for 12% of the global GDP in 2018, representing a significant portion of the global economy. [6] .

In Vietnam, public procurement is governed by the Law on Procurement (No. 43/2013/QH13) of 2013 and the Law on Management and Use of Public Property 2017. The vast majority of public procurement activities will be carried out through the bidding process and in accordance with the Law on Procurement. Within the framework and scope of activities that DauThau.INFO performs, all data that DauThau.INFO software is analyzing is from the Vietnamese government's public procurement website.
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Public Procurement Bidding

Should you participate in state procurement/public procurement?

Bidding, as discussed above, is a civilized business form in a developed market economy. Bidding in Vietnam remains negative because the information is not transparent enough and most bids are solicited from state-owned enterprises. This is due to the historical situation (we have only been open for 30 years, the same number of years as private businesses) and the fact that change takes time. And things are changing quickly, as the number of 100% state-owned enterprises in Vietnam fell from more than 12,000 in 2001 to 5,655 in October 2016, with only 718 remaining in October 2016. [1] . According to the Vietnamese government's plan, Vietnam will only have 103 enterprises with 100% state capital by 2020, primarily in defense, publishing, irrigation, public services, and a few corporations. The major economic players are primarily natural monopolies such as Oil and Gas, Electricity, and Viettel. [2] [3] .

In the future, the business environment in Vietnam will become more and more perfect, also the Vietnamese market economy will develop. Because of the implementation of online bidding and increasingly stringent bidding regulations, information transparency is managed and thoroughly analyzed through bid information analysis software [4]. The state activities will become more transparent and will gravitate toward a better direction
Although the private sector in Vietnam is still young, it is growing rapidly [ 5 ] As more large enterprises emerge, their ability to compete in the public procurement market in a transparent and equal manner through bidding will become more popular and less reliant on the beg-give relationship. This is an unavoidable trend in a market economy. Moreover, in a developed market economy, if your company cannot participate in the bidding, it is not professional enough, because all professional enterprises, whether Vietnamese or foreign, regardless of field or size, cannot ignore the public procurement market if there is sufficient capacity.

How can enterprises participate in state bidding (as contractors) and catch up with these trends?

Within the scope of this article, we will talk about bidding applied under the Law on Bidding (No. 43/2013/QH13) 2013 . Therefore, bidders who want to participate in this dramatic playground should first read the Law on Bidding (No. 43/2013/QH13) 2013 to understand the order and legal provisions on bidding.

Depending on the bidding package, the bid solicitor will specify criteria for contractor capacity and other requirements related to the ability to provide consulting services, non-consulting services, procurement of goods, and construction and installation. As a result, enterprises (contractors) must build capacity, experience, and competitiveness before bidding. To increase capacity, your company should start with small packages and work its way up to larger ones. Furthermore, joint ventures can be formed to combine with parties with greater capacity than themselves in order to increase the capacity of their businesses.
Contractors must improve their access to and analysis of bidding information in order to participate in bidding and achieve the goal of winning the bid. To maximize the initiative in finding bidding opportunities, use bidding software such as DauThau.info to automate the search and hunt for bid information, and continue to Access bid information faster, more accurately, and at a lower cost!
Enterprises must self-improve management aspects, improve management staff capacity in participating in bidding and implementing winning bidding packages, and apply information technology to all stages from Estimating to design, production/construction, administration, supervision, and customer care (eg using CRM, ERP software)... to improve efficiency at all stages, which helps to promote economic efficiency, allowing bid prices to be kept low while still achieving high profits.
Finally, let's try to compete with a few bidding packages to practice gradually, starting with small packages within your company's capacity and progressively implementing larger packages through a joint venture with other companies, and contractors, and finally take the initiative to step out into the big playing field to execute large bidding packages.

A guide to participating in public procurement for businesses just starting out in the public procurement market

  1. Full text of General Secretary Nguyen Phu Trong's opening speech of the 5th Central Conference
  2. Will only keep 100% State capital in 103 enterprises
  3. By 2020, there may be only three state-owned corporations left
  4. Launching the software to provide proactive bid information DauThau.info
  5. Mr. Truong Gia Binh: Young Vietnamese private enterprise but with the spirit of Saint Giong
  6. Wikipedia: Government procurement
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