04 Contractor Selection Methods Under the 2023 Bidding Law

Wednesday, 08 November 2023 3:00 PM
How does the 2023 Bidding Law regulate the methods of contractor selection? If your company is curious about this, let's discover more about DauThau.info in the following article.
04 Contractor Selection Methods Under the 2023 Bidding Law
04 Contractor Selection Methods Under the 2023 Bidding Law

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1. Regulations on Contractor Selection Methods according to the 2023 Bidding Law

According to the 2023 Bidding Law, the following methods of contractor selection are used:

1.1 One-stage, One-envelope

Article 30 of the 2023 Bidding Law specifies the one-stage, one-envelope method as follows:
  • The one-stage one-envelope method is applied in the following cases::
    • Open bidding and limited bidding for service provision packages other than consulting services, procurement of goods, construction, mixed packages, except as prescribed in point b of clause 1 of Article 31 of the 2023 Bidding Law.
    • Competitive quotation for service provision packages other than consulting services, procurement of goods, construction, mixed packages including goods and construction.
    • Direct contracting for consulting service packages, non-consulting services, procurement of goods, construction, mixed packages.
    • Direct purchasing for goods procurement packages.
  • Contractors submit bid documents, proposals including technical and financial proposals as required by the bidding documents.
  • The bid opening is conducted once for all bid documents and proposals.

1.2 One-stage, Two-envelope

Article 31 of the 2023 Bidding Law stipulates the one-stage two-envelope method, specifically:
  • Cases applying the one-stage two-envelope method:
    • Open and limited bidding for consulting service packages.
    • Open and limited bidding for service provision packages other than consulting services, procurement of goods, construction, mixed packages requiring high technology as prescribed by the law on science and technology.
  • Contractors submit technical and financial proposals separately as required by the bidding documents.
  • The bid opening is conducted twice. Technical proposals are opened immediately after the bid closing. Contractors meeting the technical requirements will have their financial proposals opened for evaluation.
4 methods for selecting contractors
4 methods for selecting contractors according to the Bidding Law 2023

1.3 Two-stage, One-envelope

Article 32 of the 2023 Bidding Law specifically regulates the two-stage one-envelope method, as follows:

The two-stage one-envelope method is applied in cases of open and limited bidding for goods procurement, construction, mixed packages where specific technical requirements for the package are not yet determined at the time of bidding.

In the first stage, contractors submit technical proposals without a bid price as required by the bidding documents based on the basic design or technical specifications of the package. Contractors are allowed to propose alternative solutions to the requirements in the bidding documents but must offer them separately along with the main technical proposal as required by the bidding documents. Technical proposals are opened immediately after bid closing. Contractors whose technical proposals meet the requirements of the first phase bidding documents are invited to bid in the second bidding stage.
For contractor selection in the second stage, the process is as follows:
  • Contractors from the first stage shortlist are invited to clarify their technical proposals. The clarification includes the investor, bidding organizer asking contractors to adjust their first-stage technical proposals. Contractors are allowed to comment on the bidding documents.
  • Based on the clarified technical proposals with each contractor, the first-stage bidding documents are adjusted and supplemented regarding contractor instructions, evaluation standards, technical requirements, contract conditions, and other contents to form the second-stage bidding documents, including technical discrepancies of contractors that have been accepted, proposals in the alternative solutions of contractors that have been accepted.
  • Contractors submit bid documents including technical and financial proposals as required by the second-stage bidding documents, including the bid price and bid security based on the adjusted content of the first-stage technical proposal as stipulated in point a of this clause. The bid opening is conducted once for all bid documents.

1.4 Two-stage Two-envelope

Article 33 of the 2023 Bidding Law specifically regulates the two-stage two-envelope method, as follows:
  • Contractors on the list that meet the requirements of the first stage are invited to clarify their technical proposals. The clarification includes adjustments to the first-stage technical proposals at the request of the investor or the bid solicitor. Contractors can provide feedback on the bidding documents.
  • Based on the clarified technical proposals for each contractor, the first-stage bidding documents are adjusted and supplemented with instructions to contractors, evaluation criteria, technical requirements, contract conditions, and other contents to form the second-stage bidding documents, including accepted technical deviations and alternative solutions proposed by contractors.
  • contractors submit a bid including separate technical and financial proposals as per the requirements of the second-stage bidding documents, including the bid price and bid security. The financial proposals correspond to the main technical proposal of the contractor; if a contractor proposes an alternative technical solution, they must submit the financial proposal for this alternative solution. The bid opening is conducted twice. Technical proposals are opened immediately after the bid closing. contractors meeting the technical requirements will have their financial proposals opened for evaluation.

2. Scenarios on Contractor Selection Methods

Scenario 1:
  • Question: A construction package falls under the one-stage one-envelope contractor selection method. Only one contractor participates, and the bid price is higher than the package value. Is there a solution in this case?
  • Expert DauThau.info replied: Currently, this situation is being addressed as per Clause 8, Article 117 of Decree 63/2014/ND-CP, specifically:

"8. If the bid price of all contractors meeting the technical requirements and ranked in the list exceeds the approved package value, consider one of the following solutions:

a) Allow these contractors to re-offer their bid prices if the bidding package price includes all elements constituting the cost of implementing the bidding package;

b) Simultaneously allow re-bidding by the contractors and the bid solicitor to report to the investor for reviewing the package value and approved bidding documents, if necessary.

In the case of allowing re-bidding, clearly define the preparation and submission time for re-bid documents but not more than 10 days from the date the bid solicitor sends the request for re-bidding, as well as the opening of re-bid documents according to the procedure stipulated in Article 29 of this Decree. If it's necessary to adjust the package value in the approved contractor selection plan, the competent person is responsible for approving the adjustment before the opening of re-bid documents but no more than 10 days from receiving the adjustment request, ensuring it's before the deadline for submitting re-bid documents;

c) Allow negotiation with the first-ranked contractor on the price, ensuring the negotiated price does not exceed the lowest bid price after error correction and deviation adjustment, excluding any discount. If adjustment of the package price in the approved contractor selection plan is needed, the competent person must approve the adjustment within a maximum period of 10 days from receiving the adjustment request. If the negotiation is unsuccessful, invite the next-ranked contractor for negotiation. This method only applies to open bidding cases ”

However, because there is only one contractor submitting a bid, the element "the" contractors under the above conditions is not appropriate. This is a case where the current regulations do not specifically stipulate, hopefully the new decree Instructions for the Bidding Law 2023 will provide detailed instructions, ensuring "according to the principles of ensuring competition, fairness, transparency, and economic efficiency"


 

Situation 2:
  • Question: For a one-stage two-envelope bidding package. Only one contractor participates and is deemed to meet the technical requirements. Does the bid solicitor need to review and approve the list of contractors meeting the technical requirements before opening the financial package for evaluation?
  • Expert at DauThau.info answers:  Paragraph 3 of Article 32 of Circular No. 08/2023/TT-BKHĐT states:

“3. If there is only one contractor participating or only one contractor passing the technical evaluation, it is not necessary to determine the evaluated price (in the case of a bid package applying the evaluated price method), composite score (in the case of a bid package applying a combination of technical and price methods), no need to determine preferences, nor approve the ranking list of contractors.”

Scenario 3:
  • Question: For consulting service packages under the one-stage two-envelope method, can the bid solicitor request clarification of the Bid Document concerning personnel positions during the evaluation of the technical proposal?
  • DauThau.info expert replied: The bidding party can completely request clarification of personnel when the bid documents on personnel positions are unclear.
Scenario 4:
  • Question: With the point-scoring method for a construction package, one stage two envelopes. The bid solicitor evaluates that the contractor does not meet the requirements for construction equipment capacity, even though there has been a clarification letter regarding the equipment and the contractor has supplemented new equipment. The bid solicitor still evaluates it as not meeting the requirements as the construction equipment is inadequate and does not open the contractor’s financial proposal. Is this correct?
  • Expert at DauThau.info answers: If the bid document has construction equipment that does not meet the requirements (even after clarification), then not opening the contractor’s financial proposal is appropriate.
These are the four contractor selection methods according to the 2023 Bidding Law. Hopefully, these insights from DauThau.info will be helpful in your research process.

If you have questions about contractor selection methods or related bidding matter, please contact DauThau.info for support:

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