6 tricks to circumvent the law in bidding

Monday, 13 November 2023 3:05 PM
Throughout history, in any field of society, there have always been tricks to circumvent the law for profit, and bidding is no exception. These increasingly sophisticated bidding circumvention tricks are executed in many ways. Let’s analyze them with DauThau.info in this article!
6 tricks to circumvent the law in bidding
6 tricks to circumvent the law in bidding
Nhấn VÀO ĐÂY để chuyển bài viết sang bản tin tiếng Việt
The Bidding Law of 2013 or the upcoming 2023 Bidding Law, being technically and legally stringent, is difficult to circumvent. However, this does not stop many investors, bid solicitors, or contractors from finding ways to "circumvent the law" to create their own advantages for personal gain.

6 Common Profit-Driven Tricks

First, tear apart projects to apply direct contract bidding. Despite regulations against this, many entities still split projects or procurement budgets into smaller bidding packages for direct contracting bids, which is prohibited in bidding: "l) Splitting a project or procurement budget into bid packages for the purpose of direct contracting bids; dividing projects or procurement budgets to limit the participation of contractors." (clause 6, Article 16 of the 2023 Bidding Law). Direct contracting bidding is a useful tool in some cases, but not all. The Bidding Law itself clearly states that if other forms of contractor selection can be applied, they should be preferred:
6. If the bid package specified in clause 1 of this Article meets the conditions for direct contracting bidding as specified in clause 3 of this Article but other forms of contractor selection specified in Articles 21, 22, 24, and 25 of this Law can still be applied, it is encouraged to apply a different form to select the contractor.
Second, embedding clauses in the bidding documents to "plant insiders, block outsiders." This is a common form applied by uninformed, unscrupulous investors and bid solicitor. In creating bidding documents, one of the principles that parties must follow is "Bidding documents must not contain any conditions that limit the participation of contractors or create an advantage for one or a few contractors, leading to unfair competition." This manipulation turns open bidding into limited bidding, or even as direct contracting, as the bidding package has been prepared in advance for a familiar contractor.
Third, bid rigging. This is also a relatively common form carried out through tactics such as decoys. Arrangements are made for the decoy to win the bid, while capable contractors are intentionally "hidden" or bid high to pave the way for the decoy to win. Many new businesses shared with DauThau.info that they perceive bidding as just a formality, as the packages are pre-arranged, so participating only adds frustration for the investor, and may even create a bad impression in case of future relationships.

Fourth, systematic and organized tactics from the project/procurement budget approval stage. Parties collude to inflate the estimated cost and then use bid rigging to ensure the pre-arranged contractor wins. Many criminal cases have recently exposed the bitter truth behind large bids, especially in the healthcare sector.


Fifth, corruption in bidding. This goes beyond mere "petty corruption" in bidding to become systemic and precedent-setting. Almost all contractors engaging in bidding are resigned to the fact that even with open competitive bidding, a certain "grease" amount must be factored in to "sweeten the deal" for the investor if the contract is won. This is the most troubling aspect for contractors and also distorts the bidding process to some extent.

Sixth, a recently common form is canceling bids when the intended contractor is not selected, using an innocent guise allowed by the Bidding Law, often with minor adjustments in the scope of work in the bidding documents. Many investors let the bid fall silent after opening to see unfamiliar contractors with competitive bids, then proceed to cancel the bid and choose an appropriate time to rebid. Many contractors, disheartened, abandon the pursuit or miss the information when these packages are rebid.

Prohibited Acts According to the 2023 Bidding Law

In today's article, DauThau.info would like to highlight some prohibited acts in the 2023 Bidding Law for parties to be aware of when conducting bidding on the National Bidding System:

Article 16. Acts prohibited in bidding activities
1. Giving, receiving, or brokering bribes.
2. Abusing positions and powers to illegally influence or intervene in bidding activities in any form.
3. Bid rigging, including the following acts:
a) Arranging, agreeing, or forcing one or more parties to prepare a bid document or withdraw a bid to ensure one party wins;
b) Arranging, agreeing to refuse to supply goods or services, not signing subcontracting contracts, or other forms of agreement to limit competition for one party to win;
c) Contractors or investors with the capacity and experience who have bid and meet the requirements of the bidding documents but intentionally fail to provide documents to prove capacity and experience when requested by the bid solicitor for bid document clarification or when asked for document verification, to facilitate one party winning.
4. Fraud, including the following acts:
a) Forging or distorting information, documents, materials in bidding;
b) Intentionally providing dishonest, biased information, documents in expressions of interest, prequalification documents, investment project registration documents, bid documents, proposals to distort the contractor, investor selection results.
5. Obstruction, including the following acts:
a) Destroying, deceiving, altering, concealing evidence, or reporting false facts; threatening or suggesting to any party to prevent the clarification of acts of giving, receiving, brokering bribes, fraud, or collusion with competent authorities for supervision, inspection, audit;
b) Obstructing the competent person, investor, bid solicitor, contractor, investor in the contractor, investor selection process;
c) Obstructing competent authorities in supervising, inspecting, auditing bidding activities;
d) Deliberately complaining, denouncing, or proposing false facts to obstruct bidding activities;
d) Committing violations of cybersecurity laws to intervene, obstruct online bidding.
6. Failure to ensure fairness and transparency includes the following acts:
a) Participating in bidding as a contractor, investor for a bid package, business investment project where one is the bid solicitor, investor, or performing the duties of the bid solicitor, investor contrary to the regulations of this Law;
b) Participating in the preparation, and simultaneously in the evaluation of expressions of interest, prequalification documents, bidding documents, request documents for the same bid package, business investment project;
c)  Participating in the evaluation of bid documents, proposals, and simultaneously in the evaluation of contractor, investor selection results for the same bid package, business investment project;
d) An individual from the bid solicitor, investor directly participating in the contractor, investor selection process or participating in the expert group, group evaluating contractor, investor selection results, or being the competent person, head of the investor, bid solicitor for bid packages, business investment projects where a family member as defined by the Enterprise Law is named in the bid or is the legal representative of the bidding contractor, investor;
d) Contractors bidding for procurement packages, construction, non-consultancy services provided by the contractor for consultancy services: preparation, review, evaluation of estimates, technical designs, construction drawing designs, overall technical designs (FEED design); preparation, evaluation of prequalification documents, bidding documents; evaluation of prequalification documents, bid documents; goods verification; evaluation of contractor selection results; contract supervision;
e) Bidding in one's name for bid packages under a project, business investment project where the investor, bid solicitor is an agency, organization where one has worked and held a leadership or management position within 12 months from the date of leaving the agency, organization;
g) Consulting supervisors simultaneously performing consulting verification for the bid package under their supervision;
h) Applying contractor, investor selection forms other than open bidding when conditions are not met as stipulated in this Law;
i) Specifying specific requirements for brands, origins of goods in bidding documents for goods procurement packages, construction, or mixed packages when applying open bidding, restricted bidding, competitive offers, except as stipulated in point e, clause 3 of Article 10, clause 2 of Article 44, and clause 1 of Article 56 of this Law;
k) Stating conditions in the bidding documents to limit the participation of contractors, investors, or to create an advantage for one or a few contractors, investors, causing unfair competition, violating the regulations in clause 3 of Article 44 and clause 2 of Article 48 of this Law;
l) Dividing projects, procurement budgets into bid packages for the purpose of direct contracting bids; dividing projects, procurement budgets to limit the participation of contractors.
7. Disclosing documents and information about the contractor, investor selection process, except in cases where information is provided as stipulated in point b of clause 8 and point g of clause 9 of Article 77, clause 11 of Article 78, point h of clause 1 of Article 79, clause 4 of Article 80, clause 4 of Article 81, clause 2 of Article 82, and point b of clause 4 of Article 93 of this Law, including:
a) Content of expressions of interest, prequalification documents, bidding documents, request documents before the issuance time as regulated;
b) Content of expressions of interest, prequalification documents, investment project registration documents, bid documents, proposals; content of requests for clarification of expressions of interest, prequalification documents, investment project registration documents, bid documents, proposals from the bid solicitor and responses from contractors, investors during the evaluation of expressions of interest, prequalification documents, investment project registration documents, bid documents, proposals; reports of the bid solicitor, expert team reports, evaluation reports, consultant contractor reports, relevant specialized agency reports in the contractor, investor selection process; meeting minutes, notes of bid evaluation meetings, comments and evaluations for each expression of interest, prequalification document, investment project registration document, bid document, proposal before public disclosure as regulated;
c) Results of contractor, investor selection before public disclosure as regulated;
d) Other documents in the contractor, investor selection process identified as containing state secrets as regulated by law.
8. Transferring bids in the following cases:
a) The contractor transfers to another contractor a part of the work package beyond the maximum value for subcontractors and the volume of work for special subcontractors stated in the contract;
b) The contractor transfers to another contractor a part of the work package within the maximum value of work for subcontractors stated in the contract but outside the scope of work for subcontractors proposed in the bid document, proposal without the approval of the investor, supervising consultant;
c) The investor, supervising consultant approves the contractor's transfer of work specified in point a of this clause;
d) The investor, supervising consultant approves the contractor's transfer of work specified in point b of this clause that exceeds the maximum value of work for subcontractors stated in the contract.
9. Organizing contractor selection when the source of capital has not been determined as regulated in clause 3 of Article 39 of this Law.

Prohibited acts according to the Bidding Law 2023
Prohibited behavior in bidding
Some prohibited acts are specified in Circular No. 08/2023/TT-BKHĐT:

1. For all bidding packages:
a) Stipulating excessive requirements for key personnel and main construction equipment, main equipment necessary to execute the bid package;
b) Stipulating that contractors must have confirmed participation in the pre-bidding conference or require proof of participation in the pre-bidding conference;
c) Stipulating contractor capacity and experience higher than the requirements of the bid package;
d) Stipulating similar contracts as contracts executed in a specific area or similar projects of a specific entity or must be signed with a state agency;
d) Stipulating that personnel executing the bid package must be covered by social insurance, must be personnel under employment contracts with the contractor; requirements for main construction equipment, essential equipment for the bid package must be owned by the contractor and not rented;
e) Stipulating criteria not required by specialized laws, such as professional licenses, partnership confirmations, and requirements for certificates, certifications not regulated by specialized laws (Example: bid package for document processing requires personnel to be archivists or chief archivists, meaning personnel must be civil servants, then this stipulation in the E-BD is considered a violation of clause 2 of Article 12 of Decree No. 63/2014/NĐ-CP).
2. In addition to the regulations in clause 1 of this Appendix, for goods procurement packages, additional regulations include:
a) When establishing technical requirements, setting requirements that only a specific product of a particular manufacturer meets while there are many manufacturers in the market that can provide goods for the bid package;
b) Requiring a sales license from the manufacturer or a partnership certification or other equivalent documents for common, simple goods;
c) Requiring specific brands, origins of goods, including naming countries, groups of countries, territories leading to discrimination;
d) Requiring sample goods for bid packages not under the regulations in clause 2 of Article 27 of this Circular.
d) Requiring technical support commitment issued by the manufacturer and must be stamped by the manufacturer, importer, distributor;
e) Requiring key personnel for the part of the work providing goods;
g) Requiring ISO certification for contractors who are not manufacturers;
h) Requiring key equipment to execute the bid package.
3. In addition to the regulations in clause 1 of this Appendix, for construction packages, additional regulations include:
a) Requiring contractors to confirm on-site surveys or require proof of on-site surveys;
b) Requiring contractors to commit or sign principle contracts for specific waste disposal sites, specific waste disposal distances, specific material mines, requirements for concrete mixing station distances... within a specific region or distance that only one or a few contractors meet;
c) Requiring contractors to specify the location, route, locality that vehicles transporting materials, goods for the project pass through in the E-HSDT;
d) Requiring contractors to have cash or savings at financial institutions or account balances or similar financial resource requirements;
d) Requiring key personnel for positions not required by construction laws or for common technical positions, technical workers, general laborers;
e) E-HSMT issued on the System lacks drawings or drawings are incomplete, not enough basis to prepare E-HSDT;
g) Naming specific subcontractors that the main contractor must use.

The above article of DauThau.info outlines 6 tricks to circumvent the law in bidding that parties often use. In case you have questions or answers, please contact DauThau.info via the following channels:

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