Is a three-year or longer financial report required to participate in bidding?

Monday, 02 October 2023 2:46 PM
"Must a business have independent financial accounting and have been operating for three years or more, meaning it must have a financial report for three years or more, to be eligible to participate in bidding?". This is a customer's query sent via email to DauThau.info. Let's join DauThau.info to answer this question!
Financial statements of 3 years or more are eligible to participate in bidding, is that correct
Financial statements of 3 years or more are eligible to participate in bidding, is that correct

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Eligibility of the Contractor

As per clause 1 of Article 5 of the Bidding Law 2013, the eligibility of a contractor is defined as follows:

1 . A contractor or investor is considered legally eligible if they meet the following conditions:
  • Registered for establishment, operating as authorized by the competent authorities of the country where the contractor or investor is operating
  • Independent financial accounting
  • Not in the process of dissolution; not declared bankrupt or insolvent according to the law
  • Registered on the national bidding network system
  • Ensure competition in bidding as specified in Article 6 of the Bidding Law 2013
  • Not in the period of being banned from bidding
  • Included in the shortlist for cases where a shortlist has been selected
Foreign contractors must form a partnership with local contractors or use local subcontractors when bidding internationally in Vietnam, except when local contractors are not capable of participating in any part of the package.

2. An individual contractor or investor is considered legally eligible if they meet the following conditions:
  • Full civil act capacity as per the laws of the country of which the individual is a citizen
  • Professional certificates appropriate as per the law
  • Legally registered activities as per the law
  • Not currently being prosecuted criminally
  • Not in the period of being banned from bidding.
3. Contractors and investors who are eligible as per clauses 1 and 2 of Article 5 of the Bidding Law 2013 (detailed in sections 1 and 2 above) can participate in bidding either independently or in a partnership; in case of a partnership, there must be an agreement among the members, specifying the responsibilities of the partnership leader and the joint and individual responsibilities of each member.
tu cach hop le cua nha thau duoc quy dinh khoan 1 dieu 5 luat dau thau 2013
The eligibility of contractors is specified in Clause 1, Article 5 of the 2013 Bidding Law

Is a three-year or longer financial report required to participate in bidding?

Regarding the customer's query about whether "a business must have independent financial accounting and must have been operating for three years or more, meaning it must have a financial report for three years or more, to participate in bidding," DauThau.info responds as follows:

According to Mr. Son Vu, a bidding expert at DauThau.info: "If a business meets the conditions specified regarding the eligibility of contractors in clause 1 of Article 5, Bidding Law 2013, it is allowed to participate in bidding. Additionally, one of the conditions for a contractor to be considered and proposed for awarding the bid is having the capacity, experience, and meeting the basic requirements of the package."

Therefore, the project owner will base on the specific nature and conditions of each package to specify the required number of years in the bidding documents, financial capacity, years of operation, and years of experience of the contractor accordingly.

Moreover, according to clause 1 of Article 15 of Decree 63/2014/NĐ-CP of the government, the assessment of the bid documents (including information about average revenue, financial status, etc.) is based on the bid evaluation criteria and other requirements in the bidding documents, based on the submitted bid documents, explanatory documents, and bid clarifications from the contractor to ensure the selection of a capable and experienced contractor with a feasible solution to execute the package. Therefore, the bid document evaluation must comply with the above regulations and is the responsibility of the expert group and the bid solicitor.

Thus, for the business case mentioned, if the bidding documents of the project owner require submission of financial reports for three years or more, then the contractor must meet this condition, as the bidding law does not mandate it. For instance, a newly established contractor who meets the minimum revenue requirement in the latest annual financial report is still considered eligible.”

Above is the response from the expert at DauThau.info to the query: "Is a Financial Report of Three Years or More a Requirement to Participate in Bidding?". We hope this answer helps you understand more about this case.

If you have questions about bidding that need assistance, please contact DauThau.info immediately:
 Tags: bidding

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