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As per Article 64 of the Bidding Law, one of the conditions for contract signing is that the selected bidder's bid documents remain valid. In practice, when a bidder violates the bidding regulations, they may not be entitled to a refund of the bidding guarantee, which usually occurs before the contract signing. Therefore, the Beneficiary (the inviting party / the investor) requesting the Guarantor to transfer the amount stated in the Bid Guarantee Letter usually takes place before the contract signing, that is, before the bid documents expire.
When participating in a wide-ranging bidding process, bidders must take measures to ensure their bid responsibility within the specified timeframe as required by the bidding invitation documents. Currently, the most common form of bid guarantee is through a guarantee letter from a bank or a legally recognized credit institution in Vietnam. In cases where the bidder provides bid guarantee in the form of a Bank Guarantee Letter (Guarantor), this letter is considered a "valuable document". Accordingly, during the validity period of the bidding guarantee, if the bidder violates the bidding regulations and is not entitled to a refund of the bidding guarantee, the Guarantor must immediately transfer to the inviting party (the Beneficiary) an amount of money not exceeding the total amount stated in the Bid Guarantee Letter, provided that the Guarantor receives a notice from the Beneficiary before the expiration date of the bidding guarantee.
In a wide-ranging construction bidding organized by Investor A, the bidding invitation documents stipulate that the minimum validity period of the bid documents is 90 days from the bid closing date, and bidders must submit a bid guarantee with a minimum validity period of 120 days from the bid closing date. The bid closing date is determined according to the Bidding Data Sheet as 9:00 AM on May 1, 2017, and the bid opening time is 9:30 AM on May 1, 2017.
By the time of the bid opening, the bid guarantee letter issued by the bank for bidder NT1 states "Bid guarantee effective from 8:00 am on May 1, 2017, until 9:30 am on August 28, 2017". The bid guarantee letters of other bidders, on the other hand, all state "Bid guarantee effective for 120 days from May 1, 2017". In terms of value and other valid conditions, how should the bid guarantee letters of these bidders be evaluated for this bidding process? Let's examine the issue with DauThau.INFO:
Regarding the way the validity is stated in the bid guarantee letter as "Bid guarantee effective for 120 days from May 1, 2017", this is a common and widely used practice. However, there are opinions that if it is stated this way, the bid guarantee letter is invalid because it does not accurately determine the exact time of the guarantee's effectiveness (9:00 am, 10:00 am, or 3:00 pm...). This understanding is quite mechanical and not accepted because once it is stated as "from May 1, 2017", it means that the guarantee is already effective from 12:00 am on May 1, 2017, and any liability-related matters to be fulfilled by the Guarantor on May 1, 2017, until the end of the validity period must be carried out.
Returning to the validity stated in the bid guarantee letter of bidder NT1, if we roughly calculate from May 1, 2017, to August 28, 2017, it is 120 days, which meets the requirements of the bidding invitation documents. However, because the bid guarantee letter states "Bid guarantee effective from 8:00 am on May 1, 2017, until 9:30 am on August 28, 2017", by August 27, 2017, only 119 days have passed, and it is not until 12:00 am on August 28, 2017, that it reaches 120 days. Therefore, if calculated correctly, this bid guarantee letter does not meet the 120-day requirement as stated in the bidding invitation documents, making it invalid for bidder NT1, and they will be disqualified. This situation becomes evident in the example where, at 2:00 pm on August 28, 2017, the inviting party/owner requests the Guarantor to pay the value stated in the bid guarantee letter due to the violation by bidder NT1 during the bidding process, but it cannot be fulfilled because the bid guarantee letter has already expired by 2:00 pm on August 28, 2017. This oversight is partly due to carelessness in preparing the bid documents, not checking the bid guarantee letter issued by the bank sufficiently, or not deeply understanding the issue. It also partly lies with the department requesting the bank to issue the guarantee (often the finance or accounting department), as they may not grasp the essence of the issue.
To avoid unfortunate mistakes when preparing bank guarantee letters, bidders need to pay attention to the following issues:
For Evaluation Teams/Inviting Parties, when evaluating and reviewing bid guarantee letters submitted with bid documents, be cautious and thoroughly understand the essence of the issue, avoiding subjective assumptions to ensure fair, competitive, transparent, and economically effective objectives.
The above is an important situation to note about the validity of the bid guarantee letter in the process of consulting for contractors that Bidding encounters. Sincerely thank our readers for always supporting DauThau.info throughout the past process. If you need support, please contact:
Author: Phượng Hồ Thị Hoa
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