“Package contract” according to the provisions of the Bidding Law 2023

Monday, 16 October 2023 3:45 PM
How are package contracts regulated under the Bidding Law 2023? If you have the same questions, please refer to the article below from DauThau.info to get more information during the research process!
“Package contract” according to the provisions of the Bidding Law 2023
“Package contract” according to the provisions of the Bidding Law 2023
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What is a package deal?

Currently, the Bidding Law 2023 does not specifically explain the concept of Package Contract, but this concept is detailed in Point a, Clause 1, Article 62 of the Bidding Law 2013. Specifically:
A package contract is a contract with a fixed price throughout the implementation period for the entire content of work in the contract. Payment for a package contract is made multiple times during the implementation process or one time payment upon completion of the contract. The total amount to be paid by the contractor until the completion of contractual obligations is equal to the price stated in the contract;
To put it simply, a lump sum contract is a type of contract with a fixed price that cannot be adjusted during contract implementation.
 

Which bidding packages does the package contract apply to?

According to the provisions of Point a, Clause 1, Article 64 of the Bidding Law 2023, package contracts are applied to the following bidding packages:
  • Bidding packages where at the time of contractor selection, the scope of work, technical requirements, and duration of the bidding package are clearly defined, with little possibility of changes in volume, technical requirements, and conditions. unpredictable;
  • The bidding package cannot clearly determine the volume and unit price, but the parties participating in the contract can determine the ability to manage risks, manage arising changes or determine the properties and characteristics of the first product. out, including EPC contracts and turnkey contracts;
Thus, according to the above regulations, there are 02 types of bidding packages for which package contracts are applicable.
 

Things to note when implementing a package contract

Also according to the provisions of Article 64 of the Bidding Law 2023 (points b, c, d, clause 1), when signing a package contract, you need to pay attention to the following issues:
  • The bidding package price used as a basis for approving the winning bid includes contingency costs for risk factors of work volume and price slippage that may occur during contract implementation corresponding to risk management responsibilities. delivered to the contractor in the bidding package. The bid price must include all costs for risk factors of work volume and price escalation that may arise during contract implementation corresponding to the contractor's responsibilities in implementing the contract. ;
  • The contract price does not change throughout the contract implementation period with respect to the scope of work, technical requirements and terms specified in the contract, except in cases of force majeure and changes in the scope of work to be performed. leading to changes in contract prices;
  • Payment is made according to a percentage of the contract price or the price of the project, project item, and work volume corresponding to the payment period agreed upon by the parties in the contract. Payment is not required. Confirmation of detailed completed volume.

TOP 3 questions about package contracts commonly asked in bidding

During the customer care process, DauThau.info received a few questions about package contracts as follows:

Note: Currently, the Bidding Law 2023 does not have specific regulations on package contracts, so the answers below from DauThau.info are based on appropriate Circulars/Decrees according to each question.
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TOP 3 questions about package contracts commonly asked in bidding

1. If there is a workload with a package contract, are adjustments allowed?

DauThau.info answers: According to the provisions of Clause 3, Article 36 of Decree 50/2021/ND-CP, package contracts can only be adjusted for additional workloads outside the scope of work under the contract. signed (for construction contracts, equipment supply contracts are outside the scope of work that must be performed according to the design and requirements of bidding documents or request documents; for private contracts consulting is outside the consulting tasks to be performed) and the cases specified in Points b, c, d, Clause 2, Article 143 of Construction Law No. 50/2014/QH13.

According to the above regulations, when a workload arises with a package contract, adjustments are only allowed for additional workloads that are outside the scope of work under the signed contract. Normally, price and volume The quantity in a package contract is fixed and cannot be adjusted.

2. If a bidding package incurs additional volume and costs, is the contractor allowed to terminate the package contract?

DauThau.info answers: According to the provisions of Clause 1, Article 5 of Circular 07/2016/TT-BXD guiding the adjustment of construction contract prices with package contracts:

When a reasonable additional work volume arises outside the scope of the contract or when a reasonable additional work volume does not have a unit price in the contract, the parties to the contract shall agree on the unit price of this work before perform. The determination of the new unit price is based on the principle of agreement in the contract on unit prices for additional and arising work volumes outside the scope of the contract; The volume does not have a unit price in the contract. The new unit price is determined according to the Ministry of Construction's Circular guiding the establishment and management of construction investment costs and contractual agreements.

Thus, in case the adjustment to the package contract is not due to the contractor's fault, the contractor can request the relevant parties to agree on the change in the contract unit price before performing the work.

In case the parties cannot agree on the unit price for the additional work, the contractor has the right to refuse to perform this part of the work and will not be considered a breach of the contract.

3. If the workload in the package contract is not completed, how will the contractor be handled?

DauThau.info answers: With this question, there will be 02 cases:
  • Case 1: If there is an agreement between the two parties
If the contractor does not complete the entire workload but has the consent of the bidding party, it will be allowed to adjust the quantity and sign an adjustment appendix as prescribed in Clause 1, Article 5 of Circular 07/2016/ TT-MXD mentioned above.
  • Case 2: If the contractor refuses to perform
If the contractor fails to perform all the work due to refusal to do so, it will be classified as a breach of contract. And from there, the contractor will be affected in the bidding process for the following bidding packages because of incomplete contracts.

Thus, DauThau.info has shared with you some information about "Package Contract" according to the provisions of the Bidding Law 2023. In the following articles, DauThau.info will continue to update new content. according to the Bidding Law 2023 for contractors to refer to, please regularly follow the News section of DauThau.info to update useful articles!

During the research process, if you have any questions about the package contract or other bidding issues that need assistance, you can contact DauThau.info for support:

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