WARNING! Do Not Arbitrarily Use Direct Contracting

Tuesday, 11 June 2024 10:52 PM
Over many years of serving clients in the public procurement sector, DauThau.info has received numerous questions related to direct contracting. This indicates that many packages are being conducted through direct contracting; however, this method should not be used arbitrarily. Let's analyze this warning with DauThau.info's article below.
Do Not Arbitrarily Use Direct Contracting
Do Not Arbitrarily Use Direct Contracting

Nhấn VÀO ĐÂY để chuyển bài viết sang bản tin tiếng Việt

When is Direct Contracting Permissible?

Direct contracting is applied as stipulated in Clause 1, Article 23 of the 2023 Bidding Law, specifically:

a) Urgent packages that need to be implemented to protect national sovereignty and security; packages that need to be executed immediately to address or promptly handle the consequences caused by natural disasters, fires, unexpected accidents, incidents, disasters, or other force majeure events;

b) Packages providing consulting services, non-consulting services, goods, and construction that need to be executed immediately to avoid harm to the lives and property of the local community or to prevent serious impacts on adjacent works;

c) Packages providing consulting services, non-consulting services, medicines, chemicals, testing materials, medical equipment, components, accessories, vehicles, and construction that need to be executed immediately to serve the work of disease prevention and control, or to maintain the operation of medical examination and treatment facilities in urgent cases, avoiding harm to people's lives and health; packages for purchasing medicines, chemicals, testing materials, medical equipment, components, and accessories to provide emergency treatment for patients in critical condition according to the Law on Medical Examination and Treatment in cases where the medical examination and treatment facility does not have sufficient medicines, chemicals, testing materials, medical equipment, components, and accessories; packages for purchasing medicines and medical equipment that are produced by only one manufacturer in the market;

d) Packages that need to be implemented to protect state secrets;

đ) Packages providing consulting services that must be purchased from a previously engaged bidder to ensure technological compatibility and intellectual property rights that cannot be purchased from another bidder; packages for procuring goods and non-consulting services that must be purchased from a previously engaged bidder or from the manufacturer or its agent to ensure technological compatibility and intellectual property rights with existing equipment, machinery, software, services, or due to warranty conditions that cannot be met by another bidder or manufacturer;

e) Packages with the nature of research, experimentation, purchase of intellectual property rights, purchase of broadcasting program copyrights; packages for transporting national reserve goods for relief and aid in cases where immediate delivery is required;

g) Packages providing consulting services to prepare feasibility study reports, and construction designs assigned to the author of the winning architectural design when the author meets the legal capacity requirements according to construction law; packages for constructing, restoring monuments, bas-reliefs, large murals, and artworks associated with copyright from the creation to the construction phase; packages providing consulting services for construction planning assigned to the author of the winning planning ideas or design project through a competition;

h) Packages for consulting, and executing the relocation of technical infrastructure works to serve site clearance; packages for consulting, and detecting unexploded ordnance to prepare the construction site;

i) Packages that can only be executed by one bidder in the market due to technological solution requirements;

k) Packages within national important projects where direct contracting is applied according to the National Assembly's resolution when deciding on the investment policy of the project;

l) Packages for renting storage for temporarily seized goods; packages for renting transportation and loading/unloading of temporarily seized goods at seaports, and centralized cargo inspection locations in cases where only one service provider is available in the port; packages for importing sports weapons for training and competition at clubs, schools, and sports training centers annually;

m) Packages within procurement estimates with a package value ranging from over 50 million VND to 100 million VND; packages within state-owned enterprise investment projects, enterprises with 100% state capital, and public investment projects, including: consulting service packages with a package value not exceeding 500 million VND, non-consulting, goods, construction, and mixed packages with a package value not exceeding 1 billion VND. 

Most of the packages we are asked about fall under group "m)" above, which are packages within the direct contracting threshold without any special reasons.

Why Shouldn't Direct Contracting Be Used Arbitrarily?

Today's article by DauThau.Info focuses on packages executed through direct contracting according to the thresholds set by the 2023 Bidding Law. Other packages with specific, special characteristics that require direct contracting are not covered in this scope. Packages within the direct contracting threshold are divided into two groups as follows:
  • Procurement estimates (regular procurement): Package value from 50 million VND to 100 million VND;
  • Development investment projects:
    • Consulting packages: Not exceeding 500 million VND
    • Non-consulting, goods, construction, and mixed packages: Not exceeding 1 billion VND
Why Shouldn't Direct Contracting Be Used Arbitrarily? If we look closely at the 2023 Bidding Law, Clause 6, Article 23 clearly states:

6. If a package stipulated in Clause 1 of this Article meets the conditions for direct contracting stipulated in Clause 3 of this Article but can still apply other bidder selection methods specified in Articles 21, 22, 24, and 25 of this Law, it is encouraged for the competent person to decide to apply other methods to select the bidder.

(Note: Clause 1 refers to cases for direct contracting, Clause 3 refers to conditions for direct contracting)
Additionally, Clause 6, Article 16 of the 2023 Bidding Law also specifies:
l) Dividing projects or procurement estimates into smaller packages to facilitate direct contracting; dividing projects or procurement estimates to limit bidder participation.
Currently, in bidding, it is very challenging to find reasons to execute direct contracting instead of applying other bidder selection methods because packages that apply direct contracting within the threshold do not have any special or distinctive characteristics. The timeline cannot be significantly shortened compared to other bidding methods. Particularly, online bidding through the national bidding network system is now extremely fast and convenient. If direct contracting is applied, it almost goes through the same basic steps as competitive offering or open bidding, with similar paperwork procedures. Therefore, when inspection agencies review compliance with the law in public procurement at an entity, it will be very difficult to justify or provide legitimate reasons for not choosing other more convenient, safe, transparent, public, and economically effective bidding methods that save state resources.
Thus, DauThau.info warns against arbitrarily using direct contracting as it may lead to future consequences.

If Direct Contracting is Used, What is the Process?

Direct contracting and the steps for direct contracting, as well as the process for direct contracting, are detailed in the article below:

Direct Contracting Process

Direct contracting and simplified direct contracting

Simplified direct contracting can be applied to the following packages:

a) Urgent packages that need to be implemented to protect national sovereignty and security; packages that need to be executed immediately to address or promptly handle the consequences caused by natural disasters, fires, unexpected accidents, incidents, disasters, or other force majeure events;

b) Packages providing consulting services, non-consulting services, goods, and construction that need to be executed immediately to avoid harm to the lives and property of the local community or to prevent serious impacts on adjacent works;

c) Packages providing consulting services, non-consulting services, medicines, chemicals, testing materials, medical equipment, components, accessories, vehicles, and construction that need to be executed immediately to serve the work of disease prevention and control, or to maintain the operation of medical examination and treatment facilities in urgent cases, avoiding harm to people's lives and health; packages for purchasing medicines, chemicals, testing materials, medical equipment, components, and accessories to provide emergency treatment for patients in critical condition according to the Law on Medical Examination and Treatment in cases where the medical examination and treatment facility does not have sufficient medicines, chemicals, testing materials, medical equipment, components, and accessories; packages for purchasing medicines and medical equipment that are produced by only one manufacturer in the market;

or

or packages within the direct contracting threshold decided by the investor.

or packages within the direct contracting threshold decided by the investor.

The above article warns against the arbitrary use of direct contracting, hoping it will be useful for interested bidders and inviting parties. For support in providing software solutions related to the bidding sector, please contact:

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