Is the bid guarantee situation valid or invalid?

Thursday, 05 October 2023 4:59 PM
The bid guarantee is an extremely important document, however, many contractors still make some mistakes when preparing, causing controversy about the validity of the bid guarantee. The case we encountered below is the incorrect address of the bidding party. Let's analyze with the situation in the article below.
Is the bid guarantee situation valid or invalid?
Is the bid guarantee situation valid or invalid?

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

What is a bid guarantee?

Bid guarantee (also known as "Bid guarantee") is when a contractor or investor makes one of the measures of deposit, deposit or submits a letter of guarantee from a credit institution or bank branch. Foreign banks are established under Vietnamese law to ensure the bidding responsibilities of contractors and investors within a specified time according to the requirements of bidding documents and request documents.
For online bidding (most current bidding packages), Bid Guarantee is only allowed by letter of guarantee from a credit institution or bank, the guarantee must be scanned (scanned/photographed) and attached to send. to the national bidding system.

6 cases of invalid bid guarantees

The bid guarantee is invalid when it falls into one of the following 6 cases:
  • Has a lower value than required in the bidding notice;
  • The validity period is shorter than the requirements specified in the bidding documents;
  • The name of the beneficiary is not correct, the name of the beneficiary is the name of the Procuring Entity (please note that it is the Procuring Entity, not the Investor).
  • No valid signature;
  • Sign before the Procuring Entity releases the bidding documents;
  • There are conditions that are disadvantageous to the Investor and the Procuring Entity (including failure to fully meet the sample commitments).

The bid guarantee has the wrong address

The situation we were told by the contractor was that when providing the bid guarantee, due to negligence, the guarantee-issuing bank mistakenly typed the address as: Tan Phong Ward, Lao Cai city, Lai Chau province; while the exact address of the bidding party must be: Tan Phong Ward, Lai Chau City, Lai Chau Province. For that reason, the Procuring Entity disqualified the contractor for the reason that "recording the wrong address of the Procuring Entity in the bid guarantee will be a disadvantageous condition for the Procuring Entity, and the Procuring Entity has no basis to determine it. Whether the beneficiary belongs to the bidding package or not because the bid guarantee guarantees another unit of the same name in Lao Cai city. On the other hand, if this bid guarantee is accepted, later when the contractor refuses to negotiate draft or refuse to sign the contract, at which time the Procuring Entity wants to use this letter of guarantee, it will be considered invalid."

Analyzing the above situation, the author of the article believes that the bidding party has not really handled the situation satisfactorily, because:
  • The contractor's bid guarantee, although the address is wrong, still has the correct name of the beneficiary as the bidding party (there is no possibility of there being another beneficiary with the same name in Lao Cai province, because in the bid guarantee clearly state that the beneficiary is: Management Board of the administrative and political center of Lai Chau province), the address is not a condition that causes disadvantages to the bidding party. The bidding party needs to determine that the purpose of bidding is not to eliminate contractors, but to find the contractor that best meets the requirements of the bidding party and meets the objectives of the bidding, so the bidding party should The contractor can consider this as the contractor's negligence and allow the contractor to correct the bid guarantee to the correct address of the bidding party.
  • Analyzing further, according to the law, the beneficiary here is correct, the name constituting the beneficiary does not include the address of the beneficiary. In the case of a generic beneficiary name, it is possible that any locality has this name, so confusion can easily occur, but in this case there is absolutely no such factor.
bao lanh du thau
The bid guarantee has the wrong address of the bidding party
What is even more unfortunate here is that this contractor is the contractor offering the most competitive price compared to the remaining contractors. We also checked this contractor on the system through the VIP3 software package for Seeing that I have participated and won many bidding packages, it proves that my ability to actually participate is not "bad". However, through this article we also warn that contractors about to participate in bidding packages can easily be eliminated from the bidding if they are not careful in the bid guarantee preparation step. When receiving a guarantee from the bank, you need to read and review the 6 contents we listed above to avoid unfortunate errors.

Our above article analyzes a specific case of whether a bid guarantee is valid or invalid, and each party's stance on handling a bid guarantee with certain errors. Hopefully the article will be useful not only for contractors but also for the bidding party and the team of experts evaluating bid guarantees with an objective view, ensuring fairness, transparency and economic efficiency for a bid. always accompanies and brings a lot of useful information to interested contractors. If you need support, please contact:
 Tags: bid guarantee

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