TOP 20 questions related to bid security that you need to know (Part 1)

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Question 1: When extending the validity period of the bid after the bid closing time, is it also necessary to extend the validity period of the bid guarantee?

Answer: Based on Clause 5, Article 14 of the 2023 Bidding Law regarding bid guarantees, it is stipulated as follows: 

“The validity period of the bid guarantee specified in the tender documents is equal to the validity period of the bid plus 30 days.”

In the case of extending the validity period of the bid after the bid closing time, the bidder or investor must correspondingly extend the validity period of the bid guarantee (see more details here).

*** Note: In this case, the bidder or investor must correspondingly extend the validity period of the bid guarantee and cannot change the content of the submitted bid.

If the bidder or investor refuses the extension, the bid will become invalid and disqualified. The procuring entity must return or release the bid security to the bidder or investor within 14 days from the date the procuring entity receives the written refusal to extend the deadline.

Question 2: What is the required bid security amount in the tender documents?

Answer: Based on Clause 4, Article 14 of the 2023 Bidding Law, the specific regulations regarding bid security in the tender documents are as follows:

“4. Based on the scale and nature of each project, business investment project, and specific tender package, the bid security level in the tender documents is stipulated as follows:

a) From 1% to 1.5% of the tender package price for construction and mixed tender packages with a value not exceeding VND 20 billion, and for procurement packages of goods and non-consulting services with a value not exceeding VND 10 billion;

b) From 1.5% to 3% of the tender package price for tender packages not falling under the case specified in point a of this clause;

c) From 0.5% to 1.5% of the total investment capital of the business investment project for investor selection.”

Therefore, based on the scale and nature of the For each project, business investment project, and specific bidding package, the bid security level in the tender documents is stipulated as follows:

• From 1% to 1.5% of the bid package value applies to construction and mixed packages with a bid package value not exceeding VND 20 billion, and non-consulting goods and services procurement packages with a bid package value not exceeding VND 10 billion;

• From 1.5% to 3% of the bid package value applies to packages not falling under the cases specified in item (i);

• From 0.5% to 1.5% of the total investment capital of the business investment project applies to the selection of investors.

Question 3: If a two-stage bidding method is applied, in which stage must the bidder provide bid security?

Answer: According to Clause 3, Article 14 of the 2023 Bidding Law, it is specifically stipulated as follows:

“Bids and investors shall provide bid security before the bid closing time as stipulated in the bidding documents; in the case of applying a two-stage bidding method, bidders and investors must provide bid security in the second stage.”

Therefore, in the case of applying a two-stage bidding method, the bidder must provide bid security in the second stage.

Question 4: Does bid security apply to mixed tenders?

Answer: According to point a, clause 2, Article 14 of the 2023 Law on Bidding (Regarding bid security), it is stipulated as follows:

“a) Open bidding, limited bidding, competitive bidding for tenders for non-consulting services, goods procurement, construction and mixed tenders;”

Therefore, bid security does apply to mixed tenders.

Question 5: What is the bid security amount in the tender documents for non-consulting services tenders with a value under VND 10 billion?

Answer: According to point a, clause 4, Article 14 of the 2023 Bidding Law, the specific regulations regarding the bid security amount in the bidding documents for non-consulting service packages with a package value under VND 10 billion are as follows:

“4. Based on the scale and nature of each project, investment project, or specific bidding package, the bid security amount in the bidding documents is stipulated as follows:

a) From 1% to 1.5% of the package value applies to construction and mixed packages with a package value not exceeding VND 20 billion, and non-consulting goods and service procurement packages with a package value not exceeding VND 10 billion;”

Therefore, for non-consulting service packages with a package value not exceeding VND 10 billion, based on the scale and nature, the bid security amount in the bidding documents will be from 1% to 1.5% of the package value.

Question 6: How long will it take for the bid security of an unsuccessful bidder to be refunded or released?

Answer: Based on Clause 8, Article 14 of the 2023 Bidding Law, it is stipulated as follows:

“8. The procuring entity is responsible for refunding or releasing the bid security to unsuccessful bidders or investors within the time limit specified in the bidding documents, but no later than 14 days from the date the results of the bid or investor selection are approved. For successful bidders or investors, the bid security will be refunded or released when the contract becomes effective.”

Therefore, unsuccessful bidders will have their bid security refunded or released by the procuring entity within the time limit specified in the bidding documents, but no later than 14 days from the date the results of the bid selection are approved.

Question 7: Will the bid security be refunded if the bidder fails to provide a deposit to guarantee the performance of the contract?

Answer: According to Clause 9, Article 14 of the 2023 Bidding Law, it is stipulated as follows: 

“9. Bid security shall not be refunded in the following cases:

a) After the bid closing time and during the validity period of the bid documents, the bidder or investor withdraws the bid documents or submits a written refusal to perform one or more of the proposed works in the bid documents as required by the invitation to bid;

b) The bidder or investor commits a violation of the provisions of Article 16 of this Law or violates the law on bidding leading to the cancellation of the bid as prescribed in points d and e of Clause 1, and points d and e of Clause 2 of Article 17 of this Law;

c) The bidder or investor fails to implement the performance guarantee measures as prescribed in Articles 68 and 75 of this Law;”

Therefore, the bidder needs to implement measures such as: Deposit; Submit a guarantee letter from a domestic credit institution or a branch of a foreign bank established under Vietnamese law; Submit a guarantee insurance certificate from a domestic non-life insurance company or a branch of a foreign non-life insurance company established under Vietnamese law to ensure the fulfillment of the contract.

If the contractor does not provide a deposit to guarantee contract performance, they may use one of the remaining measures. If the contractor fails to provide contract performance guarantees as stipulated in Articles 68 and 75 of the 2023 Bidding Law, the bid security will not be refunded.

Question 8: Will the bid security be refunded if the contractor does not attend contract negotiations?

Answer: According to point d, clause 9, Article 14 of the 2023 Law on Bidding (Regulations on non-refundable bid security), it is stipulated as follows:

“A bidder who fails to conduct or refuses to negotiate the contract (if any) within 05 working days for domestic bidding and 10 days for international bidding from the date of receiving the notice of invitation to negotiate the contract, or who has negotiated the contract but refuses to finalize and sign the contract negotiation minutes, except in cases of force majeure;”

Therefore, if a bidder does not attend the contract negotiation, the bid security will not be refunded according to point d, clause 9, Article 14 of the 2023 Law on Bidding.

Question 9: If a bidder's bid is cancelled due to fraudulent bidding practices, will their bid security be refunded?

Regarding the refund of bid security for a bidder whose bid is cancelled due to fraudulent bidding practices, according to Clause b, Point 9, Article 14 of the 2023 Bidding Law, it states:

“b) The bidder or investor commits a violation of the provisions of Article 16 of this Law or a violation of the law on bidding leading to the cancellation of the bid as stipulated in Clauses d and e, Points d and e, Clause 2, Article 17 of this Law;”

Referring to the cases of tender cancellation stipulated in Clause 1, Article 17 of the 2023 Law on Bidding, as follows:

“1. Cases of tender cancellation for contractor selection include:

a) All expressions of interest, pre-qualification documents, bids, and proposals fail to meet the requirements of the expressions of interest, pre-qualification documents, tender documents, and request for proposals;

b) Changes to the investment objectives and scope in the approved investment decision that alter the work volume and evaluation criteria recorded in the expressions of interest, pre-qualification documents, tender documents, and request for proposals;

c) The expressions of interest, pre-qualification documents, tender documents, and request for proposals do not comply with the provisions of this Law or other relevant laws, resulting in the selected contractor not meeting the requirements to execute the contract;

d) The winning contractor commits a prohibited act as stipulated in Article 16 of this Law;

d) Other organizations or individuals besides the winning bidder committing acts prohibited under Article 16 of this Law, leading to a distortion of the bid selection results.”

At the same time, according to Clause 4, Article 16 of the 2023 Bidding Law, it states:

“4. Fraud includes the following acts:

a) Falsifying or distorting information, documents, and records in bidding;

b) Intentionally providing untruthful or biased information and documents in expressions of interest, pre-qualification documents, investment project registration documents, bid documents, and proposals to distort the results of the selection of contractors or investors.”

According to the above regulations, a winning bidder who commits one of the fraudulent acts in bidding will have their bid canceled. If the bid is canceled in this case, the bidder will not be reimbursed the bid security as stipulated.

Question 10: When does the bid guarantee become valid?

Answer: According to Clause 5, Article 14 of the 2023 Bidding Law, the validity of the bid guarantee is specifically stipulated as follows:

“5. The validity period of the bid guarantee is specified in the tender documents as the validity period of the bid documents plus 30 days.”

The above are the TOP 10 questions out of a total of 20 questions related to bid guarantees (Part 1) that DauThau.info wants to share with your business. See more questions in Part 2. We hope that the above information will be helpful to you in your research.

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