Q: Under what conditions can power projects be awarded without Government tender?
A: Power projects can be awarded directly without
Government tender if the projects are not:
a. Investment projects for development using state funding by state
agencies;
b. Investment projects for development of state-owned
enterprises;
c. Investment projects for development other than those in a) and
b) which are financed by the state; has 30% or more of total
investment capital contributed by state-owned enterprises ; or less
than 30% but more than VND 500 billion of the total investment
capital of the project;
d. Procurement projects using state funding to provide public goods
and/ or services; or
e. Investment projects in the form of public-private partnership or
investment projects using land.
Q: Under which circumstances is direct appointment of an
investor applied?
A: Direct appointment of an investor applies in the following
cases:
a. There is only one investor registering the project's
implementation;
b. There is only one investor being able to implement the project
as the project is related to intellectual property, commercial
secret, technologies or capital arrangement;
c. The investor who proposes the project satisfies requirement of
implementing the project with the highest feasibility and
efficiency in accordance with regulations of the Government.
However, please note that direct appointment of an investor is
still a part of a Government tender, meaning that this applies only
when the abovementioned cases occur in the Government tender
process.
Q: Under which circumstances is direct appointment of a
contractor applied?
Direct appointment of a contractor applies in the following
cases:
a. An event of force majeure such as disasters, war, change of the
state policies, ...which are objective, unpredictable and cannot be
solved despite using all necessary measures within one's own
capacity. Vietnam is likely to face energy crisis in the coming
years due to significant growth in energy demand. Thus, this is a
good chance and foreign energy investors and companies should be
prepared.
b. Bid packages need to be performed to ensure national secrets.
National secrets are information in politics, national defence,
security, foreign affairs, economics, science, technology sectors
and other sectors that has not been disclosed or will not be
disclosed by the state, and if disclosed, it will cause damage to
the country.
c. Urgent bid packages need to be carried out to protect national
sovereignty, national borders, and islands;
d. Bid packages of providing advisory services, non-advisory
services, procurement of goods which must be purchased from
previous contractors to ensure the compatibility of technologies
and copyright which are unable to be purchased from other
contractors; bid packages with research and testing nature;
purchase of intellectual property right;
e. Bid packages of providing advisory services for making feasible
study reports, construction designs which have been appointed to
authors of designs of architectural works who won in a selection or
are selected when authors have full capability in accordance with
regulations; bid packages of constructing statues, reliefs,
monumental paintings, art works in association with author right
from the creation stage to construction stage of the works;
f. Bid packages of relocating technical infrastructure works
directly managed by a specialized unit for site clearance;
g. Bid packages of providing public goods and services, bid
packages with bid package price ranging from VND 500 million to VND
1 billion depending on types of projects.
Q: How is government procurement addressed under the
Trans-Pacific Partnership Agreement ("TPP")
?
A: The TPP on Government Procurement mainly deals with the
requirement to open up bidding to companies in other nations when a
government buys products or orders a public works project worth
over a certain amount. Governments undertake to timely publish
information on tender, allow sufficient time for bidders to prepare
for and submit bids, maintain confidentiality of tenders. The TPP
also requires its Parties assess bids based on fair and objective
principles, evaluate and award bids only based on criteria set out
in notices and tender documentation, create an effective regime for
complaints and settling disputes, etc. These rules require all
Parties, especially Vietnam, in the context of China's bidders
predominantly win the bids with cheap offer price but low-quality
services, to reform their bidding procedures and protect their own
interests by disqualifying tenders with poor performance and low
capacity.
Q: How to appeal Government tender
decision?
A: The TPP aims at protecting investors and their investment in the
host country by introducing requirements on non-discrimination;
fair and equitable treatment; full protection and security; the
prohibition of expropriation that is not for public purpose,
without due process, or without compensation; the free transfer of
funds related to investments; and the freedom to appoint senior
management positions regardless of nationality.
TPP also includes procedures for arbitration as means of settling
disputes between investors and the host state. It is expected to
cover new provisions such as transparency in arbitral proceedings,
disclosure of filings and arbitral awards, and participation of
interested non-disputing parties to make amicus curiae submissions
to a tribunal.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.