bidding processes in vietnam, preferential treatment in bidding processes in vietnam, vietnam preferential treatment in bidding processes, vietnam bidding processes

Vietnam Introduces Decree Detailing Preferential Treatment in Bidding Processes

The Vietnamese government has recently issued Decree No. 24/2024/ND-CP, providing detailed regulations and measures for the implementation of the Bidding Law concerning the selection of contractors. This decree, aimed at enhancing transparency and efficiency in bidding procedures, outlines specific provisions regarding preferential treatment for contractors participating in various procurement activities.

Under Article 4 of the decree, contractors competing for bids who qualify for multiple types of preferential treatment will only be entitled to the most advantageous one. In cases where all participating contractors enjoy equal advantages or none qualify for preferential treatment, there is no requirement for comparing or calculating preferences.

For bidding packages encompassing diverse components, the calculation of preferences is based on all proposals submitted by contractors for consultancy services, goods supply, and construction works. Contractors become eligible for preferential treatment if their proposed domestic expenses (consultancy fees, non-consultancy fees, domestically sourced goods, and construction) constitute 25% or more of the bidding package’s value. To qualify for preferences, contractors must demonstrate that the contractor, goods, or services offered comply with the eligibility criteria outlined in Article 1, Article 10 of the Bidding Law.

Notably, Decree No. 24/2024/ND-CP introduces detailed provisions regarding preferential treatment for domestic innovative startup enterprises, domestic contractors producing goods of Vietnamese origin, and products or services certified with eco-labels, energy labels, and equivalents.

For domestic innovative startup enterprises, the decree specifies that when bidding for their innovative products, they are exempted from revenue requirements or years of operation in the same industry within six years from the initial production of the product. These innovative products will enjoy preferential treatment as stipulated in the decree. Similarly, for domestic contractors manufacturing goods of Vietnamese origin, those transferring technology for domestic production will not need to meet revenue or operational requirements within five years from the first production of the goods.

In bidding for innovative products, individuals or groups producing innovative products as per the decree’s provisions are exempt from financial capacity requirements or years of operation within six years from the initial production.

Additionally, the decree emphasizes that products or services certified with eco-labels, energy labels, and equivalents, as per legal regulations, are entitled to preferences during bidding processes. Investors are required to stipulate technical requirements for purchasing these certified products or services based on compliance with relevant laws and regulations.

The decree’s detailed provisions aim to streamline the bidding process, foster innovation, and promote domestic production while ensuring fair competition among contractors. By offering preferential treatment to certain categories of contractors and products/services, Vietnam seeks to incentivize participation, stimulate economic growth, and enhance the quality and efficiency of bidding processes.

ASL Law is a leading full-service and independent Vietnamese law firm made up of experienced and talented lawyers. ASL Law is ranked as the top tier Law Firm in Vietnam by Legal500, Asia Law, WTR, and Asia Business Law Journal. Based in both Hanoi and Ho Chi Minh City in Vietnam, the firm’s main purpose is to provide the most practical, efficient, and lawful advice to its domestic and international clients. If we can be of assistance, please email to info@aslgate.com.

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