With the strong development of the economy, enterprises are increasingly expanding their scope of competition, specifically the international market. It is an inevitable reason for the emergence of the sector of international bidding, where contractors engage in fair competition on a global scale. In order to regulate such fair competition, legal regulations on international bidding have been promulgated to meet management needs and promote development.
Accordingly, enterprises must clearly understand international bidding by gaining thorough knowledge of the applicable legal regulations, so as to participate in bidding processes in an effective, fair, healthy, and transparent manner.
I. Current situation related to international bidding
Bidding is a form of civilized competition in a developed economy, contractors that meet the investor’s technical and cost requirements are selected.
Along with the expansion of the economy, bidding is no longer confined to the domestic activities but has been extended to the international market, allowing foreign contractors to participate. Therefore, legal regulations on international bidding have been established and maintained with the objective of ensuring competitiveness, fairness, and transparency.
II. Regulations related to international bidding
1. What is international bidding?
Pursuant to Clause 10, Article 4 of the Law on Bidding 2023, international bidding is defined as a bidding activity in which both domestic and foreign contractors or investors are eligible to participate.
International bidding is applied in the following cases:
- For bid projects for which no domestic contractor is capable of meeting its professional requirements.
- For projects using funding sponsored by international or foreign organizations where treaties or agreements require international bidding.
It is a process for selecting contractors to enter into and execute contracts for the provision of consultancy services, non-consultancy services, procurement of goods, construction and installation works, as well as for selecting investors to enter into and execute business investment project contracts, on the basis of ensuring competitiveness, fairness, transparency, economic efficiency, and accountability.
2. Conditions for organizing international bidding
Pursuant to Article 11 of the Law on Bidding 2023 provides that a bid project shall be implemented through international bidding if one of the following four conditions is satisfied:
- Sponsor(s) for the bid project requires international bidding under an international treaty or loan agreement;
- The bidding package for consultancy services, non-consultancy services, construction and installation works, or mixed packages cannot be adequately performed by domestic contractors, or the bidding package has previously undergone the domestic bidding but attracted no participating contractors;
- The bidding package for consultancy services is deemed by the competent authority to require the participation of foreign contractors in order to enhance the quality of the bidding package or project; the competent authority shall be responsible for the decision to organize international bidding;
- The bidding package for procurement of goods involves goods that cannot be produced domestically, or can be produced domestically but fail to meet one of the requirements regarding technical specifications, quality, or price. In cases where common goods have been imported and offered for sale in Vietnam, international bidding shall not be organized.
3. Notes on international bidding
In addition to the cases where international bidding is permitted as mentioned above, it is necessary to note the cases in which international bidding is not allowed. With respect to the selection of investors for project implementation, international bidding shall not be organized in the following cases:
- Projects falling under sectors or trades that are not yet open to market access for foreign investors in accordance with investment law;
- Projects required to be subject to domestic bidding due to national defense, national security, or social order and safety requirements;
- Projects implemented in areas with restricted land use or restricted sea areas for foreign investors or economic organizations with foreign-invested capital in accordance with land law and relevant laws;
- Projects with a total investment capital of less than 800 billion VND;
- Projects not falling under the cases specified at Points a, b, c, and d of this clause that have announced and invited or organized international bidding but attracted no foreign investors.
In addition, it should be noted that international bidding shall only be organized when Vietnamese contractors are incapable of executing the bidding package.
III. Questions regarding international bidding
1. Is it mandatory to use English in international bidding?
The language used in international bidding is prescribed in Clause 1, Article 12 of the Law on Bidding 2023. Accordingly, for international bidding, the bidding language shall be English, or both Vietnamese and English; no other languages are permitted.
In cases where the language used in the invitation for bidding, bidding documents, or request for proposals is Vietnamese and English, contractors or investors may choose either Vietnamese or English to participate in the bidding.
Therefore, it is not absolutely mandatory to use English in international bidding under the above provisions.
2. Are domestic contractors participating independently in international bidding entitled to bidding preferences?
Domestic contractors participating independently in international bidding are eligible for contractor selection preferences, as stipulated at Point d, Clause 1, Article 10 of the Law on Bidding 2023.
Specifically, domestic contractors participating independently in international bidding packages for consultancy services, non-consultancy services, construction and installation works, or mixed packages may enjoy one of the following preferences:
- Additional points added to the evaluation score of contractors eligible for preferences in cases where the fixed-price method, quality-based method, or combined quality-and-price method is applied for comparison and ranking;
- An additional amount added to the bidding price or evaluated price of contractors not eligible for preferences in cases where the lowest-price method or evaluated-price method is applied for comparison and ranking.
3. In which cases is international bidding for selecting investors not permitted?
Pursuant to Clause 2, Article 11 of the Law on Bidding 2023, there are five cases in which international bidding for selecting investors is not permitted, including:
- Projects falling under sectors or trades not yet open to market access for foreign investors in accordance with investment law;
- Projects required to be subject to domestic bidding due to national defense, national security, or social order and safety requirements;
- Projects implemented in areas with restricted land use or restricted sea areas for foreign investors or economic organizations with foreign-invested capital in accordance with land law and relevant laws;
- Projects with a total investment capital of less than 800 billion VND;
- Projects not falling under the above cases that have announced and invited or organized international bidding but attracted no foreign investors.
4. Is international bidding mandatory when foreign funding is used?
Pursuant to Clause 1, Article 11 of the Law on Bidding 2023 regarding international bidding, international bidding shall only be conducted for bidding packages where the funding sponsor requires international bidding, or for bidding packages for consultancy services, non-consultancy services, construction and installation works, or mixed packages that domestic contractors are incapable of executing.
Therefore, international bidding is required only where the funding sponsor explicitly requires it. In cases where the funding sponsor does not require international bidding and domestic entities are capable of meeting the requirements, international bidding is not mandatory.
