Understand the concept of contractors. What are the types of contractors (subcontractors, special subcontractors, foreign contractors, etc.)? Conditions for eligibility of contractors.
What is a contractor?
Pursuant to the Law on Bidding 2023, a contractor is interpreted as a bidding participant, which can be:
- Individual;
- Organization;
- The combination of organizations or individuals in the form of a joint venture based on a joint venture agreement (*).
If selected, the contractor will bid and directly sign and execute the contract.
Note:
(*): In case of a joint venture, the joint venture agreement must clearly stipulate the responsibilities of the head member of the joint venture and the common and separate responsibilities of each member in the joint venture for the entire scope of the bid package.
Types of contractors according to the latest Bidding Law
According to the provisions of the Bidding Law 2023, types of contractors include:
- Subcontractor;
- Special subcontractor;
- Foreign contractors;
- Domestic contractor.
Specifically each type of contractor is as follows.
➧ Subcontractor: Is understood as an organization or individual signing a contract with a contractor to participate in performing works such as construction, consulting, non-consulting, and related services of a goods supply package or work in a mixed package.
➧ Special subcontractor: Is the subcontractor that performs important work of the bid package proposed by the contractor in the bidding documents. The documents are proposed based on the requirements for capacity and experience stated in the bidding documents and request documents.
➧ Foreign contractor: An organization established under foreign law or an individual of foreign nationality participating in the bidding.
➧ Domestic contractor: An organization established under the laws of Vietnam or an individual of Vietnamese nationality participating in the bidding.
>> See more: 14 new points of the 2023 Bidding Law.
Conditions to ensure the eligibility of contractors
Depending on whether the contractor is an organization, business household or individual, the regulations on the conditions that must be met to ensure the contractor’s eligibility will be different. Specifically:
1. For contractors that are organizations
The conditions for determining the eligibility of a contractor as an organization include:
- Must meet the conditions of independent financial accounting;
- Not under criminal prosecution;
- Ensure competition in bidding in accordance with the provisions of Article 6 of the Law on Bidding;
- Have a name on the national bidding network before approving the contractor selection results;
- Not in a case of insolvency according to the provisions of bankruptcy law;
- Not in the process of dissolution procedures or having the business registration certificate, cooperative registration certificate, cooperative union, or cooperative group revoked;
- Not being subject to a period of being banned from participating in bidding according to the decision of a competent person or Minister, Head of a ministerial-level agency, Government agency, other central agency, Chairman of the Provincial People’s Committee (clearly stipulated in Clause 3, Article 87 of the 2023 Law on Bidding);
- Meet the shortlisting requirements in cases where a shortlist has been selected.
In addition, depending on whether the organization is a domestic contractor or a foreign contractor, it must meet other conditions such as:
➧ For domestic contractors:
Known as an enterprise, cooperative, cooperative union, cooperative group, public service unit or economic organization with foreign investment capital and registered to establish and operate in accordance with the provisions of Vietnamese law.
➧ For foreign contractors:
- Registered and operating in accordance with foreign laws;
- Must be able to form a joint venture with a domestic contractor or use a domestic subcontractor (except in cases where the domestic contractor does not have sufficient capacity to participate in any part of the bid package).
See also:
>> Register an account on the national bidding network;
>> How to look up contractor information on the national bidding network.
2. For contractors who are business households
- The prerequisite is to have a business registration certificate according to the provisions of law;
- Not in the process of ceasing operations or having the business registration certificate revoked;
- Business owner is not under criminal prosecution;
- Meet the prescribed conditions for having a name on the national bidding network before approving the contractor selection results;
- Ensure competition in bidding in accordance with the law;
- Not during the period of being banned from participating in bidding according to the decision of the competent authority;
- Shortlisted for cases where shortlisted.
3. For individual contractors
- Must meet the conditions of full civil capacity according to the laws of the country of which the individual is a citizen;
- Appropriate professional certification is required where required by law;
- Not being under criminal prosecution;
- Not in the case of being banned from participating in bidding according to the decision of the competent authority.
Accordingly, when a contractor fully meets the above conditions, it will be eligible and allowed to participate in the bidding as an independent contractor or a joint venture.