What is Bid Guarantee?


“Bid security” is the common way people call the case of bid security under the provisions of the 2013 Bidding Law. Accordingly, Clause 1, Article 4 of the Law on Bidding 2013 stipulates: “Bid security means the contractor or investor performs one of the methods of depositing, depositing or submitting a letter of guarantee from a credit institution or foreign bank branch established under Vietnamese law to ensure liability. bids of contractors and investors within a specified time according to the requirements of the bidding dossiers and dossiers of requirements”.

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What is a bid guarantee? Regulations – procedures & documents for participation in bid guarantee

1. Regulations on bid security

Cases of application of bid security specified in Clause 1, Article 11 of the Law on Bidding 2013 include:

Firstly, open bidding, limited bidding, and competitive offers for bidding packages of non-consulting service provision, goods procurement, construction and installation and mixed bidding packages;

Second, open bidding and appoint contractors for investor selection.

– Contractors and investors must apply bid security before the time of bid closing for bid dossiers and dossiers of proposals; in case of applying the two-stage bidding method, the contractor shall apply the bid security measure in the second stage.

– The bid security value is specified as follows:

+ For contractor selection, the value of the bid security is specified in the bidding documents, the request for proposals at a rate ranging from 1% to 3% of the bid package price, based on the scale and nature of each contract. specific bidding package;

+ For investor selection, the bid security value is specified in the bidding documents, the request for proposals according to a specified level from 0.5% to 1.5% of the total investment, based on scale and nature of each specific project.

– The validity period of the bid security specified in the bidding documents, dossier of requirements is equal to the validity period of the bids, dossiers of proposals plus 30 days.

– In case of extending the validity period of bids and dossiers of proposals after the time of bid closing, the bid solicitor must request contractors and investors to extend the validity period of the security. bid. In this case, the contractor and investor must extend the validity period of the bid security accordingly and must not change the contents of the submitted bid or proposal. If the contractor or investor refuses to extend the time limit, the bid or proposal will no longer be valid and will be rejected; the bid solicitor must return or release the bid security to the contractor or investor within 20 days from the date the bid solicitor receives the written refusal to extend.

– In the case of a joint venture participating in a bid, each member of the joint venture can provide a separate bid security or agree that one member is responsible for performing the bid security for that member and for the other members. in the consortium. The total value of the bid security must not be lower than the value required in the bidding documents and requirements. In case a member of a consortium violates the provisions of Clause 8, Article 11 of the Law on Bidding 2013, the bid security of all members of the joint venture will not be refunded.

– The bid solicitor is responsible for returning or releasing the bid security to the unselected contractor or investor within the time limit specified in the bidding dossier and dossier of requirements but not exceeding 20 days from the date of submission of bids. the date on which the results of contractor and investor selection are approved. For the selected contractor or investor, the bid security shall be returned or released after the contractor or investor takes measures to secure the performance of the contract in accordance with the provisions of Articles 66 and 72 of this Law. Law on Bidding 2013.

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– Bid security is non-refundable in the following cases:

+ Contractors and investors withdraw their bids and proposals after the bid closing time and during the validity of their bids and proposals;

+ Contractors and investors violate the law on bidding, leading to the cancellation of bids according to the provisions of Clause 4, Article 17 of the Law on Bidding 2013;

+ Contractors and investors fail to take measures to secure contract performance as prescribed in Articles 66 and 72 of the Law on Bidding 2013;

+ The contractor fails to proceed or refuses to complete the contract within 20 days from the date of receipt of the notice of bid winning from the bid solicitor or has completed the contract but refuses to sign the contract, except for the following cases: majeure;

+ The investor fails to conduct or refuses to complete the contract within 30 days from the date of receipt of the notice of bid winning from the bid solicitor or has completed the contract but refuses to sign the contract, except for the following cases: force majeure.

2. Profile composition

a) Legal documents

* For customers applying for guarantee at NHPT for the first time

– Certificate of business registration – a certified true copy of the original;

– Charter of the enterprise (except for private enterprises) – certified true copy of the original of the Client;

– A document clearly identifying the legal representative of the Client (applicable in case the Business Registration Certificate or Charter does not contain this content or has this content but has actually changed) – certified true copy of Customer’s original;

– Decision on appointment of chief accountant or in charge of accounting issued by a competent authority or person – a certified true copy of the original of the Client;

– Document of competent authority approving the loan and mortgage or pledge of property in case it requires the opinion of the competent authority according to the provisions of law or the charter of the enterprise – the original.

* The next time the customer requests for guarantee, the customer only adds legal documents in case there is a change in these documents.

Customers supplement legal documents in the following cases:

+ When there is a change in business registration or a change in the operation charter;

+ When there is a change in the legal representative;

+ When there is a change of chief accountant or person in charge of accounting

* Notes when guiding customers to submit legal documents:

Depending on the characteristics of each type of enterprise, the Branch may require relevant legal documents in accordance with the provisions of the law governing the operation of that type of enterprise.

b) Financial records

* For customers applying for guarantee at NHPT for the first time

– Financial statements for the latest 02 years and quarters up to the time of borrowing in accordance with the law. For customers who are newly established units without financial statements or legal enterprises that do not require quarterly financial statements, the Customer shall prepare a quick report of financial position to the nearest quarter.

In case the Customer’s financial statements have been audited, the Customer shall send to NHPT the audited financial statements;

– A list of credit institutions with which the Customer has a credit relationship at the time of requesting a guarantee, including the following contents: short, medium and long-term outstanding loans; debt status.

* In subsequent requests for guarantee, the Customer only adds the next quarterly and annual financial statements and the list of credit institutions with which the Customer has a credit relationship at the time of guarantee.

* On a case-by-case basis, VPBank may require relevant financial records as prescribed by law.

c) Dossier of application for guarantee

– Guarantee application form (original)

+ For bid security: Bidding documents, bidding regulations or regulations of the procuring entity proving that the foreign contractor requires a bid security (copy) enclosed with a Vietnamese translation certified by the contractor. Customer.

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For contract performance guarantee:

Importer’s document requesting contract performance guarantee (original) with Vietnamese translation certified by the customer.

Above are the sharing about what is Bid Assurance and the provisions of the law on Bid Security. If you still have questions that need to be answered, please contact us for quick answers and updates on new regulations in accordance with current laws.

Source: internet

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