What is contractor appointment?

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What is contractor appointment?

Direct Appointment of Contractor is a form of contractor selection. Appointment of contractor is a noun in English used by the English phrase “Direct Appointment of Contractor”.

According to the definition in the Bidding textbook of the National Economics University Publishing House, we can define contractor appointment as follows:

Appointment of a contractor is a form of contractor selection based on the fact that the bid solicitor specifically identifies a contractor to participate in bidding and perform the contract. During the bidding process, there is absolutely no competition between contractors“.

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Thus, with the above analysis and translation of the meaning from the English phrase, we have

Understand how to appoint a contractor. Understanding what contractor appointment is will help construction industry students easily delve into deeper issues of the construction industry and related issues.

What is the concept of contractor appointment?

2. Cases of application of the form of contractor appointment

Appointment of tender is one of 07 forms of contractor selection according to the provisions of the Law on Bidding. The contractor selection procedure is simple, the time is short and it is a relatively common application form. However, for some force majeure cases, new projects are allowed to appoint contractors. Below are some cases where contractors are assigned.

What are the cases to apply the form of contractor appointment?

2.1. Cases of appointment of contractors according to bidding packages

2.1.1. First case

As the bidding packages carry high risks, potentially endangering the lives of the implementers, very few organizations and enterprises are allowed and wish to operate in this field.

2.1.2. Second case

The bidding packages with high security in the field of national security and defense of countries always apply this form. Investment projects on the construction of military bases, the construction of military training centers or procurement and weapons procurement packages are always kept in a state of absolute secrecy.

Information about projects in general and bidding packages in particular is almost not published publicly on the mass media. The selection of contractors to perform these works can only be done through the application of contractor appointment to bind the contractor’s responsibility for confidentiality.

Because of the specificity of the field, according to Transparency International, this is an area with a very high risk of corruption in countries.

2.1.3. The third case

Appointment of contractors is applied to bidding packages with very difficult implementation conditions, low profits for contractors, and even no profit, so it is difficult to attract the voluntary participation of contractors. .

2.1.4. Fourth case

Appointment of contractor is applied to bidding packages with very small scale and very simple technical requirements that the bid solicitor believes that applying other forms not only fails to attract the attention of contractors because too little profit, but also cost the bid solicitor time and cost to organize the bidding.

The form of contractor appointment must be closely monitored from the preparation of the bidding plan to the end of the contract. This is to prevent the contractor and the bid solicitor/investor from colluding, increasing the cost of implementation or reducing the quality of the bidding package.

2.2. Cases of appointment of contractors according to contractors and investors

2.2.1. In case of appointment of contractor by contractor
In case of appointment of contractor by contractor

Bidding packages to be performed to immediately overcome or to promptly handle consequences caused by force majeure incidents; Bidding packages to be performed to ensure state secrets…

Urgent bidding packages need to be deployed in order to protect national sovereignty, national borders and islands;

Bidding packages for provision of consulting services, non-advisory services, and procurement of goods that must be purchased from contractors have been performed before due to the need to ensure compatibility of technology and copyrights that cannot be purchased from contractors. other; bidding packages of research and experimental nature; purchase intellectual property rights;

Bidding packages for provision of consulting services for preparation of feasibility study reports and construction designs shall be assigned to the authors of the architectural designs who have been selected or selected when the authors are qualified according to regulations. determined…

Bidding package for relocation of technical infrastructure works directly managed by a specialized unit to serve site clearance; bidding packages to clear bombs, mines and explosives to prepare construction sites;

Bidding packages for provision of public products and services, and packages for overdrafting are valid within the limit for which appointment of contractors is applied as prescribed, specifically:

Bidding packages with a value within the limit applicable to appointing contractors: Not exceeding VND 500 million for bidding packages to provide consulting services, non-advisory services, and public services; no more than 01 billion dong for procurement of goods, construction and installation, mixtures, purchase of drugs, medical supplies and public products. For a bidding package under a regular procurement project, the value is not more than 100 million. (Article 54 Decree 63/2014/ND-CP).

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2.2.2. Appointment of contractors for investors

Only one investor registered to perform; only one investor is able to do so because of intellectual property, trade secrets, technology or capital arrangements; The investor proposes a project that meets the requirements of the most feasible and effective project implementation as prescribed, specifically: (Clause 4, Article 22 of the Law on Bidding 2013).

Having an approved feasibility study report (for PPP projects) or project proposal (for group C PPP projects); the investor proposes the service price or the State’s capital contribution or reasonable social and State benefits; meet the requirements of protecting national sovereignty, national borders and islands. (Point c, Clause 3, Article 9 of Decree 30/2015/ND-CP).

3. Process and conditions to be appointed contractor

What is the current process as well as the conditions and steps of contractor appointment? If you are interested in learning about the contractor appointment process, please refer to the important information below about the process and conditions to be appointed.

3.1. Contractor appointment process

What is the contractor appointment process?

Currently, the contractor appointment process is carried out in accordance with the provisions of law. According to Article 56 of Decree 63/2014/ND-CP and Article 17 of Circular 58/2016/TT-BTC, there are issues that need attention as follows:

Firstly, for the bidding packages specified at Point a, Clause 1, Article 22 of the Law on Bidding, the following provisions are made: The investor or the competent authority shall determine the bidding packages and assign them to the contractor. contractors have the capacity as well as experience to carry out that bidding package. Within 15 days from the date the bidding package is delivered, the party in charge will be responsible for completing the procedures for appointing contractors. Completion procedures include:

Prepare and send contracts to the contractor side: Determine requirements on scope, content and parts of work to be performed, determine the time to perform the bidding package, determine the quality of work completion. , determine the corresponding value of the bidding package to be able to complete the contract of appointment of contractor. The results have been clearly discussed and negotiated by both parties in the contract.

Secondly, for the bidding packages in Article 54 of Decree 63/2014/ND-CP, there are provisions as follows: The bid solicitor, based on the approved objectives, scope of work and cost estimate, sends The draft contract is sent to the contractors and the investor determines the capacity and experience of that bidding package.

Third, carry out the execution of the contract, this contract is carefully drafted, needs to be consistent with the approved decisions and can be met by the contractor, along with a copy of the contract. Negotiate relevant documents to ensure the interests of both parties.

3.2. Conditions to be appointed contractor

Conditions to be appointed contractor are prescribed in Clause 3 of Article 15, Circular No. 58/2016/TT-BTC:

Ensure the implementation of contractor appointment time. Make a specific plan to be able to select an approved contractor. That contractor needs to be appointed, the list of contractors must be the units named in the databases for contractors according to the regulations of the Ministry of Planning and Investment.

Those are the conditions to be appointed contractor. Bidding packages, contractors need to fully meet those requirements and conditions to be allowed to appoint contractors.

4. Disadvantages of appointment of contractor

Besides the strengths, appointing contractors also has disadvantages that relevant agencies and individuals need to understand. Appointing contractors has potential risks, negative aspects and unpredictable consequences from the state of contractor appointment lack of transparency, not in compliance with the law.

The form of appointment of contractor still dominates competitive bidding, even though competitive bidding has demonstrated the benefits of appointment of a contractor, the dominance is still evident. In addition, the projects that are assigned contractors, if not strictly appraised, can easily cause problems such as: The value of the bid package is misreported with the actual value, the contractors will rely on on that neglect that enhances the value of the project causes many concerns for society.

The appointment of contractors for projects can reduce the effectiveness of bidding packages because it is impossible to ensure fair and transparent competition, delaying the progress of projects. In particular, with the development of Vietnam’s economy, it is noted that the current investment is spread out in too many projects, leading to fragmented annual allocation, only covering part of the demand. project investment, causing delay, capital accumulation and outstanding debt.

Tens of thousands of small projects are approved each year. Projects are approved many times without taking into account the ability to secure capital. As a result, the annual allocations to projects are too low. Localities also fell into arrears to construction contractors, making contractors unable to repay loans, leading to an increase in bad debts in the banking sector in the locality.

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Improving spending efficiency also requires significant measures in the areas of procurement and project management. There have been major efforts on procurement reform in the public sector, but most of the achievements to date have mainly been aimed at forming the legal framework. Implementation remains a challenge. Appointment of a contractor remains the dominant form, although competitive bidding has demonstrated its benefits.

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