Chapter III
INVESTOR SELECTION
Section 1. GENERAL PROVISIONS REGARDING INVESTOR SELECTION
Article 28. Investor selection procedures
1. An investor shall be selected according to the following procedures:
a) Drawing up the shortlist (where applicable);
b) Making preparations for selection of the investor;
c) Selecting investors;
d) Evaluating bidding documents;
dd) Submitting, assessing, approving and publishing investor selection results;
e) Negotiating, finalizing and concluding a PPP contract, and publishing contract information.
2. Based on the specific conditions of each project, the competent authority draws up a shortlist after issuing an investment policy under Point a of Clause 1 of Article 11 in this Law, or after approving the project under Point b of Clause 1 of Article 11 herein.
3. Selecting an investor according to the procedures specified in Clause 1 of this Article on the Vietnam National E-Procurement System shall conform to the schedule set by the Minister of Planning and Investment.
4. The investor whose project proposal has been accepted shall be entitled to the preferential treatment during the bid evaluation process.
5. The selected investor committed to hiring domestic contractors, and using domestic goods, supplies, materials and equipment, shall be given preference during the bid evaluation process.
6. The Government shall elaborate on this Article.
Article 29. Investor’s lawful status
An investor in lawful status must meet the following requirements:
1. Having an establishment and operation registration certificate issued by a competent authority of the country or territory in which that investor is operating;
2. Carrying out the independent financial accounting regime; ensuring competitive investor selection;
3. Not in the dissolution process; not falling into the case of insolvency in accordance with the law on bankruptcy;
4. Not subject to any prohibition against participation in PPP investment activities;
5. Enterprises with 100% state-owned capital must enter into partnership with private sector investors to participate in the bidding process;
6. Investors established under foreign laws must meet market access conditions when participating in the process of selection of investors in projects in the relevant conditional sectors and trades, subject to the provisions of the law on investment.
Article 30. Assurance of competitive investor selection
Bidding investors must display legal and financial independence from the parties hereunder:
1. The party giving counsel on preparation of the pre-feasibility study report or feasibility study report, except for cases where the project is proposed by an investor;
2. The party giving counsel on the assessment of the pre-feasibility study report or the feasibility study report;
3. The party giving counsel on the formulation and assessment of the invitation for prequalification and the invitation for bid; the evaluation and inspection of prequalification or investor selection results;
4. The competent authority, the contract signatory and the bid solicitor.
Article 31. Domestic or international investor selection
1. The selection of domestic investors shall be made in the forms prescribed in Articles 37, 38, 39 and 40 of this Law. Only investors established under Vietnamese law may participate in this selection process.
2. The selection of international investors shall be made in the forms prescribed in Articles 37, 38, 39 and 40 of this Law. Both investors established as per foreign law and those established as per Vietnamese law may participate in this selection process.
3. The process of selection of international investors may be applied to all PPP projects, except:
a) Projects in the industries and trades without the authorization for market access in which foreign investors make their investment in accordance with the law on investment;
b) Projects subject to the requirements concerning national defence, security and state secrets.
Article 32. Language used in the investor selection process
The language used in the process of selection of domestic investors shall be Vietnamese; the language used in the process of selection of international investors shall be either English or Vietnamese and English.
Article 33. Bid guarantee
1. Based on the scale and nature of each project, the value of a bid guarantee shall be specified in the invitation for bid at a determined rate of between 0.5% and 1.5% of total investment of the project.
2. The period of validity of the bid guarantee specified in the invitation for bid shall be equal to the validity period of the bid plus 30 days.
3. In case of extension of the validity period of a bid, the bid solicitor must request the investor to give an extension equivalent to the period of validity of the bid guarantee provided that the contents of the submitted bid are not changed. In case the investor refuses to give such extension, the bid will be no longer valid and eliminated.
4. In case a partnership participates in a bid, each partner member can provide a separate bid guarantee or can enter into an agreement under which a partner member is responsible for providing the bid guarantee for both that partner member and others joining the partnership. Total value of a bid guarantee shall not be less than the value requested in the invitation for bid. In case where there is a member in the partnership violating the provisions of Clause 6 of this Article, the bid guarantees provided by all member partners shall not be refunded.
5. Bid solicitors must return or release bid guarantees to unsuccessfully bidding investors within the time limit specified in the invitation for bid, but not longer than 14 days from the date on which the results of investor selection are approved. With regard to the selected investor, their bid guarantee shall be returned or released after the PPP project enterprise established by the investor has fulfilled their obligations specified in the contract performance security (or performance bond) as prescribed in Article 48 herein.
In case an investor refuses to give an extension as prescribed in Clause 3 of this Article, the bid solicitor must return or release the bid guarantee to the investor within 14 days from the date on which the bid solicitor has received the written document on refusal of extension.
6. Bid guarantees shall not be returned in the following cases:
a) Investors withdraw their bids during the validity of these bids;
b) The investor violates the law on bidding to the extent that such violation leads to the bid cancellation as prescribed at Point dd of Clause 1 of Article 34 herein;
c) The investor has not conducted or refused to negotiate or finalize the contract within 30 days of receipt of the bid-winning notice from the bid solicitor, or has negotiated and finalized the contract but refused to sign the contract, except in force majeure cases;
d) PPP project enterprises established by investors has failed to fulfill their obligations specified in the contract performance security (or performance bond) as prescribed in Article 48 herein.
Article 34. Bid cancellation
1. Bid cancellation shall occur in the following cases:
a) All applications for prequalification and bidding documents do not meet the requirements of the invitation for prequalification or the invitation for bid;
b) Objectives and scale mentioned in the invitation for prequalification or the invitation for bid change;
c) The invitation for prequalification or the invitation for bid fails to comply with regulations laid down in this Law or other relevant laws to the extent that the selected investor fails to meet the requirements for project implementation;
c) The investor selection process is carried out in breach of regulations laid down in this Law or other relevant laws to the extent that competition between investors is restricted;
dd) There is any proof of bribe offer, receipt or brokerage, bid rigging, fraud, abuse of position and power with the intention of illegally interfering in bidding activities to the extent that such acts falsify results of investor selection.
2. Organizations and individuals that commit violations to the extent of bid cancellation as prescribed at Points c, d and dd of Clause 1 of this Article shall pay compensation to related parties and shall be subject to actions prescribed by law.
Article 35. Bid solicitor’s responsibilities during the investor selection process
1. Assume responsibility before law and to competent authorities for the investor selection process.
2. Ensure faithfulness, objectivity and equality.
3. Pay compensation in accordance with laws.
4. Keep documents or records confidential.
5. Store relevant information provided in law on archives.
Article 36. Handling of investor selection situations arising in the project execution process
1. Handling of investor selection situations arising in the project execution process means any response to cases arising that has not been prescribed clearly and in detail herein.
2. Competent authorities and bid solicitors shall be responsible before law for situation handing decisions on the basis of ensuring conformity with the following principles:
a) Such decisions must be issued to ensure competitiveness, fairness, transparency and economic efficiency;
b) Such decisions must be made based on the investment policy decision; the project approval decision; the invitation for prequalification; prequalification applications or bidding documents; prequalification results, investor selection results; the contract that has been signed with the selected investor; actual situation of project implementation.
3. The Government shall elaborate on this Article.
Section 2. INVESTOR SELECTION APPROACHES
Article 37. Open bidding
1. Open bidding is an approach to selecting investors in which the number of participating investors is not limited.
2. Open bidding must be applied to all PPP projects, except the cases specified in Articles 38, 39 and 40 of this Law.
Article 38. Competitive negotiation
Competitive negotiation approach shall be employed in the following cases:
1. No more than 03 investors meeting project execution requirements are invited to attend;
2. Projects use high technologies on the list of high technologies prioritized for investment and development thereof under the provisions of the law regarding high technologies;
3. Projects use high technologies prescribed in law on technology transfer.
Article 39. Investor appointment
1. The approach to appointing investors shall be employed in the following cases:
a) Projects need to meet the requirements concerning national defence, security and state secret;
b) Projects need to immediately select a substitute investor in accordance with Point a of Clause 4 of Article 52 in this Law to ensure continuity in the project implementation process.
2. The authority having competence in granting the decision on approval of projects shall decide the investor appointment; in case of appointment of an investor in the project prescribed at Point a of Clause 1 of this Article, prior to appointment of the investor, the Prime Minister's consent must be obtained upon consultation with the Ministry of National Defense and/or the Ministry of Public Security about national defense, security and state secret protection requirements.
Article 40. Investor selection taking place in certain special cases
1. In case where conditions arising in a PPP project are so specific or particular that the investor selection approaches referred to in Article 37, 38 and 39 of this Law cannot be applied, competent authorities shall seek the Prime Minister’s decision on the investor selection plan.
2. Documentation submitted to the Prime Minister to seek his decision shall include the followings:
a) Basic project information;
b) Explanation about specific or particular conditions of a project;
c) Plan for selection of investors in special cases shall describe the following information: investor selection steps; specific solutions to address specific and particular characteristics of the project which are proposed to ensure the investment efficiency of the project.
Section 3. METHODS AND STANDARDS FOR EVALUATION OF PREQUALIFICATION OR BIDDING DOCUMENTS
Article 41. Methods and standards for evaluation of prequalification applications
1. Evaluation of an application for prequalification shall be made by employing the scoring method according to the 100 or 1,000-point grading system referred to in the application for prequalification. The scoring method shall be developed based on the evaluation standards for prequalification applications as specified in Clause 2 of this Article.
2. Standards for evaluation of pre-qualification applications shall include the following basic details:
a) Financial - commercial capacity and experience, capital arrangement capability; experience in execution of similar projects.
In the case of a partnership, the investor’s capability and experience shall be determined by the aggregate capacity and experience of member partners; any investor as the head of a partnership must contribute at least 30% of their capital to the partnership’s equity while each member partner must contribute at least 15% of their capital to the partnership’s equity;
b) Preliminary project execution plan and project implementation commitment;
c) Past disputes and claims related to contracts that have been being executed.
Article 42. Methods and standards for evaluation of bidding documents
1. Capability and experience evaluation shall be made according to the 100 or 1,000-point grading system referred to in the bidding documentation. Standards for capability and experience evaluation shall be subject to provisions laid down in clause 2 of Article 41 herein.
2. The technical evaluation shall be made based on the 100 or 1,000-point grading system or the pass/fail grading system prescribed in the invitation for bid. The technical evaluation standards shall comprise project quality, capacity and performance standards; project operation, management, business, maintenance and care standards; environmental and safety standards; other engineering standards.
3. Financial – commercial evaluation shall be made according to the comparison or ranking approach specified in the invitation for bid. The comparison and ranking approach shall be developed according to financial – commercial evaluation standards, including one of the following standards:
a) Standards for public product and service prices and charges;
b) Standards for state capital used for supporting the construction of infrastructure works and systems;
c) Standards for social and state benefits.
4. The Government shall elaborate on this Article.
Article 43. Pre-approval inspection of investor selection results
An investor may obtain a recommendation for selection if they meet the following requirements:
1. Their bidding documents are valid;
2. They satisfy capability and experience requirements;
3. They conform to technical requirements;
4. They meet financial – commercial requirements;
5. Their bidding documents are ranked first.
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