Chapter V
COMPETITIVE BIDDING FOR SELECTION OF INVESTORS IN LAND-USING PROJECTS
Section 1. DETAILED PROCEDURES
Article 56. Detailed procedures
1. Preparation for the investor selection:
a) Make the bidding documents;
b) Appraise, approve the bidding documents.
2. Organization of investor selection:
a) Invite bids;
b) Publish, adjust, clarity the bidding documents;
c) Prepare, submit, receive, manage, adjust, withdraw bid-envelopes;
d) Open technical proposals.
3. Evaluate technical proposals, including:
a) Evaluate the legitimacy of technical proposals;
b) Evaluate technical proposals in details;
c) Appraise, approve the list of investors that satisfy technical requirements.
4. Opening and evaluating financial – commercial proposals, including:
a) Open financial – commercial proposals;
b) Inspect the legitimacy of financial – commercial proposals;
c) Evaluate financial – commercial proposals in details and rank investors;
d) Preliminarily negotiate the contract.
5. Submit, appraise, approve, and publish the investor selection result.
6. Contract negotiation, completion, and conclusion:
a) Negotiate and complete the contract;
b) Conclude the contract.
Section 2. PREPARATION FOR INVESTOR SELECTION
Article 57. Making the bidding documents
1. Basis for making the bidding documents:
a) The announced list of projects;
b) The pre-qualification results (if any);
c) The approved investor selection plan;
d) Applicable regulations of law on land, housing, real estate trading, investment, construction, and relevant regulations of law.
2. Contents of the bidding documents:
a) The bidding documents must not contain any condition that restricts the participation of investors or provide advantage for one or some investors, which create unfair competition;
b) The bidding documents must contain sufficient information for investors to make their bid-envelopes, including:
- Overall information about the project including the project name, purposes, functions, location, scale, progress schedule, condition of the site, land area, and planning targets;
- Instructions for investors including the bidding procedures and the bidding data table;
- Requirements for project execution; requirements in terms of architecture, environment, safety; other contents of the project (if any);
- Bid-envelope evaluation standards, including standards for evaluating investors’ experience and capacity if pre-qualification is not applied (If pre-qualification is applied, it is not required to establish standards for evaluation of investors’ capacity and experience. However, investors must be required to update information about their capacity and experience); standards for technical evaluation and financial – commercial evaluation, and corresponding evaluation methods;
- The forms including: the letter of bid, technical proposal, financial - commercial proposal, bid security, commitment of a financial institution (if any), and other form;
- Deadline for land allocation or land lease; land use purposes; land area for each purpose;
- The basis for determination of the land levies, land rents payable by the investor to state budget within the land allocation or land lease period;
- Preliminary plan for land clearance and compensation;
- Floor price = m1 + m2
Where:
+ m1 is the preliminary total cost of project execution (not including the cost of land clearance and compensation) determined by the soliciting entity on a case-by-case basis for the purpose of making the best use of the land area; land use plan is based on the overall planning on a scale of 1:2000 or spatial planning on a scale of 1:500 (if any).
+ m2 is the total cost of land clearance and compensation determined by the soliciting entity according to the plan mentioned in Article 11 of this Decree.
The bidding documents must specify that if the cost of land clearance and compensation is lower than the level offered by the investor, the difference shall be paid to state budget; otherwise, the investor shall cover the deficit. The investor shall have the cost of land clearance and compensation deducted from the land rent. Nevertheless, the deduction shall not exceed the land rent as prescribed by land laws.
- The draft contract consists of requirements of the project, deadline for land allocation or land lease; land area; land rent, land levies; method for deducting cost of land clearance and compensation from land rents; method of land levy payment; responsibility to cooperate with organizations specialized in land clearance and compensation; applicable regulations; contractual rewards and penalties; force majeure events, reconsideration of the contract during the project operation, and other contents.
Article 58. Methods and standards for evaluation of bid-envelopes
The method for evaluating bid-envelopes is expressed by the evaluation standards written in the bidding documents, including:
1. Standards and methods for evaluating investors’ capacity and experience as prescribed n Point d Clause 1 Article 17 of this Decree (if pre-qualification is not applied).
2. Methods and standards for technical evaluation:
a) Depending on the scale, characteristics, and type of the project, technical standards include:
- The conformity of the project targets proposed by the investor with the approved overall planning on a scale of 1:2000 or spatial planning on a scale of 1:500 (if any).
- Requirements in terms of project scale, architectural solutions, and basic functions of the project;
- Environmental and safety requirements;
- Other standards that suit the project on a case-by-case basis.
b) Technical evaluation method:
Grades shall be given on a scale of 100 or 1,000 to establish technical standards for evaluation, including the minimum and maximum grade for each overall standard and detailed standard. When establishing technical standards, it is required to set a minimum passing grade which is not lower than 70% of the total technical grade and the grade for each criterion prescribed in Point a Clause 1 of this Article; not lower than 60% of the maximum grade of the same criterion.
c) The grading structure mentioned in Point a of this Clause must suit the project contract on a case-by-case basis. The total grade must be 100%.
3. Standards and method for financial – commercial evaluation:
a) Standards and method for financial – commercial evaluation include:
- The price offered by the investor (A) = M1 + M2
- Investment efficiency (B) = M2 + M3
Where:
+ M1 is the total cost of project execution (not including cost of land clearance and compensation) proposed by the investor in the bid-envelope.
+ M2 is the cost of land clearance and compensation proposed by the investor in the bid-envelope, which must be transferred to a competent unit to carry out land clearance and provide compensation.
+ M3 is the payment to state budget offered by the investor in the bid-envelope.
b) Financial – commercial evaluation method
- Public-interest-based method shall be applied to financial – commercial evaluation.
- Bid-envelopes that satisfy technical requirements shall be ranked according to investment efficiency (B). The investor that have the offered price (A) that is not lower than the floor price, the cost of land clearance and compensation (M2) that is not lower than m2, and the highest investment efficiency shall be ranked first and invited to preliminary contract negotiation.
Article 59. Appraising and approving the bidding documents
The bidding documents shall be appraised and approved in accordance with Article 28 of this Decree.
Section 3. ORGANIZATION OF INVESTOR SELECTION
Article 60. Conditions for publishing bidding documents
Bidding documents to select investors in land-using projects when all of the conditions below are satisfied:
1. The conditions in Clause 2 Article 7 of the Law on Bidding are satisfied;
2. There is a overall planning on a scale of 1:2000 or spatial planning on a scale of 1:500 (if any).
Article 61. Organization of investor selection
Investor selection shall be carried out in accordance with Section 3 Chapter III of this Decree. If pre-qualification is not applied, the publishing of bidding documents and opening of technical proposals shall be carried out as follows:
1. Bid solicitation
The bidding announcement shall be posted in accordance with Point dd Clause 1 Article 4 and Point b Clause 1 or Point a Clause 2 Article 5 of this Decree.
2. Publishing of bidding documents
The bidding documents shall be issue to investors that participate in competitive bidding. With regard to joint ventures, only one member of the joint venture shall buy the pre-qualification documents, even if the joint venture has not been established.
3. Opening of technical proposals
Technical proposals shall be opened in accordance with Article 32 of this Article, even if only one investor submits the bid-envelope.
Section 4. EVALUATION OF TECHNICAL PROPOSALS
Article 62. Evaluation of technical proposals
1. The validity of technical proposals shall be checked in accordance with Clause 1 and Clause 2 Article 36 of this Decree.
2. Evaluation of investors’ capacity and experience:
Evaluation of investors’ capacity and experience shall be carried out according to the evaluation standards set out in the bidding documents. If pre-qualification is applied, it is not required to evaluate investors’ capacity and experience. However, investors must be required to update information about their capacity and experience
3. Every investor that has a valid technical proposal and satisfactory in terms of capacity and experience shall have the technical proposal undergone detailed evaluation.
4. Detailed evaluation of technical proposals shall be carried out in accordance with Clause 4 Article 36 of this Decree.
Article 63. Appraising, approving the list of investors that satisfy technical requirements
The list of investors that satisfy technical requirements shall be appraised and approved in accordance with Article 37 of this Decree.
Section 5. OPENING AND EVALUATING FINANCIAL – COMMERCIAL PROPOSALS
Article 64. Opening financial – commercial proposals
Financial – commercial proposals shall be opened in accordance with Article 38 of this Decree. The following information must be read out loud during the opening session: The investor’s name; quantity of originals and photocopies of the financial - commercial proposal; the letter of bid of the financial - commercial proposal; effective period of the financial - commercial proposal; total investment in the project (not including the cost of land clearance and compensation) proposed by the investor (M1), the cost of land clearance and compensation offered by the investor (M2), payment to state budget (M3), if any; increase in payment to state budget (if any); technical grads of bid-envelopes that satisfy technical requirements; and relevant information.
Article 65. Evaluating financial – commercial proposals
Financial – commercial proposals shall be evaluated in accordance with Article 39 of this Decree. The validity of the letter of bid of the financial - commercial proposal shall be evaluated according to: the letter of bid which bears the signature and seal (if any) of the investor legal representative as requested in the bidding documents. Total project cost (not including the cost of land clearance and compensation) proposed by the investor (M1), the cost of land clearance and compensation offered by the investor (M2), payment to state budget (M3), if any, written in the letter of bid must be specific in number and text, appropriate, and logical; the same item must not have various offered values or put under conditions that are disadvantageous for state authorities or the soliciting entity. The letter of bid of a joint venture must bear the signatures and seals (if any) of every joint venture member. The head member of the joint venture may sign the letter of bid on behalf of the joint venture if so agreed in the joint venture agreement.
Article 66. Preliminarily contract negotiation
1. The investor ranked first shall be invited to preliminary contract negotiation. If the invited investor does not come or refuses the contract negotiation, such investor shall not have the bid security returned.
2. Preliminary contract negotiation must be based on:
a) Report on evaluation of bid-envelopes;
b) The bid-envelope and clarifying documents provided by the investor (if any);
c) The bidding documents.
3. Rules for Preliminary contract negotiation:
a) Do not negotiate the investor's offers that are conformable with the bidding documents;
b) The preliminary contract negotiation must not change fundamental contents of the bid-envelope.
4. Contents of preliminary contract negotiation:
a) Preliminary negotiation of the contents that are not specific, clear, or appropriate enough, or not consistent between the bidding documents and the bid-envelope, and inconsistency within the bid-envelope, which may lead to disputes or affect the responsibilities of parties during the contract execution;
b) Preliminary negotiation of issues that arise during the investor selection (if any) to complete details the project;
c) Negotiation of other necessary issues.
5. During the preliminary contract negotiation, the parties shall complete the draft contract.
6. If the preliminary contract negotiation does not succeed, the soliciting entity shall request the competent person to consider inviting the investor ranked next to preliminary contract negotiation. If the next negotiation does not succeed, the soliciting entity shall request the competent person to consider canceling the bidding as prescribed in Clause 1 Article 17 of the Law on Bidding.
Article 67. Rules for approving successful bidder
An investor shall be considered for selection when all of the conditions below are satisfied:
1. The investor has a valid bid-envelope;
2. The investor is qualified in terms of capacity and experience;
3. The investor satisfy technical requirements;
4. The investor’s offered price (A) is not lower than the floor price, the cost of land clearance and compensation (M2) is not lower than m2, and the investment efficiency is highest.
Section 6. SUBMISSION, APPRAISAL, APPROVAL, AND PUBLISHING OF INVESTOR SELECTION RESULT; CONTRACT NEGOTIATION, COMPLETION, AND CONCLUSION
Article 68. Submission, appraisal, approval, and publishing of investor selection result
1. The submission, appraisal, approval, and publishing of investor selection result shall comply with Clauses 1, 2, 3, 4, and 6 of Article 42 of this Decree.
2. If an investor is selected, the written approval for investor selection result must contain:
a) The project's name; purposes, functions; location; scale;
b) Name of the selected investor;
c) The time limit and schedule of project execution;
d) Conditions for using land to execute the project (location, area, purpose, and duration); time limit for completion of the detailed construction planning on a scale of 1:500;
dd) Total cost of project execution (not including cost of land clearance and compensation); unit price of land use right (LUR) or land rent; payment to state budget;
e) Other information (if any).
Article 69. Contract negotiation, completion, and conclusion
1. According to the investor selection result, preliminary contract negotiation result, a competent authority shall organize the contract negotiation and completion with the selected investor.
2. Contents of contract negotiation and completion:
a) The contents of contract negotiation and completion must not change fundamental contents of preliminary contract negotiation prescribed in Clause 4 Article 66 of this Article and the investor selection result. Contents of contract negotiation and completion include:
- Details of preliminary contract negotiation;
- Foundations for concluding the project contract.
b) Apart from the contents mentioned in Point a of this Clause, the soliciting entity shall request the competent person to decide other contract negotiation and completion contents.
3. If the contract negotiation and completion does not succeed, the soliciting entity shall request the competent person to consider cancelling the investor selection result and inviting the investor ranked next to preliminary contract negotiation, then following the steps prescribed in Articles 66, 67, and 68 of this Decree and Clause 1, Clause 2 of this Article.
4. The contract conclusion shall comply with Articles 69, 70, 71, and 72 of the Law on Bidding. The selected investor shall commence the execution of the land-using projects in accordance with the contract, regulations of law on investment, construction, and relevant law.
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