Chỉ thị 37/CT-TTg

DIRECTIVE

ON RECTIFYING THE BIDDING MANAGEMENT, NEGOTIATION, ENTRY INTO AND PERFORMANCE OF CONTRACTS IN PROJECTS FUNDED WITH OFFICIAL DEVELOPMENT ASSISTANCE (ODA) AND CONCESSIONAL LOANS OF DONORS

In the past, the management and implementation of projects and programs funded with ODA capital and concessional loans have seen positive changes. However, there remain many problems leading to complicated complaints or lawsuits, especially those related to contractual compensation, thus increasing costs and reducing investment effectiveness. This situation is mainly attributable to the poor capacity and experience of a number of contractors and unsatisfactory capacity of project owners and project management units to negotiate, enter into and manage contracts.

In order to increase the effectiveness of the bidding management, actively contributing to the effective implementation of programs and projects funded with ODA capital and concessional loans, the Prime Minister requests:

I. Regarding bidding management and contract performance

1. The ministries, sectors and localities, state economic groups and corporations, especially units having projects which are implemented behind schedule, have a low disbursement rate and encounter problems in the implementation process, to identify and review problems in the selection of contractors and the negotiation and entry into of contracts for bidding packages funded with ODA capital or concessional loans in the past, thereby devising thorough solutions; and to strictly implement the agreements and commitments already concluded between the Vietnamese Government and donors.

2. Project owners to properly perform the following contents:

a/ For bidding packages for which bidding dossiers have not yet been issued:

- To ensure that the contents of bidding dossiers conform with the provisions of treaties or international agreements already signed with donors. At the same time, to fully comply with Vietnamese laws on the submission, appraisal and approval of bidding contents;

- To incorporate criteria for detailed evaluation that meet the requirements of bidding packages into bidding dossiers so as to ensure transparent and effective bidding to select contractors that are fully eligible in terms of status, capacity and experience and offer feasible solutions to executing bidding packages;

b/ For bidding packages in the process of contract negotiation:

- To ensure schedule and funding for compensation and ground clearance work before entering into contracts. In case of urgency to immediately execute bidding packages when still unable to ensure the planned compensation and ground clearance schedule stated in the contracts, project owners shall propose handling solutions to competent authorities for consideration and decision;

- To clearly determine financial mechanisms in the contracts to bind the contractors to ensure the schedule and quality of works, while controlling expenses in total investment amounts (compensation, bonus, fine, suspension or termination of contracts). In the process of negotiating contracts and reviewing total contract values, not to include in the contracts indirect expenses for other items that have no payment sources;

- To forecast exchange rate risks in case contractors offer bidding package execution expenses in foreign currencies, especially those different from the payment currencies of donors. Contracts must clearly state the source of price index, way of calculating equivalent values and exchange rates. To take measures to control risks related to the fluctuation of foreign exchange rates in contracts;

- To clearly determine the formula of calculating inflation rates for goods (supplies, equipment, materials, raw materials, fuels) purchased at home and for goods purchased from abroad in accordance with regulations applicable to adjustable unit price-based contracts. At the same time to clearly state the handling methods for arising amounts caused by inflation for which no calculation formula is available;

- To report to competent authorities for specific solutions, including also hiring legal consultants in the process of negotiating and entering into contracts (if necessary) in order to avoid contract disputes;

- In the course of negotiating contracts, if contractors make proposals different from bidding dossiers, to consider the reasonability of these proposals before making decision ensuring quality, schedule and price as required in bidding dossiers and take responsibility for such decision.

c/ For bidding packages for which contracts are being performed:

- To increase supervision to ensure the performance of contracts according to plan and schedule stated in bid dossiers and signed contracts;

- To strictly handle contractual breaches like delayed execution, failure to ensure quality of supplies, equipment, works, etc. To disclose information on the handling of violations prescribed in Clause 4, Article 90 of Bidding Law No. 43/2013/QH13;

- To fully report on information of foreign contractors that win contracts in Vietnam under Article 128 of the Government’s Decree No. 63/2014/ND-CP of June 26, 2014, detailing a number of articles of the Bidding Law regarding contractor selection, to the Ministry of Planning and Investment for summarization and monitoring;

- To closely coordinate with local administrations in reviewing problems in ground clearance work that cause delays in the handover of ground areas agreed in the contracts and report them to competent authorities for timely handling plans;

- To request contractors to provide a guarantee for contract advances equivalent to the value of such advances in order to secure funding sources in case contractors breach contracts. At the same time to apply measures to make sure that contractors use advances for proper purposes and requirements of bidding packages.

d/ To clearly determine their responsibilities and those of project management units under current regulations. In case of necessity or at the request of donors, project management units may represent project owners to perform a number of tasks of the latter provided they have letters of authorization by project owners or documents stating the decentralization of powers to the project management units to perform specific tasks.

II. Regarding capacity building for project management units

1. The ministries, sectors and localities and state economic groups and corporations should evaluate the capacity of project owners and project management units in order to immediately rectify the decentralization of powers in bidding according to regulations.

2. Project owners, when setting up project management units, shall take into account the use of existing capable project management units or professional ones in order to properly perform the tasks of assisting the project implementation and contract management, develop criteria for each position in a project management unit in order to form professional project management units with sufficient project management qualifications and skills; study and implement the decentralization of responsibilities to project management units in order to curb time for carrying out procedures.

3. Project owners shall review project management unit staffs in order to increase bidding and project management training to ensure satisfaction of professional requirements by project owners, bid solicitors, bidding experts groups and persons according to current regulations while raising their sense of professional ethics and personal responsibility.

III. Organization of implementation

1. The ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of provincial-level People’s Committees, chairpersons of Boards of Directors and chairpersons of Members’ Councils of state economic groups and corporations shall, according to their respective functions, tasks and scope of management, direct owners and management units of projects funded with ODA capital or concessional loans to thoroughly grasp and properly implement this Directive. They shall send annual reports to the Ministry of Planning and Investment for summarization and reporting to the Prime Minister.

2. The Ministry of Planning and Investment shall assume the prime responsibility for, and coordinate with other ministries, sectors and localities in, monitoring and urging the implementation of the Directive; and propose the Prime Minister to strictly handle violations under current regulations.-