CIRCULAR No.7-BKH/VPXT OF APRIL 29, 1997 FURTHER GUIDING THE IMPLEMENTATION OF THE REGULATION ON BIDDING BY FOREIGN INVESTED ENTERPRISES

On the basis of the Regulation on Bidding issued together with Decree No.43-CP of July 16, 1996 of the Government and Inter-ministerial Circular No.02-TTLB of February 25, 1997 of the Ministry of Planning and Investment, the Ministry of Construction and the Ministry of Trade guiding the implementation of the Regulation on Bidding; and at the same time to facilitate the implementation of the Regulation on Bidding by joint venture enterprises and parties to business cooperation contracts under the Law on Foreign Investment in Vietnam (hereafter referred to commonly as foreign invested enterprises), the Ministry of Planning and Investment provides the following additional guidances for the implementation of the Regulation on Bidding by foreign invested enterprises:

I. SCOPE OF APPLICATION:

1. The provisions of this Circular shall apply to projects of foreign invested enterprises with at least 30% of the prescribed capital being contributed by Vietnamese State enterprises as defined in the Regulation on Bidding.

2. The competent agency that grants the investment license for a project shall be the agency that will issue a written approval of the bidding plan and bidding results of such project:

- Foreign invested enterprises with projects licensed by the Ministry of Planning and Investment shall have their bidding plans and bidding results approved in writing by the said Ministry.

- Foreign invested enterprises with projects licensed by the provincial-level People� Committees or Managing Boards of Industrial Parks shall have their bidding plans and bidding results approved in writing by the said agencies.

II. CONTENTS TO BE APPROVED BY THE MINISTRY OF PLANNING AND INVESTMENT

1. Bidding plan:

After being granted the investment license, to deploy the implementation of a project, the foreign invested enterprise shall have to work out a bidding plan for the whole project before organizing the bidding.

The bidding plan should define all work regarding the consultancy, construction and installation and procurement of materials and equipment which need or need not to be opened for bidding.

Contents of a bidding plan have been stipulated in Article 5 of the Regulation on Biding and Section I (1), Part II of Inter-ministerial Circular No.02/TTLB of February 25, 1997, of which the 4 following details must be clarified:

- The division of a project into bidding packages

- The estimated value of each bidding package

- The form of bidding

- The mode of contract performance

The division of a project into bidding packages must be reasonable and based, first of all, on technological characteristics or the duration for the implementation of the project. The project should not be divided into too big bidding packages so as to provide conditions for bidders (especially Vietnamese bidders) to participate in the bidding.

The total estimated value of bidding packages and the project�s remaining items not opened for bidding must not exceed the total investment capital already prescribed in the investment license.

The form of international bidding shall be used only for bidding for consultancy, construction or procurement of materials and equipment for projects with particular technical requirements that are beyond the capabilities and experiences of Vietnamese bidders.

An investment license shall serve as legal basis for the approval of a bidding plan. If the bidding plan does not conform with the investment license such as the excess of investment capital, change of the bidding form..., the foreign invested enterprise shall have to fill procedures for adjusting and supplementing the investment license in accordance with the provisions of Circular No.03/BKH-QLDA of March 15, 1997 of the Ministry of Planning and Investment guiding the procedures for the implementation of foreign investment projects in Vietnam.

2. Bidding results:

Only after the biding plan has been approved, shall the foreign invested enterprise proceed with the bidding. The bidding must be organized in accordance with the approved bidding plan.

Bidding results shall be approved on the basis of each bidding package.

Some work to be done in the process of organizing the bidding such as the appointment of a group of specialists or the hiring of consultants, the contents of the tendering dossier, evaluation criteria... shall be decided by the Managing Board of the joint venture enterprise (or the authorized representatives of parties to a business cooperation contract).

After considering, evaluating and classifying bid dossiers, the Managing Board of the joint venture enterprise (or the authorized representatives of parties to a business cooperation contract) shall approve the bidding results.

The report on the bidding process should focus on such major details as the working results of the group of specialists or consultants, the tendering dossier�s contents, the evaluation criteria (the scale of points), the results of evaluation of bidders (their capabilities, experiences, technical solutions, bidding prices, the number of points...), the bid winner and his/her offered bidding price.

III. DOCUMENTS NECESSARY FOR PROPOSING THE APPROVAL

1. Regarding the bidding plan:

- A written proposal for the approval of the bidding plan made by the foreign invested enterprise.

- A written explanation of the grounds for the elaboration of the bidding plan, including the division of the project into bidding packages, the estimated value of each bidding package, the form of bidding and the mode of contract performance...

- A copy of the investment license or the adjusted investment license (if any).

- The feasibility study and documents amending or supplementing it (if any).

The bidding plan shall be approved within 20 days after the receipt of a full dossier (including the time for consulting specialized ministries with regard to complicated projects).

2. Regarding bidding results:

- A written proposal for the approval of the bidding results made by the foreign invested enterprise, in which the bidders and their offered bidding prices must be clearly stated.

- A report on the organization of the bidding, the evaluation and classification of bidders.

- Proposals of the Managing Board of the joint venture enterprise (or the authorized representatives of parties to a business cooperation contract) on the bidding results.

- A copy of the bid dossier of the bidder proposed to be the bid winner.

The bidding results shall be approved within 20 days after the receipt of a full dossier (including the time for consulting the specialized ministries with regard to complicated projects).

All the above-said documents (except for copies of bid dossiers) must be made in Vietnamese.

IV. COST OF EVALUATION TO APPROVE THE BIDDING RESULTS

Cost of evaluation to approve the bidding results of bidding packages proposed by foreign invested enterprises shall be determined on the basis of Inter-ministerial Circular No.02-TTLB of February 25, 1997 (Point 3, Part III) and shall be guided in details as follows:

- It shall apply only to consultancy bidding packages valued at 10 billion VND or more and bidding packages for the procurement of materials and equipment or construction and installation, valued at 50 billion VND or more.

- It must be equivalent to 50% of the level prescribed in Inter-ministerial Circular No.02-TTLB of February 25, 1997.

The Ministry of Planning and Investment promulgates the above guidances for foreign invested enterprises to be aware of and abide by them, thus creating conditions for a quick consideration and approval.

The Minister of Planning and Investment

TRAN XUAN GIA