On 23 June 2023, the National Assembly adopted the new Law on Tendering effective from 1 January 2024 (Law on Tendering 2023). In an effort to foster a more competitive market, the Law on Tendering 2023 introduces significant amendments regarding the scope of application, methods, and procedures for selecting tenderers and investors. This post will summarize some notable changes in the Law on Tendering 2023.

1)         Amendments to the scope of application

Under both the Law on Tendering 2023 and the old Law on Tendering 2013, the selection of investors for (1) projects using land in accordance with the law on land, and (2) other projects in accordance with specific laws must comply with the tendering procedures.  The Law on Tendering 2023 provides for certain changes relating to such cases.

Regarding projects using land, the above requirement appears to refer to the circumstances of land allocation and land rental via tender procedure as set forth in the new Land Law effective from 1 January 2025 (Land Law 2024). Under the Land Law 2024, the provincial People’s Council must decide to allow a project  using land to be tendered. This condition is not provided in the Land Law 2013 and the Law on Tendering 2013.

With respect to other projects in accordance with specific laws, under Decree 23/2024 implementing the Law on Tendering 2023, the Government specifies projects subject to tendering under specific laws. Such projects include, for example, investment projects for the renovation and reconstruction of apartment buildings, or investment projects for the construction of domestic solid waste treatment works. Previously, the Law on Tendering 2013 did not provide for further clarification on this issue.  

2)         Amendments to the methods of tenderer/investor selection

The Law on Tendering 2023 allows alternative methods of tenderer selection other than those provided under the Law on Tendering 2023 provided that such methods must meet the specific requirements (e.g., having modern electronic means, ensuring competition and fairness). In addition, the Law on Tendering 2023 has abolished the method to select investor by direct appointment (chỉ định thầu), which was previously applied under the old law to projects where only one investor registers.

3)         Amendments to the procedures of tenderer/investor selection

Regarding the tenderer selection procedure under the Law on Tendering 2023, the project owner may submit a general plan (kế hoạch tổng thể) to the competent authority for approval, depending on the scale and nature of the project. The general plan contains information such as project owner’s capacity assessment; risk management in tendering; implementation schedule.

Regarding procedures for selecting an investor for a project, the Law on Tendering 2023 also requires the announcement of business investment projects by the competent authority on the national tendering network before preparing tender documents. Additionally, to be selected, an interested investor and its tender documents must be evaluated on the basis of several new criteria, such as land use efficiency and investment efficiency in the development of specific sectors, fields, and localities.

4)         New types of contracts in tendering

The Law on Tendering 2023 introduces new contract types in the tendering process applicable to each specific circumstance. These include (i) cost-plus-fee contract, (ii) output-based contract, (iii) percentage-rate contract, and (iv) hybrid contract.

5)         Timeline of application of tendering via the Internet

Starting from 1 January 2025, certain tendering methods such as (i) open tendering, (ii) limited tendering, and (iii) competitive quotation for procuring goods, must be processed via the Internet. The Government will provide further guidance on the specific timeline, procedures, and exemptions for cases not conducted via the Internet.

This post is written by Tran Duc Long and edited by Hoang Thi Thanh Thuy.