(Chinhphu.vn) –Mr. Pham Hoang Trung’s office (in Hanoi) is a state-owned enterprise which hold more than 50% of the capital; have a project of purchasing machinery and  renovatingas well as repairing factories. Quoted price to renovate and repair factories is under VND 400 million that is subject to self-financed capital and assigned to a private unit to execute the construction package.

Mr. Trung would like to ask, does the company have to apply the law of contractor designation? If yes, should the company apply the normal or shortened form of contractor?

Regarding this issue, The Ministry of Planning and Investment has the following opinions:

Point c, Clause 1, Article 1 and Clause 44, Article 4 of the Bidding Law stipulate that Projects on development investment other than cases defined at Point a and Point b of this Clause which are financed by state, state-owned enterprises with level equal to 30% or more or less than 30% but more than VND 500 billion in total invested capital of project is governed by this Law; Financed by the State means the use of State Budget funds; national bonds, Governmental bonds, bonds of local authorities; official development assistance capital, concessional loans from donors; fund for development of non-business activities; credit facilities for investment and development of the State; credit facilities guaranteed by the Government, loans guaranteed by assets of state; investment and development funds of State-owned enterprises, and value of land-use right.

For Mr. Trung's case, if the enterprise is not a State-owned enterprise and the purchase of machinery, renovation and repair of the factory is not a development investment project as stipulated in Clause 11, Article 4 of The Bidding Law is not covered by the Bidding Law.

In case the above-mentioned procurement that belongs to a project on development investment as stipulated in Clause 11, Article 4, the Bidding Law and the project using State capital, State-owned capital of 30% or more 30% but over VND 500 billion in the total investment of the project, the project is governed by the Bidding Law according to the above regulations. In this case, the application of contractor designation must comply with the provisions of Article 22 of the Bidding Law and Section 1, Chapter V, the Decree No. 63/2014 / ND-CP.