7. Exemptions to Competitive Bidding
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7. Exemptions to Competitive Bidding Start Comparison
a. Are there any exemptions to competitive bidding, i.e. under what conditions is a direct award/single sourcing permissible?

Yes. Under the Bidding Law, all project processes discussed in Section 2(a) above are subject to open bidding by default. The open bidding process does not limit the number of bidders nor does it contain conditions restricting the participation of bidders or favouring one or more bidders. It is prohibited to use a bidder selection process other than open bidding when the conditions are not suitable.

When certain conditions are met, the selection of a contractor can also be done in the following forms:

  • Limited bidding. This process applies to a bid package which has high technical requirements or which involve special techniques that can only be satisfied by some bidders;[1]
  • Direct appointment. The direct appointment of a contractor applies to:[2]
    • (i) bidding packages which need to be executed to immediately remedy or promptly handle consequences of force majure events; or (ii) bidding packages which need to be executed to protect state secrets; or (iii) bidding packages which need to be executed immediately to prevent direct harm to the life, health and property of local communities or advert serious impacts on adjacent works; or (iv) bidding packages to purchase medicine, chemicals, medical supplies and equipment for epidemic and disease prevention and combat in emergency cases;
    • emergency bidding packages which need to be executed to defend national sovereignty, national boundaries and islands;
    • (i) bidding packages to provide consultancy or non-consultancy services, procurement of goods which must be purchased from contractors that have previously executed packages in order to ensure technological compatibility and copyright which cannot be purchased from other contractors; or (ii) bidding packages for research or testing purposes; or (iii) for the purchase of intellectual property rights;
    • bidding packages (i) to provide consultancy on elaboration of feasibility study reports or construction engineering which are designated to the authors of work architecture designs that win the bidding or are selected when they satisfy the prescribed capacity conditions; or (ii) to construct monuments, relief, grant murals and artistic works subject to copyright from the stage of creation to be stage of construction;
    • bidding packages (i) to remove technical infrastructure facilities directly managed by a specialized unit to serve the ground clearance; or (ii) to sweep bombs, land mines, and explosive objects to prepare for construction sites;
    • bidding packages to provide public products or services, and bidding packages with prices within the limit eligible for contractor appointment according to the Government's regulations and suitable to socio-economic conditions in each period.
  • Direct procurement.
    • Direct procurement applies to bidding packages to procure similar goods under the same project or under another project or cost estimate.
    • Conditions for application of this process include (i) the selected contractor has been previously awarded a contract; (ii) the current package possess similar features and a smaller scale than 130% of the previous packages; (iii) the bid price does not exceed the price of respective works under the previous bid package and (iv) contract of the previous bid was signed no longer than 12 months prior to the approval of the current direct procurement.[3]
  • Competitive quotation in the procurement of goods. Competitive quotation applies to bid packages within the limited price as regulated by the Government, for (i) ordinary and simple, non-consultancy service bidding packages; or (ii) bidding packages to procure ordinary goods, which are available on the market with standardized technical properties and of equivalent quality; or (iii) simple construction bidding packages with approved construction drawing designs.[4]
  • Self-implementation. The form will apply where the investor is also a contractor with sufficient capability and experience to implement the bid package belonging to the project which such an investor manages and uses.
  • Special case. In the case of a bid package with particular requirements for which the abovementioned forms of contractor selection cannot be applied, the investor will prepare a plan for selection of contractors which ensures competitiveness and economic effectiveness and will submit it to the Prime Minister for consideration and decision.
  • Centralised procurement is a method where contractors are selected through open bidding. Centralised procurement applies to cases in which goods or services need to be procured in large quantities or of similar types in one or more than one agency, organisation, enterprises or project owner. The entities shall (i) gather the procurement demands, select contractors and directly sign contracts with contractors selected to provide goods or services or (ii) gather the procurement demands, select contractors, sign a written framework agreement with one or more than one selected contractor to serve as a ground for units with procurement demand to directly sign contracts with contractors selected to provide goods or services.[5] The validity of duration of a framework agreement shall be specified in the contractor selection plan and shall not exceed 3 years.[6]
  • Regular procurement is a method where contractors are selected in accordance with the forms and methods of selection of contractors, investors and professional bidding organisations.[7] Regular procurement applies to state bodies, political organizations, socio-political organizations, socio-politico-professional organizations, socio-professional organizations, social organizations, people's armed forces units or public non-business units regarding the procurement of goods or services when they satisfy the following conditions:
  1. using the funding source for regular procurement and
  2. goods or services are on the list of goods and services subject to procurement to maintain routine operations of the respective entities[8] except for the procurement for national defense and security purposes.[9]
  • For the purchase of medicine, and medical equipment, please refer to Section 10(c).

 

[1] Article 21, Bidding Law.

[2] Article 22, Bidding Law.

[3] Article 24, Bidding Law.

[4] Article 23.1, Bidding Law.

[5] Article 44.3, Bidding Law.

[6] Article 45.2, Bidding Law; Article 72, Decree No. 63.

[7] Chapters II, III Bidding Law.

[8] Article 46, Bidding Law.

[9] Article 73, Decree No. 63.

b. What are the consequences for violation of the competitive bidding requirement?

The violator are subject to remedies/enforcement mechanisms discussed in Section 8(a) below.