VIETNAM COUNTRY PROCUREMENT ASSESSMENT REPORT ... Sep 01, 1999  · Mr. Rakesh Nangia,...

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Transcript of VIETNAM COUNTRY PROCUREMENT ASSESSMENT REPORT ... Sep 01, 1999  · Mr. Rakesh Nangia,...

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    Document of The World Bank

    Report No. 25144-VN

    VIETNAM

    COUNTRY PROCUREMENT ASSESSMENT REPORT

    Transforming Public Procurement

    October 2002

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    Currency Equivalents Currency Unit = Vietnam Dong (VND)

    USD 1.00 = VND 15,363 (October 2002)

    Abbreviations and Acronyms

    ADB Asian Development Bank CAS Country Assistance Strategy CPAR Country Procurement Assessment Report EVN Electricity of Vietnam FDI Foreign Direct Investment FIDIC Fédération Internationale des Ingénieurs-Conseils JBIC Japan Bank for International Cooperation GOV Government of Vietnam GTZ German Technical Assistance Agency ICB International Competitive Bidding IDF Institutional Development Fund MOF Ministry of Finance MPI Ministry of Planning and Investment NCB National Competitive Bidding ODA Official Development Assistance OOG Office of Government PC Peoples Committee PEO Procurement Evaluation Office, MPI PIU Project Implementation Unit PPO Public Procurement Office SOE State-owned Enterprise TACIS Technical Assistance to Commonwealth of Independent States UNCITRAL United Nations Commission on International Trade Regulations and Law UNDP United Nations Development Program WTO World Trade Organization

    Fiscal Year:

    Government of Vietnam: January 1 to December 31 World Bank: July 1 to June 30

    Regional Vice President: Mr. Jemal-ud-din Kassum, EAPVP Country Director: Mr. Rohland Klaus, EACVF Sector Director: Ms. Marisa Fernandez-Palacios, EAPCO Regional Procurement Advisor: Mr. Denis Robitaille, EAPCO Task Team Leaders: Mr. Rakesh Nangia, EACVF; Nguyen Chien Thang, EAPCO

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    Foreword

    am very pleased to introduce the first comprehensive Vietnam Country Procurement Assessment Report (CPAR). The report provides a detailed analysis of the recent progress made by the Government of Vietnam, of

    outstanding issues and an appropriate plan to address them.

    I am delighted to note that in a relatively short period of time, Vietnam has made impressive progress in establishing a framework for a modern public procurement system. Good procurement practices reduce costs and produce timely results and avoid waste and delays Efficient Procurement also reduces the scope for corruption, and encourages good firms to participate in the bidding and achieves quality results for.

    While Vietnam has made considerable progress in reforming its public procurement system and moving towards an appropriate and efficient system, public procurement is still less than perfect. During the preparation of this report, issues have been discussed with stakeholders in different forums, and there is agreement on the proposed actions to move forward on public procurement. The World Bank and the donor community are ready to assist the Government of Vietnam in the implementation of this action plan.

    I sincerely hope that this report is a meaningful contribution to further

    improving the public procurement system in Vietnam and highly recommend it for reading.

    Klaus Rohland Country Director, The World Bank Vietnam

    I

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    Vietnam Country Procurement Assessment Report

    Table of Contents

    EWORD ............................................................................................................................iii

    ACKNOWLEDGEMENTS ..............................................................................................vii

    I. EXECUTIVE SUMMARY ............................................................................................. 1

    SUMMARY OF KEY ISSUES....................................................................................... 2 SUMMARY OF KEY RECOMMENDATIONS............................................................. 4

    II. THE PUBLIC PROCUREMENT SYSTEM................................................................. 7

    LEGAL AND REGULATORY FRAMEWORK .......................................................................... 7 Introduction.................................................................................................................. 7

    The Legislative and Regulatory Authorities ............................................................ 7 The Judicial and Arbitration Systems ...................................................................... 8

    Key Issues and Recommendations ............................................................................... 9 Current Procurement Legislation ............................................................................. 9 The Proposed Ordinance on Procurement................................................................ 9 Rules for Civil Servants ......................................................................................... 11 Anti-Corruption Legislation................................................................................... 12 Contract Law .......................................................................................................... 13

    PROCUREMENT PROCEDURES AND PRACTICES ............................................................... 14 Introduction................................................................................................................ 14 Key Issues and Recommendations ............................................................................. 14

    Procurement Planning ............................................................................................ 14 Methods of Procurement ........................................................................................ 15 Advertising ............................................................................................................. 16 Bidding Opening .................................................................................................... 18 Standard Bidding Documents................................................................................. 18 Bid Evaluation........................................................................................................ 19 Review and Final Approval Process ...................................................................... 20 Low Bid Price......................................................................................................... 22 Project Implementation and Supervision ............................................................... 23

    INSTITUTIONAL FRAMEWORK ......................................................................................... 24 Independent Procurement Body................................................................................. 24 The Main Features of a Public Procurement Office (PPO) ...................................... 24

    HUMAN RESOURCES AND PROCUREMENT CAPACITY ..................................................... 26 FINANCIAL ACCOUNTABILITY IN THE PUBLIC SECTOR ................................................... 27 OVERALL RISK ASSESSMENT...........................................................................................28

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    III: SOEs AND THE CONSTRUCTION INDUSTRY .................................................... 28

    IV: LESSONS FROM WORLD BANK EXPERIENCE ................................................. 31

    PROCUREMENT EXPERIENCE UNDER WORLD BANK ASSISTED PROJECTS IN VIETNAM .... 32

    V: ACTION PLAN FOR TRANSFORMING PUBLIC PROCUREMENT .................... 36

    ANNEXES

    Annex I: A Review of the 5th Draft of Vietnam Public Procurement Ordinance Annex II-A: Legal Framework Annex II-B: Trade Practices Annex II-C: Financial Framework Annex II-D: Public Sector Procurement of Goods/Works Annex II-E: Public Sector Selection of Consultants Annex II-F: Procurement Performance Annex II-G: Private Sector Procurement Annex II-H: Checklist Comparing NCB Procedures and World Bank Policy Annex III-A: Classification of Investment Projects Annex III-B: Available Methods for the Selection of Bidders Annex IV: Construction Industry Reform – Summary Report Annex V: Summary of Pertinent Laws and Regulations Annex VI: NCB Acceptability – Proposed Provisions for Bank legal agreements ATTACHMENTS

    The Procurement Ordinance - 5th Draft The Government Decree 88/1999/ND-CP of September 1, 1999

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    Acknowledgements

    he first procurement review was completed in 1994, at a time when ODA resources were unavailable to Vietnam and most international commercial dealings were with former COMECON partners on a barter trading system. The initial work for this report

    was begun in 1998 by a World Bank mission. Rapidly changing circumstances and continued reforms in the area of pro