Vietnam - Selling to the Government Vietnam - Selling to the Government
The Vietnamese government is the leading purchaser of goods and services in Vietnam. If provincial and municipal governments and state-owned enterprises are included, the potential for sales to this sector is very large. Bolstering state budget allocations, Vietnam is also the recipient of significant levels of Official Development Assistance (ODA). Infrastructure is the principal development priority for ODA, but other key sectors include transportation, telecommunications, energy, environmental/water, civil aviation, education, and financial services. In May 2016, the United States lifted a three-decade ban on the sale of certain categories of defense articles to Vietnam, opening a new sector to U.S. companies.
Government procurement is regulated by the Law on Public Procurement, 43/2013/QH13, approved on Oct 26, 2013, and Decree No 63/2014/ND-CP dated August 15, 2014, which contains stipulations related to selection of contractors. Government procurement funded by ODA loans and grants is normally governed by regulations on tendering of relevant donors in accordance with loan agreements between the Vietnamese government and donors.
Public investment projects are classified in accordance with Article 6 of the Law on Public Investment into Group-A, Group-B, and Group-C projects. Classification criteria comprise of urgency/significance, area/location, sector, investment components or capital required.
Government procurement practices can be characterized as a multi-layered decision-making process, which, despite some recent improvements, often lacks transparency and efficiency. Although the Ministry of Finance allocates funds, various departments within the ministry or agency are involved in determining necessary government expenditures. Currently, ministries and agencies have different rules on minimum values for the purchase of material or equipment, which must be subject to competitive bidding. High value or important contracts, such as infrastructure, require bid evaluation and selection and are awarded by the Prime Minister’s office or other competent body, except for World Bank, Asian Development Bank, UNDP, or bilateral official development assistance (ODA) projects. Some solicitations are announced officially in the Vietnamese language newspapers such as Dau Thau, Nhan Dan, Lao Dong, and Saigon Giai Phong, and in the English language newspapers Vietnam News and Vietnam Investment Review. American firms may also be able to register to obtain a consolidated listing of government or private tenders in Vietnam at Intellasia and may check MPI’s public procurement website.
The key to winning government contracts includes a high degree of involvement and communication between the foreign supplier, the local distributor or representative, and relevant government entities. Interaction should begin during the project planning stage. To secure orders in competitive bidding, it is necessary to establish rapport and credibility, as well as to educate the procuring entity as to how the product or service can support project needs well before the bid is publicly announced. Although the timing for tender opening, bid closing and award notification varies from project to project and preparation of government budgets. Experienced foreign suppliers caution that even after awards are made, negotiations on price, specifications, payment terms, and collateral may continue for some time.
It is also advisable that U.S. firms consider the U.S. Department of Commerce’s Advocacy Center early in the process and prior to bidding. Many governments finance public works projects through borrowing from the Multilateral Development Banks. Please refer to “Project Financing” Section in “Trade and Project Financing” for more information.
Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.