DECISION

ON THE ISSUANCE OF THE STATUTE ON CONSTRUCTION AND ASSEMBLY BIDDING THE MINISTER OF CONSTRUCTION

Pursuant to Decree No.1 5-CP on March 4, 1994 of the Government defining the functions, tasks, power and organizational structure of the Ministry of Construction;
Pursuant to Decree No. 15-CP on May 2, 1993 of the Government defining the tasks, power and State management responsibility of the ministries and ministerial-level organs;
With a view to improving the pricing and budgeting work in order to improve managerial work, fight against waste, losses and other negative aspects in investment and building as instructed by Decision No. 92-TTg on March 7, 1994 of the Prime Minister of the Government;

DECIDES:

Article 1.- To issue in conjunction with this Decision the Statute on Construction and Assembly Bidding in replacement of the Statute on Construction Bidding issued in conjunction with Decision No.24-BXD/VKT on February 12, 1990 of the Ministry of Construction.

Article 2.- This Statute takes effect throughout the country as from April 1st, 1994.

Article 3.- The Ministries, the State Commissions, the agencies attached to the Central Government and the People's Committees of the provinces and cities directly attached to the Central Government shall popularize this Decision, guide and organize the implementation of the modalities in construction and assembly bidding in accordance with this Statute.

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THE MINISTER OF CONSTRUCTION




Ngo Xuan Loc

STATUTE

ON CONSTRUCTION AND ASSEMBLY BIDDING

(issued in conjunction with Decision No. 60-BXD/VKT on March 30, 1994 of the Minister of Construction)

This Statute defines the modalities for construction and assembly bidding at all State-owned building projects (including projects funded by the State Budget, credit fund, self-supplemented fund of the State-owned businesses). This Statute also applies to the projects directly funded by foreign investments, non-State projects (including projects of private businesses, businesses founded by virtue of the Corporate Law, or cooperatives...) if bidding for building and assembly is to be held.

I. GENERAL PROVISIONS

Article 1.- Types of building and assembly projects:

1. The State-owned building projects shall have to organize bidding for construction and assembly before starting, except for the following categories which are allowed to adopt the construction and assembly bidding modalities provided for in Part III of this Statute or according to the regime of designation in construction and assembly bidding:

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- Projects for research and experimentation purposes;

- Projects to be urgently built in case of natural disasters or damage caused by enemy actions;

- Projects of small construction and assembly value (below 100,000,000 VND);

- Some other special projects the bidding for which is designated by the Government.

- Projects of a special character of some branches of activity which have received permission from the Prime Minister of the Government.

The investment administrator and the financial institution or the banks at different echelons shall not supply capital or grant loans to the projects in which the investor arbitrarily awards contracts in contravention of the above stipulations. At the same time they shall handle related questions depending on the seriousness of the violation by the investor.

2. Bidding for construction and assembly may be held for the whole project or each part of the project, depending on the size, character and type and concrete conditions of each project.

- Bidding for construction and assembly of the whole project shall be held for small-sized projects.

- Bidding for the construction and assembly of each part of the project may be held for projects above the average norm. In particular, with regard to very large projects, bidding may be held for each category of work with a large volume of construction and assembly (ground leveling, foundation, pile driving...).

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1. Complete supply of the design dossier and approved cost estimate of the bidding project.

- In regard to small-size projects, the tenderer must submit the necessary technical design dossier and construction design (or technical design and construction blueprint in case of a project requiring complicated techniques), total cost estimates and the cost estimates of each part of the project already approved by the authorized echelon.

- In regard to large projects, he must submit the already approved technical design dossier and total cost estimates. In case bidding is tendered for each part of the project, each part must be provided with the construction blue-print and the estimated cost of construction and assembly already approved by the authorized echelon. In special cases when a project has not gathered all the conditions for establishing the total cost estimates but some parts of the project need to be constructed, the cost estimates of each of these parts must be subject to approval of the investment administrator.

2. Guarantee of sufficient capital to make payments according to the contract:

- In regard to a project funded by the budget, the project must be listed in the capital construction plan of the ministry or the locality.

The Planning, Fiscal and Banking organs at various echelons shall supply the necessary capital (or loans) as construction and assembly progress according to the approved economic and technical feasibility plan or technical design of these projects.

- In regard to the projects funded by the self-supplemented capital of the business or by the credit fund, the investor shall discuss with the Bank to determine the existing capital and the lending capability of the Bank (where the investor opens his account).

- In regard to the projects funded by different sources of capital, these sources must be certified by the managerial organ of each of these sources.

- In regard to the projects funded by capital mobilized from the population, there must be a commitment to payment by the mobilizing organization, such a commitment have been certified by the administration at the province or city level (or district level in regard to a small project) and the guarantee of the bank where the mobilizing organization carries out its transactions.

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If it is determined that the necessary capital can be mobilized only after a certain period of time, the investor still can organize the bidding but he must clearly specify this in the tendering notice so that the prospective contractors could evaluate their capabilities before joining the bidding.

3. Having prepared the construction ground on which compensations have been made for the land and crops (for the whole or part of the ground depending on the tempo of construction); having the permit for land use and the permit of construction as prescribed by current regulations of the State.

4. Having prepared all the necessary dossiers for the tender.

Article 3.- The tenderer:

1. The unit which organizes construction and assembly bidding (tenderer) is the investor or the general contractor (who subcontracts a number of installations in the project or part of the construction volume).

2. The investment administrator shall not replace the investor in organizing the bidding but has only the responsibility to:

- Examine the decision of the investor;

- Allocate the capital to the investor and assign him with the responsibility to preserve and develop the capital;

- Guide, supervise and control the preparations of adequate conditions by the investor before holding the bidding;

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- Supervise and control the execution of the task by the investor and handle cases of non-compliance.

Article 4.- Tender dossier:

1. The tender dossier comprises the following documents:

- Notice on the tender;

- Guidance to the bidding;

- Concrete terms of the contract;

- Technical design and construction blueprint, appendices on technical specifications, measurements, quality and technical descriptions;

- Estimates for bidding prices with listing of prices in the country and exchange rates (if any);

- Form of bidding application;

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- Form of contract;

- Form of guarantee of contract execution;

- Supplementary documents (if any).

2. The investor has the responsibility to answer in writing or by telegram all questions related to the tender dossier which the bidding units ask for explanation. These answers must be sent to all bidding units.

3. At least 10 days before the expiration of the date for the sending of the bidding application, the investor may modify or supplement the tender dossier if he finds it really necessary. These modifications and supplements must be communicated in writing or by telegram to all the bidding units which have bought bidding dossiers. The bidding units must expeditiously notify in writing or by telegram the investor that they have received these modifications and supplements.

In case of major modifications or supplements, the investor may extend the deadline for the filing of the application but not longer than one third of the time-limit already stated in the tender notice.

Article 5.- Conditions for the bidding unit:

All construction and assembly organizations are entitled to take part in a bidding if they meet the following conditions:

1. They have a business permit and an operation permit for construction business in conformity with the professional qualification and area of operation issued by the authorized echelon as prescribed by current State regulations (if it is a unit directly under a licensed organization, it must have the mandatory certificate of this organization). A licensed organization in construction business is entitled only to send a bidding unit for a bidding project (either as direct participant or a mandatory participant).

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3. In case of a bidding joint venture, the parties to the joint venture must send a representative unit and only one bidding application. The representative unit must list all the units in the joint venture.

The joint venture units must also fill the conditions stated at Point 1 and 2, Article 5, of this Statute and take joint responsibility for the execution of the contract with the investor (if they win the bid). Among the joint venture units there must be economic contracts to clearly define the responsibilities and interests of each unit.

4. Paying the bidding fee and buying the tender dossier. The fee for each tender depends on the category of the project but shall not exceed two million dong. The cost of the tender dossier depends on the cost of compilation and printing of each tender and must be clearly written in the tender notice.

5. Filling the bidding warranty issued by a specialized bank valued at between 1% and 3% of the bidding price. The bidding warranty must be submitted before the bidding opens and shall be returned to the bidder if he does not win the bidding.

With regard to the winner, the investor shall return him the warranty after he has signed the building contract and submits the contract warranty as prescribed in Article 20 of this Statute.

Article 6.- Basis norms for participation in and examination of a bidding:

1. Technique and quality:

- The bidding plans must meet the technical requirements of the design dossier contained in the tender dossier;

- It must ensure the quality and provide guarantee for the project according to current regulations;

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a/ Price of bidding participation:

- The price of bidding participation is based on the volume of work stated in the cost estimates and unit price proposed by the bidding participant;

The unit price of bidding participation must be based on the price platform defined in the "Guidance to Bidding" of the project. The setting of the price platform in the "Guidance to Bidding" and the readjustment of prices must conform with the regulations on the construction prices of the Government.

- The participating unit in the bidding must list all the unit prices of the different types of work already mentioned in the estimates. The investor shall not pay for any job the unit price of which is not specified.

b/ Price of bidding examination:

The bidding examination price is the ceiling price used as basis for bidding examination. It is determined by the estimated value of the construction in the already approved total estimate or the estimated value of each part of the project approved according to the current regulations of the State, taking into account the concrete conditions of each project (time of construction, capital and other specific conditions, if any). The price for bidding examination is proposed by the investor and submitted to the investment administrator for approval.

3. Time for completion of the project:

Ensuring the construction tempo already stated in the tender dossier.

Article 7.- Bidding Examination Council:

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2. Composition of the Council and the echelon authorized to decide on its formation:

The echelon which approves the economic and technical feasibility plan shall decide on the formation of the bidding examination council and shall nominate the chairman of this Council.

The Council comprises:

- The representative of the echelon that examines and approves the economic and technical feasibility plan of the project;

- The representative of the investment administrator (if the examination and approval of the economic and technical feasibility plan of the project is to be done by the Prime Minister).

- The investor;

- The representative of the ministry or service specialized in construction management (depending on whether the bidding project is managed by the central or local government);

- The representative of the bank (if the project is funded by the lending source);

- The representative of the planning and financial office (if the project is funded by the budget source).

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Article 8.- Forms of bidding:

1. Broad bidding: The investor makes wide publicity of the tender on the mass media with clear specification of the conditions for the potential bidders so that the construction organizations know and may take part in the bidding (if they fill the conditions).

2. Limited bidding: The investor shall inform and invite a number of specialized and qualified construction organizations (of the bidding project) or a prestigious construction unit to join the bidding. The investor must report to the investment administrator and the Ministry of Construction (or the Construction Service if the project is managed by the local authorities) on the list of the construction units which he intends to invite to the bidding. The investor shall send the tender only after the above offices have agreed.

The limited bidding shall apply only to large-scale projects with complicated technical requirements decided by the echelon which examines and approves the economic and technical feasibility plan.

Except the difference in the tender notice, both the broad bidding and limited bidding shall conform to the stipulations at Part II of this Statute concerning the contents and order of the bidding.

II. ORDER OF THE ORGANIZATION OF BIDDING IN CONSTRUCTION AND ASSEMBLY

Article 9.- Preparing the tender dossier:

a/ To organize a tender for construction, the investor must first of all prepare all the documents stipulated at Article 4 of this Statute.

b/ Apart from the documents in the tender dossier, the investor must do the following preparatory works:

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- To apply for a permit for construction;

- To prepare the ground for construction at the required tempo (including compensation for the land, crops, house transfer, dismantling, leveling and filling);

- Calculating the price for bidding examination and submit it to the authorized echelon for approval. This price shall be used as basis for considering the price of the winning bidder. It is not stated in the tender (confidential) so that the bidding units may propose different prices in their competition.

Article 10.- Registering the bidding:

1. Once the conditions have been prepared for the bidding, the investor shall register the bidding with the investment administrator and the ministry or service specialized in construction management.

2. The specialized construction management office has the responsibility to examine the procedures and conditions for the organization of the bidding. If it finds that not all the prescribed conditions have been met, it shall guide the investor to fill all conditions before organizing the bidding.

Article 11.- Tender notice:

After the specialized construction management office has certified that all the procedures and conditions for organizing the bidding have been met, the investor shall send the tender notice. The notice must be published at least 30 days before the opening of the bidding.

Article 12.- Checking the conditions of the participating units:

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The investor has the responsibility to check the conditions for the bidding units and choose those units which meet the set conditions.

Article 13.- Submitting the bidding dossier:

1. After checking the conditions for the bidding units, the investor shall invite those units which meet the conditions of bidding to buy the tender dossier, visit the construction site and inform them of the deadline for the filing of the bidding and the time (with specified hour) and place for the opening of the bidding.

All expenditures related to the inquiry and compilation of the tender dossier shall be borne by the units participating in the bidding (whether they win the bid or not).

During the process of examining the tender dossier and visiting the construction site, the investor may organize discussion and exchange of views with the participating units in the bidding if they ask questions about the contents and requirements of the work which are not yet clear to them.

2. After carefully inquiring into and making adequate preparations for the dossier, the unit participating in the bidding shall send to the investor the following documents:

- The sealed application for bidding;

- A copy of the business license and the construction operation permit;

- Presentation of the capability of the participating unit and the similar projects which it has built in the five years nearest to the time of the bidding and its on-going construction projects;

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- An estimate of the price of bidding;

- The guarantee for bidding participation.

The whole bidding participation dossier shall form an original dossier and the copies (the number of copies is to be determined by the investor). Each dossier shall be contained in a large envelope signed and sealed and sent to the address of the investor within the time-limit written in the tender notice. The investor has the responsibility to preserve the bidding dossier and shall not open the envelopes before the date of the opening of the bidding.

Article 14.- Effective time-limit of the bidding application:

In the bidding application there must be stipulated the effective time-limit of the bidding application (not shorter than 30 days after opening of the bidding). Past this time-limit when receiving the winning notice, the winning unit may accept or not accept it while still have the bidding guarantee returned to him.

In special cases, before the expiration of the effective time-limit of the bidding application, the investor may ask in writing the participating unit to extend this time-limit (by not more than 10 days). The participating unit may accept or not this extension. In case it accepts this extension in writing, all stipulations on payment and guarantee of bidding shall continue to apply during the already extended effective time-limit of the participating unit. If the participating unit does not accept the extension, the investor still has to return to it the bidding guarantee.

Article 15.- Modifying and withdrawing the bidding dossier:

After sending its bidding participation dossier, if it wants to modify or withdraw the dossier, the participating unit must send a notice to the tenderer (specifying the contents of the modification or the withdrawal) before the deadline for filing the participating application stipulated in the tender notice. The contents of the modifications shall be placed in a sealed envelope. The investor has the responsibility to preserve and shall not open the envelope before the date of the opening of the bidding. After the expiry of the dead-line for submitting the application, the notice for modification or withdrawal of bidding participation dossier shall not longer be effective.

Article 16.- Opening the bidding:

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At the public opening of each participating dossier, the Council reads the name of the participating unit, the various documents in the dossier, the price offered for bidding, the time-limit for completion, the written notices on the supplements, modifications or withdrawal of the application (if any), the bidding guarantee of each unit and the other details which the Council deems necessary to make public.

- The whole proceedings of the opening of the bidding must be recorded with full listing of the participants and the signatures of all the present participating units.

Article 17.- Choice of the winning unit:

The process of selecting the winning unit shall proceed in the following order:

1. Examination of the dossiers of the participating units:

a/ Examining the conformability of the participating dossiers. All the unconformable dossiers shall be eliminated right in this stage.

b/ In the process of examining the participating dossiers, the Examination Council may request each participating unit to explain the unclear points in its dossier. The requests and answers shall be registered in written form. When necessary, the Examination Council may directly inspect the conditions for participation in the bidding stipulated in Article 5 of this Statute.

c/ Rectifying the errors in the participating dossiers (if any).

While examining the participating dossiers, if an error in calculation is discovered, the Examination Council shall rectify this error and notify the participating unit. If the latter does not accept these corrections, the application shall be eliminated.

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The participating dossiers shall be evaluated and compared on the basis of each basic norm mentioned in Article 6 of this Statute. These evaluations and comparisons shall be later incorporated into a common evaluation and comparison based on all the three norms.

The evaluation of each norm in based on the following:

a/ Technical and quality norms:

- The level of satisfaction concerning the technical and quality requirements set in the design dossier;

- The rationality of the technical solutions and measures of construction;

- The compatibility of the construction machines (quantity, types...) together with the specifications and conditions of operation of each category of construction job;

- Guarantee of environmental hygiene...

If a participating dossier fails to meet first the technical and quality requirements raised in the design dossier, there is no need to examine the other norms and the participating dossier shall be eliminated.

b/ Norms about prices:

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- The correctness and rationality of the unit prices of the various construction jobs;

- Price level.

c/ Time norms for the completion of the project:

- Capability of ensuring the tempo of construction stipulated in the tender dossier;

- The rationality of the tempo of construction at different parts of the projects or interrelated kinds of work;

- Capability of ensuring the proposed tempo.

With regard to projects with close and accurate demands on the time for the completion of the project, this norm is the first basis to eliminate the non-conformable participating dossiers.

The above norms are evaluated by the method of rating. Depending on the requirements of each project, the Examination Council shall define the amount of points for each norm in the total of points used for evaluation (usually 100 points).

Apart from the three above basis norms, some other auxiliary norms may also be considered, such as encouragement to the use of advance techniques, the use of new materials, high-quality materials, local materials, preference for the participating units in the country...

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All developments in the process of examining and selecting the winning unit must be recorded and signed by all members of the Examination Council.

3. Selecting the winning unit:

a/ For project above the average norm:

Basing himself on the result of the examinations by the Council, the Chairman of the Council shall file a report (attached to the minutes of the Examination Council) to the investment administrator for consideration and selection of the winning unit.

b/ For projects below the average norm:

The Chairman of the Council shall base himself on the result of the examination of the Council to decide jointly with the investor the winning unit.

Article 18.- Notification to the winning unit:

Before the expiry of the effective time-limit of the participating units, the investor shall send to the winning unit the winning notice accompanied by the draft construction contract based on the documents in the tender dossier and the minutes of the examinations which decided the winner.

Article 19.- Signing the construction contract and deployment of the construction according to the result of the examination of the bidding:

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2. The signing of the construction contract must abide by the current statute on economic contract in capital construction.

Article 20.- Guarantee to implement the contract:

When signing the construction contract, the winning unit must file the guarantee to implement the contract issued by the Bank valued at 10% of the contract value.

Within the time-limit stated in the notice on bidding to the winner, if the latter does not submit the guarantee to implement the contract, he shall be regarded as having abandoned the project and shall not be entitled to redeem his guarantee fee for participation in the bidding. In this case the investor may select the bidding unit ranking second to sign the contract or may organize another bidding.

Article 21.- Handling cases of change of the winning norms:

In the process of implementation of the contract, it is forbidden in principle to change the norms in winning the bid (prices, volume, quality and term of construction). In the event of a change in design approved by the investment administrator, the volume of construction shall be readjusted according to the approved modified design, but no change is allowed for the unit prices. In case of sudden change of prices, the investor must together with the planning, financial and construction offices re-examine the unit prices in order to readjust them.

Article 22.- Modalities for payment and settling the accounts of the project:

1. With regard to the projects financed by advance capital:

- After signing the construction and assembly contract, the investor shall advance to the contracting unit a sum not smaller than 10% of the contract value (or of the value of the volume to be achieved in the year if it is a major project) so that the latter may begin the construction;

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- In case of delayed payment according to the volume of work achieved in the month, the investor shall have to pay also interest (according to the rate set by the bank) corresponding with the sum and the duration of the delay.

2. Implementation of the package contract price (i.e. no change in the price of contract at the time of final settlement of the accounts of the project) if it is a project with a construction time-limit of less than one year. In this case the investor may advance up to 30% of the value of the project and make payment at the tempo to be mutually agreed upon.

Article 23.- Handling of cases of unsuccessful bidding:

After offering the tender, if on the day of the scheduled opening of the bidding no unit registers to take part, or if the registering units do not meet the bidding conditions, or if no registering unit meets all the requirements as to the quality, time-limit and prices, a new bidding must be organized and the investor must revise the conditions and requirements listed in the tender dossier in order to make them suitable and feasible.

III. SELECTING AND APPOINTING CONTRACTOR FOR THE CONSTRUCTION AND ASSEMBLY OF STATE-OWNED PROJECTS

Article 24.- Requirements for the projects where the contractor is selected:

Observance of the stipulations in Article 2 of this Statute must be ensured before the selection of the contractor if the project belongs to the category in which the contractor is to be selected.

Article 25.- Presentation of units to be selected as contractor:

1. After preparing all the necessary conditions, the investor shall send to the ministry or service specialized in the management of construction, communication and water resources a document proposing the presentation of the units to take part in the bidding together with the following documents:

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- Specification of the technical design;

- Requirements in economic and technical terms, time-table for construction and other requirements (if any).

2. On the basis of the documents received from the investor, the ministry or service specialized in construction shall present from three to five construction units to the investor.

3. The investor shall send the dossier of the project to the construction units which have been presented. The content of this dossier is similar to that of the tender dossier stipulated in Article 5 of this Statute (except the form of bidding participation guarantee).

Article 26.- Filing the dossier for participation in selection of contractor:

The invited construction units which agree to participate in the selection of the constructor shall make a dossier for participation and send it to the investor at the right address and in the prescribed time-limit. The contents of this participation dossier and the formalities for filing the dossier are similar to those stipulated in Article 13 of this Statute (except the guarantee for participation in the bidding).

Article 27.- Selecting the contracting unit:

1. The selection of the contracting unit with regard to a project where the contractor must be selected comes under the jurisdiction of the Contractor Selecting Council. The composition and tasks of this Council are stipulated like in Article 7 of this Statute.

2. At the appointed time, the Contractor Selecting Council publicly opens the envelopes containing the dossiers of the participants in the selection. The modalities to open the bidding are similar to those defined in Article 15 of this Statute but the presence of the participating units is not necessary.

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Article 28.- Appointing the contractor for the project:

With regard to the projects of which the contractor is to be appointed by the Prime Minister, the investor has the responsibility to sign the contract of delivery and reception of contract with the general contracting organization to be appointed regarding the construction and assembly of the whole project including the dwelling houses of the operational workers.

The Ministry of Construction has the responsibility together with other members in the Council for inspection of the economic and technical feasibility plan (as currently defined by the State concerning the management of capital construction) to inspect the technical design and the total cost estimate of the project and submit them to the Prime Minister for approval.

On the basis of the approved total estimate, the investment administrator shall approve the estimate for each part of the project according to the construction blueprint as basis for the signing of the contract and the payment and settlement of accounts of the project.

IV. SANCTIONS, INSPECTION AND CONTROL OF THE BIDDING

Article 29.- Fines:

All acts of violation of the stipulations in this Statute leading to the violation of its fairness, openness and legality shall be regarded as acts causing economic damage and shall be sanctioned:

- If the violator is the participating unit in the bidding, it shall be eliminated from the list of the participants in the bidding and cannot redeem the money of guarantee for bidding participation;

- If the violator is the investor, the result of the bidding shall be annulled and the investment administrator shall guide the reorganization of the bidding. The investor shall have to make compensations for the expenditures for the participating units.

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1. The ministries specialized in construction management have the responsibility to carry out periodical inspection or unwarranted inspection of the bidding projects of the units under the management of the central offices. The Ministry of Construction and services of construction have the responsibility to inspect the organization of bidding at a number of projects of various branches and localities (when necessary).

2. The services specialized in the management of construction have the responsibility to inspect and control the contracting projects under local management.

3. The contents of inspection and control: Depending on the concrete situation of each contracting project, the inspection and control may be conducted on the whole of the dossier of the bidding or on each part and each work where questions have arisen (including the payment stage) whenever a project does not abide by the provisions of this Statute.

4. The inspection and control offices have the responsibility to propose to the authorized echelon to recognize or annul the result of the bidding. The concerned parties have the right to appeal if they see that the decision of the authorized offices is unfair.

V. FINAL PROVISION

Article 31.- This Statute takes effect on the day of its signing and applies uniformly throughout the country. All regulations on bidding in construction which are contrary to this Statute are now annulled.

Article 32.- The ministries, ministerial-level agencies and other offices attached to the government, the Chairmen of the People's Committees in the provinces and cities directly attached to the Central Government have the responsibility to guide the application of this Statute and inspect its implementation by the units under their jurisdiction.