2. General Provisions under the Bidding Law 2023
2.1. Assurance of competition (Article 6)
Article 6 of the Bidding Law 2023 establishes the foundational requirement that contractors submitting expressions of interest or prequalification applications, and contractors participating in bidding, must be legally and financially independent from parties that exercise controlling influence over the selection process. This includes consultants preparing invitation documents, project management and supervision consultants, design and cost-estimate consultants, evaluation and appraisal consultants, and the project owner (with limited exceptions for public service units).
In limited bidding, contractors participating in the same package must also be independent from one another. Quantitative thresholds are set: ownership or capital contribution exceeding 30% between contractor and project owner/procuring entity, or exceeding 20% among contractors in limited bidding or between contractor and related consultants, generally destroys independence.
Clause 4a of Article 6 (added by Law No. 57/2024/QH15) provides a specific exception for parent companies, subsidiaries and member companies within state economic groups and state corporations, allowing them to participate in packages of one another if the goods or services fall within the group’s main business lines. This exception addresses practical needs of large state groups but requires careful oversight.
2.2. Prohibited acts protecting competition (Article 16)
Article 16 comprehensively prohibits acts that undermine competition, including bribery, abuse of power, collusion (arranging withdrawal of bids, restricting competition, deliberately withholding capacity documents), fraud, obstruction, failure to ensure fairness and transparency, disclosure of confidential information, illegal subcontracting, and organizing selection without confirmed funding. Notably, clause 6 details unfair practices such as a party bidding on a package for which it is the project owner, simultaneously preparing and appraising bidding documents, specifying brands or origins, imposing conditions that limit participation or create advantages for certain contractors, and artificially splitting packages to enable direct contracting.
3. Specific Provisions and Exemptions
3.1. Direct contracting – the largest exception (Article 23)
Article 23 exhaustively lists cases in which direct contracting may be applied, including national defense and security emergencies, natural disasters and force majeure, epidemic prevention, protection of state secrets, technology compatibility and copyright, research and intellectual property, unique technology solutions, National Assembly resolutions for important national projects, and low-value packages (thresholds currently up to VND 1 billion for construction/mixed packages). Clause 6 encourages the use of competitive methods whenever possible even if direct contracting conditions are met, reflecting the principle that competition is the rule and direct contracting the exception.
3.2. Special regime under the Railway Law 2025 (Article 31)
The Railway Law No. 95/2025/QH15 (passed 27 June 2025, mainly effective 1 January 2026) creates a sector-specific framework. Article 31 permits the competent authority to apply limited bidding or direct contracting for railway projects (investors, consultancy, non-consultancy, construction, EPC, EC, EP and turnkey packages) in accordance with the Bidding Law.
Critically, clause 3 of Article 31 provides that the project owner is not required to apply the competition-assurance requirements of the Bidding Law to consultants who prepared the feasibility study report, FEED design or technical design when those consultants are engaged under direct contracting for subsequent construction or EPC packages. This targeted exemption allows the same entity to act as both design consultant and construction/EPC contractor on a railway project – something normally prohibited under Article 6 of the Bidding Law due to conflict of interest. The mechanism aims to ensure design–construction continuity and accelerate large-scale projects such as the North–South high-speed railway and urban metro lines, while still requiring compliance with other Bidding Law provisions.
4. Evaluation of Advantages and Disadvantages
4.1. Advantages
First, quantitative independence thresholds (20% / 30%) and the closed list of direct-contracting cases improve clarity, reduce discretionary assessment and support compliance with international commitments (CPTPP, EVFTA).
Second, the Railway Law 2025 exemption is pragmatic for a sector with few qualified domestic contractors and complex technology. Continuity between design and construction can reduce interface risks and shorten schedules for high-speed and urban railway projects.
Third, open competitive bidding for civil works packages (earthworks, bridges, stations) under metro or railway upgrading projects has enabled multiple domestic and international contractors to compete on equal terms, producing more competitive prices while preserving independence from design and supervision consultants.
Fourth, the encouragement to prefer competitive methods even when direct contracting is available reinforces the primacy of competition.
4.2. Disadvantages and challenges
First, allowing the same contractor to prepare FEED/technical design and then execute the EPC/construction package under Article 31.3 of the Railway Law creates a structural conflict of interest risk (inflated quantities or design biased toward the contractor’s own construction capabilities). Control then relies heavily on appraisal and audit mechanisms, which have inherent limitations.
Second, Article 31.1 refers only to limited bidding and direct contracting, without expressly mentioning open competitive bidding. This may be interpreted as narrowing competition in railway projects and could be misused to favor familiar contractors.
Third, specialized packages (signaling, telecommunications, electrification, rolling stock) often involve a narrow market of qualified international suppliers. Rigid application of independence rules can result in insufficient participation, forcing reliance on special-circumstances or unique-technology exceptions.
Fourth, despite the prohibition on package splitting, artificial fragmentation and overly restrictive technical requirements in bidding documents remain difficult to detect and sanction in practice.
5. Conclusion and Recommendations
The competition principle remains the foundation of Vietnamese bidding law, articulated rigorously in Articles 6 and 16 of the Bidding Law 2023, with a closed list of exceptions in Article 23 and a sector-specific exemption in Article 31 of the Railway Law 2025. The latter is tailored to the technical and capacity realities of railway projects but requires disciplined application.
Recommendations include: (i) strengthening inspection and supervision of non-competitive methods; (ii) issuing detailed guidance on conflict-of-interest assessment for design–construction combinations under Article 31.3 of the Railway Law; (iii) tightening control over package splitting and restrictive bidding conditions; (iv) reviewing value thresholds for direct contracting; and (v) promoting e-procurement and greater transparency.
VICI Law recommends that project owners and contractors proactively review ownership structures, affiliated relationships and eligibility from the dossier preparation stage to minimize legal risk and safeguard the integrity of the selection process.
Note: This article is prepared on the basis of the Law on Bidding No. 22/2023/QH15 as amended by Law No. 57/2024/QH15 and Law No. 90/2025/QH15, the Law on Railways No. 95/2025/QH15, and relevant guiding decrees. It is for reference only and does not constitute case-specific legal advice.
