How many % of volume is assigned to subcontractors by the main contractor?

How many % of volume is assigned to subcontractors by the main contractor?

According to regulations, one of the prohibited acts in bidding is that a contractor transfers to another contractor, the work in the bidding package valued at 10% or more or less than 10% but over 50 VND billion (after subtracting the work under the responsibility of subcontractors) calculated on the signed contract price.

Ms. Hoang Thi Hang (in Soc Trang Province) would like to request the authorities to guide the situation as follows:

The investor and EPC general contractor signed the EPC contract in April 2018. In the process of contract performance, the general contractor submits to the investor for approval of subcontractors (together with records of capacity and experience) to perform the construction work of the contract (the value of the package accounts for about 25% of the value of the EPC contract).

However, while the bids submitted by the general contractor at the bidding stage do not declare this scope of work as using subcontractors and do not declare this subcontractor in the list of subcontractors.

In the bidding documents, Chapter I, Section 29.2 states "Principal contractors may only use subcontractors to perform works with a total subcontractor value not exceeding 50% of the bid price" and Section 29.3 rule "Main contractor is not allowed to use subcontractors for work other than the job declared and use subcontractors stated in the Bid; the replacement and addition of subcontractors outside the list of subcontractors mentioned above. in the Bid and the use of subcontractors in excess of the rate specified in ITB Section 29.2 may be performed only when there is a plausible and reasonable reason and approved by the investor; in case of using subcontractors for the other work without the declared work using subcontractors, without the list of subcontractors mentioned in the Bid which has not been approved by the investor, is considered the act of "contract assignment".

Also according to bidding documents, Chapter I, Section 3.8 the prohibited acts stipulates "Transferring of tenders, including the following acts:

a) The contractor transfers to another contractor the work in the bidding package with the value of 10% or more or less than 10% but more than VND 50 billion (after subtracting the work part of the subcontractor's responsibility) based on signed contract price;

b) The Investor, the supervision consultant approves the contractor to transfer the work under the contractor's responsibility, except for the part of the work under the responsibility of the subcontractor declared in the contract.

Ms. Hang asked, in this case, if the investor evaluates that this sub-contractor is qualified and experienced, will the investor be able to approve this sub-contractor? Is it in violation of Section 3.8 of Chapter 1 of the bidding documents if approved?

The Ministry of Planning and Investment answers to this issue as follows:

According to Clause 8, Article 89 of the Bidding Law, one of the prohibited acts in bidding is that a contractor transfers to another contractor the work in the bidding package with the value of 10% or more or less than 10% but above VND 50 billion (after subtracting the work under the responsibility of subcontractors) calculated on the signed contract price; The investor, the supervision consultant shall approve for the contractor to transfer the work under the contractor's responsibility, except for the part of the work under the responsibility of the subcontractor declared in the contract.

For Ms. Hang's problem, the selection of contractor must comply with the above regulations.

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