Is there a provisioning fee reduction when lowering bid prices?

Is there a provisioning fee reduction when lowering bid prices?

In case the bidding package applies the type of contract based on fixed unit price or adjusted unit price and the bidder proposes a discount but does not specify the way of the discount, it shall be interpreted as a proportional discount for all items stated in the column "Description of the job invitation to bid".

Mr. Quang Hoang Tung (in Da Nang City) would like to request authorities to guide the handling of the situation as follows:

The bid solicitor shall organize the bidding for construction and installation bidding packages in the form of a single-stage, two-envelope dossier or contract under the form of fixed unit price. Bidding documents require bidders to offer bid prices in 2 parts: The bid price is based on the workload of the bidding items and the fee contingency.

Contractor A offers a bid of VND 55 billion, in which VND 53 billion is the offer price for the workloads of the bidding items according to the bidding documents and VND 2 billion for contingency. The bidder has a letter of VND 4 billion discount on the bid price (do not specify any specific decrease for the bid).

When determining the bidding unit price after the bid price reduction of contractor A, there are two views:

- Point 1: The bidder's VND 4 billion discount is evenly reduced on the bid price, so the provision for fees is also reduced.

- The second point of view: The bidder's discount of VND 4 billion is calculated evenly on the bidding item that the contractor participates in, no reduction for the contingency fee due to the provision of fees is not a bidding item. Therefore, the fee contingency is fixed, and there is no decrease in price.

Both views result in the same total post-discount bid price for contractor A. However, the fixed unit price for each job, after price adjustment is different according to the above two points of view.

This results in the payment for the contractor later (if winning) is different.

Mr. Tung would like to ask, what is the correct view in this case?

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

Under the guidance in Section 14.3 Chapter I of the Bidding Documents Form with the application of the single-stage and two-envelope bidding procedure (Form 02) issued together with Circular No. 03/2015 / TT-BKHDT dated May 6, 2015 of the Ministry of Planning and Investment, in case the bidder proposes a discount, it can be recorded directly in the bid form of the financial proposal or a separate proposal in the discount letter.

In case of price reduction, the bidder must clearly state the content and method of discount on the specific jobs and items stated in the column "Description of job invitation to bid".

If the method of price reduction is not specified, it is understood to be a proportional discount for all items stated in the column "Description of job invitation".

Accordingly, in cases where a bidding package applies the type of contract based on fixed unit price, contract based on adjusted unit price and the bidder proposes a discount but does not specify the way of discount, it is understood as a contractor. prorated discounts for all items listed in the column “Job description of the tender offer”, whereby the discount does not take into account the contingency cost part.

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