Selecting a contractor is a crucial step in the development and implementation of construction projects, especially in the field of industrial construction design. Currently, there are various contractor selection methods applied depending on the nature, scale, and specific requirements of each project. Let's explore the latest contractor selection methods with BIC!
According to the 2023 Procurement Law, significant changes have been made to the regulations regarding contractor selection to ensure transparency, competitiveness, and efficiency in public procurement activities. Below are the 9 main contractor selection methods stipulated in the law:
Open bidding is the most common method in construction projects, particularly for large-scale projects or those with high technical requirements. With this method, any contractor that meets the established criteria can participate in the bidding process. This process typically includes steps such as publicly announcing the invitation to bid, collecting bid documents, and evaluating based on technical criteria, pricing, experience, and capacity.
This method does not limit the participants, creating a transparent and competitive environment. This helps project owners easily access a diverse range of contractors across various fields, thereby providing more options to find the most suitable partners.
Open bidding is the optimal choice for projects that require quality assurance and cost-effectiveness. However, this process requires project owners to invest significant time in carrying out tasks from announcing the invitation, continuing to receive documents, to evaluating and selecting.
Unlike open bidding, restricted bidding is a form that limits the number of contractors invited to participate. These contractors are usually selected based on specific criteria such as experience, financial capacity, ability to meet technical requirements, or achievements in similar projects.
This form is often applied to projects that require complex technical specifications or need to ensure high quality and timely delivery. The investor may directly invite contractors from a pre-selected list or those proposed by stakeholders.
Direct appointment is a method of selecting a contractor that primarily does not require competitive bidding. Instead, a single contractor is invited to participate and carry out the project. This contractor is typically chosen based on their capacity, experience, and ability to meet the specific requirements of the project.
This method is often applied to projects with high specificity, exclusivity, or in urgent situations that require prompt action. The decision for direct appointment is usually based on legal grounds, accompanied by thorough evaluations and approvals to ensure transparency.
Competitive bidding is a method of contractor selection in which the investor requests a number of specific contractors to submit bids for a package. This method has a process that is almost universally recognized but is simplified to save time and resources.
The steps involved in competitive bidding include:
- Preparing and sending a request for quotation.
- Receiving and reviewing bids from contractors.
- Comparing, negotiating, and signing a contract with the contractor that best meets the requirements.
This method is commonly applied to packages with small values or simple scopes of work, such as the supply of materials, equipment, or the execution of minor tasks.
Direct procurement is a method of contractor selection in which the investor directly signs a contract for goods or services with a supplier without the need for a bidding process. This method is often applied in special cases, when there is an urgent need or when purchasing specific products or services that only a few suppliers can provide.
The direct procurement process is usually straightforward, primarily focusing on direct negotiations regarding price, quality, and contract terms with the chosen supplier.
The self-implementation form is an option where the project owner directly develops the project's tasks instead of hiring external contractors. In this case, the owner will take full responsibility for all stages, such as planning, organizing construction, managing resources, and supervising quality. This form is often applied to small-scale, less complex projects or projects where the investor already has a suitable workforce and infrastructure.
This form encourages direct community involvement in various stages of the project, from planning and providing feedback to development and supervision. The role of the community goes beyond just providing manpower; it also ensures that the project aligns with the actual needs and desires of the local population. This form is typically applied to projects with a high social impact, such as building community infrastructure, improving living conditions, or local development programs.
Price negotiation is the process in which the investor and the contractor directly negotiate and discuss the price and contract terms before signing the official contract. Instead of going through a bidding process or competitive offers, the parties involved will discuss in detail the pricing, quality, schedule, and other conditions to reach a final agreement. This method is particularly suitable in cases that require operational flexibility, where both parties can adjust the price to align with the specific capabilities and requirements of the project.
Contractor selection in special cases is applied when the project or work must comply with specific requirements that cannot be addressed through conventional bidding methods. These cases may include emergency projects, special technical requirements, or when there is only one contractor capable and qualified to perform the work. According to legal regulations, in these matters, the investor can select a contractor without going through bidding procedures, but must still ensure transparency, openness, and reasonableness in the selection process.
Choosing a contractor is one of the important decisions in the project implementation process. Currently, there are various forms of contractor selection, each with its own advantages and disadvantages. Below are the 4 most widely used forms of contractor selection:
One of the notable advantages of open bidding is its high level of competition. Due to the large number of participating contractors, these entities often need to optimize their pricing and quality to meet the requirements of the investor. This brings benefits to the project:
- Reasonable pricing: Contractors compete with each other by offering the best possible prices while still meeting technical requirements. This helps the investor save costs without compromising quality.
- Variety of choices: With many contractors participating, the investor can compare and thoroughly evaluate different technical methods, from technical solutions to implementation approaches.
- Transparency in the implementation process: Publicizing the bidding process and evaluating proposals helps minimize risks related to unethical behavior or lack of transparency.
Restricted bidding offers many practical benefits, especially in quality control and ensuring project effectiveness.
- Contractor quality assessment: Only contractors who have been evaluated and proven capable are allowed to participate. This helps eliminate unqualified contractors, minimizing risks during project execution.
- Time-saving in evaluation: With a limited number of contractors, the investor can focus on analyzing and thoroughly evaluating the bidding documents, leading to quicker and more accurate decision-making.
- Ensuring progress: The participating contractors are usually reputable and experienced in their specific fields, which helps ensure construction progress and project quality.
Direct contracting provides clear benefits in special requirement situations:
- Time-saving: There is no need to organize a complex bidding process; the investor can quickly sign contracts and immediately develop the project. This is particularly useful in urgent cases, such as addressing disaster aftermath or completing projects that need to be finished quickly.
- Assurance of contractor capability: The contractors who are directly appointed are often reputable and experienced in the relevant field. This helps ensure the quality and effectiveness of project execution.
- Increased flexibility: With direct contracting, the investor can directly discuss contract terms, optimizing costs and technical requirements according to actual needs.
Competitive bidding offers many practical benefits for medium and small-scale projects:
- Time and cost savings: The process is simpler and less complex compared to extensive bidding, helping investors reduce preparation time and organizational costs.
- Ensuring competitiveness: Despite the simplified process, this method still ensures competitiveness by soliciting quotes from multiple contractors, allowing homeowners to choose the best service provider.
- Suitable for small projects: For contracts with low value or tasks that do not require high technical skills, competitive bidding is the optimal solution to ensure economic efficiency and project timelines.
Choosing the appropriate contractor form plays a crucial role in the construction design process of a project. Making the right choice will help optimize the quality production process, save costs, and ensure the implementation timeline, significantly contributing to the project's success. Contact BIC now – a trusted partner in factory design and construction, for in-depth consultation and comprehensive support!
