8 types of contracts with contractors according to the latest Law on Bidding

Article overview

Contracts with contractors are an important part of the bidding process, helping to ensure the rights and obligations of participating parties. Understanding these types of contracts according to the latest bidding laws will help businesses choose the appropriate contract form, minimize legal risks and optimize financial efficiency. From there, businesses can better manage and monitor projects, ensuring progress and quality of work.

The latest types of contracts with contractors today
The latest types of contracts with contractors today

Conditions for signing contracts with contractors

According to Article 66 of the Law on Bidding 2023, the conditions for signing contracts with contractors are as follows:

  • At the time of signing, the bid documents and proposals of the selected contractor are still valid. For centralized procurement, the framework agreement applies. At the time of signing, the framework agreement is still valid.
  • At the time of signing, the selected contractor must ensure that it meets the technical and financial capacity requirements to carry out the bidding package according to the requirements of the bidding documents and request documents.
  • The investor must ensure the conditions of advance capital, payment capital, implementation premises and other necessary conditions to implement the bidding package on schedule.

Types of contracts with contractors according to the provisions of the Law on Bidding 2023

Below are 8 types of contracts with contractors according to Article 64 of the Law on Bidding 2023:

  • Package contract: Applicable when the scope of work, technical requirements, and implementation time are clear and have few changes. Fixed contract price, payment based on percentage.
  • Fixed unit price contract: Applicable when the work is clear but the exact volume has not been determined. Fixed contract price, payment based on actual work quantity.
  • Contract based on adjusted unit price: Applicable to bidding packages with risk of input price fluctuations. Contract price can be adjusted according to agreement in the contract.
  • Time-based contracts: Applicable in emergency situations or consulting services when it is difficult to determine the scope and time of implementation. Payment based on actual working time.
  • Cost-plus contract: Applicable when the scope of work and input costs have not been determined. Payment according to actual costs plus management fees and profits.
  • Output-based contracts: Applicable when payment is based on the results of work performed, including quantity and quality of output.
  • Percentage contract: Only applicable to construction insurance packages, contract value is based on actual construction value.
  • Mixed contract: Combining the above contract types, each part of the work will apply a separate contract type.
Types of contracts with contractors in the Law on Bidding 2023
Types of contracts with contractors in the Law on Bidding 2023

Things to note when signing contracts with contractors today

When signing a contract with a current contractor, the parties need to pay attention to a number of important points to ensure legality, fairness and efficiency in the contract implementation process. Here are the key notes:

  • Clearly define the scope of work: Clearly state technical requirements, quality and work standards to avoid disputes.
  • Choose the appropriate contract type: Choose a contract appropriate to the nature of the bidding package (full package, fixed unit price, time-based,…).
  • Clear payment terms: Specify specific payment method and time to avoid financial disputes.
  • Implementation time and progress: Determine time and progress milestones, with solutions when progress is slow.
  • Warranty and maintenance terms: Clarify responsibilities for warranty and maintenance of products and works.
  • Dispute resolution: Regulations on dispute resolution methods (mediation, arbitration, court).
  • Contract changes: There are provisions for adjusting the value, time, and scope of work when necessary.
  • Check legality: Ensure the contract complies with legal regulations on bidding.
  • Appendices and attached documents: Attach relevant appendices, drawings and documents.
  • Contract monitoring: Monitoring mechanism to ensure progress and quality of work.
Some notes when signing contracts with contractors in 2023
Some notes when signing contracts with contractors in 2023

Consulting services and support for the process of signing contracts with contractors at Long Phan

At Long Phan, we are proud to provide in-depth consulting services and comprehensive support in signing contracts with contractors. We provide the following consulting services:

  • Consulting on choosing between different types of contracts, ensuring compliance with project goals and requirements.
  • Evaluate and check contract terms for compliance with regulations and your rights.
  • Consulting on the financial capacity, experience and quality of contractors, helping you choose a reliable partner.
  • Providing detailed and accurate contract negotiation and drafting services, ensuring maximum benefits.
  • Contract dispute resolution: Support in case of disagreement or dispute
  • Consulting on methods to resolve contract disputes.
  • Consulting on the bidding process from document preparation to contract signing, ensuring transparency and compliance with regulations.

Understanding and correctly applying types of contracts with contractors according to the latest bidding law is an important factor to ensure transparency and fairness in the contractor selection process. These types of contracts not only help participating parties ensure their legal rights but also create a solid basis for effective project implementation. Contact Long Phan via the hotline 0906735386 for advice and support.