Lao People's Democratic Republic
Peace Independence Democracy Unity Prosperity

Ministry of Finance

 No. 0063/MOF
Vientiane Capital, Date: 12 March 2004

IMPLEMENTING RULES AND REGULATIONS ON DECREE OF GOVERNMENT PROCUREMENT OF GOODS, WORKS, MAINTENANCE AND SERVICES

     •  Based on the Decree 03/PM dated 9 January 2004 on government procurement of goods, works, maintenance and services,

      •  Based on Decree 127/MOF dated 3 October 2000 on the organization of the Ministry of Finance,

    The Minister of Finance issues the following implementing rules and regulations:
 

PART I:
General Provisions
 

Article 1: Purposes

     The purpose of the Implementing Rules and Regulations of the Decree 03/PM dated 09 January 2004 on government procurement of goods, works, maintenance and services is to:

1. Ensure the transparency of public procurement through procedures set out in the Decree on government procurement of goods, works, maintenance and services and these Implementing Rules and Regulations;

2. Achieve regularity and uniformity of procurement procedures of government entities and state enterprises;

3. Achieve efficiency and economy in the government procurement of goods, works, maintenance and services;

4. Guarantee all economic sectors fair and equal treatment in competitive bidding for the supply of goods, works and services to government entities and state enterprises.
    

Article 2: Definitions

      Wordings used in these Implementing Rules and Regulations shall have the following meaning:

      Bidding means the price and quality competition process for the supply of goods, works and services under determined procedures and steps.

      Bid securities means security underwritten by a bank and delivered by the bidder as a guarantee that the validity of the bid will be maintained until the contract is signed or until the expiration of the period of validity. At the conclusion of a contract with the successful bidder, the bid security will be replaced by a performance security. The terms “bid security”, “bid bond” and “bid guarantee” are synonymous although their implementing mechanism will differ. For example, a “security” is issued by a bank, while a “bond” is issued by an insurance institution.

      Bidder means an interested or qualified individual, companies, enterprises, joint venture or international enterprises who participates in competitive bidding under a procedure determined by the procuring entity or the project owner.

      Bidding procedure means a procedure set out under Part II and Part III of these Implementing Rules and Regulations.

     Contract means written agreement between the procuring entity or project owner and successful bidder on terms and conditions acceptable to the parties and in accordance with the Tender Document.

     Conclusion of contract means the written agreement of the procuring agency or project owner to enter into a contract with the successful bidder under a procurement procedure and which must be notified to the successful bidder.

     Contract acceptance means notification issued in writing by the procuring entity or project owner and acceptance by the successful bidder of contract award which is legally binding in accordance with Article 12 of the Contract Law No. 02/90/PSA dated 10 July 1990.

     Contractor or Supplier means an individual, firms and enterprises entering a contract to supply goods, provide works, maintenance and services to government entities.

     Donor means a country or international financial institution extending loans/credits and/or technical or financial assistance to promote economic, social and environment development.

      Goods means any object in solid, liquid or gaseous form that has an economic value which can be exchanged and traded such as equipment, parts, machinery, vehicles and other products;

     Government entities mean all sectors of the Government of Lao PDR at the national or local levels, including organizations representing the Lao Government in foreign countries, which are using the national budget.

     Invitation to bid/Notification means a document published or notified by the procuring entity or the project owner to inform contractors or suppliers that it intends to commence a procurement procedure.

     National budget means domestic funds and funds derived from external aid and loans of foreign countries and financial institutions.

     National secret means things that bear the risk of affecting the national stability, security and order, such as warfare weapons, vehicles and equipment, construction directly aimed at purposes of defense and security.

     Pre-qualifications and Post-qualification : means the process of evaluating the capability of prospective bidders to perform the particular contract satisfactorily, taking into account their (i) experience and past performance on similar contracts, (ii) capabilities with respect to personnel, equipment, and construction or manufacturing facilities and (iii) financial position.

     Procuring entity/Project owner means a government entity or state enterprise that is making use of the national budget.

    Services mean expert services provided by a consulting firm or individual consultant to conduct research, surveys, designs and supervision of works and other services.

     State enterprise means a business entity established and managed by the State or established in joint venture with other business entities in which the State holds at least 51% of the shares.

     Tender Documents means documents issued by the procuring entity or project owner to potential bidders in which are set out the terms and conditions of the procurement. Such documents include an invitation to bid, instructions to bidders, evaluation criteria, bid forms, specifications for goods, works or services, price forms and conditions of contract, sample of required bid security and other securities.

     Tender Committee means the committee established in accordance with Part V of these Implementing Rules and Regulations and in light of the value of the works, goods or services has the responsibility of organizing and supervising the procurement in accordance with the procedures defined in Part II, III, IV, VI, VII and VIII of these Implementing Rules and Regulations.

     Threshold value : means the value expressed in Kip used as reference for the selection of procurement procedures.

     Two-stage bidding procedures means the bidding procedures carried out in two different stages: in the first stage, interested parties are invited to submit technical proposals and methodologies for pre-selection; in the second stage, the pre-selected qualified parties submit bids.

   Works means:

1. Civil works : any activity, such as construction, repair, renovation, decoration, installation, erection, excavation, dredging and similar activities related to roads, bridges, irrigation, houses, office buildings, hospitals, schools or any other works which make use of a combination of labor, machinery, equipment and technology.

2. Mechanical and electrical works : any activity, such as repair, installation, renovation, erection and similar activities of a mechanical or electrical nature in the context of a project or related to turbines, generators, transformers or electrical equipment in substations or other works which make use of a combination of labor, machinery, equipment and technology.

Article 3: Application

     • Subject to Article 3(2) and Article 12, all public procurement by ministries, equivalent agencies and local authorities, including state units and enterprises, shall be carried out in accordance with the provisions of these Implementing Rules and Regulations.

     • These Implementing Rules and Regulations do not apply to bidding process for:

     • Goods and equipment directly intended for defense and security purposes.

     • Works or services which are held secret or the execution of which must use special security measures or when the protection of the basic interests of the State so requires.

     • Apart from the two cases mentioned above (a) and b), these Implementing Rules and Regulations shall apply to goods, equipment and vehicles intended for routine administration and works related to buildings, offices, houses, hospitals under the defense and security authorities.