Selecting the right contractor is not just “purchasing a service” – it defines the quality, schedule, and legal risk profile of the entire project.

Reading suggestion: To see the full picture and follow the logical flow of the Construction Law, you should read:

Official legal text: Construction Law 2014 (No. 50/2014/QH13), as amended by Law No. 62/2020/QH14 – Download signed PDF.

I. Legal basis for contractor selection

Contractor selection in construction activities must comply with:

  • Law on Bidding 2013 (No. 43/2013/QH13);
  • Construction Law 2014 (No. 50/2014/QH13), as amended by Law No. 62/2020/QH14;
  • Decrees on project management and quality management (e.g. Decree 15/2021/NĐ-CP, Decree 06/2021/NĐ-CP);
  • Circulars of the Ministry of Construction on institutional capability certificates and professional practice certificates.

II. Core principles in contractor selection

Legally compliant contractor selection must ensure the following principles:

  • Transparency, fairness, and effective competition, in accordance with the Law on Bidding;
  • Right scope – right capability: the contractor must be suitable for the type, grade and scale of the works;
  • Investment efficiency: optimizing life-cycle cost, not just “lowest bid price”;
  • Legal compliance, avoiding unlawful appointment of contractors and regulatory risks;
  • Priority on quality and safety, not sacrificing them for short-term savings.

Key point: A good contractor is not only about “low price” but a combination of capacity, experience, management system and legal compliance.

III. Conditions for institutional contractors

For organizations participating in construction activities:

  • They must have a valid certificate of construction capability (Grade I, II, III) appropriate to:
    • Type of works: civil, industrial, transport, infrastructure, etc.;
    • Grade of works: special grade, I, II, III, IV.
  • They must have relevant project experience comparable in scale, nature and site conditions;
  • They must employ key personnel (chief designer, site manager, chief supervisor, etc.) holding suitable professional certificates;
  • They must maintain a quality, safety and financial management system adequate for the size of the contract.

IV. Conditions for individual practitioners

Individuals taking key roles in the construction contract must meet the following conditions:

  • Hold a valid professional practice certificate in the relevant discipline, such as:
    • Surveying; architectural, structural, M&E, fire protection and infrastructure design;
    • Construction supervision;
    • Cost estimation, cost management, project management.
  • The certificate must be valid for the grades and types of works they are in charge of;
  • Fulfil the required experience and working years as prescribed by regulations.

V. Essential contents of a construction contract

A construction contract is the “legal backbone” between the employer and the contractor. It should clearly define at least:

Content Meaning & notes
Scope of work Clearly identify what the contractor shall perform, quantities, and the boundary with the employer’s or subcontractors’ responsibilities.
Quality requirements Specify applicable standards and codes (TCVN, QCVN and any foreign standards if applied).
Schedule Start and completion dates, milestones; conditions for extension and treatment of delay.
Contract price & pricing method Lump sum, fixed unit price, adjustable unit price, etc.; and the mechanism for price adjustment when material prices fluctuate.
Advance & payments Advance ratio, payment conditions for each stage, required documents, and payment time frame.
Warranty & maintenance Warranty period, retention money for warranty, obligations for remedy of defects.
Dispute resolution & termination Mechanisms for negotiation, mediation, arbitration or court; conditions for unilateral termination.

Golden rule: The clearer and more detailed the contract is, the lower the risk of disputes will be.

VI. Why proper contractor selection matters

  • Protects work quality and service life through capable contractors;
  • Reduces legal risks, avoiding prolonged complaints and disputes;
  • Supports cost and cash-flow control over the project’s life cycle;
  • Improves schedule performance, minimizing suspension or unfinished works;
  • Builds the reputation of the employer and the project brand in the market.
In short: Contractor selection is one of the most critical decisions in a construction project. Choosing the right contractor – in full compliance with the law and aligned with project requirements – means you have already completed half of the journey towards a safe, high-quality and efficient project.

Thank you for taking the time to read or listen to Article 7/13 in this Construction Law series with INDUSVINA.

We appreciate your commitment to learning and are ready to support you in applying the law correctly to project management, construction and investment practice.