Selecting the right contractor is not just “purchasing a service” – it defines the quality, schedule, and legal risk profile of the entire project.
- Article 1: Scope of regulation & applicable entities – Read Article 1
- Article 2: Definitions in the Construction Law – Read Article 2
- Article 3: Construction planning – Read Article 3
- Article 4: Management of construction investment projects – Read Article 4
- Article 5: Construction design – Read Article 5
- Article 6: Construction permits – Read Article 6
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.
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.
