What is the bidding process? How to apply it for businesses

In today’s competitive market economy, industries such as construction, services, and goods frequently organize bidding to find the best service providers while optimizing costs. Additionally, it is an opportunity for contractors to demonstrate the quality of their services. The article below will provide the most accurate and specific information about the bidding process.

1. What is the bidding process?

The bidding process is a competitive process among contractors based on meeting the requirements of the procuring entity to execute a contract for consulting services, procurement of goods, construction, etc. All activities in the bidding process are based on competition, fairness, transparency, and economic efficiency.

Bidding is a fair business competition method in the modern era

During the bidding process, the buyer (the project owner) organizes the bid to let sellers (the contractors) compete. The buyer’s goal is to obtain goods and services that meet their technical and quality requirements at the lowest cost. The seller’s objective is to win the right to supply those goods and services at a price that covers input costs and ensures the highest possible profit.

The bidding process is commonly used in education, services, and especially in construction. In addition to this article, businesses in the construction industry can find related information through the articles 5 steps to effectively manage construction industry processes and construction project management software by 1Office.

2. Common bidding methods

Currently, the two most common bidding procedures are the single-stage, one-envelope method and the single-stage, two-envelope method, where:

• The single-stage, one-envelope method is often applied to technically simple, small-scale bidding packages with few technical implementation options (a small-scale package is a goods procurement package with a value not exceeding 10 billion VND; a construction or mixed package with a value not exceeding 20 billion VND).
• The single-stage, two-envelope method is applied to goods procurement packages with a value over 10 billion VND and construction or mixed packages with a value greater than 20 billion VND.

See also: Project management process according to ISO: 5 stages of international standard implementation

3. The latest steps in the bidding process [updated 2026]

To participate in bidding activities, businesses need to understand the complete bidding process. A bidding process consists of 5 main steps as follows:

Invitation to bid

To proceed with the invitation to bid, the procuring entity must prepare the following:

• Prequalification of contractors: The prequalification of contractors ensures that the invitation to bid is limited to contractors who have sufficient capacity and experience to execute the package.
• Preparation of bidding documents: The bidding documents include: the invitation to bid; requirements related to the goods or services being procured; methods for evaluation, comparison, ranking, and selection of contractors; etc. To ensure transparency and maximum competitive opportunity for contractors, the bidding documents must be complete and must not be arbitrarily modified. In case of changes or additions, the revised content must be sent in writing before the bid submission deadline (at least 10 days in advance) to allow bidders time to review and adjust their bids accordingly.
• Announcement of invitation to bid: To ensure competition and fairness, all bidding packages must be widely publicized through mass media for open bidding cases, or an invitation to register for bidding must be sent to eligible contractors in the case of limited bidding.

Bid submission

After the public announcement of the invitation to bid, interested contractors will proceed with the bid submission procedure by sending their documents directly or by post to the procuring entity. The procuring entity is responsible for providing instructions on how to prepare the bid documents and must maintain the confidentiality of the information in the bidder’s documents.

When bidding, the procuring entity may require bidders to provide a bid security (in the form of a deposit, escrow, or bid bond) to ensure the validity of the bid (the deposit rate does not exceed 3% of the total value of the goods or services).

In the case of an unsuccessful bid, the procuring entity must return the deposit or escrow amount to the bidder within 7 days from the date of the result announcement.

Bid opening

Immediately after the bid closing (finalizing bid submissions), the procuring entity will organize the bid opening or do so at a predetermined time. Valid and timely bid submissions must be opened publicly during the bidding process, and bidders have the right to attend the public bid opening. The procuring entity may ask bidders to clarify unclear points in their bid documents. The clarification of bid documents must be made in writing. At the bid opening, the procuring entity and the bidders present must sign the record.

The bid opening record must contain the following information: Name of the goods or services; date, time, and location of the bid opening; name and address of the procuring entity and bidders; the bid price submitted by the bidder; any modifications, additions, and other relevant information, if any.

Bid evaluation

Trong quá trình chấm thầu, hồ sơ dự thầu được đánh giá và so sánh theo từng tiêu chí riêng để làm căn cứ đánh giá. Các tiêu chuẩn trên được đánh giá bằng phương pháp cho điểm theo thang điểm hoặc phương pháp khác được ấn định trước khi mở thầu.

Căn cứ vào kết quả đánh giá hồ sơ dự thầu, bên mời thầu phải xếp hạng, lựa chọn các bên dự thầu theo phương pháp đã được ấn định. Trong trường hợp có nhiều bên tham gia dự thầu có điểm ngang nhau thì bên mời thầu có quyền lựa chọn nhà thầu.

Contract Signing

Immediately after the bidding results are available, the procuring entity is responsible for notifying the bidders of the bidding results.

The procuring entity proceeds to finalize and sign the contract with the winning bidders based on the following: the bidding results, the requirements in the bidding documents, the content stated in the bid, and any additional legal agreements (if any).

During post-award negotiations, the parties may require the winning bidder to make a deposit, escrow, or provide a guarantee to ensure contract performance. The deposit or escrow amount is specified by the procuring entity but does not exceed 10% of the contract value.

4. What should be noted in the bidding process?

In the bidding process, all parties must pay special attention to legal compliance, ensuring transparency, fairness, and especially strictly controlling the specified timelines to avoid legal risks or loss of participation rights.

Below is a summary of key timelines that contractors and project owners need to master:

How to calculate time in bidding

• Approval of the contractor selection plan: Maximum of 5 working days, from the date of receiving the appraisal report.
• Issuance of bidding documents, request for proposals: After 3 working days, from the first day of posting the invitation to bid, invitation for quotations, or sending the invitation letter, until before the bid closing time.
• Preparation of expression of interest documents: Minimum of 10 days for domestic bidding and 20 days for international bidding, from the first day the expression of interest documents are issued until the bid closing time.
• Preparation of pre-qualification documents: Minimum of 5 working days, from the first day the request for proposals is issued until the bid closing time.
• Evaluation of expression of interest, pre-qualification documents: Maximum of 20 days for domestic bidding and 40 days for international bidding.
• Evaluation of selection bids: Maximum of 30 days for domestic bidding and 40 days for international bidding, from the bid closing time until the day the procuring entity submits the contractor selection results to the project owner for approval.
• Evaluation of bids: Maximum of 45 days for domestic and 60 days for international, from the bid closing time until the day the procuring entity submits the contractor selection results to the project owner for approval.

The Law on Bidding (Article 12, Clause 1, Points g and h) stipulates that the bid evaluation time can be extended by no more than 20 days, provided that the project implementation schedule is maintained.

Online bidding process

Following the digital transformation trend, online bid evaluation is now quite popular, especially with the digital transformation in the construction industry and during the Covid pandemic when large gatherings were restricted. This is when project management tools prove their usefulness.

The online contractor selection process is detailed in Circular 04/2017/TT-BKHĐT, which provides detailed regulations on contractor selection through the National E-Procurement System. It is similar to the steps of the bidding process mentioned above, with the only difference being that the procuring entity will prepare E-Bidding Documents (E-BD) by logging into the system and selecting the corresponding sections to create the Bidding Documents (BD). Then, the procuring entity will post the E-Invitation to Bid (E-ITB) and simultaneously issue the E-BD.

3. Average time to complete a bid package

• • Calculated from the date of issuing bidding documents to the date of contract signing.

  • If the time is too long, there is a risk of project delays, affecting disbursement and development goals.

4. Cost savings rate compared to the initial estimate

• • Measures the ability to optimize finances through competitive bidding.

  • A reasonable savings rate (usually from 5–10%) indicates a transparent and effective process.

5. Rate of complaints and disputes arising

• • An important KPI to measure transparency.

  • If the number of complaints is high, it means the bidding invitation or evaluation process has issues that need to be addressed.

6. Rate of bid packages being canceled or reorganized

• • Each canceled bid package means increased administrative costs, wasted time, and reduced investor credibility.

  • The lower this KPI, the more professional the management process is proven to be.

Applying KPIs helps investors track the strengths and weaknesses in the bidding process, thereby enabling continuous improvement. When KPI data is transparent, investors not only enhance management efficiency but also build trust with contractors and regulatory agencies, reduce legal risks, and increase competitiveness.

Complaint resolution process in bidding

In bidding activities, complaints are almost unavoidable, especially for high-value bid packages or those with many competing contractors. Complaints may relate to the conditions in the bidding documents, evaluation criteria, the bid evaluation process, or the contractor selection results. If not handled transparently and promptly, complaints can delay project progress and affect the reputation of both the investor and the regulatory agency.

According to the Law on Bidding No. 90/2025/QH15 (effective from July 1, 2025), the complaint resolution process is standardized as follows:

• Step 1 – Submitting a complaint:

  • Contractors have the right to submit a complaint within 10 working days from the date of receiving the results or discovering a violation.

  • The complaint must be in writing, clearly stating the content, request, and providing accompanying evidence.

• Step 2 – First-level resolution by the investor / procuring entity:

  • Receive the complaint, create a complaint file, and organize verification.

  • Response deadline: 7–15 working days, which can be extended to a maximum of 30 days for complex cases.

  • The resolution result must be sent in writing to the complaining contractor.

• Step 3 – Second-level complaint:

  • If they disagree, the contractor can submit a complaint to a higher-level regulatory agency (e.g., the Ministry of Planning and Investment, Provincial People’s Committee, or a specialized ministry).

  • Resolution time: 30–45 days, depending on the complexity.

• Step 4 – Filing a lawsuit in court or with an arbitrator:

  • If an agreement is still not reached, the contractor can file a lawsuit under civil litigation procedures or commercial arbitration.

  • This is the final step and is legally binding.

Thus, the complaint process is designed with a bottom-up mechanism, from internal to legal, helping to reduce disputes and create opportunities for reconciliation before resorting to court. A transparent investor typically resolves issues definitively in the first round, limiting the risk of prolonged disputes.

Frequently Asked Questions about the Bidding Process

Can a bidder withdraw their bid after it has been submitted?

Yes. Bidders have the right to withdraw or modify their bid documents in writing before the bid closing time. After the bid closing time, withdrawing the bid may result in the forfeiture of the bid security.

How can you tell if a bidding package has signs of “tailored” technical criteria?

A common sign is when the bidding documents specify overly detailed requirements regarding specific brands, model numbers, or unique certifications/experience that only a single bidder in the market can meet.

What is the minimum time from the announcement to the bid closing?

According to new regulations, the minimum bid preparation time is 15 days for domestic open bidding and 30 days for international bidding from the date the bidding documents are issued.

Is the project owner allowed to cancel the bid if all bid prices exceed the budget estimate?

Yes. If all bids exceed the approved budget estimate and negotiations do not yield economic efficiency, the project owner has the right to cancel the bid to reorganize it.

Is it mandatory to submit a paper-based bid security for online bidding?

It is not necessary. Bidders can submit an electronic guarantee (a scanned copy of the bank guarantee document) along with their bid on the national bidding network system to ensure consistency and speed.

Conclusion

The information above provides a comprehensive overview of the bidding process for business leaders and other interested parties. We hope this article equips managers, individuals, and organizations involved in bidding with the legal knowledge needed to conduct the process in a fair and lawful manner.