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Microsoft Word 3 FTU Nghiem Thi Thuy Hang KTQT Tom tat Tieng Viet docx MINISTRY OF EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY *** SUMMARY OF PHD THESIS PUBLIC PROCUREMENT IN INTERNATIONAL ECONOMI[.]
MINISTRY OF EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY *** SUMMARY OF PHD THESIS PUBLIC PROCUREMENT IN INTERNATIONAL ECONOMICS INTEGRATION Major: International Economics Code: 9310106 NGHIEM THI THUY HANG Hanoi – 2023 The thesis is completed at: Foreign Trade University Respondent 1: …………………………………………………………………………………… …………………………………………………………………………………… Respondent 2: …………………………………………………………………………………… …………………………………………………………………………………… Review 3: …………………………………………………………………………………… …………………………………………………………………………………… The thesis will be defended before the School-level Review Board meeting at …………………………………………………………………………………… …………………………………………………………………………………… At the hour of the month of 2023 The thesis can be consulted at the National Library and the Library of Foreign Trade University Hanoi - 2023 INTRODUCTION Rationale Public procurement typically accounts for a large portion of total government spending, accounting for an average of 15% or more of a country’s GDP Development of public procurementactivities in international economic integration has become a common and inevitable trend in most of developed countries in the world In Vietnam, the concept of “Public Procurement”,“Government Procurement” is conveyed through the concept of bidding In 2013, the Law on Bidding No 43/2013/QH13 was promulgated on November 26, 2013 as a general law, and codified the contents of other legal documents regulating public procurementactivities in general Vietnam is currently only taking the initial steps in the development of public procurementcompared to the developed countries and international practices In the legal mechanisms and policies on bidding, there are still some inconsistent provisions between the law on bidding and specialized laws that have not been thoroughly resolved, causing difficulties for contractors during the implementation process; the number of projects applying the form of direct appointment of contractor still accounts for a high proportion; the competitiveness and economic efficiency of online bidding have not been brought into full play; the competition between contractors, goods and products, as well as the openness and transparency in public procurementin Vietnam is still limited, which is the cause of corruption, negativity, loss of state capital, etc From the perspective of international economic integration, Vietnam’s public procurement remains closed to foreign contractors until the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) comes into effect From the gap in development level, the difference between the provisions of the GPA and the regulations on public procurement in the country shows that Vietnam is still not really qualified to become a member of the GPA Within the framework of FTAs, Vietnam has signed the integration agreements on public procurementin the CPTPP, EVFTA, UKVFTA, and RCEP which have officially taken effect After more than years of official effect, the organization of procurement in accordance with the provisions of Decree No 95/2020/ND-CP and Decree No 09/2022/ND-CP on guiding the implementation of procurement under the agreements still has a lot of confusions, difficulties and challenges for management agencies, procurement agencies, and contractors of Vietnam In addition, the effective application of domestic preferential measures, dispute settlement preferences in the transition period is also an urgent issue for Vietnam Therefore, the study of the thesis topic of “Public procurement international economic integration” is really essential and meaningful in both scientific and practical aspects Research objectives and research questions of the thesis 2.1 Research objectives of the thesis: The study aims to systematize the theoretical basis of government procurement, assess the real situation of public procurement in Vietnam in international economic integration, and on that basis, propose solutions and recommendations to promote Vietnam’s public procurementactivities in international economic integration to 2025 with a vision by 2030 2.2 Main research questions (1) What factors affect government procurement? What are the criteria for assessing the level of international economic integration in the field of government procurement?; (2) How countries around the world carry out public procurementin international economic integration? and what lessons have been learned for Vietnam?; (3) What is the current state of public procurementin international economic integration in Vietnam?; (4) What are the solutions and recommendations to promote Vietnam’s public procurementactivities in international economic integration to 2025 with a vision by 2030? 2.3 Research tasks (1) Systematize the theoretical framework for government procurement; (2) Study the experience of public procurementin some countries in the world in international economic integration, and draw lessons for Vietnam; (3) Analyze and assess the current state of Vietnam’s public procurement in international economic integration; (4) Propose solutions and recommendations to promote Vietnam’s public procurement activities in international economic integration from now to 2025 with a vision by 2030 Objects and scope of research of the thesis 3.1 Research objects The research objects of the thesis are the theoretical and practical issues of public procurement in international economic integration 3.2 Research scope of the thesis In terms of contents, the thesis focuses on studying and clarifying the contents of public procurementin international economic integration; In terms of space, the thesis studies and assesses the current state of public procurement in Vietnam and some countries in the world (UK, Australia, Korea, China) in international economic integration; In terms of time: From 2012 to 2022; solutions and recommendations to 2025 and vision by 2030 Analytical framework of the thesis Government procurement Theoretic al basis Public procurementin international economic integration Influential factors DIAGRAM OF THE ANALYTICAL FRAMEWORK OF THE THESIS Procurement International Legal principles Procurement integration framework fields and methods Green Procurement procurement forms Public procurementin some countries, and the lessons learned Real situation of Vietnam’s public procurementin international economic integration Procurement fields and methods Legal framework Procurement forms Procurement principles Solutions and recommendations Procurement effective International integration Source: Author’s construction Research methods The PhD student uses the methods of analysis, synthesis, statistics, comparison, SWOT analysis, case study, consultation, investigation, field survey, and data processing to enhance their mutual complementarity in the process of researching and proposing solutions The methods of consultation, investigation and field survey associated with SWOT analysis are to assess general understanding of public procurement issues in international economic integration; clarify the strengths, weaknesses, opportunities and challenges of Vietnam’s procurement agencies, enterprises and contractors when implementing integration commitments in this field, etc Primary research data is collected through a survey of 102 public procurement agencies, enterprises, and economic-financial experts in 2022 Structure of the thesis: The main content of the thesis includes chapters: Chapter 1: Literature review and research methods Chapter 2: Theoretical basis of public procurement in international economic integration Chapter 3: Public procurement in international economic integration in some countries, and the lessons learned Chapter 4: The real situation of public procurement of Vietnam in international economic integration Chapter 5: Solutions to promote Vietnam’s public procurement activities in international economic integration to 2025 with a vision by 2030 CHAPTER 1: LITERATURE REVIEW OF PUBLIC PROCUREMENT IN INTERNATIONAL ECONOMIC INTEGRATION 1.1 Researches related to public procurement 1.1.1 Regarding public spending, and relationship between public spending and public procurement Regarding the public spending, and the relationship between public spending and government procurement, there have been studies by Duong Thi Binh Minh (2002-2004), Su Dinh Thanh and Bui Thi Mai Hoai (2006), Lucian Cernat and Zornitsa Kutlina-Dimitrova (2015), Stephanus Pertrus (2009), the Government of Vietnam and World Bank (2005) (2017) 1.1.2 Regarding the concept and scale of government procurement Regarding the concept and scope of government procurement, there have been studies by Sue Arrowsmith (2010b), Jorge Lynch (2014), OECD (2017), European Commission (2020), World Bank (2002) 1.2 Researches related to international experience of public procurement in international economic integration 1.2.1 Regarding some countries’ experience of government procurement Regarding the experience of some countries in government procurement, there have been studies by Joe Farnell and Lorna Booth (2014), and Institute for Government (2018), European Commission (2016), Korea Development Institute (KDI) (2013), Ho In Kang (2012), Australian Ministry of Finance (2013), WTO (2018), David S.Jones (2007), Nghiem Thi Thuy Hang (2020) 1.2.2 Regarding public procurement in international economic integration Regarding public procurement in international economic integration, there have been studies by Inbom Choi (1999), Robert D Anderson, Philippe Pelletier, Kodjo Osei-Lah and Anna Caroline Müller (2011), Foreign Economic Review (2016), Claudio Dordi & Federico Lupo Pasini (2016), David Seth Jones (2014), Locknie Hsu (2006), United States Government Accountability Office (2016), Patrick Messerlin, Sébastien Miroudot ( 2012), Office of the United States Trade Representative, The East African Business Council (EABC) (2021) 1.3 Researches related to sustainable public procurement/ green public procurement Regarding sustainable public procurement/ green public procurement, there have been studies by the United Nations Environment Program (2017), OECD (2015), Nghiem Thi Thuy Hang (2018) 1.4 Researches related to VietNam’s public procurement, opportunities and challenges for vietnam’s public procurement in international economic integration 1.4.1 Regarding Vietnam’s government procurement Regarding Vietnam’s government procurement, there have been studies by Chu Thi Thuy Chung (2017), Nguyen Chi Dung (2019), Nguyen Thi Nhu Nguyet (2022), Do Kien Vong (2018), Vietnam Chamber of Commerce and Industry (VCCI) and British Embassy in Hanoi (2016) 1.4.2 Opportunities and challenges for Vietnam’s public procurement in international economic integration Regarding the opportunities and challenges for Vietnam’s public procurement in international economic integration, there have been studies by the Ministry of Industry and Trade (2021), the New Zealand Ministry of Foreign Affairs and the New Zealand Embassy in Vietnam (2021), Australia Program to Support Vietnam’s Economic Reform - Aus4Reform (2020), MSc Pham Minh Quoc (2022), Transparency International U.S Office and Center for International Private Enterprise (2012), Sangeeta Khorana, Vo Tri Thanh and Dang Chien Thang (2011) 1.5 General assessment of the main findings of the related works and research gaps 1.5.1 General assessment The domestic and international research results show that the development of public procurement in international economic integration has become a common and inevitable trend in most of developed countries in the world The trend of completing the legal framework on public procurement in accordance with the international standards, strictly applying the principles of openness, transparency, non-discrimination, “Value for money” in procurement along with the enhancement of centralized procurement, online procurement, open bidding, supervision and integration of government procurement, etc., has helped develop public procurement in many countries, making important contributions in saving and improving the efficiency of public spending In terms of public procurement integration, there are currently 48 countries around the world that have signed to participate in the GPA (within the WTO framework) and many FTAs with the content of government procurement Compared with developed countries with a long history of government procurement, Vietnam is currently only taking the initial steps in the development of this field compared with developed countries and international common practices The method of centralized procurement has been expanded, but it is still not uniform across localities and units The overall savings rate in procurement is low and tends to decrease over the years Violations of the law in bidding are still quite common Vietnamese law is still not compatible with international practices on issues such as transparency, competition in the order and procedures for government procurement, etc However, the level of international integration in the field of public procurement of Vietnam is higher than that of China, a big country in the region 1.5.2 Research gaps Although previous research works have made certain contributions on both theoretical and practical bases related to the thesis topic, the PhD student still finds some research gaps as follows: First of all, most of the studies have not systematized the theoretical framework for government procurement, and have not linked public procurement with international economic integration Secondly, even though there are a lot of international empirical researches on government procurement, or public procurement in international economic integration, they are generally scattered, lack of transparency, or inconsistent with the actual conditions, the current level of development and integration of Vietnam, so they are not really valuable for reference Thirdly, there has been no research and assessment of the real situation of public procurement in Vietnam in the period before and after the CPTPP agreement officially took effect (from January 2019 to now); the limitations and shortcomings in public procurement in Vietnam have not been clarified from the perspectives of procurement scale, forms and methods of procurement, procurement principles, procurement efficiency, integration, etc., or identifying opportunities and challenges for Vietnam’s public procurement in international economic integration in the future, etc Fourthly, there is no research with a synchronous solution system that can change the basic and general perception of the research topic because new solutions only focus on a few specific aspects in a narrow scope There are no solutions to promote Vietnam’s public procurement in the coming period of international economic integration as well as recommendations to implement those solutions Therefore, the research results of the thesis topic of “Public procurement in international economic integration” is an independent study on public procurement in international economic integration The new point of this research is to study the issue of public procurement in international economic integration with the aim of proposing solutions to promote this activity of Vietnam in the coming international economic integration This new point is shown throughout by the PhD student in terms of the theoretical framework, the analysis of the current situation, and the system of solutions and recommendations of the thesis 1.6 Contributions of the thesis On the basis of inheritance of previous studies, the thesis has made some contributions as follows: Firstly, the thesis has systematized the theoretical basis of public procurement, and public procurement in international economic integration, identified and clarified the factors (including factors of international economic integration) affecting public procurement Secondly, it has generalized, analyzed and evaluated the real situation of public procurement in international economic integration of some typical countries (UK (EU), Australia, Korea, China), and drawn some lessons learned Thirdly, the thesis has studied and assessed the real situation of public procurement in Vietnam in the period before and after Vietnam’s accession to the CPTPP up to now, identified limitations, shortcomings and causes in public procurement of Vietnam in the recent international economic integration At the same time, the thesis has also identified opportunities and challenges for Vietnam in implementing its commitment to integration in the field of public procurement in the coming time Fourthly, it has proposed a group of solutions to develop Vietnam’s public procurement activities in international economic integration from now to 2025 with a vision by 2030, and some recommendations for implementation CHAPTER 2: THEORETICAL BASIS OF PUBLIC PROCUREMENT IN INTERNATIONAL ECONOMIC INTEGRATION 2.1 PUBLIC PROCUREMENT 2.1.1 Concept, characteristics, principles and objects of public procurement Public procurement is a major component of public spending, has a sizable impact on the aggregate demand of any domestic economy Public procurement spending accounts for about a third of total public spending in OECD countries (Lucian Cernat and Zornitsa Kutlina-Dimitrova, 2015) In Vietnam, the concept of “public procurement” is rarely used, but instead is the concept of “bidding” According to the Law on Bidding No 43/2013/QH13, bidding is the process of selecting contractors to sign and perform contracts for supply of consulting services, non-consulting services, procurement of goods, construction and installation; selecting investors to sign and perform contracts of PPP investment projects, land-using investment projects on the basis of ensuring competition, fairness, transparency, and economic efficiency Public procurement in Vietnam includes: Procurement for maintenance of operations of State agencies, political organizations, socio-political organizations, units of the people’s armed forces; investment and development projects; procurement for activities of State-owned Enterprises (SOEs) According to the PhD student, “Public procurement is a procurement activity performed by the government and the agencies using state budget to purchase goods and services for regular operation, development and investment, and perform the functions of the State” Public has several key characteristics related to the source of funds used, the purpose of procurement, the subject and object of procurement Unlike private procurement, public procurement is carried out with State capital, including capital from the state budget Public procurement is intended to perform State functions or perform tasks assigned by the State The subjects of public procurement are state budget-using units, state agencies, socio-political organizations, SOEs, and other organizations with budget allocations (according to the State Budget Law) Procurement objects in public procurement include goods, services and works Public procurement is one of the sensitive fields; therefore, it is necessary and important to comply with the principles related to public procurement The Organization for Economic Cooperation and Development (OECD) sets out a group of 12 principles in public procurement, related to|: (1) Transparency; (2) Integrity; (3) Market access; (4) Balance; (5) Market participation; (6) Efficiency; (7) E-procurement; (8) Capacity; (9) Evaluation (10) Risk management; (11) Accountability; (12) Integration In all public procurement activities, three subjects (government, citizens and private sector) are directly involved 2.1.2 Legal basis for public procurement Public procurement is a relatively complex process, related to many different fields of law; therefore, since 1994, the United Nations Commission on International Trade Law (UNCITRAL) has drafted a Model Law on Public procurement to help countries have a basis to develop an appropriate public procurement legislation 2.1.3 Methods of public procurement, and forms of selection of contractors to supply goods and services There are a lot of methods of public procurement, such as centralized procurement, decentralized procurement, and unified procurement The common form of selection of contractors to supply goods and services in public procurement according to the provisions of the Model Law on Public procurement (UNCITRAL, 2011) includes: Open bidding; Limited bidding; Requesting a project proposal without negotiation; Bidding in two stages; Requesting a project proposal through dialogue; Requesting a project proposal through successive negotiations; Competitive negotiation; Electronic reverse auction; Procurement from a single source (direct appointment of contractor) 2.1.4 The role of public procurement for the economy Public procurement plays an important role for the economy, reflected in the following aspects: Ensure the public financial management system works well, effectively use the state budget; Guarantee the supply of goods and services to state agencies, people and society; Ensure effective management and use of state assets; Contribute to promoting production development, bringing benefits to the national economy; Contribute to anti-corruption; Contribute to promoting technology transfer 2.2 Public procurement in international economic integration 2.2.1 Public procurement under the Public procurement Agreement (GPA) of the WTO The GPA is a “multilateral” agreement, included in Annex of the Agreement Establishing the WTO; however, WTO members are not bound by the GPA (United Nation, 2003) The GPA is an agreement that applies to all regulations related to public procurement of member countries The Agreement focuses on the Principles of national treatment and non-discrimination; Ensuring transparency and procedural fairness in bidding; Principles of special and differential treatment for developing countries; Attention to the overall benefits of liberalization of public procurement 2.2.2 Public procurement under free trade agreements (FTAs) Public procurement is an important content always present in most FTAs of developed countries Considering an FTA between a developed country and a developing country shows that it is more likely that developed countries take advantage of the chapter of market access for public procurement due to their ability to supply However, most of developing countries are not able to take advantage of this, or at least not at the same level, because they are not yet ready to supply 2.2.3 Sustainable Public Procurement/Green Public Procurement under the United Nations Sustainable Public Procurement Initiative (SPPI) On a global scale, sustainable public procurement is increasingly being implemented as a policy tool to support national, regional and international policies and programs in order to promote sustainable development A lot of governments and organizations voluntarily participate in the Sustainable Public Procurement Initiative (SPPI), which is an initiative of the United Nations Environment Program (UNEP), with the goal of promoting sustainable public procurement globally by promoting cooperation among stakeholders, and highlighting the potential benefits and impacts of participation in the initiative 2.2.4 Criteria for assessing the level of integration in the field of public procurement Evaluating and measuring the level of openness and integration of a country’s public procurement field is a rather complicated and controversial issue in international forums Some criteria to measure the level of openness and integration in the field of public procurement can be referred to as follows: ► For developing countries, which have not joined the GPA: (1) The level of openness and integration in the legal framework of domestic public procurement through commitments to reduce and eliminate tariff barriers, regulations on the protection of domestic goods and enterprises; (2) The degree of conformity and compatibility between the domestic public procurement law and the signed commitments and the GPA; (3) The degree of application of international bidding; (4) The leve of information technology application in public procurement; (5) The level of publicity and transparency of information about international bidding packages compared to other countries and regions ► For developed countries that have acceded to the GPA: (1) Being a member of the GPA; (2) The degree of application of measures to protect domestic enterprises, goods and services through formal and informal barriers; (3) Scale of total value of main procurement packages subject to compliance with commitments in the GPA and FTAs ► For all countries that have or have not joined the GPA: In the FTA, three criteria can be measured: (1) Which government agency will have to conduct international procurement?; (2) How much is the procurement value subject to international bidding?; (3) What types of goods and services are accepted for international bidding? 2.3 Factors affecting public procurement activities 2.3.1 Influential factors Group of subjective factors - The Government’s thinking, perception and views on international economic integration The fact that the Government of a country has a clear and strong perception and views on international economic integration is a major and leading factor affecting the policy and direction of economic development and integration of that country as well as the field of public procurement - Public procurement policy Public procurement policy is often considered as a legal tool to stimulate domestic production and consumption markets - Legal base system The system of laws and legal documents affecting public procurement are intended to create an environment and legal basis for this activity - Organization of implementation of the law on public procurement Public procurement is a complex activity, involving many fields; therefore, a good implementation of the law on public procurement will contribute to improving compliance with the law, and limiting violations of public procurement agencies - Objectives, culture and requirements for monitoring Differences in objectives, culture and requirements for monitoring are also the factors that have a certain impact on public procurement activities of countries - Application of science and technology The application of science and technology is an important factor affecting management affairs, contributing to improving the productivity, quality and efficiency of management affairs in all fields, including public procurement - Qualification and capacity of management agencies, procurement agencies: Public procurement is a complex activity; therefore, the qualification and capacity of state management agencies, investors, and bid solicitors have a great influence on public procurement - Contents, characteristics and nature of bidding package In public procurement, depending on the contents, characteristics and nature of each bidding package, procurement agencies shall decide to apply different procurement processes, methods and forms - Methods and forms of public procurement Selection of method and form of procurement is considered to be a factor that has a great impact on public procurement - The competitiveness of domestic contractors is seemed as an important factor that not only affects the competitiveness of enterprises to capture market share but also is a measure of the country’s competitiveness in the regional and global procurement market - Industry associations in charge of organization, support and connection will help enterprises in the business field have more competitiveness to participate in large bidding packages, especially bidding packages with competitive elements with foreign contractors Group of objective factors - International economic integration International economic integration is a factor from the external environment, but this is a factor that has great impact on public procurement activities of countries International economic integration places requirements on countries to sign new generation FTAs with the content of public procurement; implement the commitment to open up and integrate the public procurement sector with other countries in order to achieve optimal procurement efficiency for the Government - Natural disasters and epidemics: Natural disasters and epidemics, such as the Covid-19 pandemic, have been a major factor affecting public procurement activities of many countries and regions around the world in 2020 2.3.2 International economic integration is the factor which has great impact on public procurement Positive impacts: (1) Impact on the completion of the legal framework on public procurement of each country; (2) Promote the development of the public procurement market through access to international market; (3) Impact on acquisition and improvement of advanced science and technology application level of each country; (4) Contribute to improving the efficiency of public procurement; (5) Help countries use state budget more efficiently through competitive procurement at the international level; (6) Increase competitive pressure in public procurement activities, thereby improving the competitiveness of domestic enterprises, and expanding the public procurement market to many countries; (7) Impact on training and fostering of cadres in the field of public procurement, thereby improving the quality of human resources; (8) Contribute to promoting the process of economic restructuring, and restructuring of commodity production Negative impacts or costs: (1) Countries must pay the cost of reforming their domestic legal system in accordance with the conditions of international economic integration; (2) Enterprises shall incur costs related to training and fostering of personnel to meet international standards; (3) Competitive pressure on domestic contractors CHAPTER 3: PUBLIC PROCUREMENT IN INTERNATIONAL ECONOMIC INTEGRATION IN SOME COUNTRIES, AND THE LESSONS LEARNED 3.1 The real situation of public in international economic integration in some countries 3.1.1 Basis for selecting research countries The basis for the PhD student to choose countries, including UK, Australia, Korea and China, to study is: (i) In terms of geographical location, these countries are located in both Europe, Australia and Asia; (ii) In terms of economic development level, these countries belong to both the group of developed and developing countries; (iii) Regarding the level of international economic integration, they all have a deep and wide level of international economic integration, and they are all members of the WTO for a long time Regarding the integration of public procurement, the UK, Australia, and Korea are all members of the GPA, participating in a lot of FTAs with the content of public procurement; (iv) In terms of qualifications and experience in the field of public procurement, the group of research countries includes both experienced and latecomer countries 3.1.2 Real situation of public procurement in international economic integration in selected countries Real situation of public procurement in the UK In the UK, the public procurement market developed early, is highly commercial and highly stable The purchase value of public goods and services in the UK is usually equivalent to one-third of the total state budget expenditure Legal basis for public procurement: As a member of the European Union acceded to the GPA in 1996, the UK must comply with the provisions of the GPA in the WTO and the general regulations of the EU On the basis of the EU’s general regulations, the UK has issued specific legal regulations on public procurement In the process of development of public procurement, the legal provisions on public procurement of the EU in general and the UK in particular are regularly renewed In January 2021, the UK became a party to the GPA as an independent country (WTO, 2022) Form of selection of contractors: Competition is the core principle in public procurement In order to strengthen management and improve efficiency of public procurement, each form of public procurement comes with a minimum number of participants Principles in implementing public procurement: The UK is a typical country of strict adherence to basic principles in public procurement Projects for procurement of goods and services valued at more than £1 million and works of more than £3.5 million must be publicly disclosed in the Official Journal of the European Union Regarding e-procurement, since 2014 (revised GPA), the UK has led the EU in the rate of e-procurement even though it is not compulsory Procurement agencies not necessarily have to choose cheap goods and services, but prioritize choosing goods and services with prices and quality that meet customer needs (Value for money) Evaluation of public procurement is one of the basic and important steps in the public process Areas and methods of public procurement: The UK conducts public procurement for goods, services and works; however, the procurement of services is more diversified and developed than many other countries In 2000, the UK established not-for-profit Central Purchasing Bodies (CPBs) that ensure Government objectives The operating budget of CPBs comes from fees from contractors providing goods and services on the list of contractors that are allowed to provide goods and services for the government; consulting service fees from contractors are charged on successful procurement contracts under the centralized method The UK’s centralized procurement model is considered a typical model and has been studied and referenced by many countries Green/ sustainable public procurement: The UK has been using eco-labels since 1992 and developed an Action Plan on Sustainable Public Procurement in 2007 Public procurement integration: The UK joined the GPA early and is one of the most integrated public markets in the world The UK has signed a lot of FTAs with the content of public procurement with partners who are not GPA members, and is one of 45 governments and organizations worldwide that have voluntarily signed to join the SPPI Real situation of public procurement in Australia Australia is a country with a developed public procurement market with procurement value accounting for about 17% of GDP per year (Anthony and Evans, 2010) Legal basis for public procurement: The Commonwealth Procurement Rules (CPRs) issued by the Australian Department of Finance which took effect on July 1, 2012, amended and supplemented from April 20, 2019, are the Australian Government’s legal framework for public procurement which the procurement agencies must comply with when bidding for procurement of goods and services In 2019, Australia officially joined the GPA In addition, Australia has enacted several laws related to general public procurement Form of selection of contractors to supply goods and services: Open and limited bidding accounted for 93.8% of all bidding packages in Australia from 2013/14 to 2017/18 Principles in implementing public procurement: Australia is a country that values openness and transparency in public procurement; therefore, ensuring transparency and accountability are the required principles set forth by CPRs All public procurement information is posted on the Australian E-Procurement System “Value for money” is also a core rule in public procurement in Australia Areas and methods of public procurement: The public procurement areas include goods and services (including construction services), in which procurement of services usually accounts for over 60% of total procurement contracts, and procurement of goods accounts for the remaining percentage, more than 30% In terms of procurement methods, Australia has 120 procurement agencies covered by the CPRs Government agencies are responsible for their own procurement decisions and processes, and each agency has its own requirements for contractors providing goods and services for them However, it is the principle of “Value for money” that requires the procurement agencies to coordinate in organizing procurement (centralized procurement) Public procurement integration: In spite of a country with a fairly developed public procurement market, and an observer of the GPA since 1996, in May 2019, this country officially became the 48th member of the GPA The reason why Australia joined the GPA late is because before this country still had legal regulations that did not meet the requirements of the GPA The trend of integrating public procurement within the framework of FTAs takes place strongly in Australia Except for FTAs with China and Indonesia, 12 FTAs of Australia have the content of public procurement integration Real situation of public procurement in Korea Korea has an early developed public procurement system and is a model for many countries to learn from Korea has considered public procurement reform as one of the anti-corruption measures; therefore, after the Anti-Corruption Law (2001) was promulgated, Korea established an electronic public procurement system 10 Legal basis for public procurement: The system of legal basis for public procurement was promulgated relatively early and continuously revised and improved based on three main principles: Transparency in procurement opportunities; transparency in contract performance, and the principle of non-discrimination in the application of international bidding under the provisions of GPA Korea also promulgated other laws to promote online bidding activities such as the Law on Electronic Transactions and the Law on Electronic Signatures, etc Form of selection of contractors to supply goods and services: The main forms of selection of contractors include: open bidding, limited bidding, and direct appointment of contractors As a country with a high level of publicity and transparency in public procurement, open bidding is the main method implemented in this country Principles in implementing public procurement: Korea attaches great importance to compliance with the principle of openness and transparency in public procurement, whereby all bidding notices are published on the Korea Online E-Procurement System (KONEPS) Korea is one of the countries with the largest e-procurement system in the world with an e-procurement rate of 95% at state agencies The principle of “the best value for money” is emphasized and adhered to in Korea To achieve the goal of quality management, Korea established the Society for Quality Management, and set the main objectives to ensure the best performance of quality management tasks Areas and methods of public procurement: Korea does public procurement for goods, services and works A centralized public procurement system is established from the central to local levels At the central level, there is a centralized Public Procurement Service (PPS) for procurement of goods and services for government agencies valued at over 100 thousand USD, and construction works valued at over million USD At the local level, procurement of goods and construction works is decentralized to local authorities to conduct by themselves Green/ Sustainable Public Procurement: Korea has used eco-labels since 1992 and enacted the Act on Promotion of Purchase of Green Products since 2005 Korea established an online Green Products Information System (GPIS) in 2005 in order to strengthen competition among public organizations, facilitate the monitoring and reporting of the annual green procurement process Public procurement integration: Joining the GPA in 1997 and being a country with a developed public procurement sector, most of Korea’s FTAs have a chapter on public procurement The content of commitments in Korea’s FTAs basically comply with the GPA document of WTO; however, with some exceptional FTAs, the content of commitments tends to be more open and favorable (such as KORUS) Korea is one of 45 governments and organizations worldwide that voluntarily participated in the SPPI Real situation of public procurement in China The public procurement scale of China has continuously increased in recent years In 2020, China’s public procurement value accounted for 10.2% of total budget expenditure and 3.6% of GDP Legal basis for public procurement: The system of regulatory documents on public procurement in China is less complete than that of the UK, Australia, and Korea China’s Public procurement Law 2003 was revised and took effect on August 31, 2014 The Law on Bidding and Procurement was implemented at the beginning of 2000 to regulate the procurement activities of SOEs China has also issued many relevant legal documents to support public procurement Form of selection of contractors to supply goods and services: There are 06 forms of contractor selection (open bidding, limited bidding, price investigation, competitive negotiation, competitive consultation, direct appointment of contractor) applied at both central and local levels In 2019, China’s open bidding accounted for 78.6% of procurement tenders 11 Principles in implementing public procurement: The publicity and transparency of information on public procurement in China is still limited compared to the developed countries such as the UK, Australia, and Korea China has been piloting E-procurement since 1996, but it has just been fully implemented since 2020 Areas and methods of public procurement: China does public procurement for goods, services, and works; however, the proportion of service procurement of this country has been promoted in recent years Centralized procurement is done in China with the aim of cutting costs through the implementation of large-scale procurement Green/ Sustainable Public Procurement: China issued a policy related to green public procurement in the Public Procurement Law 2002 In 2005, all government agencies were required to carry out green procurement and publish a detailed list of products that government agencies can procure This list has been updated over the years and tends to expand The revised Public Procurement Law 2014 of China also provides for environmental protection Public procurement integration: As a developing country, China uses public procurement as an important tool to achieve economic goals The Public procurement Law stipulates that local authorities and state-owned enterprises give priority to domestic goods, services and construction projects in public procurement; therefore, it is legal for the government to favor domestic contractors over foreign contractors in this country (Chao Wang, 2015) From the perspective of FTAs, China has signed 16 FTAs, but none of them have content on public procurement China also has some barriers to market entry clearly prescribed 3.2 Some lessons learned on public procurement in international economic integration drawn from the research countries 3.2.1 Completion of the legal framework in the field of public procurement in accordance with the international standards Countries manage public procurement activities through different legal documents; however, a group of experienced countries (UK, Australia, Korea) has a legal framework system that meets the international standards, and the requirements of development and integration compared to latecomer countries like China 3.2.2 Regarding compliance with basic principles in public procurement The experienced countries in public procurement and integration into the public procurement field strictly adhere to the basic principles of public procurement, typically: Openness, transparency; Value for money; E-procurement, etc 3.2.3 Regarding the selection of contractors to supply goods and services through open bidding Experience in public procurement in the UK, Australia, Korea, etc., shows that the trend of use of open bidding is the main method in public procurement 3.2.4 Regarding increase in centralized procurement Establishing a centralized procurement agency is an option of some countries such as the UK and Korea 3.2.5 Regarding monitoring and evaluation of the quality of public procurement The monitoring and evaluation of the results of completing the task of providing goods and services in terms of quantity, quality, time, and satisfaction of the beneficiaries of goods and services, plays an important role in public procurement in many countries 3.2.6 Regarding strengthening international integration in the field of public procurement International integration in the field of public procurement is an inevitable trend in the world, and international integration in the field of procurement aims to enhance sustainable economic development 12 CHAPTER 4: THE REAL SITUATION OF PUBLIC PROCUREMENT OF VIETNAM IN INTERNATIONAL ECONOMIC INTEGRATION 4.1 Vietnam’s current legal basis on public procurement 4.1.1 Legal basis The current legal basis on public procurement in Vietnam, which is governed mainly by the following legal documents: Law on Bidding No 43/2013/QH13 dated 26/11/2013 (Bidding Law 2013) and its guiding documents; Relevant laws and guiding documents including: Law on State Budget 2015; Law on Management and Use of Public Assets 2017, Law on Anti-corruption and thrift practice and anti-waste, etc.; Decree No 95/2020/ND-CP and Decree No 09/2022/ND-CP on amending and supplementing some articles of Decree No 95/2020/ND-CP, has created a legal framework to fully and responsibly implement Vietnam’s procurement commitments in agreements including CPTPP, EVFTA, UKVFTA 4.1.2 State management apparatus for public procurement in Vietnam The state management apparatus for public procurement in Vietnam includes: the Government, the Prime Minister; Ministry of Planning and Investment; Ministries, central agencies, People’s Committees at all levels 4.2 The real situation of public procurement of Vietnam in international economic integration 4.2.1 A brief overview of Vietnam’s international economic integration After more than decades of market opening and international integration, Vietnam has actively integrated into the international economy with a roadmap and an increasingly extensive level (from narrow to broad in terms of partners and areas of commitment, from low to high in terms of commitment level) Vietnam has had a positive relationship with international monetary and financial institutions, as of December 2022, has signed and is negotiating 17 bilateral and multilateral FTAs, of which 15 FTAs have come into force and are being implemented 4.2.2 The real situation of public procurement of Vietnam in international economic integration before 2019 The size of public spending tends to increase: Public procurement is an important component of public spending; therefore, studying the size of Vietnam’s public spending in a period of time also reflects the size of the country’s public procurement The average state budget expenditure in the period of 2015 - 2018 reached VND 1,339,994 billion, 9.83% higher than the average expenditure of VND 1,219,973 billion in the period of 2010 - 2015 However, the proportion of development investment spending over the total state budget expenditure in the period of 2015 - 2018 tends to decrease, reaching 25.91% compared to 29.16% in the period of 2010 - 2015 The number and size of procurement packages tend to increase: Vietnam is a developing country, so every year the Government spends a large amount of money on public procurement The total value of public procurement packages (winning bid price) has accounted for 10 - 12% of GDP and over 40% of total state budget expenditure Specifically, in 2015, the total value of the public procurement packages was VND 472,238.4 billion, equivalent to 12% of GDP (calculated at current prices) and accounting for about 40% of the total state budget expenditure By 2018, the total winning bid price reached VND 647,676,143 billion, equivalent to 11.7% of GDP and accounting for about 48.3% of total state budget expenditure There are differences between types of procurement packages in bidding: For bidding packages using State capital for development and investment, the construction sector is the field which has the highest bid package price and total winning value In 2018, the construction sector had 3,842 bidding packages (29.31%) with the winning value accounting for 57.37% While bidding packages use state capital to purchase assets to maintain regular operations of state agencies, procurement of goods 13 always accounts for the largest proportion In online bidding, the goods sector has the highest number of bidding packages, accounting for 74% and 47.29% of the total number of bidding packages implemented online in 2016 and 2018, respectively (Ministry of Planning and Investment 2017, 2019) Open bidding is the main form of contractor selection: In 2017 and 2018, open bidding became the method of contractor selection with the highest total number of bidding packages and the highest total value of bidding packages In 2018, the whole country had 193,250 bidding packages (accounting for 77.41%) using state capital for development and investment goals implemented with the total package price of 415,154.851 billion VND (accounting for 60.73%), in which, there are 31,004 bidding packages with open bidding (accounting for 17.21%), and the highest total package price and total winning price (VND 293,691,1 billion, accounting for 79.5% and VND 281,308.859 billion, accounting for 79.36%, respectively) (Ministry of Planning and Investment, 2018, 2019) Strengthen the application of principles in public procurement: Publicity of bidding information continues to be enhanced, creating maximum transparency, specifically publicizing bidding information on the Bidding Newspaper with 225,385 news posted in 2018 The national bidding network system by the end of 2018 had more than 27,000 bid solicitors, more than 83,000 contractors registered; nearly 150,000 contractor selection plans, and about 104,000 notices of invitation for bids published E-bidding continued to grow strongly in 2018; however, 2018 is still the third consecutive year in which the target has not been achieved in line with the roadmap of Joint Circular No 07/2015/TTLT-BKHDT-BTC dated September 8, 2015 by the Ministry of Planning and Investment, and the Ministry of Finance Centralized procurement method accounts for a low proportion: Vietnam applies both decentralized and centralized procurement methods Centralized procurement has directly contributed to ensuring the strict management and use of State assets, limiting the situation of purchasing assets exceeding standards and norms, and fighting waste In 2018, the total value of the bidding packages implemented by the method of concentrated procurement accounted for nearly 3% of the total package value across the country, the saving rate was nearly times higher than the national saving rate of 9.12% However, there are still many agencies and units that have not fully and synchronously implemented the centralized procurement method, or the efficiency of centralized procurement is still at a low level (Ministry of Planning and Investment, 2019) The efficiency of bidding activities tends to decrease: The efficiency of bidding activities is measured in many ways, typically measuring economic efficiency through the savings rate in bidding In recent years, the overall savings rate in bidding has tended to decrease over the years, although the proportion of direct appointment of contractor nationwide has tended to decrease, and open bidding has increased The savings rate of e-bidding is always higher than that of traditional bidding in the whole country (in 2016, 9% of e-bidding compared to 7.11% of traditional bidding; in 2017, 8.2% of e-bidding compared to 6.98% of traditional bidding; in 2018, 7.15% of e-bidding compared to 5.26% of traditional bidding) (Ministry of Planning and Investment, 2019) The integration of public procurement has made a fundamental step: In the trend of international economic integration, international cooperation activities in the field of bidding of Vietnam in the period of 2011 - 2018 have been promoted, affirming its goal in building a transparent and effective environment of public procurement, in line with international standards and practices, and at the same time helping to further enhance the role and position of Vietnam in the international arena Vietnam has coordinated with international organizations to develop and implement policies to perfect the legal framework on bidding based on practical experience and good practices in the world Becoming an observer of the GPA, participating in the Open Contracting Vietnam (OCVN), the Procurement Monitoring and Evaluation System (M&E), and the National bidding network system are important and necessary steps in the process of Vietnam 14 implementing international integration on procurement Vietnam has conducted negotiations on the content of public procurement in some FTAs Along with the trend of opening up for international economic integration, international bidding in Vietnam also tends to increase In 2016, the whole country achieved 2.03% of the total number of international bidding packages, 0.8% higher than the rate of 2012 In fact, there have been many big contractors in Vietnam winning bids, especially in the construction industry After becoming an observer of the GPA in 2012, Vietnam can participate in meetings, thereby grasping the trend in negotiations to make appropriate decisions in negotiating the agreements that Vietnam is and will be participating in 4.2.3 The real situation of public procurement of Vietnam in international economic integration from 2019 to now The size of public spending continues to increase compared to the same period: In the period of 2019-2021, the size of state budget expenditure tends to increase in value compared to the same period of the years in the period of 2015-2018 The average proportion of development investment spending to total state budget expenditure in the period of 2019-2021 reached 30.63%, higher than the rate of 25.61% in the period of 2015-2018 The proportion of recurrent expenditure to total state budget expenditure of the years in the period of 2019 - 2021 decreased to 61.95% compared to the rate of 72.5% in the period of 2015-2018 The number and size of procurement packages tend to decrease: In 2021, the number of bidding packages nationwide (300,157 bidding packages) only decreased by 0.5% compared to 2020; however, the total value dropped sharply with a decrease of 33.55% compared to 2020 to VND 636,914.36 billion, equivalent to 7.58% of GDP (at current prices) and about 37.75% of total state budget expenditure The bidding sector continues to maintain the difference between types of procurement packages: In the period of 2019-2021, bidding packages using State capital for development and investment purposes in the construction and installation industry continue to have the highest package price and total winning value, accounting for 61.04% and 62.19% of the total price and total winning value, respectively With bidding packages for regular activities of State agencies, procurement of goods always accounts for the largest proportion with 52.67% of total bidding packages, and 72.32% of total winning value (Ministry of Planning and Investment, 2022) In e-bidding, the goods sector still has the highest number of bidding packages, accounting for 39.09% and 38.17% of the total number of bidding packages applying online contractor selection in 2020 and 2021 (Ministry of Planning and Investment, 2021, 2022) Open bidding continues to be the main form of contractor selection: In the period of 2019 2021, the forms of open bidding, competitive offer, and shortened competitive offer tend to increase Open bidding is the form that accounts for the highest percentage in terms of both the total number of bidding packages and the total winning value In 2021, the whole country had 213,968 bidding packages (accounting for 71.29% of the total number of packages) using state capital for development and investment objectives, which are implemented with a total package price of 490,155.397 billion VND (accounting for 80.45%), of which, 37,535 bidding packages apply open bidding (accounting for 17.69%) but have the highest total package price and total winning bid price (427,724.88 billion VND, accounting for 88.2%, and 410,805.08 billion VND, accounting for 88.28%, respectively) Out of 86,189 bidding packages using State capital to purchase assets to maintain regular operations of State agencies implemented in 2021, there are 8,380 bidding packages of open bidding (accounting for 9.72%) which is a form of contractor selection with a total winning price (VND 70,530 billion, accounting for 59.2%) (Ministry of Planning and Investment, 2022) During the Covid-19 pandemic, direct appointment of contractor has tended to increase the value of bidding packages when the total value of bidding packages increased from 8.0% in 2020 to 12.85%, and the savings rate was as low as 2.57% However, there have been many cases of violations 15 of the law on bidding such as intentionally subdividing bidding packages to meet the prescribed limit for direct appointment of contractor, or grouping many other small bidding packages together to create a complicated bidding package, taking advantage of loopholes in the provisions of the Bidding Law on direct appointment of contractor in some cases to make profit Continue to promote the application of principles in public procurement: Publicity of bidding information on both the National Bidding Network System and the Bidding Newspaper continues to be enhanced in the period of 2019-2021, which helps to improve contractors’ access to information, thereby improving competition and transparency in bidding In the period of 2019 2021, e-bidding has achieved impressive results compared to the previous period In 2021, the number of bidding packages increased to 115,371 bidding packages, an increase of 190.6% compared to 2019, and 02 e-bidding targets have far exceeded the targets directed by the Government in the Resolution No 01/NQ-CP dated January 1, 2021 Regarding the price of bidding packages in the context of the whole country’s fight against the Covid-19 pandemic, there have emerged a number of cases of law violation due to collusion in appraisal of prices to inflate the value of bidding packages to make profit The centralized procurement method is expanded and implemented more strongly: In the period from 2019 - 2021, the centralized procurement method has been expanded and implemented more strongly In 2021, the whole country had 804 procurement packages organized to select contractors under the concentrated procurement method (increased to 11.35% compared to 2020) with a total procurement value of VND 34,856.95 billion (5.47% of the total package price nationwide), the winning bid price of VND 29,221.95 billion (decreased to 22.2% compared to 2000; increased to 29.4% compared to 2018) Some units and localities have had a high proportion of the total value of the concentrated procurement packages for many years, such as Dong Nai, Yen Bai, Vietnam Electricity, etc The efficiency of bidding activities continues to decrease gradually: In the period of 2019 2021, although the proportion of open bidding packages has increased, the overall savings rate in bidding activities of the whole country continues to decrease gradually over the years, from 5.58% (in 2019) to 4.87% (in 2020) and 4.34% (in 2021) The savings rate in bidding activities is also uneven among units, localities and fields Centralized procurement has been well implemented, especially in some localities with high savings rates of over 30%, which have positively contributed to the overall savings rate nationwide E-bidding in 2021 saved about VND 1,974 billion of direct administrative costs, increased by 14.4% compared to 2020 The field of public procurement has entered the implementation phase of commitments in the signed FTAs: After 2019, the international bidding situation in Vietnam has not had many positive changes, even tended to decrease compared to the previous period due to the heavy impact of the Covid-19 epidemic On a global scale, international investors facing many difficulties (capital resources, travel restrictions, human resources, imported raw materials, etc.) have had to stop looking for new investment opportunities The procurement agency involved in the integration commitment is also in the process of studying the commitments and preparing conditions for the implementation of Decree No 09 In 2021, out of 300,157 bidding packages implemented nationwide, there are only 1,867 international bidding packages (accounting for 0.62%) which have a total value of 50,576 billion VND, total winning value of 48,812.2 billion VND (accounting for 7.66%) Within the scope of Decree No 95/2020/ND-CP and Decree No 09/2022/ND-CP, from 2019 to the end of 2022, only 02 procurement packages have been implemented in the whole country The common characteristics of these two packages are that they are both in the field of goods procurement, of moderate size with the average total winning value of VND 81.16 million, and a low savings rate in procurement (reaching 1.02% and 0.007%) 16 Vietnam is in the early stages of public procurement development in general and public procurement integration in particular Firstly, in terms of joining the GPA Although Vietnam has not joined the GPA as a member, Vietnam has become the 26th observer of the GPA since 2012 and is still continuing to perform the role and duties of observers at the GPA Secondly, in terms of joing FTAs with public procurement content Vietnam has signed 04 FTAs with the content on public procurement, and the agreements have taken effect since 2019 Thirdly, in terms of relevance and compatibility between domestic public procurement law and commitments in the signed FTAs and GPA Vietnam’s domestic law on bidding has made strides in line with international practices on bidding or general obligations on transparency and competition in bidding order and procedures Fourthly, in terms of the level of implementation of international bidding, publicity and transparency of information International bidding was implemented early in accordance with the Law on Bidding 2005 and has tended to increase in quantity and value in the years before the Covid-19 epidemic Along with becoming an observer of the GPA, Vietnam has participated in several integration activities in the field of public procurement The disclosure of information and data on international bidding activities in the post-integration period from 2019 to now is more limited than information on other aspects Fifthly, in terms of the level of application of information technology in public procurement The level of application of e-bidding in recent years has increased in both quantity and total value of bidding packages, bringing many practical effects, especially during the Covid-19 pandemic Vietnam is still in the process of promoting the implementation of e-bidding to contribute to more efficient and transparent use of the state budget In general, Vietnam is currently in the early stages of public procurement development in general and public procurement integration in particular After 2025, the level of integration in the public procurement sector will be higher in the short term because the committed threshold for the value of bidding packages has decreased sharply 4.2.4 General assessment of Vietnam’s public procurement in international economic integration Some achievements on public procurement in international economic integration (1) The size of annual state budget expenditure of the whole country in the period of 20192021 tends to increase in value compared to the same period of the years in the period of 2015-2018 State budget spending on public procurement in recent years has tended to increase in value compared to the same period last year, demonstrating the important role and priority of national resources for public procurement (2) The legal framework on bidding continues to be improved in a way that is gradually consistent with international practices The Law on Bidding 2013 has made strides in the direction of conformity with international practices or general obligations on transparency and competition in bidding order and procedures The Ministry of Planning and Investment is currently presiding over the (amended) Bidding Law Project with the spirit of clearly identifying obstacles and inadequacies in the current law, thereby amending and completing it, and at the same time meeting the actual requirements of real life and new context The legal framework for e-bidding has been gradually improved, creating maximum convenience for users The Decrees guiding the implementation of integration commitments in the field of public procurement within the framework of FTAs have been developed and promulgated, laying a basic foundation for legislation to asymptotizes with high standards of international practices in the field of public procurement (3) The form of contractor selection in recent years has gradually changed in a positive and competitive trend, more in line with the general development trend of countries in the region and in 17 the world Open bidding has become the form of contractor selection, accounting for the highest percentage in terms of total number of packages and total winning value, contributing to supporting the selection of goods and services for efficient procurement as well as state budget spending (4) The method of centralized procurement is popularly implemented in many agencies, units and localities, directly contributing to ensuring the strict management and use of State assets, and at the same time, limiting the situation of purchasing assets exceeding standards and norms, and antiwaste Some units and localities regularly have a high proportion of the total value of the concentrated procurement packages, making a positive contribution to the overall savings rate of the country (5) Bidding information has been fully and uniformly managed, and at the same time posted on the National bidding network system, the Bidding newspaper has supported contractors to look up and access bidding information conveniently, timely and reliably, helping to increase competition and transparency in bidding activities (6) Vietnam’s public procurement integration has made initial positive strides, creating a premise for implementation of commitments on public procurement integration within the framework of FTAs in the coming time, and at the same time, support the negotiation of other FTAs in the future Vietnam is in the early stages of public procurement development in general and public procurement integration in particular Some shortcomings and limitations on public procurement in international economic integration: (1) The size of state budget spending on public procurement is still limited when state budget spending on public procurement reached 11.7% in 2018; (2) The law on bidding still has many shortcomings and problems (there are a number of inconsistent or overlapping provisions in the legal mechanisms and policies on bidding; there are no regulations or inadequate regulations on incentive and preferential policies for subjects participating in public procurement activities; e-bidding does not have adequate regulations on the process of inspection, supervision and handling of violations in bidding; promulgate separate governing decrees for related subjects; the policy system on public procurement still has points that are not compatible with international standards and commitments in the agreements signed by Vietnam); (3) In the process of implementing bidding activities, there are some shortcomings and limitations In particular, violations and negatives in bidding are quite common; the overall savings rate in bidding is not high and tends to decrease gradually; centralized procurement has not been implemented thoroughly and synchronously by many agencies and units, or its effectiveness is still low; publicly and transparently posting information of investors and bid solicitors is still limited and inadequate; international bidding still accounts for a very low proportion of the total number of bidding packages and total value of bidding packages The number of enterprises and corporations participating in and winning international tenders is still limited, focusing on a few large enterprises and corporations in the field of construction Causes of limitations and problems: (1) The ratio of the total value of public procurement packages to GDP decreased, mainly because the management of state budget revenue and expenditure over the past time has been implemented more strictly, economically, and effectively; (2) The legal policies and mechanism on bidding still exist a number of inconsistent and unified regulations that have not been thoroughly resolved; (3) The status of projects applying the form of direct appointment of contractor still accounts for a high percentage because the Bidding Law stipulates that the contractor appointment limit is 18 still high compared to international practices, resulting in the number of bidding packages applying direct appointment of contractor still accounting for a large proportion; (4) The general savings rate in bidding activities is not high, it may be due to the unfavorable geographical conditions of the place where the bidding package is implemented, failing to attract many contractors who meet the requirements on capacity and experience, etc.; (5) Centralized procurement has not been implemented thoroughly and synchronously by many agencies and units, or its efficiency is still low although this procurement method has many advantages; (6) Difficulties and obstacles in implementing e-bidding in some ministries, sectors and localities over the past time are mainly due to the limited number of qualified and trained personnel (7) The competitiveness of domestic contractors is still limited Because the number of Vietnamese enterprises and corporations with large scale, competitiveness, and high integration ability in bidding accounts for a low proportion, this is also one of the reasons that have certain influence on Vietnam’s ability to participate in and efficiency in public procurement over the past time CHAPTER 5: SOLUTIONS TO PROMOTE VIETNAM’S PUBLIC PROCUREMENT ACTIVITIES IN INTERNATIONAL ECONOMIC INTEGRATION TO 2025 WITH A VISION BY 2030 5.1 Domestic and international contexts affecting vietnam’s public procurement in international economic integration 5.1.1 International context In the international context, with many unpredictable developments, countries tend to seek a new balance between international integration, continuing to participate in globalization, and consolidating and improving the self-reliance and self-control of the economy In order to take advantage of opportunities, and limit the negative impacts of the Fourth Industrial Revolution, developing countries will strengthen linkages and cooperation in advanced science and technology from outside, thereby improving endogenous technological capacity for economic development The Covid-19 pandemic has had a profound impact on all aspects of life, especially the economy, politics and society of most countries World economic growth slows down, but international economic integration is still the main trend in the world 5.1.2 Domestic context Vietnam’s economic growth slows down in the context that the global economy continues to fluctuate and face many difficulties and risks As a highly open economy, the promotion of negotiation and signing of FTAs helps Vietnam diversify its export markets and avoid too much dependence on one market Fiscal policy aims to support people and businesses to overcome difficulties, maintain production and business activities, and ensure social security, and at the same time, promote the economy to develop in a sustainable way In the period of 2021-2026, the Ministry of Finance has set a goal of mobilizing, allocating and effectively using financial resources of the State and society to meet the dual goals of both prevention and control of the Covid-19 pandemic, and socio-economic recovery and development 5.2 Opportunities and challenges for vietnam’s public procurement in international economic integration 5.2.1 Opportunities for Vietnam’s public procurement in international economic integration 19 International economic integration gives Vietnam the opportunity to: (i) Get access to, raise awareness, knowledge and experience on public procurement in international economic integration; (ii) There is motivation to promote the implementation of reform and consolidation of the legal framework on public procurement towards the integration commitments signed in FTAs in particular and international practices in general; (iii) Promote Vietnam’s public procurement market to gradually adapt and develop in accordance with the general trend of the region and the world; (iv) Attract the FDI flows from developed countries According to the survey results, in international economic integration, public procurement agencies have the opportunity to improve their awareness and experience in organizing the selection of contractors for bidding packages with foreign elements (81.2% of respondents), and at the same time, have the opportunity to improve English proficiency, information technology, and international bidding expertise for staff, procurement experts (67.7% of respondents) Domestic contractors have the opportunity to improve their competitiveness (64.7% of respondents), and accumulate experience in competitive bidding with foreign contractors (60.8% of respondents) 5.2.2 Challenges for Vietnam’s public procurement in international economic integration International economic integration poses many challenges for Vietnam in: (i) Reforming and perfecting the legal framework on public procurement in line with the current economic situation and international practices; (ii) Upgrading and perfecting the technology infrastructure system for convenient, safe, fair and transparent e-bidding; (iii) Propagating, disseminating and raising awareness for the people and stakeholders about the issue of public procurement in international economic integration; (iv) Encouraging and supporting the development of domestic enterprises and manufacturing industries Public procurement agencies may face challenges in effectively utilizing the transition period for research, learning and pilot implementation (80.6% of respondents), applying the legal provisions on bidding in general and Decree No 95/2020/ND-CP, Decree No 09/2022/ND-CP to publically and transparently implement competitive procurement with foreign contractors (62.4% of respondents) Domestic contractors face challenges from effectively taking advantage of the transition period to improve the competitiveness of enterprises (66.4% of respondents), improving their English, information technology, and international bidding law for their staff and experts (60.7% of respondents) 5.3 Vietnam’s orientation on public procurement in international economic integration to 2025 with a vision by 2030 Vietnam’s orientation on public procurement in international economic integration to 2025 and vision by 2030 focuses on the following contents: Strengthen the legal system on public procurement towards centralization, synchronization, leanness and efficiency; Implement international economic integration in the field of public procurement and towards green procurement; Adhere to standard principles in public procurement; Improve efficiency in public procurement; Improve thrift and anti-waste in public procurement; Enhance the role of inspection, supervisión, and strictly handle violations in public procurement 5.4 Solutions to promote vietnam’s public procurement in international economic integration to 2025 with a vision by 2030 5.4.1 Group of solutions to perfect mechanisms and policies on public procurement in international economic integration Reviewing and amending the Law on Bidding 2013 and the system of guiding documents (1) Basis for proposing solutions: From the experience of the UK, Australia, and Korea, the current situation of public procurement in Vietnam and the actual implementation of the Law on Bidding, it shows that the review and amendment of the Law on Bidding 2013 and the system of guiding documents is very necessary Vietnam has signed and joined the agreements on public 20 procurement; (2) Solution content: Review and amend the Law on Bidding 2013 and the system of guiding documents in the direction of further improvement, step by step opening to integration and ensuring strict management, avoiding profiteering and corruption, and at the same time, ensuring the harmony between the interests of the State and investor when implementing procurement packages Specifically: Prevent fraud and corruption in bidding through studying, supplementing and perfecting regulations on bidding documents; promote e-bidding to ensure publicity, transparency, and simplify procurement procedures; Review and amend provisions in the Law on Bidding 2013 that have conflicts and overlaps with specialized laws; Research, supplement and integrate green public procurement into the Draft Law on Bidding (amended) towards building a Green Procurement Law in the long term; (3) Implementing unit: The Ministry of Planning and Investment from 2021 is the unit in charge of developing the Draft Law on Bidding (amended) which is in the final stage Towards consolidating the legal system on bidding to ensure consistency, concentration, and conformity with international standards to which Vietnam is a member (1) Basis for proposing solutions: The legal system on bidding of countries around the world tends to be unified and consistent with international standards In Vietnam, the Public issued the Decree No 95/2020/ND-CP, Decree No 09/2022/ND-CP on guiding bidding activities in accordance with the commitments in CPTPP, EVFTA and UKVFTA In case the two decrees have not yet stipulated, the Law on Bidding 2013 will be applied, thus causing certain difficulties in implementation; (2) Solution content: In the long term, strengthen the legal system on bidding in line with international standards and integration trends to apply to all bidding activities in general when more FTAs with the content of public procurement are signed and when the capacity of domestic contractors has been improved; (3) Implementing unit: The Ministry of Planning and Investment actively studies the plan to perfect the legal system on bidding with a roadmap, ensuring consistency and inheritance in the medium and long term Ministries and sectors related to public procurement(other than the Ministry of Planning and Investment) actively review legal provisions related to public procurement to include in the revised plan Speeding up the process of developing the guiding documents for Decree No 95/2020/ND-CP and Decree No 09/2022/ND-CP (1) Basis for proposing solutions: After issuing Decree No 95/2020/ND-CP and Decree No 09/2022/ND-CP, the Ministry of Planning and Investment needs to develop and issue guiding circulars; (2) Solution content: International bidding is a complex economic activity, so it is necessary to speed up the process of developing the guiding documents for implementation of the two Decrees, and pilot implementation to meet the requirements of state management and advantages of the transition period; (3) Implementing unit: The Ministry of Planning and Investment continues to develop and issue documents guiding the implementation of the contents of the two Decrees The agencies, ministries, sectors and localities speed up the development and issue of guiding documents under their respective management 5.4.2 A group of solutions to promote the organization and implementation of public procurement in international economic integration Stepping up propaganda and dissemination activities on public procurement in international economic integration (1) Basis for proposing solutions: CPTPP, EVFTA and EUVFTA are the first agreements that Vietnam has signed to commit to opening the public procurement sector, so this is a completely new field for most of people and stakeholders in Vietnam The survey results show that the subjects related to Decree No 95/2020/ND-CP and Decree No 09/2022/ND-CP are in dire need of information dissemination and training support; (2) Solution content: Disseminate information to relevant subjects and people on various media about the issue of e-procurement; 21 Decree No 95/2020/ND-CP, Decree No 09/2022/ND-CP and their guiding circulars; opportunities and challenges posed in the coming time; regulations and characteristics related to the public procurement market of regional countries, etc.; (3) Implementing unit: Ministry of Planning and Investment, agencies, ministries, sectors and localities Procurement management units under ministries, sectors, and local Departments of Planning and Investment need to closely coordinate with relevant agencies, units and localities to monitor, guide, inspect, examine, supervise, rectify and handle violations in bidding activities in localities Proactively and thoroughly adhering to basic principles of public procurement in line with international practices (1) Basis for proposing solutions: Based on the experiences of the UK, Australia, Korea, and Vietnam’s commitments in free trade agreements; (2) Solution content: Actively and thoroughly adhere to the principles of publicity and transparency in accordance with the agreements signed by Vietnam; Continue to promote the implementation of e-bidding in the direction of increasing the rate, quantity, scope and field of bidding; Strengthen the application of open bidding; Develop a mechanism to monitor and evaluate results and output efficiency, and study to establish an independent agency specializing in settling complaints and claims on public procurement; (3) Implementing unit: State management agencies involved in public procurement Promoting centralized procurement implementation (1) Basis for proposing solutions: Vietnam’s centralized procurement model has many limitations and has not fully brought into full play the positive role of public procurement in effective state budget management and the centralized procurement model of the UK; (2) Solution content: Strengthen the implementation of online centralized procurement towards the goal of 100% of online centralized procurement in the period of 2022 - 2025; Research and evaluate the applicability of the model of independent and professional centralized procurement unit in Vietnam instead of the current concurrent model; (3) Implementing unit: Ministries, ministerial-level agencies, Governmental agencies, localities, economic groups, State corporations shall direct investors and affiliated public procurement tenderers to implement The government directs the study of the independent centralized procurement model Strengthen training to improve capacity, standardize the team of public procurement officers towards professionalization and experience in public procurement in international economic integration (1) Basis for proposing solutions: Procurement staff of public procurement agencies are the ones who have the authority to decide, advise senior leaders and develop public procurement plans of agencies and units; (2) Solution content: Strengthen training to improve the general understanding and in-depth knowledge of public procurement officers, especially, leaders and staff in charge of public procurement of procurement units governed by Decree No 95/2020/ND-CP and Decree No 09/2022/ND-CP Pilot implementation of internal bidding according to new regulations to accumulate experience; (3) Implementing unit: Public procurement agencies, especially agencies and units governed by Decree No 95/2020/ND-CP and Decree No 09/2022/ND-CP Strengthen research and study on domestic preferential measures and dispute settlement as committed in the signed trade agreements (1) Basis for proposing solutions: After the transition period, Vietnam will have to apply the provisions on dispute settlement in case of breach of obligations as committed; (2) Solution content: Apply domestic preferential measures with a certain appropriate rate Actively study the provisions in the commitments related to dispute settlement to gain understanding and response measures; (3) Implementing unit: Public procurement agencies, especially agencies and units governed by Decree No 95/2020/ND-CP and Decree No 09/2022/ND-CP 22 5.5 Some recommendations for domestic contractors and associations to promote vietnam’s public procurement activities in international economic integration to 2025 with a vision by 2030 In order to promote Vietnam’s public procurement activities in international economic integration from now to 2025 with a vision by 2030, the PhD student proposes some recommendations to state management agencies, domestic contractors and associations For domestic contractors, it is recommended to: Actively improve knowledge on public procurement in international economic integration; Develop a roadmap to improve competitiveness in the medium and long term; Actively research and apply regulations on origin, and penetrate the new public procurement market For the association of contractors, it is recommended to: Maximize the role in creating a regular coordination mechanism between the association, state agencies, and enterprises, and in competition with foreign contractors The Vietnamese Association of Contractors and Investors need to develop synchronous solutions and plans to be able to compete with foreign contractors Industry associations, press agencies, etc need to enhance the role of independent supervision in public procurement bidding CONCLUSION Along with the process of renewal and development of the country, the field of public procurement in recent years has made initial development steps, contributing to creating a competitive and transparent environment, saving time and state budget spending, etc However, Vietnam’s level of development and international integration in public procurement still has a very long distance compared to developed countries in the region and the world Starting from the studied issue, the thesis has studied the public procurement issue of Vietnam in international economic integration based on both theoretical and practical basis, and has drawn some conclusions and completed some of the following tasks: Firstly, the theoretical basis for public procurement in international economic integration has been systematized On the basis of literature review related to the thesis, the PD student has identified the research gap, and solved the research questions in the following chapters of the thesis Secondly, the results of international experience research in Chapter and actual situation analysis in Vietnam in Chapter have shown the development trend of public procurement in the world, and the current state of Vietnam’s public procurement in international economic integration, the achieved results, limitations, shortcomings and causes Thirdly, based on studying international experiences, current situation of Vietnam’s public procurement, opportunities and challenges posed in international economic integration, in order to promote Vietnam’s public procurement activities in international economic integration from now to 2025 with a vision by 2030, it is necessary to implement the group of solutions of perfecting mechanisms and policies, and the group of solutions of promoting implementation of public procurement Accordingly, perfect mechanisms and policies in the direction of amending and supplementing the current Law on Bidding 2013 and a system of guiding documents, aiming to perfect the legal system on bidding to ensure consistency, concentration, and conformity with international standards to which Vietnam is a member, speeding up the process of developing guiding documents for Decree No 95/2020/ND-CP and Decree No 09 2022/ND-CP In organization and implementation, it is necessary to focus on and promote propaganda and dissemination on public procurement in international economic integration; proactively and 23 thoroughly adhere to the principles of publicity and transparency in public procurement, promote the application of open bidding, e-bidding, and centralized bidding, etc Procurement agencies need to improve the general understanding and in-depth knowledge of public procurement, public procurement integration for stakeholders; strengthen training and fostering of public procuremen tofficers with high professional qualifications, knowledge of the law and procurement of goods and services, good English proficiency, etc., in order to have sufficient capacity and qualifications to appraise and select reputable contractors and the best goods and services to be provided Vietnamese contractors need to actively improve their general understanding and knowledge of public procurement; improve the competitiveness of enterprises; actively research and penetrate new public procurement markets, especially for large markets; master the regulations on origin of goods to take advantage of tax incentives of the two agreements, etc It is hoped that the research results of the thesis will contribute to reflect the general picture of Vietnam’s public procurement in international economic integration; especially, solutions and recommendations will help Vietnamese managers, procurement agencies, contractors, etc., get more information and basis to effectively implement public procurement activities in international economic integration in the period up to 2030./ 24