It is necessary to ban bidding on businesses that win bids for national rice reserves but "run away"

Many contractors gave up

Ms. Nguyen Thi Pho Giang - Deputy Director General of the General Department of State Reserves - said that in 2023, the General Department was assigned a plan to import 220,000 tons of rice into the reserve warehouse, but by the end of the year, only 62% of the plan had been implemented; more than 83,197 tons of rice remained unpurchased.

According to Lao Dong's investigation, the rice that has not been imported into the reserve's warehouses is mainly due to contractors giving up. A typical example is the story that happened at the State Reserve Department in Thai Binh region.

In 2023, the State Reserve Department of Thai Binh region planned to buy 7,500 tons of rice divided into 6 bidding packages. However, in 2023, Thai Binh could only import more than 50%.

The reason is that 3/6 bid packages of the State Reserve Department in Thai Binh region were "run away" by the winning enterprises. That is bid package number 1 supplying 900 tons of rice. The winning unit is Khai Minh International Trading Company Limited, address HH4 - Nam An Khanh Urban Area, An Khanh Commune, Hoai Duc.

Package No. 2 provides 1,000 tons of rice. The winning bidder is Dong Phuong General Trading Company Limited, located at Mrs. Bui Thi Quy's house, Kim Village, Vu Lac Commune, Thai Binh City, Thai Binh Province.

Package No. 4 provides 1,800 tons of rice. The winning bidder is Van Loi Company Limited, located in Bao Cuu village, Thanh Chau ward, Phu Ly city, Ha Nam province.

Why bid?

Talking to Lao Dong reporters about the issue of bidding units, Mr. Bui Dinh Toan - Deputy Director in charge of the State Reserve Department in Thai Binh region - said: "This is the general situation of the reserve industry in 2023, the reason is because rice prices are high and fluctuate erratically. There was a time in about 2 weeks when rice prices increased by several thousand VND/kg. Contractors determined that if they continued to work, they would of course incur losses, so they accepted losing their deposit, violating the Bidding Law to refuse to perform the contract".

From the business perspective, Ms. Ngo Thi Bich Tho - representative of the contractor Dong Phuong General Trading Company Limited (the unit that "ran away" after winning the bid) - said that due to the high market price of rice and the difference compared to the price of reserve rice, the business could not do it.

“For example, if a company buys rice at 15,000 VND/kg but the reserve price is only 12,500 VND/kg, or buys at 16,000 VND/kg but the bid price is only 13,100 VND/kg, then the company will face a loss of 2.5 billion VND to nearly 3 billion VND for over 1,000 tons of rice. We have also submitted a request to remove and adjust the rice price to the General Department of State Reserves and the Ministry of Finance , but we have not seen any results,” said Ms. Tho.

Is just a fine without a bidding ban too light?

The fact that businesses "fail" to bid for national reserve rice raises questions about sanctions.

It is known that in 2023, many enterprises defaulted on bidding for national reserve rice. However, these enterprises were only fined and no enterprises were banned from bidding.

Take the example of 3 contractors who ran away in Thai Binh and were also punished by many reserve agencies. However, the punishment only stopped at terminating the contract or being fined, no business was banned from bidding.

From an economic perspective, the amount of money that businesses have to pay in fines is nothing compared to the losses they would have incurred if they had fulfilled their contracts. Typically, Dong Phuong General Trading Company Limited was fined 655 million VND by the Thai Binh Regional Reserve Department after defaulting on its contract. Meanwhile, according to the owner of this business, if they had supplied rice according to the contract, they could have lost from 2.5 billion VND to nearly 3 billion VND.

It is known that, in addition to being fined, since 2020, the Ministry of Finance has proposed to ban participation in bidding activities to supply national reserve goods for acts of not performing or partially performing contracts to supply national reserve goods.

However, speaking with Lao Dong, a representative of the Department of Reserve Management said that contractors with bad bids are not banned from bidding but only have their points deducted.

Accordingly, the reputation score is divided into 3 levels: Contractors that have not violated reputation are evaluated at 50 points. Contractors that have signed contracts to supply rice with regional State Reserve Departments but do not follow the schedule (late delivery) or deliver goods that do not ensure quality, causing units to refuse to import goods: are evaluated at 20 points. Contractors that have been approved by regional State Reserve Departments to win the national reserve rice supply package but do not proceed or refuse to complete the contract or have completed the contract but refuse to sign the contract are evaluated at 0 points but are not disqualified.

So, with the current sanctions of fines without bidding bans, will it be possible to end the situation of enterprises supplying rice for national reserves defaulting on bidding? Because this phenomenon has happened in many places at different times.

Source