Subcontractors are contractors who sign agreements with the prime contractor to perform a portion of the prime contractor’s work. Within subcontractor regulations, there are provisions for special subcontractors. This term refers to subcontractors proposed by the prime contractor in their bidding dossier to carry out special, important tasks within the tender package.

Legal grounds : Under clause 27, clause 28 of article 4 of Law No. 22/2023/QH15 on bidding, the subcontractor shall be understood as follows:

“27. Subcontractors are organizations and individuals who sign contracts with the contractor to participate in the implementation of the construction work; consulting; non-consulting; Services related to the goods supply bidding package and tasks under the mixed bidding package.

28.Special subcontractors in particular,carry out the important works of the bidding  package proposed by the contractor in the bidding dossier, the proposed documents on the basis of the requirements of competence, experience recorded in the bidding  documents, request documents.”

Rights and Obligations of the Subcontractor:

Pursuant to Decree 24/2024/ND-CP, specifically in paragraph 2 of Article 123, the following specifies:

• Contractors who have entered into contracts with subcontractors listed in the bidding dossier, proposal documents, or signed with a subcontractor who is approved by the investor to participate in the implementation of assembly work, consulting,  non-consulting, Services related to the goods supply bidding package and tasks under the mixed bidding package. The use of subcontractors does not alter the contractor’s obligations. The contractor is responsible for the volume, quality, progress, and other responsibilities for the part of the work performed by the subcontractor.
• The replacement or supplementation of subcontractors specified above, or changes to the subcontracting details specified in the bidding dossier or proposal documents can only be carried out with the approval of the investor and the supervising consultant and must not exceed the maximum value of work for the subcontractor indicated in the contract. The use of subcontractors must align with the needs of the contractor in executing the contract, and the subcontractor must meet the competence and experience requirements as specified by the contracting party.
• The contractor is responsible for selecting and using competent and experienced subcontractors to meet the requirements for performing the assigned work. In the case of using a special subcontractor to carry out important works of the bidding package as required in the invitation form, the assessment of the competence and experience of the special subcontractor shall be carried out in accordance with the provisions set out in the invitation form. When using a special subcontractor, the contractor does not need to meet the competence or experience requirements for the part of the work assigned to the special subcontractor.
• The contractor is responsible for making full and timely payments to the subcontractor in accordance with the agreement between the contractor and the subcontractor.

Thus, the prime contractor can only conclude a subcontract with a subcontractor that has the practical capacity in accordance with legal provisions. In reality, there are many disputes related to construction where the main contractor signs contracts with subcontractors who do not have guaranteed operational capacity. This often leads to shortcomings in the implementation of construction items, failure to meet quality standards, or lack of supervision by the main contractor, resulting in many errors during the execution process. Regarding legal liability on General Contractor, The prime contractor is liable to the investor for the progress, quality, safety of work, environmental protection, its faults, and the work performed by the subcontractors.

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Above is an article sent to you by Globalink’s team of legal experts. Globalink hopes that it has partly helped you solve the initial problem.

In case you or other readers still have other questions, please contact Globalink’s legal team via the following information:

Hotline phone number: 0908.173988 – LLM. Vu Quyet Tien (Attorney)

Email: Tienvu.globalinklaw@gmail.com

Or go to the Company headquarters: 67/4 Hoang Hoa Tham, Ward 6, Binh Thanh District, Ho Chi Minh City

Transaction office: 656/47 Đ. Cach Mang Thang 8, Ward 11, District 3, Ho Chi Minh City, for more specific advice and guidance from us.

Article author: Do Hong Ha.

Translator: Bui Minh Đức