A RESEARCH PAPER PRESENTED TO THE FACULTY OF THE GRADUATE SCHOOL SOUTHERN LUZON
STATE UNIVERSITY IN COLLABORATION WITH THAI NGUYEN UNIVERSITY
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ThAi nguyen University Southern luzon STATE University
Socialist Republic of Vietnam Republic of Philippines
HARMONIZATION OF PUBLIC COMPETITIVE TENDERING :
EMPIRICAL EVIDENCE FROM THE MINISTRY
OF HEALTH IN VIETNAM
Advisor : Dr. Alice T. Valerio
Name of Student : NGUYEN DUY PHUONG
English Name : NOAH
Date of Birth : 13-12-1974
Course : SLSU-DBA1
Hanoi May, 2013
A RESEARCH PAPER PRESENTED TO THE FACULTY OF THE GRADUATE SCHOOL SOUTHERN LUZON
STATE UNIVERSITY IN COLLABORATION WITH THAI NGUYEN UNIVERSITY
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HARMONIZATION OF PUBLIC COMPETITIVE TENDERING :
EMPIRICAL EVIDENCE FROM THE MINISTRY OF
HEALTH IN VIETNAM
A Dissertation
Presented to the Faculty of the
Graduate School of Southern Luzon State University
in Collaboration With Thai Nguyen University
In Partial Fulfilment
of the Requirements for the Degree
Doctor in Business Administration
NGUYEN DUY PHUONG
May 2013
A RESEARCH PAPER PRESENTED TO THE FACULTY OF THE GRADUATE SCHOOL SOUTHERN LUZON
STATE UNIVERSITY IN COLLABORATION WITH THAI NGUYEN UNIVERSITY

DBA Candidate
A RESEARCH PAPER PRESENTED TO THE FACULTY OF THE GRADUATE SCHOOL SOUTHERN LUZON
STATE UNIVERSITY IN COLLABORATION WITH THAI NGUYEN UNIVERSITY
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TABLE OF CONTENTS
Page
ACKNOWLEDGMENT iii
DEED OF DECLARATION iv
TABLE OF CONTENTS v
LIST OF TABLES ix
LIST OF FIGURES x
LIST OF ABBREVIATIONS xi
APPROVAL SHEET xii
ABSTRACT xiii
CHAPTER I 1
INTRODUCTION 1
1. Background of the Study 1
2. Statement of the Problem 3
3. Objectives 5
4. Hypotheses of the Study. 6
5. Significance of the Study 6
6. Scope and Limitations of the Study 7
7. Definition of Terms 9
CHAPTER II 13
REVIEW OF RELATED LITERATURE 13
1. Systems Theory 13
2. Administrative Theory 14
A RESEARCH PAPER PRESENTED TO THE FACULTY OF THE GRADUATE SCHOOL SOUTHERN LUZON
STATE UNIVERSITY IN COLLABORATION WITH THAI NGUYEN UNIVERSITY
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STATE UNIVERSITY IN COLLABORATION WITH THAI NGUYEN UNIVERSITY
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APPENDIES
Appendix Page
1. LETTER REQUEST FOR THE CONDUCT OF THE SURVEY 80
2. SURVEY QUESTIONNAIRE 82
3. CURRICULUM VITAE 89
4. BUDGET REVENUES AND EXPENDITURES 95
5. TOTAL GOVERNMENT EXPENDITURE , 1990-2010 95
6. CORRUPTION PERCEPTIONS INDEX 96
7. MINISTRY OF HEALTH STRUCTURE 97
A RESEARCH PAPER PRESENTED TO THE FACULTY OF THE GRADUATE SCHOOL SOUTHERN LUZON
STATE UNIVERSITY IN COLLABORATION WITH THAI NGUYEN UNIVERSITY
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LIST OF TABLES
Table Page
1. Factors affecting the harmonizing 35
2. Likert scale summated rating for openness and transparency procurement 41
3. Discrepancy in public procurement 43
4. Department of Administrators 58
5. Testing result of reliable of Model 65
6. Description of Mean and Standard Deviation 66
7. Post Hoc Tests openness and transparency procurement 67
8. Model Summary Option 69
9. ANOVA F-Test 69
10. T-test coefficient 70
11. Linear regression for 02 removed variables 72
12. T-test for Coefficient and Multicollinearity 72
A RESEARCH PAPER PRESENTED TO THE FACULTY OF THE GRADUATE SCHOOL SOUTHERN LUZON
STATE UNIVERSITY IN COLLABORATION WITH THAI NGUYEN UNIVERSITY

PMU
Project Management Unit
PPC
Provincial People Committee
WB
World Bank
A RESEARCH PAPER PRESENTED TO THE FACULTY OF THE GRADUATE SCHOOL SOUTHERN LUZON
STATE UNIVERSITY IN COLLABORATION WITH THAI NGUYEN UNIVERSITY
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APPROVAL SHEET
This thesis, entitled “HARMONIZATION OF PUBLIC COMPETITIVE
TENDERING:EMPIRICAL EVIDENCE FROM THE MINISTRY OF HEALTH IN
VIETNAM”, prepared and submitted by Nguyen Duy Phuong in partial fulfillment of the
requirements for the degree of Doctor in Business Administration, has been examined and
recommended for acceptance and approval for FINAL EXAMINATION.
ALICE T. VALERIO, PhD
Adviser
Approved by the Committee on Oral Examination with a grade of PASSED on ….
2013
Dr……………………… ………………… Member
Dr……………………… ………………… Member
Dr……………………… ………………… Member
Dr……………………… ………………… Chairman
Accepted in partial fulfillment of the requirements for the degree of Doctor in Business
Administration.
THAI NGUYEN UNIVERSITY SOUTHERN LUZON STATE UNIVERSITY
Dean Dean
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STATE UNIVERSITY IN COLLABORATION WITH THAI NGUYEN UNIVERSITY
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them.
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CHAPTER I
INTRODUCTION
1. Background of the Study
Public procurement management occupies an important position in the national project
administration because its importance is evident both in practice and in the theory literature.
Above 40 years ago, Phillip Cooper (1980) noted this when he stated that public
administration should pay attention to the importance of procurement. In describing public
procurement as a critical administrative activity, many other famous scholars acknowledged
its importance, too. In fact, Vietnam Government spends a lot of money, despite signs of
modest declines in recent years. Government's collective purchasing still accounts for nearly
one-third of the nation's Gross Domestic Product (Appendix 4). Procurement is the purchase
of goods and services by public and private enterprises. Efficiency in procurement has long
been recognized as a way to obtaining the desired goods or services at the lowest price or,
more generally, at the best “value for capital”. The most common practices of procurement
involve some forms of tenders and it is believed that, under these, efficient procurement
outcomes can usually be achieved in situations where there are enough firms in the
procurement market to sustain reasonable competition. In cases with a reduced number of
firms, more sophisticated arrangements are necessary to prevent practices such as collusion,
bid-rigging, fraud and corruption, which hinder the achievement of efficient outcomes. Public
procurers also face the additional challenge of preventing political favoritism where contracts
are allocated according to loyalty or support rather than on the grounds of efficiency
1
.
Public investment in Vietnam includes all investments the government and private
business sectors are undertaking which include (a) Investment from the budget (allocated to
the Ministries, and distributed to local); (b) Investing in programs targeted support; (c)
2
International investment credit (loans of international organizations); and (d) Investment of

proportion of expenditure to GDP is relatively stable as shown in Appendix 5.
This study relating to public procurement practices has developed along the organizing
of procurement processes and the effects of different procurement methods or practices. This
recognizes several tools and strategies for its effective implementation. Several aspects have
been investigated such as the type of tendering, usefulness of open procedures, the impact of
transparency purchases which is considered including a quality component or mechanisms
for preventing corruption. These aspects have been incorporated into the laws and regulations
and this study has estimated the effects of such procurement practices in its models.
2. Statement of the Problem
Public procurement is a very important instrument used for allocation of a major part
of public expenditures of a State. Because of its importance, guarantees of a transparent, open,
and specified system of public procurement should exist in every country. However, the
reality in the Asian countries is different. A number of purchases are not open and therefore
funding allocation is not transparent and possibly also not effective.
As a developing country and as a member of ASEAN, Vietnam has been investing so
much on economic infrastructure, social human resource development, and environmental
protection
3
The government has been borrowing a significant amount from the foreign
sources as well as receiving aids outside of official development assistance (ODA) to focus on
investment projects that have been committed with the donors including procurement
regulations such as the World Bank (WB), Asian Development Bank (ADB), and The Japan
International Cooperation Agency (JICA). The effectiveness of these projects depends in no
4
small measure on the skills and qualifications of those who administer them. In Vietnam, up to
now, project administrators wishing to improve their understanding of and skills in
administration could find little of direct relevance to their field in the administrative literature.
Beside, the corruption is a serious problem which can be attributed to lack of procurement
administration (Appendix 6). The core relates to perceptions of the degree of corruption as
seen by business people and country analysts, ranging from 10 (highly clean) to 0 (highly

4. What changes on LLT can be recommended to make the procurement system
be effective?
3. Objectives
In general, this study assessed the transparency and openness in procuring management
in Vietnam. Specifically, this study aimed to compare the Vietnamese Laws and International
Regulations in Procurement. The thesis shall focus on following objectives:
1. To describe the common and the unique provisions in the International
Law on Tendering (ILT) and Local Law on Tendering (LLT) in Vietnam;
2. To determine how procurement and bidding are being done in the
Ministry of Health as measured in terms of openness and transparency;
3. To analyze how can the ILT and the LLT be harmonized in the Ministry
of Health using transparency and openness as factors of harmonization;
and
4. To formulate the best method to make the procurement system be more
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effective.
4. Hypotheses of the Study.
It was assumed that higher transparency and openness is the better preconditions for a
good procurement, competition in tendering, and for a better proportion between the lower
price and higher quality resulting in the effectiveness of tendering.
It was hypothesized that openness and transparency are significantly affecting
harmonization in ILT and LLT in the Ministry of Health. The harmonizing indicator is related
to transparency level and openness level in public procurement. The openness and
transparency are the tools which support control of the public procurement by the public, and
thus they possibly decrease possibilities for corruption activities. Openness is regarded as a
possibility of individual stakeholders to participate in the public procurement process.
Transparency means both active and passive publishing of information. The passive
publishing of information by purchasers upon request is made under Vietnam Law and
International regulation. An active publishing of information occurs when the proper
purchaser publishes selected information, whether in an official international journal, own

investigating in order to appraise the effect of competition in procurement in the
international market.
6. Scope and Limitations of the Study
The conceptual framework of procurement regulation identifies a relationship between
improving procurement legislative regulation and procurement method chosen. In doing so, it
implicitly recognizes that markets are not perfectly competitive and that there is opportunity
for improving procurement outcomes. This study was not able to identify the source of
changes in procurement disciplines. This will become important in interpreting the results
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because, although we can see the effects of different procurement tools, the author cannot
disentangle the effects strictly derived from the compliance with the domestic laws and
international regulation, as some of the measures envisaged are voluntary.
It is also worth noticing that the analysis is not a comparison between regulated and
non- regulated tenders. As by definition, all the records included in the analysis are covered by
the present laws. The practice is therefore useful to compare different degrees of openness, all
of which are envisaged under the domestic laws and international regulation. In doing so, and
because of limitations of the data, this study focused on the benefits which are quantifiable,
and this implies looking at the differences in two legislation systems (domestic and
international). There may be other intangible benefits related to increases in quality, better
tailored services, or innovative solutions which are not recorded in the data and hence are not
quantifiable in this study.
Despite the many books devoted to the art of administration, generally, there have been
few descriptions of administrative concepts related to public procurement administration
specifically to health projects through International Competitive Bidding (ICB) method. So
this study has not been able to identify the source of changes in procurement regulation and
laws. The analysis is not a comparison between regulated and non-regulated tenders. Because
of limitations of the data, this study was focused only on the benefits which are qualitative and
this implies looking at the differences in international procurement regulation and Vietnam
procurement law. There may be other intangible benefits related to increases in quality, better
tailored services, or innovative solutions which are not recorded in the data and, hence, are not

International regulations are guidelines of international organizations which are used to
inform those carrying out a project that is financed in whole or in part by a loan
from them. (These International organizations financed grant, or these
International organizations administered funds of the policies that govern the
procurement of goods, works, and services (other than consultant services)
required for the project. The financing agreement governs the legal
relationships between the Vietnam’s Government and this Organization, and
the Guidelines are made applicable to procurement of goods and works for the
project, as provided in the agreement. The rights and obligations of Vietnam’s
Government and the providers of goods and works for the project are governed
by the bidding documents, and by the contracts signed by the borrower with the
providers of goods and works, and not by these Guidelines or the financing
agreements. No party other than the parties to the financing agreement shall
derive any rights there from or have any claim to the proceeds of the financing)
Local competitive bidding refers to the process of selection of a contractor who satisfies
the requirements of the party calling for tenders, in which domestic tenderers
participate.
Local Law on tendering is a law that regulates tendering activities in order to select
contractors for provision of consultancy services, for procurement of goods, and
for construction and installation for tender packages belonging to the following
projects. This includes all Vietnamese legal documents issued by the Assembly
and Government Pursuant to the 1992 Constitution of the Socialist Republic of
Vietnam as amended by Resolution 51-2001-QH10 passed by Legislature X of
the National Assembly at its 10th Session on 25 December 200. This Law
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Openness procurement means that, given the use of public funds, public procurement
opportunities should be open to all international qualified bidders and the
public should have access to information pertaining to public procurement.
There are also some procurement methods, such as direct/ selecting purchase,
that limit the availability of the solicitation document to bidders meeting certain