Ministry of Finance Calls for Strengthened Management and Use of Subcontractors to Ensure Project Discipline

The Ministry of Finance calls for strengthened management and use of subcontractors to control project quality and progress.

Strengthening Measures to Supervise the Use of Subcontractors

Specifically, the Ministry of Finance requires units under the Ministry, economic groups, and state-owned corporations for which the Ministry of Finance acts as the representative of the state ownership interest (economic groups and state-owned corporations) to strengthen internal inspection and supervision of the implementation and use of subcontractors in bidding packages and projects under their management. Priority should be given to important and key bidding packages and projects, large-value packages, delayed projects, packages involving multiple consortium members, or those using multiple subcontractors. At the same time, organizations and individuals under their management who violate regulations or fail to fulfill their responsibilities in contract performance and subcontractor management must be strictly handled.

The Official Letter states that economic groups and state-owned corporations must direct their affiliated project owners to strictly comply with the requirements of the Prime Minister under Directive No. 12/CT-TTg dated April 3, 2026, on strengthening and improving the effectiveness, efficiency, and accountability of bidding activities, with a focus on the following key areas:

First, review the list of subcontractors and special subcontractors, if any, as well as the scope and volume of work, value, and proportion of work assigned to subcontractors under the signed contract. Strictly control the addition or replacement of subcontractors and any changes to the scope of subcontracted work stated in the bidding documents or proposal documents, ensuring that such changes do not result in contract transfer in violation of the law.

Second, require contractors to fully fulfill their responsibilities for managing and controlling the quality, progress, and other contractual obligations relating to the work performed by subcontractors. The use of subcontractors does not alter the contractor's responsibilities under the contract signed with the project owner.

Third, require supervision consultants and project management consultants to fully perform their responsibilities under the consulting contracts signed with project owners and applicable laws, and promptly identify and report to project owners any errors or violations by contractors in mobilizing or using subcontractors.

Fourth, proactively review and address shortcomings and limitations in contract management with contractors, preventing minor deficiencies from accumulating into serious violations. Strengthen on-site inspections of contractors' direct implementation of the work under their responsibility, including the mobilization of labor, equipment, and materials, as well as the organizations and individuals involved in implementation, in order to accurately identify the entities directly performing the contractual work under each contract and bidding package.

Fifth, inspect and verify cases where there are signs of illegal contract transfer by contractors and promptly apply measures within the competent authority's powers to prevent such violations. Where there are sufficient grounds to determine that a contractor has illegally transferred a contract, the violating contractor must be handled in accordance with the contract and applicable laws. The competent authorities must also be promptly informed for consideration and decision on whether to prohibit the violating contractor from participating in bidding activities, and the relevant case files must be transferred to competent authorities for consideration and handling where there are signs of legal violations.

Contract performance results and contractor information must be fully updated and publicly disclosed on the National E-Procurement System in accordance with the law.

Sixth, fully update and publicly disclose information on contract performance results and information on contractor violations, if any, for bidding packages and projects subject to the Law on Bidding on the National E-Procurement System in accordance with the law.

The Ministry of Finance assigned the Department of Planning and Finance, within the scope of its functions and responsibilities, to take the lead and coordinate with the Department of Public Procurement and relevant units in strengthening inspection and supervision of bidding activities within the finance sector. Particular attention will be paid to contract performance and the use of subcontractors in important and key bidding packages and projects of the Ministry in order to prevent and address violations, if any.

Thoroughly Addressing Illegal Contract Transfers and the Misuse of Subcontractors

The timely and decisive measures introduced by the Ministry of Finance are expected to help rectify and thoroughly address prominent shortcomings in bidding activities in recent years, particularly the practice of “selling contracts” and illegal contract transfers.

In practice, alongside contractors that strictly comply with state regulations on implementing bidding packages and projects after winning contracts, there remain cases where main contractors, after winning a bid, unilaterally add or replace subcontractors or change the scope of work beyond permitted limits without going through the bidding documents or obtaining approval from the project owner.

This can result in contract transfers in violation of the law, while inadequate subcontractor capacity may affect project progress and quality. Of particular concern is the fact that many subcontractors participating in major projects lack the appropriate construction capacity certificates required by regulations, resulting in construction that fails to meet technical standards and directly affecting the quality of works. In some cases, bidding packages are fragmented, causing delays. There are even projects where winning contractors overuse subcontractors or employ multiple layers of intermediary subcontractors, such as subcontractors of subcontractors, further fragmenting the bidding package. As a result, management becomes dispersed, leading to prolonged delays in key projects.

Another issue of concern is that the unauthorized use of subcontractors can also result in weak control over payment chains when main contractors fail to clearly manage the work volume and progress of subcontractors. This may lead to cost disputes, outstanding workers' wages, or the withholding of payments owed to subcontractors, potentially resulting in occupational safety risks and environmental pollution at construction sites, directly affecting project progress and quality.

According to the Department of Public Procurement, the root cause of this situation lies in lax management by project owners and supervision consultants. Project owners and project management consulting units have not fully fulfilled their internal supervision responsibilities and have been slow to review subcontractor lists and verify the proportion of work assigned to subcontractors.

At the same time, main contractors may avoid responsibility for managing the overall implementation of projects. Although the law stipulates that the use of subcontractors does not alter the main contractor's overall responsibility to the project owner, many main contractors still tend to delegate responsibility to subcontractors without sufficiently managing their quality and contractual obligations. This has resulted in a range of consequences that directly and indirectly affect the implementation of bidding packages in accordance with the objectives, conditions, and standards under which the contracts were awarded.

Another contributing factor is that the legal boundary remains insufficiently clear. In practice, the criteria distinguishing between the “lawful use of subcontractors” and “illegal contract transfer” in the implementation of major projects remain ambiguous, making it difficult to address violations at their root.

In addition, the lack of effective modern management tools has contributed to shortcomings in subcontractor management. Many main contractors still rely on manual management methods and lack digital tools to accurately monitor subcontractors' progress, cash flows, and resources in real time, resulting in deficiencies in subcontractor utilization and adversely affecting project quality and implementation progress.

Strengthening Subcontractor Management Discipline to Ensure Project Progress and Quality

The Department of Public Procurement stated that the coordinated implementation of the measures set out in Official Letter No. 14422/BTC-QLĐT would contribute to strengthening discipline in the use of subcontractors in bidding packages of economic groups and state-owned corporations for which the Ministry of Finance represents the state ownership interest, thereby rectifying and improving the effectiveness of project management.

The coordinated implementation of the measures under Official Letter No. 14422/BTC-QLĐT is expected to strengthen discipline in the use of subcontractors in bidding packages of economic groups and state-owned corporations for which the Ministry of Finance represents the state ownership interest.

In particular, the measures are expected to enhance the effectiveness and efficiency of management by requiring units to strengthen the review of legal and contractual documents, verify subcontractor lists and work volumes, and require project owners to thoroughly review the list of subcontractors and special subcontractors, the scope of work, the contract value, and the percentage of work assigned to subcontractors compared with the signed contract. Changes to contractors must be strictly controlled. Any addition or replacement of subcontractors or changes to the scope of work compared with the bidding documents must be lawfully approved and comply with the maximum percentage prescribed under Decree No. 349/2026/NĐ-CP.

At the same time, contractors are responsible for assessing the competency certificates of subcontractors and ensuring that all subcontractors possess appropriate construction activity competency certificates corresponding to the grade and type of construction works they undertake. Contractors must also strictly control actual construction activities at project sites.

The Department of Public Procurement also particularly emphasized the responsibility of main contractors under the measures set out in the Official Letter. Accordingly, the use of subcontractors does not alter the obligations of the main contractor, which remains fully responsible to the project owner for quality and progress. Contractors should regularly and promptly compare actual personnel and machinery with registered lists and maintain strict supervision of activities at the construction site.