Decree No. 110/2011/ND-CP dated December 5, 2011 of the Government on the management of lease and purchase of aircraft and aircraft engines, spare parts and supplies and aircraft, aircraft engine, spare part and supplies maintenance and repair services

THE GOVERNMENT

Decree No. 110/2011/ND-CP of December 5, 2011, on the management of lease and purchase of aircraft and aircraft engines, spare parts and supplies and aircraft, aircraft engine, spare part and supplies maintenance and repair services

THE GOVERNMENT

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the November 29, 2005 Investment Law;

Pursuant to the November 29, 2005 Enterprise Law;

Pursuant to the November 29, 2005 Bidding Law;

Pursuant to the June 29, 2006 Law on Civil Aviation of Vietnam;

At the proposal of the Minister of Transport,

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Decree provides conditions, competence to decide on and procedures for lease and purchase of aircraft, aircraft engines, spare parts and supplies; aircraft, aircraft engine, spare part and supplies maintenance and repair services; and aircraft spare part and supplies services for civil purposes for:

1. Projects with 30% or more of their capital funded by the State to purchase aircraft and aircraft engines.

2. Operations not subject to formulation of investment projects, including lease of aircraft, aircraft engines, spare parts and supplies and purchase of aircraft spare parts and supplies, aircraft spare part and supplies services, and aircraft, aircraft engine, spare part and supplies maintenance and repair services of Vietnamese enterprises with 30% or more of state-owned capital.

Article 2. Subjects of application

This Decree applies to Vietnamese and foreign organizations and individuals involved in the lease and purchase of aircraft, aircraft engines, spare parts and supplies; and aircraft, aircraft engine, spare part and supplies maintenance and repair services within the scope of regulation specified in Article 1 of this Decree.

Article 3. Application of treaties and international agreements

For programs and projects funded with official assistance development (ODA) sources, the lease and purchase of aircraft, aircraft engines, spare parts and supplies and aircraft, aircraft engine, spare part and supplies maintenance and repair services shall be carried out on the basis of provisions of treaties to which the Socialist Republic of Vietnam is a contracting party or international agreements which competent agencies or organizations of the Socialist Republic of Vietnam have concluded.

Article 4. Interpretation of terms

1. Aircraft documents include aircraft logbook, aircraft records, instruction, operation and use documents and other attached documents.

2. Aviation administration means an authority in charge of aircraft registration, grant of airworthiness certificates and supervision of aircraft activities. The Civil Aviation Administration of Vietnam is the aviation administration of Vietnam.

3. Aircraft spare part and supplies supplier means an aircraft spare part and supplies manufacturer, aircraft manufacturer, aircraft engine manufacturer, aircraft spare part and supplies distributor, aircraft spare part and supplies service providers, a maintenance and repair establishment or an airline.

4. Maintenance and repair service provider means an establishment maintaining and repairing aircraft and aircraft engines, spare parts and supplies or an airline.

5. Aircraft engine means the main engine mounted on an aircraft to create the main propulsion for the aircraft.

6. Aircraft spare parts and supplies means details of an aircraft and its engine, including also auxiliary engine, landing gear and special-use tools and equipment, for aircraft operation, maintenance and repair. Lists of aircraft spare parts and supplies are included in documents issued by manufacturers.

7. Maintenance and repair services include jobs of restoring and maintaining (including also whole or partial technical management and direct maintenance on aircraft) aircraft and aircraft engines, equipment, spare parts and supplies in an airworthy state.

8. Direct purchase means the placement of an order directly with a supplier on the basis of its bid.

9. Competitive bidding means the selection of one among suppliers on the basis of comparing their bids according to approved criteria.

10. Maintenance and repair establishment means an institution established and operating under the law of the country where it is established and licensed by an aviation administration to provide technical maintenance of aircraft and aircraft engines, spare parts and supplies.

11. Aircraft spare part and supplies service means the lease or exchange of aircraft spare parts and supplies or provision of package spare part and supplies services.

12. Package spare part and supplies service means the service of complete supply, including supply of aircraft spare parts and supplies, repair of spare parts and supplies, storage of spare parts and supplies and flight hour-based management program.

13. Flight hour-based management program covers maintenance, repair and general management of aircraft engines, landing gear, spare parts and supplies.

Article 5. Principles of management of lease and purchase of aircraft, aircraft engines, spare parts and supplies; aircraft, aircraft engine, spare part and supplies maintenance and repair services

1. Observance of the Vietnamese law on civil aviation activities.

2. Achievement of the planning objective of development of a civil aircraft fleet, and focused and synchronous investment suitable to the business capacity, financial capability and aircraft operation, maintenance and repair capacity of enterprises.

3. Satisfaction of the standards of airworthiness and safe operation of aircraft in accordance with the Law on Civil Aviation of Vietnam, relevant legal documents and treaties on civil aviation to which the Socialist Republic of Vietnam is a contracting party.

4. Efficient state-funded lease and purchase of aircraft, avoiding loss and waste.

Article 6. Competence to decide on lease and purchase of aircraft, aircraft engines, spare parts and supplies or aircraft, aircraft engine, spare part and supplies maintenance and repair services

1. For state budget-funded projects on purchase of aircraft and aircraft engines:

The Minister of Transport shall decide on investment in state budget-funded projects on purchase of aircraft engines, spare parts and supplies. In case of aircraft purchase, the Minister of Transport shall decide on the investment after obtaining in-principle consent of the Prime Minister.

2. For non-state budget-funded projects on purchase of aircraft and aircraft engines specified in Clause 1, Article 1:

The boards of directors (members’ councils) of enterprises or directors general or directors of enterprises (for enterprises without boards of directors (members’ councils)) shall decide on the investment. In case of aircraft purchase, heads of enterprises shall decide on the investment after obtaining in-principle consent of the Prime Minister.

3. For lease of aircraft, aircraft engines, spare parts and supplies and purchase of spare parts and supplies, aircraft spare part and supplies services or aircraft, aircraft engine, spare part and supplies maintenance and repair services specified in Clause 2, Article 1:

The boards of directors (members’ councils) of enterprises or directors general or directors of enterprises (for enterprises without boards of directors (members’ councils)) shall decide on the investment. In case of aircraft purchase, heads of enterprises shall make decisions.

4. Boards of directors (members’ councils) may authorize or assign other bodies or persons to decide on issues falling under their competence.

Article 7. Requirements on lessors of aircraft with or without flight crews, suppliers of aircraft spare parts and supplies and providers of maintenance and repair services

1. A lessor of aircraft with or without a flight crew, a supplier of aircraft spare parts and supplies or a provider of maintenance and repair services must be an enterprise lawfully established and operating under the law of the country where it is headquartered.

2. In addition to Clause 1 of this Article, a lessor of aircraft with a flight crew must have an aircraft operator certificate; a provider of aircraft maintenance and repair services must have a certificate of eligibility for aircraft maintenance and repair granted by the aircraft administration of the country where it has made business registration and recognized by the aviation administration of Vietnam.

Article 8. Requirements on aircraft, aircraft engines, spare parts and supplies

1. The age of leased or purchased aircraft complies with Clause 2, Article 6 of the Government’s Decree No. 76/2007/ND-CP of May 9, 2007, on air transportation business and general aviation.

2. Aircraft engines, spare parts and supplies must be on lists issued by aircraft manufacturers and aircraft engine manufacturers.

Chapter II

LEASE OF AIRCRAFT

Article 9. Form and method of selection of aircraft lessors

1. Form:

a/ The selection of aircraft lessors shall be carried out in the form of competitive bidding;

b/ In case the type of aircraft needed for lease is scarce and the aircraft lessor requests participation in an auction, the competent person of the enterprise shall decide on participation in the auction on the basis of aircraft information and market price.

2. Method:

The method of selection of aircraft lessors through competitive bidding is that of single-dossier bag. An aircraft lease bidder shall submit a dossier containing technical and financial proposals as required by the requirement dossier.

Article 10. Procedures for competitive bidding

1. Elaboration of a document on the aircraft lease need, which has the following principal contents:

a/ Grounds for elaboration of a lease plan;

b/ Identification of the lease need: number of aircraft, type, time of aircraft delivery, lease term and form;

c/ Operation plan: projected flight routes;

d/ Plan to assure operation capacity;

e/ Operation efficiency;

f/ Situation of the lease market;

g/ Proposed form of selection of aircraft lessor;

In case of necessity to lease aircraft to replace aircraft used for special flights or requisitioned for the State’s purposes, aircraft in maintenance, damaged due to accidents, technical problems or unexpectedly put out of operation for force majeure reasons, or lease aircraft without a flight crew for seasonal operation, the document on the aircraft lease need should only state the lease need, operation plan and situation of the lease market.

2. Competent persons of enterprises shall decide on the form of invitation for competitive bidding with the basic contents specified in Clause 3 of this Article by either of the following ways:

a/ Publishing the announcement of the aircraft lease need in the mass media for at least 3 consecutive issues of a Vietnamese-language newspaper and one issue of an English-language newspaper;

b/ Sending letters of invitation for competitive bidding directly to at least 3 international bidders.

3. Basic contents of a requirement dossier:

a/ Aircraft: Type, year of manufacture (for used aircraft for which information on ex-workshop number, type of engine, seating layout and entertainment devices is needed);

b/ Lease form;

c/ Lease term;

d/ Place of aircraft registration during the lease term;

e/ Lease charge;

f/ Aircraft overhaul fund;

g/ Deposit or guarantee;

h/ Insurance related to aircraft and operator;

i/ Validity duration of a proposal dossier;

j/ Tax obligation under Vietnamese law;

k/ Attached documents (applicable to used aircraft): Technical specifications of aircraft, including also information on fuselage and engine; compartment layout; seating layout; standards of aircraft kitchen.

4. The interval between the date of first publication of an invitation for competitive bidding and the date of issuance of a requirement dossier is at least 5 days. The time for preparation of a proposal dossier is at least 5 days from the date of issuance of a requirement dossier.

5. Method of sending a proposal dossier: An interested bidder may send a proposal dossier directly, by post or via fax or e-mail but shall assure that this dossier contains his/her/its at-law representative’s signature. Proposal dossiers of Vietnamese bidders must contain also a certification seal. Proposal dossiers made in the electronic form must comply with the law on e-transactions.

6. Proposal dossiers shall be evaluated for selection of a short list of bidders having aircraft meeting requirements.

7. Direct negotiations shall be held with short-listed bidders and the winning bidder shall be selected on the basis of results of direct negotiations.

Article 11. Method of evaluation of proposal dossiers for aircraft lease

1. The method of evaluation of proposal dossiers for aircraft lease is synthesizing results of legal, technical, commercial and financial evaluations:

a/ Legal evaluation: To examine lawful rights of the aircraft lessor to aircraft on lease and legal requirements specified in Article 7 of this Decree;

b/ Technical evaluation: To examine the satisfaction by aircraft of requirements on the age and technical state of aircraft, technical configuration and related legal certificates. To be further examined and evaluated, a proposal dossier must be evaluated to be technically satisfactory;

c/ Commercial evaluation: To examine the satisfaction by aircraft of requirements on seating layout, kitchen, entertainment programs, layout change to satisfy operation requirements of the enterprise, and aircraft delivery time;

d/ Financial evaluation: To make an overall evaluation of the lease rate, maintenance fund, layout change, insurance and other expenses.

2. The evaluation of results of direct negotiations shall also be conducted according to the above criteria. The winning bidder is the one with the best overall evaluation result.

Article 12. Aircraft lease contracts

1. Except the case specified in Clause 2 of this Article, an aircraft lease contract with a foreign partner shall be approved by the Board of Directors (the Members’ Council) or the general director or director of the enterprise (for enterprises without a Board of Directors or Members’ Council) and will be valid only after the aircraft lease is approved in writing by the director of the Civil Aviation Administration of Vietnam.

The Minister of Transport shall issue a circular to guide the procedures for approving aircraft lease.

2. In case of leasing an aircraft for not more than 7 consecutive days to replace another aircraft which is used for special flights or requisitioned for other public-duty purposes or replace an aircraft damaged in an accident or encountering a technical problem or unable to operate due to a force majeure event, the enterprise shall notify in writing the Civil Aviation Administration of Vietnam that the lessor has an appropriate aircraft operator certificate.

3. In case of leasing aircraft with a flight crew, an aircraft lease contract is construed to cover also an aircraft operation and/or maintenance-repair service contract, regardless of whether this contract constitutes part of the aircraft lease contract or is an independent contract, signed with the same lessor or another service provider.

Article 13. Extension of aircraft lease term

1. The extension of the term of an aircraft lease contract is valid only after it is approved in writing by the director of the Civil Aviation Administration of Vietnam.

2. The Minister of Transport shall issue a circular to guide the procedures for approving the extension of the term of an aircraft lease contract.

Chapter III

PURCHASE OF AIRCRAFT AND AIRCRAFT ENGINES

Section 1

PURCHASE OF AIRCRAFT

Article 14. Investment procedures

1. The formulation, submission, appraisal, approval and implementation of aircraft investment projects comply with current regulations on investment.

2. In a special case subject to approval of the Prime Minister, an enterprise may concurrently formulate an investment project and negotiate with aircraft manufacturers.

Article 15. Forms and method of selection of aircraft suppliers

1. Forms:

a/ Open bidding;

b/ Restricted bidding;

c/ Contractor appointment through direct negotiations.

Contractor appointment through direct negotiations is applicable when the aircraft supplier is the aircraft manufacturer. The application of this form must be permitted by the Prime Minister.

2. Method of selection:

The method of selection of aircraft suppliers is that of single-dossier bag. An aircraft supply bidder shall submit a dossier containing technical and financial proposals as required by the requirement dossier.

Article 16. Procedures for selection of aircraft suppliers in the form of contractor appointment through direct negotiations

1. Invitation for participation in contractor appointment:

a/ Aircraft shall be purchased directly from aircraft manufacturers. Depending on each type or model of aircraft to be purchased, a letter of invitation and a requirement dossier shall be sent directly to the manufacturer of the aircraft type concerned;

b/ For the case specified in Clause 2, Article 14 of this Decree, an enterprise may purchase aircraft directly from an aircraft manufacturer without having to send letters of invitation for bidding and to issue a requirement dossier.

2. Basic contents of a requirement dossier:

a/ Aircraft: Type, engine and configuration of aircraft (for used aircraft, information on the year of manufacture, ex-workshop number, type of engine and configuration of aircraft is required);

b/ Form of purchase;

c/ Time of aircraft delivery;

d/ Price of aircraft;

e/ Aircraft overhaul fund (applicable to used aircraft);

f/ Deposit;

g/ Insurance related to aircraft and aircraft operator (applicable to used aircraft);

h/ Validity duration of a proposal dossier;

i/ Attached documents (applicable to used aircraft): Technical parameters of aircraft, including information on fuselage and engine; compartment layout; seating layout; and standards of aircraft kitchen.

3. Time for preparation of a proposal dossier: At least 15 days from the date of issuance of a requirement dossier, an invited bidder shall prepare a proposal dossier containing technical, financial and commercial proposals.

4. Ways of sending proposal dossiers: An interested bidder may send his/her/its proposal dossier directly, by post, via fax or e-mail but shall assure that this dossier contains the signature of his/her/its at-law representative. Proposal dossiers of Vietnamese bidders must have also a certification seal. Proposal dossiers made in the electronic form must comply with the law on e-transactions.

5. The bid solicitor shall invite interested bidders to negotiate on contracts, and to explain, clarify, amend or supplement necessary details of their proposal dossiers in order to prove their satisfaction of the set requirements.

6. Submission for approval, appraisal and approval of contractor appointment results: Based on contractor appointment results and appraisal reports, the person with investment-deciding competence shall approve contractor appointment results.

7. Negotiations on, finalization and signing of contracts:

Based on a decision approving contractor appointment results, an enterprise shall negotiate and finalize a contract with the appointed contractor for signing. Only after being approved by the person with investment-deciding competence, will such contract be valid.

The procedures for approving contractor appointment results comply with the Bidding Law.

8. In a special case subject to approval of the Prime Minister, an enterprise may pay a (refundable) deposit for aircraft booking and enjoying other preferences before formulating a project or signing a contract on aircraft purchase.

Article 17. Procedures for selection of aircraft suppliers through open bidding or restricted bidding

The order and procedures for selection of aircraft suppliers through open bidding or restricted bidding comply with current regulations on bidding.

Article 18. Bid and contract performance guarantees

In case of contractor appointment through direct negotiations, bidders may be exempt from paying bid and contract performance guarantees.

Enterprises shall base themselves on the characteristics, size and capacity of specific bidders to decide whether to exempt these bidders from paying bid and contract performance guarantees.

Article 19. Contract forms

1. Package contracts: Contract prices are kept unchanged throughout the course of contract performance.

2. Adjustable-price contracts: Contract prices are calculated according to basic prices and the inflation formula provided in contracts. Basic prices are kept unchanged throughout the course of contract performance.

Section 2

PURCHASE OF AIRCRAFT ENGINES

Article 20. Forms and method of selection of aircraft engine suppliers

1. Forms and method of selection of aircraft engine suppliers

a/ For first-time aircraft investment or lease: For aircraft engines and standby aircraft engines accompanying aircraft investment projects and engines of leased aircraft which purchasers  are entitled to select, the selection of engine suppliers shall be conducted in the form of competitive bidding under Article 21 of this Decree;

b/ For investment in or lease of additional aircraft of the same type: For aircraft engines and standby aircraft engines accompanying aircraft investment projects and engines of leased aircraft which purchasers are entitled to select, the selection of engine suppliers shall be conducted in the form of contractor appointment under Article 16 of this Decree;

c/ For types of aircraft for which aircraft manufacturers recommend a single type of engine: The selection of engine suppliers shall be conducted in the form of contractor appointment through direct negotiations according to the procedures specified in Article 16 of this Decree;

d/ For standby aircraft engines: The selection of engine suppliers shall be conducted in the form of competitive bidding or direct purchase from selected engine manufacturers.

2. Bids sent directly or by post or via fax or e-mail are accepted provided they contain signatures of bidders’ at-law representatives. Bids of Vietnamese bidders must contain also certification seals. Bids made in the electronic form must comply with the law on e-transactions.

3. Enterprises shall base themselves on the characteristics, size and capacity of specific bidders to decide whether to exempt these bidders from paying bid and contract performance guarantees.

Article 21. Procedures for purchase of aircraft engines in the form of competitive bidding

1. Organization of first-time competitive bidding:

a/ Step 1: Making the first-time requirement dossier under Clause 3 of this Article.

b/ Step 2: Inviting bidders to participate in competitive bidding.

The competent person of the enterprise shall decide to apply either of the forms of invitation for competitive bidding specified in Clause 4 of this Article.

c/ Step 3: Clarifying dossiers.

Based on first-time proposal dossiers of aircraft engine suppliers, the enterprise shall discuss directly with bidders to clarify details of these dossiers, including post-sale assistances as required in the first-time requirement dossier, warranty conditions, training, and the method of evaluation of selected engines to be applied on the same plane.

The time limit for this step is 30 days.

2. Organization of second-time competitive bidding:

a/ Making the second-time requirement dossier with the same contents as the first-time requirement dossier on the principle of keeping unchanged the assistances and compulsory requirements for conversion to the same plane and technical specifications of engines in the first-time proposal dossiers;

b/ Sending the second-time requirement dossier to aircraft engine suppliers that have participated in the first-time competitive bidding. The time for bidders to prepare second-time proposal dossiers is at least 10 days.

c/ Evaluating the second-time proposal dossiers and selecting a type of aircraft engine and an engine supplier that has a proposal dossier with the lowest evaluated price, then submit them to a competent authority for approval.

The time limit for this step is 60 days.

3. Basic contents of a first-time requirement dossier:

a/ Contract address and officers;

b/ Information on type and number of aircraft, aircraft delivery schedule, number of requested engines (engines mounted on wings and standby engines), engine delivery schedule, maximum takeoff weight, average flight duration, average number of flights per year, running time and other relevant parameters;

c/ Request for engine-related information like reliability of engines in operation, operation utilities, maintenance requirements and transport utilities;

d/ Information on post-sale assistances such as warranty, training, technical assistance experts, technical documents and other assistances, if any; the market situation of this type of engine and other information (if any);

e/ Request for bids of engine prices and standby engine prices and for discounts;

f/ The method of payment.

4. Forms of invitation for competitive bidding:

a/ Publishing an announcement of the aircraft engine purchase in the mass media for at least 3 consecutive issues of a Vietnamese-language newspaper and one issue of an English-language newspaper;

b/ Sending letters of invitation for bidding to engine suppliers approved by aircraft manufacturers.

5. The interval between the date of first publication of an invitation for competitive bidding or the date of sending the requirement dossier and the date of issuance of the requirement dossier is at least 5 days. The time for preparation of a first-time proposal dossier is at least 10 days after the date of issuance of the first-time requirement dossier.

6. Ways of sending a proposal dossier: An aircraft engine supplier participating in the bidding may send a proposal dossier directly, by post or via fax or e-mail but shall assure that this dossier contains his/her/its at-law representative’s signature. Proposal dossiers of Vietnamese bidders must contain also a certification seal. Proposal dossiers made in the electronic form must comply with the law on e-transactions.

Article 22. Method of evaluation for selection of aircraft engine suppliers

1. The method of evaluation for selection of aircraft engine suppliers is synthesizing results of legal, technical, commercial and financial evaluations:

a/ Legal evaluation: To examine lawful rights of the aircraft engine seller to aircraft engines and the legal requirements specified in Article 7 of this Decree;

b/ Technical evaluation: To examine the satisfaction of leased aircraft engines with the requirements on technical state, characteristics and configuration and related legal certificates. To be further examined and evaluated, a proposal dossier must be evaluated to be technically satisfactory;

c/ Commercial evaluation: To examine the satisfaction of aircraft engines with the operation requirements of the enterprise and the aircraft engine delivery schedule;

d/ Financial evaluation: To make an overall evaluation of prices, operation investment and insurance expenses and other expenses.

2. The evaluation of results of direct negotiations shall also be conducted according to the above criteria. The winning bidder is the one obtaining the best overall evaluation result.

Chapter IV

PURCHASE OF AIRCRAFT SPARE PARTS AND SUPPLIES

Article 23. Classification of aircraft spare parts and supplies

By method of procurement, aircraft spare parts and supplies may be classified as follows:

1. Aircraft spare parts and supplies supplied by purchasers themselves: Lists of aircraft spare parts and supplies approved by aircraft manufacturers or aircraft lessors that agree to let purchasers supply.

2. Aircraft spare parts and supplies supplied by sellers: Lists of aircraft spare parts and supplies identified according to technical standards of aircraft manufacturers and supplied by aircraft manufacturers.

3. Initially purchased aircraft spare parts and supplies: Lists of aircraft spare parts and supplies drawn up on the basis of projects or a general plan before a type of aircraft is put into operation or upon a substantial adjustment of the number of aircraft in operation.

4. Regular aircraft spare parts and supplies are those available in a plan year to serve the additional adjustment of the reserve level or meet the requirements of aircraft maintenance and repair in the course of operation, and those purchased under different types of orders: normal orders, latently urgent orders, urgent orders.

Article 24. Forms of selection of aircraft spare part and supplies suppliers

On a case-by-case basis, the selection of aircraft spare part and supplies suppliers may be conducted in any of the following forms:

1. For first-time aircraft investment or lease: For aircraft spare parts and supplies supplied by purchasers, those supplied by sellers accompanying aircraft investment projects and those of leased aircraft which purchasers are entitled to select, the selection of aircraft spare part and supplies suppliers shall be conducted in the form of competitive bidding according to the procedures specified in Articles 25 and 26 of this Decree.

2. For investment in or lease of additional aircraft of the same type: For aircraft spare parts and supplies supplied by purchasers, those supplied by sellers accompanying aircraft investment projects and those of leased aircraft which purchasers are entitled to select, the selection of aircraft spare part and supplies suppliers shall be conducted in the form of contractor appointment through direct negotiations according to the procedures specified in Articles 16 and 26 of this Decree.

3. For initially purchased and regular aircraft spare parts and supplies: The selection of aircraft spare part and supplies suppliers shall be conducted in the form of competitive bidding. In case there is only one aircraft spare part and supplies supplier or the aircraft spare part and supplies supplier is an aircraft, aircraft engine or spare part and supplies manufacturer providing price discounts and post-sale assistances, enterprises may purchase aircraft spare parts and supplies directly from such manufacturer or distributors authorized by such manufacturer.

4. Competitive bids sent directly or by post or via fax or e-mail may be accepted provided they contain signatures of at-law representatives of bidders. Competitive bids of Vietnamese bidders must contain also certification seals. Competitive bid dossiers made in the electronic form must comply with the law on e-transactions.

5. In emergency cases, cases in which aircraft flights are suspended or aircraft have accidents which directly affect the operation of aircraft: Aircraft spare part and supplies suppliers shall be selected on the basis of plans that enable the quickest supply of aircraft spare parts and supplies in the form of direct purchase.

6. Enterprises shall base themselves on the characteristics, size and capacity of specific bidders to decide whether to exempt these bidders from paying bid and contract performance guarantees.

Article 25. Procedures for purchase of aircraft spare parts and supplies supplied by purchasers

1. Elaborating a requirement dossier for competitive bidding, then submitting it to a competent authority for approval and sending it to aircraft spare part and supplies suppliers. Such dossier shall be elaborated on the basis of the list of aircraft spare parts and supplies provided by the purchaser and approved by the aircraft manufacturer or by the aircraft lessor that agrees to let the purchaser supply, and enclosed with a list of aircraft spare part and supplies suppliers.

2. Receiving and clarifying proposal dossiers and identifying assistances of aircraft spare part and supplies suppliers:

a/ Identifying post-sale assistances like training, provision of equipment and tools for operation and maintenance, warranty and other assistances. Fixing these assistances so as to request suppliers to make their last bids before being compared on the same plane;

b/ Giving certification to aircraft spare part and supplies suppliers and notifying the aircraft manufacturer of the fixed assistances, policies and requirements on equipment of the purchaser and binding conditions for contract performance.

3. Making an overall evaluation and selecting equipment and aircraft spare part and supplies suppliers based on their last bids after fixing the assistances and credit supports. Overall evaluation covers evaluation of bids, transport freight, forwarding charges, entrustment charge (if any), time of delivery, payment conditions, supply capacity, post-sale assistances, transactions in the course of supply and other arising factors.

4. Submitting selection results to a competent authority for approval.

5. Issuing a notice of selection results to the aircraft manufacturer, and organizing implementation.

Article 26. Procedures for purchase of aircraft spare parts and supplies supplied by sellers

1. Elaborating a list of aircraft spare parts and supplies, then submitting it to a competent authority for approval, and sending requirements to aircraft spare part and supplies suppliers. Such list shall be elaborated on the basis of a list of aircraft spare parts and supplies supplied by the aircraft manufacturer notified by this manufacturer and enclosed with a list of aircraft spare part and supplies suppliers.

2. Receiving information from aircraft spare part and supplies suppliers, identifying and clarifying assistances of these suppliers:

a/ Identifying post-sale assistances like training, warranty and other assistances;

b/ Notifying and certifying fixed assistances, policies and requirements on equipment to aircraft spare part and supplies suppliers.

3. Evaluating and selecting types and suppliers of aircraft spare parts and supplies based on assistances, then submitting selection results to a competent authority for approval.

4. Notifying a list of selected aircraft spare part and supplies suppliers to the aircraft manufacturer.

Article 27. Procedures for purchase of initial aircraft spare parts and supplies

1. Identifying necessary operation parameters and data to serve as a basis for the elaboration of a list of aircraft spare parts and supplies as recommended by the aircraft and aircraft engine manufacturers, then submitting such list to a competent authority for approval, and providing it to the aircraft and aircraft engine manufacturers.

2. Selecting and submitting to a competent authority for approval a list of aircraft spare parts and supplies on the basis of the list recommended by the aircraft and aircraft engine manufacturers for purchase, practical capability and financial balance.

3. Selecting aircraft spare parts and supplies suppliers in the form of competitive bidding. In case there is only one aircraft spare part and supplies supplier or the aircraft spare part and supplies supplier is an aircraft, aircraft engine or spare part and supplies manufacturer providing price discounts and post-sale assistances, enterprises may purchase aircraft spare parts and supplies directly from such manufacturer or distributors authorized by such manufacturer.

4. Submitting to competent authorities for approval an aircraft spare part and supplies supply plan and their supplier.

5. Placing orders and organizing implementation.

Article 28. Procedures for purchase of regular aircraft spare parts and supplies

1. Identifying codes and quantities of aircraft spare parts and supplies based on requirements arising in the course of operation, storage addition, maintenance and repair and according to technical documents of the manufacturer.

2. Selecting aircraft spare parts and supplies suppliers in the form of direct purchase or competitive bidding.

3. Submitting for approval orders to be placed according to authority decentralization.

4. Placing orders and organizing implementation.

Article 29. Procedures for selection of package spare part and supplies service providers

1. Compiling a requirement dossier for competitive bidding based on the type and identification number of aircraft, type of engine and configuration of aircraft, then submitting it to a competent authority for approval, and sending requirements to service providers.

2. Identifying assistances like training, technical notification and other assistances and policies on aircraft spare parts and supplies. Fixing these assistances for comparison on the same plane. Contacting bidders to clarify their bids.

3. Making an overall evaluation and submitting selection results to a competent authority for approval.

4. Organizing contract negotiations, submitting for approval and signing contracts.

Chapter V

HIRING OF MAINTENANCE AND REPAIR OF AIRCRAFT, AIRCRAFT ENGINES, SPARE PARTS AND SUPPLIES

Article 30. Forms of selection of aircraft and aircraft engine maintenance and repair establishments

1. The selection of aircraft and aircraft engine maintenance and repair service providers shall be conducted in the form of competitive bidding under Article 31 of this Decree, or in the form of contractor appointment through direct negotiations under Article 16 of this Decree.

In case there are fewer than 3 maintenance and repair establishments, the form of direct negotiations with these establishments shall be applied.

2. The selection of service providers for a program on flight hour-based management, maintenance and repair of aircraft engines shall be conducted in the form of competitive bidding under Article 31 of this Decree or contractor appointment through direct negotiations with aircraft engine and landing gear manufacturers under Article 16 of this Decree.

In special cases of technical problems or accidents, the form of direct purchase may be applied to have the quickest provision of maintenance and repair services.

3. Ways of sending proposal dossiers: Interested maintenance and repair service providers may send their proposal dossiers directly, by post, via fax or e-mail provided these dossiers contain their at-law representatives’ signatures. Proposal dossiers of Vietnamese bidders must have also certification seals. Proposal dossiers made in the electronic form must comply with the law on e-transactions.

4. Enterprises shall base themselves on the characteristics, size and capacity of specific bidders to decide whether to exempt these bidders from paying bid and contract performance guarantees.

Article 31. Procedures for selection of aircraft and aircraft engine maintenance and repair establishments

1. Compiling a requirement dossier for competitive bidding based on the type and configuration of aircraft, then submitting it to a competent authority for approval and sending it to aircraft and aircraft engine maintenance and repair service providers.

2. Evaluating proposal dossiers according to approved evaluation criteria.

3. Submitting selection results to a competent authority for approval. Organizing contract negotiations, submitting for approval and signing a contract.

4. After signing a contract, the enterprise shall report to the Civil Aviation Administration of Vietnam on details of the contract, including name, nationality and legal entity status of the maintenance service provider, responsibilities and powers of contracting parties, date of signing and date of expiration of the contract. Enterprises that fail to report to the Civil Aviation Administration of Vietnam on details of their contracts shall be sanctioned under the Government’s Decree No. 91/2007/ND-CP of June 1, 2007, on sanctioning of administrative violations in the field of civil aviation.

Article 32. Procedures for selection of aircraft spare part and supplies maintenance and repair establishments

1. For aircraft spare parts and supplies with framework contracts:

a/ Selecting a list of and signing framework contracts with aircraft spare part and supplies maintenance and repair establishments based on the list of aircraft spare parts and supplies;

b/ When there is a need for repair, selecting an aircraft spare part and supplies maintenance and repair establishment from the list of aircraft spare part and supplies maintenance and repair establishments having signed framework contracts, based on specific repair jobs. The selection shall be based on evaluation of repair expenses and repair cycle;

c/ Placing repair orders.

2. For aircraft spare parts and supplies without framework contracts: Placing repair orders directly with aircraft spare part and supplies manufacturers.

Article 33. Lease and exchange of aircraft engines, spare parts and supplies

1. Based on requirements of their production and business operations, enterprises may select the form of lease or exchange of aircraft engines, spare parts and supplies from/with approved partners.

2. The selection of partners for lease or exchange of aircraft engines, spare parts and supplies shall be conducted in the form of competitive bidding or direct purchase from manufacturers.

3. Enterprises shall base themselves on the characteristics, size and capacity of specific bidders to decide whether to exempt these bidders from paying bid and contract performance guarantees.

Chapter VI

IMPLEMENTATION PROVISIONS

Article 34. Effect

This Decree takes effect on February 1, 2012.

Article 35. Organization of implementation

1. The Ministry of Transport shall implement this Decree.

2. Ministers, heads of ministerial-level agencies, heads of government-attached agencies and related organizations and individuals shall implement this Decree.-

On behalf of the Government
Prime Minister
NGUYEN TAN DUNG